Achieving Maximum Trade Facilitation in a Regulatory Environment

1. HOW TO ACHIEVE MAXIMUM TRADE FACILITATION IN A REGULATORY ENVIRONMENT Rolf M. Jeker, Executive Vice President SGS Société Générale de Surveillance S.A. UNECE International Forum on Trade Facilitation 29 - 30 May 2002

2. TRADE NEEDS & GOVERNMENT OBJECTIVES WHAT DOES THE TRADE COMMUNITY WANT ? Strengthening and maximization ofFREE, GLOBAL, TRANSPARENT & FASTforeign trade exchange as a principal condition for commercial success = TOTAL TRADE LIBERALIZATION (no interference from Governments: no tariffs, no delays, no bureaucracy)

3. TRADE NEEDS & GOVERNMENT OBJECTIVES WHAT ARE THE GOVERNMENT OBJECTIVES ? Ensure the realization of all macro- and micro-economicbenefitsfrom foreign trade as stipulated by the respective laws and other trade regulations in the country involved(“protection of national interests”). = TOTAL COMPLIANCE OF THE TRADE WITH GOVERNMENT REGULATIONS - Revenue from customs and VAT - Safety, health, environment, consumer protection, security.  here to stay and most likely to grow

4. TRADE NEEDS & GOVERNMENT OBJECTIVES TRADE OFF BETWEEN THE TRADE NEEDS AND THE GOVERNMENT OBJECTIVES OPTIMISATION TRADE FACILITATION & CUSTOMS MODERNIZATION TOTALCOMPLIANCE WITH THE GOVERNMENT REGULATIONS TOTALTRADE LIBERALIZATION TRADE NEEDS GOVERNMENT OBJECTIVES

5. TRADE FACILITATION • To remove obstacles / regulations through negotiations and rule making : medium-longer term • To find practical solutions to expedite trade flowsin context of existing and new regulations : short term

6. PRACTICAL SOLUTIONS TO MINIMIZE IMPACT OF REGULATIONS • Apply control where most efficient to avoid congestion (pre-shipment ; post-entry audit) • Avoid multi-layer control chains for departing and arriving goods • Use available technology efficiently Apply selectivity through risk management techniques

7. RISK MANAGEMENT : TURN DATA INTO INFORMATION TO IDENTIFY RISKS • Identification of relevant risk factors • Obtain relevant information nationally and internationally • Develop database with powerful IT tools Validated and updated information is the key

8. Type of Threat EXPORT ARRIVAL RISK MANAGEMENT

9. RESULTS  fewer delays/obstacles & lower transaction cost for trade participants while  protecting collection of customs and tax revenues  providing level playing field for local industry  protecting local consumers  stimulating foreign direct investment

10. RESULTS : A WIN-WIN SITUATION Lower cost to trade and Government through selective controls  reduction in transaction cost facilitates implementation : the trade participants are prepared to pay for the service  pragmatic improvement possible without time-consuming negotiations

11. GLOBAL ALLIANCE FOR TRADE EFFICIENCY (GATE) • Industry driven initiative to reduce transaction cost in cross-border transactions:  Demonstrate compliance to importing country through third party certification  Obtain green channel facilities  Paid for by the trade participants

12. INTEGRITY / TRANSPARENCY AS AN OBSTACLE TO TRADE FACILITATION • Lack of transparency / integrity is a major obstacle : it implies delays and additional cost.  Solutions need to foster "good governance"  Implied additional cost to trade and losses to government have to be fought vigorously  Need for independent audits

13. USE OF PRIVATE SECTOR SUPPORT • Independent third party validation of transactions • Access to "state of the art" / best practice due to global experience • Extensive reach beyond national borders- access to information worldwide- control of supply chain