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UN/CEFACT

An Introduction to the work of the UN Centre for Trade Facilitation and Electronic Business Ray Walker OBE Chairman, UN/CEFACT Steering Group Special Adviser on Trade Processes and Electronic Business to the UK Department of Trade and Industry raywalker@attglobal.net. UN/CEFACT.

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UN/CEFACT

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  1. An Introduction to the work of the UN Centre for Trade Facilitation and Electronic Business Ray Walker OBE Chairman, UN/CEFACT Steering Group Special Adviser on Trade Processes and Electronic Business to the UK Department of Trade and Industry raywalker@attglobal.net UN/CEFACT

  2. Overview • What is the Centre’s Goals and Vision? • How did it start? • How is it organised and how does it work ? • What is Trade Facilitation and what benefits does it bring? • What are the key issues in e-business? • Points to take home

  3. UN/CEFACT’s Fundamental Goals and Vision Fundamental Goals To accelerate the growth of global commerce so that the economic benefits arising from it can sustain a secure, integrated, but diverse world, where there are no “divides” and which is culturally respectful Vision Simple, Transparent, Effective Processes for Global Commerce

  4. UN/CEFACT – Background • 1965: Early work on trade documents in Sweden • 1968: UN task force established in Geneva • 1970: Working Party 4 established; Trade Facilitation work starts • 1973: Work starts on EDI (TDI) • 1978: First global trade data elements directory published (UNTDED); Legal work starts • 1983: First international EDI syntax published; • 1987: UN/EDIFACT syntax approved as an ISO standard • 1990: First UN/EDIFACT messages published • 1996: Over 150 UN/EDIFACT messages developed and approved www.uncefact.org

  5. UN/CEFACT – Background • 1997: UN/CEFACT established • 1999: ebXML project launched • 2001: ebXML approved. • To date over 30 practical Recommendations have been made to governments to improve Trade Facilitation and e-business • Many Guidelines for best practice have been published • The use of Business Process Information Modelling unites the approach to both Trade Facilitation and e- business issues www.uncefact.org

  6. UN/CEFACT- Organisation • Plenary: Centre’s highest decision making body • Steering Group: Centre’s management and coordination body • Groups: Main bodies for undertaking or supporting the work programme • Working groups: Sub–element of a Group dedicated to a specific work item • Projects: Sub–element of a group or Working Group

  7. UN/CEFACT- Organisation • Plenary is made up of delegations from UN member states and international organisations representing the public and private sectors e.g. World Customs Organisation, International Chamber of Commerce, EAN International • All delegations have the same rights e.g. An international organisation has the same rights as a member state • This is a very special feature which emphasises our objective of an open interface between public organisations and private business

  8. UN/CEFACT- Organisation • The Chair, and the 5 Vice Chairs (2 from ECE member states, 2 from other UN regions and 1 from international organisations) are elected by the Plenary. Currently, the Chair is from Germany, and the Vice – Chairs are from Japan, Nigeria, UK, USA and the IAPH. • Steering Group (CSG) is also elected by the Plenary and is chaired a one of the VC nominated by the Chair and approved by the Plenary • CSG meets physically 4 times a year but works daily by e-mail

  9. UN/CEFACT - Work Programme • The current work programme includes the analysis and modelling of business processes particularly in global trade , the rationalisation of international trade procedures, the development of electronic business exchange standards (e.g.UN/EDIFACT, ebXML), coding, and associated legal aspects • It is carried out through empowered permanent and ad hoc working groups and through joint ventures www.uncefact.org

  10. Proposed New Group Structure There will be five Groups, three operational and two in support. Operational Groups • Global Commerce Processes Group • Information Content Management Group • Standards and Technologies Application Group Support Groups • Techniques and Methodologies Group • Legal Group

  11. The Groups and their Initial Constituents Global Commerce Processes Group – GCPG • Business Process Analysis (BPAWG) • International Trade Procedures (ITPWG) • Trade Facilitation Policy and Best Practice* • Specification of Common Business Processes (eBTWG) • Specification of Reference models (BPAWG/ITPWG) • Specification of UN Recommendations (ITPWG) * Proposed New Working Group

  12. The Groups and their Initial Constituents Information Content Management Group – ICMG • Semantic Rules* • Code Directories (CDWG/EWG) • Library Management (eBTWG) • Business Information Objects Reference Library (eBTWG) • Catalogue of Common Business Processes • Business Document Library (eBTWG) • Core Component Library (eBTWG) • TDID/TDED (EWG) * Proposed New Working Group

  13. The Groups and their Initial Constituents Standards and Technologies Group (STAG) • Business Domain Groups (EWG) • Cross Domain Harmonisation (EWG) • Cross Domain Assessment and Approval (EWG) • Technical Production and Maintenance (EWG) • Core Component Technical Specification (EWG/eBTWG) • Design Rules (EWG) • Syntax Rules (JSWG) • UN/EDIFACT Messages(EWG) • XML Schemas/DTDs * * Proposed New Working Group

  14. The Groups and their Initial Constituents Techniques and Methodologies Group (TMG) • UN/CEFACT Modelling Methodology-UMM (TMWG) • Base (Meta) Specifications (eBTWG) • Technical Research in Trade Facilitation and e-Business* (*/TMWG) * Proposed new activity

  15. The Groups and their Initial Constituents Legal Group (LG) • Legal Processes and Issues • UN/ECE Legal Recommendations • Legal Guidelines and Legal Advice to UN/CEFACT Groups

  16. The UN/CEFACT Forum It is important to understand that neither the Operational or Support Groups are Silo’s. They are intimately related and collectively will be called The UN/CEFACT Forum The Forum will meet twice a year with all the Groups and their Working Groups present.

  17. ebXML • ebXML is set of interoperable specifications developed by over a 1000 experts worldwide covering infrastructure ( the technology of message interchange) and content (the messages) • The specifications are freely available and are being implemented by major vendors today www.ebXML.org

  18. UN/CEFACT SIMPLE, TRANSPARENT AND EFFECTIVE PROCESSES FOR GLOBAL BUSINESS.

  19. What are International Trade Transaction Costs? The costs of meeting commercial, governmental, transportation and payment procedures in international trade, compared with the costs of meeting the equivalent procedures in national trade Procedures are the collection, presentation, communication and processing of information in paper or electronic format

  20. How do these extra costs occur ? • Every international trade transaction involves a minimum of 7 participants. They are: Exporter, Freight Forwarder/Transporter, National Customs, Foreign Customs, Importer, Importer’s Bank, Exporters Bank • All deep sea or air transactions have at least 10 participants (Add a minimum of 2 Air/Sea Ports and one Carrier) • For movements that transit third countries add at least another 2

  21. How do these extra costs occur ? • Each movement incurs procedural costs as it moves along the transaction chain • Information exchange costs are very high e.g. each deep sea shipment involves at least 24 documents/information exchanges • Over 80% of the information exchanged is the same!

  22. The International Trade Transaction involves: • Participants • Procedures • Documents especially aligned documents • Data exchange (EDI, XML)

  23. Example transaction: seaport [bill_lading] Issuing Bank Corresponding Bank [lc] [bill_lading] [bill_lading] Import Customs Import Port Authority Export Port Authority Export Customs [lc_ [customs_ [manifest] release] [cargo_declare] [remittance_ [manifest] [lc_ request] [exp_ [discharge_permit] advice] [customs_ [stowage_ approval] declare] [exp_ plan] [eta] [bill_ declare] [manifest] [commercial_ [bill_ lading] [ship_ [bill_lading] Invoice] details] lading] Exporter (Shipper) [clearance] [manifest] Export Shipping Line Export Liner Agent Export Forwarder [manifest] Importer (Consignee) Import Forwarder Import Liner Agent Import Shipping Line [ship_ [delivery_ [despatch_ [ship_ [eta] order] ins_act] notice [stowage_ request] [arrival_ [arrival_ notify] [manifest] notify] plan] [ship_ instruct] [bill_ lading] [load_ [delivery_ [manifest] [stowage_plan] instruct] [arrival_notify] order] [manifest] [ins_contr_req] [manifest] [load_list] [goods_ [pre_arrival] [trans_ [trans_ available] [ins_contract] notify] interest] [manifest] [stowage_plan] [bill_lading] [delivery_ Import Transporter Import Stevedore Export Stevedore Export Transporter Insurance order] import export

  24. How much are the extra costs?

  25. How much are the extra costs? Expressed as a percentage of invoice value, studies have shown that the extra costs are between 2% and 7 %

  26. How much are the extra costs? • 7% NCITD (USA) 1971 published study (deep sea markets) • 2% SITPRO (UK) 1987 unpublished study (EU markets only) • 2% Cechini report (EC) 1988 published study (EU markets only) • 4% SWEPRO (Sweden) 1994 published study (all markets)

  27. How much are the extra costs? 3 %is probably a good working average The actual costs will depend on the market and on the level of Trade Facilitation measures in place

  28. Can these extra costs be reduced?

  29. Can these extra costs be reduced? YES but it requires leadership, knowledge and effort!

  30. Can these extra costs be reduced? • Most CEO’s have no experience of international trade, and in general, little interest in effective export practice • Some CEO’s also seem to think that “one size fits all”

  31. Can these extra costs be reduced? Applying Trade Facilitation and other best practice techniques in can substantially reduce the extra costs – by up to 60%

  32. What is Trade Facilitation?

  33. What is Trade Facilitation? It is the technique that improves the ability of entities to exchange products and services through the simplification, rationalisation, and whenever possible, the elimination of procedures

  34. Effective trade facilitation is achieved through the combination of : • Rigorous analysis of the international trade transaction process • Simple and efficient information exchanges • Skillful implementation of best practice within companies • Effective cooperation between commerce and government • Successful inter-governmental policy negotiations • Practical steps at border points

  35. What are the key issues in e-business?

  36. e-business:what is it? • It is the use of Information and Communication Technologies (ICT) to radically improve business and administrative processes and practices • But it is not just about technologies; it is equally about rationalisingand integratingthe underlying business processes

  37. e-business is already well established! Globally EDI , Bar Coding, CAD/CAM are widely used in all sectors of industry and commerce. EDI, especially UN/EDIFACT, is also extensively used in many government departments worldwide e.g. Customs, Purchasing, Healthcare, Statistics, etc.

  38. e-business developments • Collaborative business concepts (e.g. online exchanges) and supporting applications, including Portals, with contract, transaction and security tools, are appearing almost on a daily basis • In this development frenzy it is very easy to lose focus

  39. e-business:what should I focus on? • Framework issues need to be carefully considered • Interoperability - deploying products that are built on open standards and which can work together - is critical • Agreeing common data definitions, with precise and unambiguous meanings, and using them in all exchanges with business partners is the foundation of success

  40. e-business: what are the framework issues? • Relevant Law • Trust & Security • Intellectual property rights • Privacy • Consumer protection • ICT Standards

  41. In today’s world information standards are absolutely critical to interoperability and, therefore, the key to the success of e-business In particular, structured information exchanges are fundamental

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