uTradeHub : The Korea’s Strategy for Trade Facilitation

1. uTradeHub : The Korea’s Strategy for Trade Facilitation Ah Rom Lee romi2327@ktnet.com

2. About KTNET e-Trade Implementation Standards uTradeHub Services

3. About KTNET

4. KTNET Profile KTNET is evaluated as the world’s first-class Paperless Trading service provider. “Korea was ranked as one of the top three economies with Paperless Trading environment”, Assessment Report On Paperless Trading of APEC Economies 2005. 500+ documents 1991 Invested by KITA Paperless Tradingservices 12 million transactions per month 100% customs automation 47,052companies Customers 4,900Shipping/ Airline / Logistics companies 100financial Institutions / banks/ insurance companies * KITA: Korea International Trade Association

5. KTNET’s Paperless Trading network Other European Countries U.K. Germany ASEAL EU France HK Singapore PAA KTNET Macau ChineseTaipei Thailand Malaysia Manifest Data report agent Forwarder Trade Firm Shipping Line Bank Japan China Korea CustomsService Global Network Service Provider Customs Broker TRAXON Bonded Transportation ARINC CyberLogitec Airline Inspection Company AT&T

6. e-Trade Implementation - What we have done

7. Korea’s e-Trade Development Single Window Development MOVE to INTERNET • Starting Web-based Service • Certificate of Origin • Letter of Guarantee • Delivery Order • Establishment of electronic trade platform • e-Trade Document Repository • Integrated and consolidated one-stop trade services SERVICE EXPANSION • Import Clearance • Manifest Submission • Tariff Refund INITIAL SERVICE • L/C, E/L, I/L • Insurance • Export Clearance ESTABLISHMENT • Comprehensive Trade Automation Plan (1989) & Act (1991) • KTNet founded (1992) Phases 3rd 1st 2nd (1990~1999) (2003~) (1999~2002)

8. Concept of Single Window Korean Case Bank Logistics Company Global Network User Trade Chain License/ Certificate Authority Customs Service Single Window Electronic Traders

9. uTradeHub Project Year1 Year 3 Year 2 Building Core Infrastructure (2005) Introducing eTrade portal (2006) Realizing uTrade by eBL & eNego (2007) To cope with Korea’s growing trade volume by upgrading the Electronic trading system into a single window system Goal 2004 ~ 2007 Project Period About 30 million (USD) Project Cost Ministry of Knowledge Economy (MKE) Korea International Trade Association (KITA) Korea Trade Network (KTNET) Leading Agencies

10. Legal Infrastructure Foreign Trade Act Electronic Transactions Act Digital Signature Act Commercial Law (2007) Trade Automation Act (1991) e-Trade Facilitation Act (2005) • Enacted Trade Automation Act (1991) • Revised the Act into ‘e-Trade Facilitation Act’ (2005) • Established legal basis for circulation of e-Trade documents • Defined role of service providers specializing in e-Trade • Revised Commercial Law (2007) • Introduced electronic bill of lading and specified the operating rules including title registry

11. Korea’s e-Trade before uTradeHub

12. Korea’s e-Trade with uTradeHub

13. Standards

14. Standardization Objective -To guarantee openness and interoperability of uTradeHub with international standards so that electronic trade documents may be exchanged among related entities domestically and internationally - For uTradeHub to illustrate best practices of trade facilitation through national single window platform Domestic & Int’l Standards - Guidelines for development of XML Electronic messages(v3.0), Korea Institute for Electronic Commerce (KIEC) - KIEC XML CC Library, KIEC Korea -Core Component Technical Specification, UN/CEFACT TMG, 2003 - XML Naming & Design Rules, UN/CEFACT ATG, 2004 - UN/CEFACT Modeling Methodology, UN/CEFACT TMG, 2002 Int’l

15. Standardization Process of uTradeHub 2 3 1 • Business Process Analysis • Selection of docs for standardization • Standards registration at Korea EDIFACT Committee (KEC) • Analysis of Docs • CC abstraction and analysis • Standardization Document Standardization (‘06.01 ~ ‘06.12) Process Analysis (‘05.09) Standards Registration (‘07.04~11)

16. Standards Evaluation at KEC application • No. of Docs • Trade: 25 • Financing and payment: 57 • Logistics: 6 • Customs : 6 • Insurance: 8 TAG • Technical Advisory Group’s Evaluation • Observing standards guidelines? • Technologically acceptable/desirable? SG Standards Group Evaluation - Accommodating industry specific business requirements? - Reflecting standardized business process?

17. uTradeHub Services @ www.uTradeHub.or.kr

18. Insurance Export insurance Credit Evaluation Caro insurance Requirements Certification Import requirement certification (customs director) Import requirement certification (recommendation) Certificate of Origin Customs Customs clearance Business Process in uTradeHub • Shipping and transportation • Shipping request • e-B/L • Cargo delivery • e-D/O (Master/House) • Bonded delivery request • Delivery allocation request • Financing and Settlement • Letter of Credit • e-Negotiation

19. VAN Featured Service : MFCS Airline FFM,FWB,FSB (Cargo-IMP) (Overseas) ARINC/ SITA Airline Integrated M/F (KEDIFACT) M-M/F MFCS Carrier KCSCargo Management System Internet (TCP/IP H-M/F Forwarder • Functions • Collects manifest information from air lines/ocean carriers/forwarders • Consolidate data and submit to the Customs for comprehensive management of all cargoes entering/exiting Korea. • Benefits • Reduces cost of managing/distributing documents related to arrival and departure of ships, loading/unloading of cargo • Increases effectiveness/correctness of cargo related information

20. Featured Service : e-DO ② Issuance of e-LG ④ access and authentication of e-L/G Shipping Companies/ Forwarders ① Bank ① Application for e-LG E-DO and e-LG Mgt system ② ‘ ⑥ Notification of e-DO ③ Submission of e-LG ⑤ Issuance of e-DO Warehouses Traders • Functions • provides convenient and timely ways for traders to pick-up import cargo without full set of shipping documents required for the pick-up of the cargo • Benefits • Saves cost by electronic procedure of application/issuance/notification of LG and DO • Convenient authentication of originality of LG and DO by way of electronic password methods, thus streamlining offline procedures • Increases effectiveness/correctness of cargo related information

21. Featured Service : e-LC Service • L/C work process before e-L/C EDI Printed on Paper Negotiating bank Advising bank Paper Paper Exporter Notification Negotiation • L/C work process after e-L/C internet internet Negotiating bank Advising bank Negotiation Notification Exporter • e-L/C information saved in Trade Document Repository (TDR) and shared by banks • All processes (notice, transfer & negotiation) are electronically handled and recorded • As the negotiation result is shared by all banks, no risk of fraudulence or loss of L/Cs

22. Featured Service : e-B/L Service e-B/L Management System Shipping Request e-B/L Title Registry E-B/L notification/inquiry e-TDR Traders Portal e-B/L issuance/ inquiry UI EAI e-B/L information inquiry Shipping Request Negotiation Shipping Request e-B/L e-B/L e-L/C balance management system Banks Forwarders Shipping Lines • Create and transfer BL electronically • Remove paper based operation • Manage related endorsement records