Asia-Pacific Foreign Investment Brief
The FDI, Trade, and Economic Development Community

Abu Dhabi Ports' Maqta Gateway has signed a memorandum of understanding (MoU) with telecommunications services provider Etisalat in an effort to enable connectivity and bring digital innovation across the port facilities. As explained, the partnership will help transform the port with technologies like #cloudcomputing #IoT and #bigdata, paving the way for a new era of #digitaltransformation in the #maritime sector. “We aim to transform our port facilities with smart solutions and technologies. Etisalat as a partner will help us achieve our vision by delivering digital services that are in line with the Abu Dhabi vision 2030,” Dr. Noura Al Dhaheri Chief Executive Officer, Maqta Gateway, commented. Maqta Gateway developed the first-of-its-kind #portcommunitysystem (PCS) in UAE and operating it for Abu Dhabi Ports. The platform acts as a #singlewindow provider by facilitating information flow between all stakeholders, port authorities and traders. It can also interlink to other port community systems while following international standards for electronic data interchange. #globaltrade #tradefacilitation #digitalisation #gtdwchina #eports #paperlesstrade #maritime #trade #middleeast #china #globaltrade #abudhabi #uae VIEW ARTICLE

By Mikael Lind (Research institutes of Sweden (RISE) and International PortCDM Council (IPCDMC)) and André Simha (MSC (Mediterranean Shipping Company SA) and Digital Container Shipping Association (DCSA)) Never has the desire for collaboration in the shipping industry been as strong as it is today. Based on our combined experiences of bringing digitalization and innovations to the maritime and other industries, we can see that the attitude towards collaboration and data sharing has changed dramatically over the last few years. The traditional reluctance or inability to share information across the maritime transportation chain is becoming history. The emerging amount of digitally twinned devices and accessibility to multiple data streams is enabling possibilities for big data analytics and machine learning. The adoption of IOT (Internet of Things) technology for such things as smart containers, and capturing agreements and outcomes from systems of production in systems of records are additional enablers for digital collaboration. The actors are starting to realize the opportunities and benefits of enhanced situational awareness within the maritime supply chain resulting from the utilization of these data sharing possibilities. They start to understand that all those taking part in this paradigm shift will increase their ability to plan and use resources much more efficiently and effectively. And this will result in efficiencies and better outcomes on both the macro and micro levels – in other words benefits for individual actors as well as better performance for the marine transportation chain as a whole. Maritime is catching up with other transport sectors Unlike the world’s air transport sector, which has for many years been gaining substantial benefits from collaboration, sea transport has so far tended to operate in the context of a self-organized ecosystem, where each actor acts to a large degree independently whenever they can, often taking decisions that benefit them, with less thought on how those decisions might affect others. This outlook may well stem from the legacy of the Mare Liberum (The Freedom of the Seas) first declared in 1609 by the Dutch jurist and philosopher Grotius, who formulated the principle that the sea was international territory and that all nations were free to use it for seafaring trade. In such an environment where every nation is free to travel to every other nation, and to trade with it, this can easily lead to an attitude of “every man for himself” and as such doesn’t really encourage collaboration. But as we have witnessed during recent years, there have been changes in the way that maritime operations are taking place. Authorities and fleet operation centers ashore now monitor and advise the captain about various aspects of sea-based operations – for better safety, efficiency and environmental protection. This ranges from monitoring and advising on traffic to watching the performance of onboard machinery. The latest example of monitoring and advice concerns the intensified debate on how to reduce the carbon footprint of ships through enhanced interactions on what happens at sea and what happens when a ship gets to port. Data sharing enables collaboration Already today there are instances where shipping companies keep track of digital time stamps for port visits which can then be used for analysis of port and terminal performance throughout the world. There are ports that are adopting the concept of Port Collaborative Decision Making (PortCDM) to bring together all port actors and the ships and to share relevant data for the mutual benefit of all. This is also being extended to Port-to-Port data sharing enhancing the planning horizons for downstream ports which leads to improvements not only for the participating ships and individual port, but also for the maritime ecosystem from a holistic point of view. For some purposes, collaborative data sharing environments are also bringing new block chain applications into the equation, such as block chain approaches for bills of lading. In order to respond to the agenda for enhanced safety, efficiency, and the desire to preserve the natural environment, collaboration and data sharing within and between organizations is an important element in moving forward. It is all about coordination and the synchronization of the various different activities that all contribute to maritime transportation. This is all enabled by data sharing, building upon agreed standards, providing the ability for all those with authorized access to obtain a clear understanding of the status of various activities in the transportation chain - both as planned events and in their actual execution. This then allows them to better plan and anticipate how their contribution and resources will be used most effectively, both from a micro as well as a macro viewpoint. This has the consequence that the actors in the self-organized ecosystem that is shipping now have a significant and mutually beneficial possibility to harvest the opportunities of integrating their operations with others. We are seeing more and more examples, such as shipping companies talking to each other, ports starting to coordinate with up- and downstream ports as well as shore centers becoming more integrated with port and ship operations. Hinterland operations are also getting more closely associated and coordinated in how their operations fit together with the ports. In a society where everything is now driven towards just-in-time, resource efficiency, and enhanced environmental concerns, nothing is going to be better than the weakest link, which, without these changes, is all too often the case in the maritime sector. VIEW FULL ARTICLE #gtdwchina

“The deployment of #AEO programmes and the propagation of #MRAs around the world are positive developments as they contribute to securing the #internationaltrade #supplychain, whilst enhancing #tradefacilitation. However, can MRAs be effectively implemented and offer traders the benefits they were promised?” “A #blockchain solution offers concrete advantages for the management of the AEO certification process and the implementation of MRAs, making it possible to record and share transactions, according to an agreed protocol among a group of parties, with each transaction being secured and protected by an immutable audit trail.” Join us at #GTDWChina as we discuss and explore such initiatives, innovation and technology for global trade facilitation and compliance 16-18 June Shanghai Website: https://lnkd.in/gk7JaFE Programme: https://lnkd.in/fzHJUUD VIEW ARTICLE #globaltrade #customsmodernisation #tradetechnology #tradetech #interoperability #trade #gtdwchina #aeo #trustedtrader #authorisedeconomicoperator #customs #supplychain #globaltrade #tradefacilitation #tradetech #cadena #wco #worldcustomsorganisation

Multimodal technologies for secure & paperless supply chain are a key feature of the GTDW China program, 16-18 June with leading speakers from APMEN UNCTAD, IPCSA, IATA, DCSA and more - Programme: https://lnkd.in/fzHJUUD Last week, the Qingbaijiang District local government in Chengdu announced the launch of a blockchain platform for cross-border trade. It is aimed at the multimodal transport system commonly used for goods moved between China and Europe. One of the nation’s largest international banks, the Industrial and Commercial Bank of China (ICBC), was involved in the platform’s development. The ‘China-Europe e-Single’ platform was officially launched on October 23rd, and hopes to condense multiple government trade services to a single portal. It claims to be China’s first to focus on multimodal transport, where blockchain can more effectively connect carriers and trace goods. The report added that it could help supply chain SME financing and provide accurate logistics data. A ‘single-window system’, the platform enables traders to submit regulatory documents in one place. They are then sent to government entities such as customs, border control, trade boards, chambers of commerce, and foreign exchange. This is a far more efficient way of facilitating trade than having to visit each agency individually. “The use of digitalization to drive free trade innovation, through the blessing of blockchain technology, will accelerate the interconnection of inclusive finance and cross-border trade along the Central and Western Europe,” stated a representative of the ICBC, which was an early participant of the China Banking Association trade finance blockchain. The platform was piloted on the 20th with the Chengdu International Land Port Operation Co., a domestic branch of the ICBC in Sichaun, and overseas Warsaw and Moscow branches. Imports of wood from Russia and textiles from Poland were transported into the Sichaun area, with the digital platform managing trade documents. According to China Wuliu, the e-Single system was also piloted with an ICBC branch in Abu Dhabi. This instance saw the digitization of documents such as bills of lading, allowing consistent data storage of imports in one place. With blockchain, the records are immutable and trusted. Taking place in the Qingbaijiang District of the Sichuan Pilot Free Trade Zone, the local authorities hope that this successful initiative will boost the area’s influence and trade. While the ICBC is one of the top four Chinese banks, it contends with the likes of China Construction Bank, CITIC, and even the PBOC in blockchain trade finance. VIEW ARTICLE #supplychain #tradefacilitation #paperlesstrade #singlewindow #gtdwchina #china #trade #chinatrade #blockchain #digitalisation #modernization #beltandroad #billsoflading #tradefinance

Canada-based Global Container Terminals (GCT) joined the TradeLens blockchain supply chain platform. GCT operates four terminals in North America, including New Jersey and New York. GCT Deltaport, in the Port of Vancouver, is Canada’s largest marine terminal. TradeLens is a joint digital shipping platform from IBM and Maersk, and its members represent over half the world’s container cargo capacity. The platform boasts of five out of the top six ocean carriers, and ten of GCT’s customers have committed to the platform. “As competition increases from other ports and customer demands intensify, we need to activate every solution to increase cargo velocity through our terminals and improve performance,” said Doron Grosman, President & CEO of GCT. TradeLens is aiming to reduce shipping delays and eliminate paper-based transactions. Apart from the digitization of the supply chain, the platform also hopes to bring transparency to shipping transactions. Additionally, it employs IoT devices and sensor data to measure temperature control, container weight and other aspects. For GCT, the motive is to connect with ocean carriers, beneficial cargo owners and railways. With documentation on a blockchain, cargo can be offloaded faster as even the customs department is overlooking the shipping event. “Integrating data with ports, terminals, logistics providers, shippers, and carriers is essential for the vision of TradeLens to realize new ways of working within a collaborative industry ecosystem. GCT’s connection to TradeLens strengthens this new era of transparency and collaboration for the global supply chain,” said Mike White, CEO of Maersk GTD and Head of TradeLens. The purpose is interoperability between various stakeholders by integrating APIs into their existing systems. The platform will be rolled out in phases at GCT’s four ports. A few months ago, Hapag-Lloyd and Singapore-based Ocean Network Express (ONE) joined TradeLens. These were significant additions as other top carriers MSC, CMA-CGM and Israel’s Zim were already a part of the platform. Many had thought that with Maersk as a founder, the platform would struggle to attract competitor participants. Two months ago, the Thailand Customs Department adopted the platform, the second country in Southeast Asia after Singapore to use the system. “As TradeLens evolves, it is critical more supply chain partners participate to facilitate an open and transparent approach to information sharing. This enhanced level of visibility and efficiency will ultimately benefit the entire industry and our customers” Eyal Ben-Amram, CIO of ZIM. VIEW ARTICLE Get the latest on Secure Supply Chain Standards, Interoperability & Technologies at GTDW China Trade Facilitation, Compliance & Digitalisation 16-18 June Shanghai: www.kwglobaltrade.com

2 for 1 Finishes Tonight - 4th GTDW Anti Illicit Trade, Brand & IPR Protection Exhibition & Conference, Part of GTDW China Trade Development Week, 16-18 June, Shanghai. With over 70% of our speakers confirmed and 78% of stands already sold across the main exhibition, we are on track for our largest edition to date with 40 exhibitors and on track for 800 senior attendees across governments and the private sector to assure safety, security, compliance & interoperability across global supply chains. CONFIRMED SPEAKERS · [KEYNOTE] Ricardo Treviño Chapa, Deputy Secretary General, World Customs Organization (WCO) · Alan Bersin, Senior Fellow, Belfer Center for Science & International Affairs at the Harvard Kennedy School; Executive Chairman, Altana Trade & Technology; Former Commissioner of US Customs and Border Protection, Department of Homeland Security · Andrew Keable, CEO, KW Group; Chairman, GTDW Advisory Council · Christoph Stegemann, Director Sales & Business Development, Asia Pacific, tesa scribes · Douglas McKay, VAT & Customs Director Asia Pacific, Lear Corporation · Ethan Xu, Director, International Trade Compliance, Otis Elevator Co. · Glyn Hughes, Global Head of Cargo, International Air Transport Association (IATA); Advisory Council Member of GTDW · Günther Marten, Minister Counsellor, European Union Intellectual Property Office (EUIPO), Delegation of the European Union · Huang Feng, Director General, Shanghai Asia-Pacific Model E-port Network Operational Center (SAOC); Advisory Council Member of GTDW · Dr Jan Hoffmann, Chief, Trade Logistics Branch, DTL, United Nations Conference on Trade & Development (UNCTAD); Advisory Council Member of GTDW · Dr Lars Karlsson, CEO & MD, KGH Global Consulting; Former Director WCO and Swedish Customs; Advisory Council Member of GTDW; Advisory Board Member of INCU; Chairman of the IBMATA Advisory Board · Lisa McAuley, Chief Executive Officer, Global Trade Professionals Alliance (GTPA) · Louisa Xu, IP Manager, Treasury Wine Estates · Michael Yu, North Asia Brand Protection Head, Unilever · Miller Wang, Brand Protection Director & Legal Counsel, MCM APAC · Dr. Mohammad Saeed, Senior Trade Facilitation Adviser, International Trade Centre (ITC); Advisory Council Member of GTDW · Ray Xu, Vice President, Legal, Pernod Ricard · Richard Morton, Secretary General, International Port Community System Association (IPCSA); Advisory Council Member of GTDW · Roman Quaedvlieg, Principal Consultant, RAQ Consulting; Former Commissioner, Australian Border Force; Former CEO, Australian Customs & Border Protection; Former Chief Police Officer, Australian Federal Police · Prof. Samuel C. Bautista, Chief Learning Officer, Academy of Developmental Logistics & Member, Management Committee, International Network of Customs Universities (INCU) · Stephen Dunn, Regional Director Of Investigations, Asia Pacific, Sanofi · Thomas Bagge, CEO & Statutory Director, Digital Container Shipping Association (DCSA) · Virginie Ticha, President, International Federation of Consular Chambers for Africa (F.I.C.A.) VIEW: EVENT WEBSITE VIEW: GTDW CHINA 2020 PROGRAMME VIEW: SPONSORSHIP & EXHIBITION PROSPECTUS EMAIL: globaltrade@kwconfex.com #gtdwchina #antiillicittrade #illicittrade #brandprotection #financialcrime #tradeflows #ecommerce #smallparcels #technologies #trade #fightthefakes #fake #counterfeit #brandowners #intellectualproperty #authenticity #trackandtrace #taxstamps #printing #packagingsecurity #customs #police #judiciary #tax #freetradezones #scanning #technologies #qrcode #collaboration #interpol #crime #pharma #tobacco #alcohol #revenue #taxadministration #customsmodernisation #blockchain #artificialintelligence

China will introduce more measures to better facilitate cross-border trade and investment, including improving foreign exchange management and further streamlining regulatory requirements with a view to attracting foreign investors with a more enabling business environment. The decision was adopted on Wednesday at the State Council's executive meeting, chaired by Premier Li Keqiang. Attendees at the Wednesday meeting agreed on 12 measures to boost cross-border trade and investment. ARTICLE It was decided at the meeting that the pilot reform of foreign exchange receipts and payments facilitation will be expanded. Procedures of receipts and payments of relevant funds will be simplified for micro and small cross-border e-commerce companies. The reporting processes on foreign exchange businesses for trade in goods will be improved. Enterprises will make their own decisions on whether or not to set up verification accounts. Registration for the list of foreign exchange receipts and payments for trade will be facilitated for enterprises and their subsidiaries. Project contractors will be allowed to put their overseas funds under unified management. "It is important to keep foreign trade and investment stable under the current situation by taking further steps in opening-up," Li said. Foreign firms engaged in non-investment businesses will be allowed to make equity investments on the mainland with their capital funds. The pilot program that facilitates revenue payments under capital accounts will be expanded. Registration for writing off companies' borrowings from foreign lenders will be delegated to banks. Pilot programs will be carried out where registration for each foreign borrowing is no longer required. Limits on the number of foreign currency accounts under capital accounts will be removed, to facilitate foreign exchange settlement under certain capital accounts. "Given the increasing complexity on global financial markets, it is important to guard against the risks in cross-border capital flows and maintain financial stability. The general principle is to maintain a macro-prudential policy while enhancing micro regulation," Li said. Statistics from the State Administration of Foreign Exchanges on October 6 show that China's foreign exchange reserves stood at 3.0924 trillion U.S. dollars by the end of September, up by 0.6 percent from the beginning of this year. "The renminbi exchange rate needs to be kept basically stable at an adaptive and equilibrium level, and foreign exchange reserves at a reasonable level. This is crucial for the overall stability of the macro economy. It is also a principle that we've long followed," Li said. Measures on keeping foreign trade stable were adopted at the meeting. Policies on export tax rebate and credit-based insurance will be further improved. More efforts will be made to develop a network of high-standard free trade areas, foster new forms of industry in foreign trade, and set up another group of comprehensive pilot zones for cross-border e-commerce. Imports including agricultural products, daily consumer goods, equipment and parts will be increased to meet domestic demand. New zones will be developed to facilitate innovation in imports. The meeting also urged to host a fruitful China International Import Expo this year. "China has a vast domestic market, yet is also deeply integrated into the global economy. There is much pressure on foreign trade. What is important now is that the many policies that have been introduced will be fully delivered, in an effort to achieve the goal we set early this year of ensuring the steady growth and raising the quality of foreign trade," Li said. According to statistics released by the General Administration of Customs in October, China's foreign trade maintained steady performance in the first three quarters of this year. Imports and exports totaled 22.91 trillion yuan (about 3.24 U.S. dollars), up by 2.8 percent year-on-year. The number of foreign trade companies kept increasing. Another 141,000 got newly registered, up by 7.7 percent year-on-year. Join us at #GTDWChina in Shanghai on 16 - 18 June 2020 as we bring together high level international stakeholders to discuss issues around #tradefacilitation #tradecompliance #digitalisation #crossbordertrade #globaltrade #tradetech #interoperability #singlewindows #antiillicittrade #anticounterfeiting #brandprotection #asiatrade #chinatrade #china #interoperability #tradepilots #standardisation Visit website: https://lnkd.in/gk7JaFE Programme: https://lnkd.in/fzHJUUD Prospectus:http://bit.ly/ChinaSPEX

Task Force drives towards global standards for supply chain visibility “The increasing data link-up between shippers and ports was in evidence last week when an Alibaba- led group, developing common #standards for #supplychainvisibility, on the eve of its first anniversary released Enabling Logistics Visibility by Interconnecting Logistics Information Service Systems in a Standardised Way. The Logistics Visibility Task Force was set up by Chinese e-commerce giant Alibaba Group with its in-house logistics operator Cainiao Networks, China’s National Logistics Information Platform (LOGINK) and the IPCSA - International Port Community Systems Association which comprises #portcommunitysystems, #cargocommunitysystems, sea and airport authorities and #singlewindow operators in around 40 countries. Like other industry-wide digitisation-inspired initiatives, such as the Digital Container Shipping Association (DCSA), its chief aim is to develop a set of common #standards that would allow different community systems to relay data to each other.” VIEW ARTICLE This is a major focus of #GTDWChina Trade Facilitation, Compliance & Digitalisation Conference & Exhibition taking place in Shanghai 16-18 June 2020 with IPCSA part of the GTDW Advisory Council and Co-hosted with APMEN China we welcome stakeholders to join us in Shanghai. View the programme at https://lnkd.in/fzHJUUD Andrew Keable Richard Morton Thomas Bagge #tradefacilitation #globaltrade #interoperability #gtdwchina #globaltrade #standards #trade #chinatrade #ports #cargo #maritime #shipping #digitalisation #internationaltrade #

A timely article that will be covered in depth at GTDW China Trade Development Week in June, Shanghai to address the issues and solutions around small parcels and ecommerce along with the impacts on customs and how to counter the impact of illicit trade through new innovations & tech. VIEW PROGRAM: http://bit.ly/GTDWChina2410 We invite attendees from Customs & Tax Authorities, Ministries of Trade/Economy/Finance, IP, Police & Judiciary Authorities, Heads of Brand Protection, Heads of Trade & Customs Compliance to register for this capacity building event for FREE. Please register through globaltrade@kwconfex.com The flow of consignments delivered by postal operators or express courier services, sometimes over borders, is increasing at a rapid rate. Most of the consignments are small and generally of “low value.” The fact that the value is low often means not only are they exempt from duties, but also that only minimal information is required to be provided when the goods enter a country. The situation compromises Customs enforcement capacities to protect society from security and safety risks. As the WCO recently published guidance material under its E-Commerce Package, this article looks at how we can reconcile the need to secure our borders and facilitate e-commerce by putting adequate measures and tools in place. E-commerce has come a long way since Michael Aldrich created online transaction processing in 1979. The term refers today to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. From a Customs perspective, it is used to refer to the sale of physical products online, including illicit ones. Driven by the increase in internet users worldwide as well as smartphone and mobile penetration, e-commerce has revolutionized the way businesses and consumers market, sell and purchase goods, providing a vast choice of products as well as advance shipping, payment, and delivery options. There are now even specific terms to refer to mobile-commerce (M-Commerce) and social media commerce (S-Commerce – integrates social media into e-retail sites and adds e-commerce functionality to social networks. Approximately 18% of e-commerce takes place via social media). Today, it is widely recognized that the growing e-commerce sector is beneficial to economies, providing new growth engines, developing new trade modes, driving new consumption trends, and creating new jobs. It has especially opened up growth opportunities to micro, small and medium-sized enterprises (MSMEs) in terms of wider access to foreign markets by lowering entry barriers and reducing operational costs. Today, it is widely recognized that the growing e-commerce sector is beneficial to economies, providing new growth engines, developing new trade modes, driving new consumption trends, and creating new jobs. It has especially opened up growth opportunities to micro, small and medium-sized enterprises (MSMEs) in terms of wider access to foreign markets by lowering entry barriers and reducing operational costs. Cross-border business-to-consumer (B2C) e-commerce is expected to grow by 27% between 2018 and 2019. A large part of this trade consists of consignments delivered by postal operators or express courier services, sometimes over borders. Most of the consignments are small and generally of “low value,” although the definition of this low value varies from country to country. According to the International Post Corporation (IPC) survey, 84% of cross-border goods bought online are classified under Universal Postal Union (UPU) terminology as packets travelling in the letter-post stream weighing up to 2 kg, and 83% of the total packets transported by postal operators (parcel-post and express mail service products) are valued under 100 US dollars. The fact that the value is so low means not only are they exempt from duties (being below de minimis thresholds), but also that only minimal information is required to be provided when the goods enter a country. The exponential increase in the number of such shipments, whether they are transported by postal operators or express courier services, presents a number of new challenges to governments and businesses alike. Low value does not mean low risk. The same risks associated with traditional trade apply to e-commerce, at the same time there are new risks associated with safety and security. But today’s enforcement capacities and regulatory frameworks were not designed to deal with a world where millions of businesses and individuals engage in billions of micro-transactions, often resulting in shipments of small parcels from small businesses  or individuals to other small businesses or individual consumers. In such circumstances, many shipments containing goods that are prohibited or which infringe the law pass undetected. When flagged for review, shipments can be held up for hours, or even days. But e-commerce merchants who compete on timely delivery are anxious to keep merchandise moving. The pressing question is how to effectively manage this time-sensitive flow of goods without straining control operations as well as the capacity of logistics service providers, and without creating complex procedures and a heavy workload for small businesses and individuals who have limited capacity to meet complex trade regulations. A pertinent question, therefore, arises: how can we reconcile the need to secure our borders and facilitate small business trade in an increasingly digital world? SAFETY AND SECURITY RISKS As revenue collection is still a priority for many Customs administrations, revenue-related issues are often raised Customs representatives when discussing the impact of e-commerce development on their administrations. However, one should not forget that e-commerce is also creating safety and security risks. Vendors may split and/or under-value consignments to keep the value of an individual shipment below the specified reporting threshold. Goods may also be shipped in containers via air or sea, placed in bonded warehouses, and then exported in small quantities below the de minimis threshold once an e-commerce order is received. These low-value orders can be consolidated and shipped in truckloads. No advance notice is required and the driver can simply present a paper manifest to Customs at the border. If, according to the manifest, every shipment on the truck meets the de minimis criteria, then no formal entry is required, and no Harmonized System (HS) commodity codes need appear on that document. The carrier is responsible for preparing the manifest based, in part, on information received from the foreign shipper(s). That information may well be incomplete, a common problem with e-commerce shipments. More and more seizures of illicit substances and goods in the mail segment are being reported to the WCO. Some of the goods illicitly traded are extremely harmful to society, such as drugs, arms and ammunition, chemical substances, explosives, prohibited food, plants, animals and their parts, and intellectual property rights (IPR) infringing goods. As reported in the WCO Illicit Trade Report[1], the number of seizures of psychotropic substances/drugs and counterfeit items transported via regular, express mail and parcels continues to grow.  The amounts transported are rather small compared to other modes of transport, but the number of seizures made using this mode is huge in comparison to other modes, as the statistics for 2017 show. This mode of transport was used in: 9% of psychotropic substance reported seizures; 2% of cocaine reported seizures; 8% of IPR infringing product reported seizures. The 2019 OECD Report[2] on Trends in Trade in Counterfeit and Pirated Goods further indicates that “small parcels sent by post or express courier are a prime and growing conduit for counterfeit goods”. From 2014 to 2016, small parcels accounted for 69% of Customs seizures, up from 63% from 2011 to 2013. This element of e-commerce exists due to the perceived anonymity offered by some internet platforms, the ease of sale and purchase, the fragmented and direct nature of selling and buying, confidence in supply due to efficient delivery solutions, the inadequacy of legislative frameworks, and a belief that enforcement agencies will not follow up or intercept small or low value shipments. New methods are also being utilized, including the use of social media and person-to-person encrypted chats, to facilitate illicit trade. E-COMMERCE PACKAGE Existing legal and regulatory frameworks, systems and procedures were designed to support business-to-business (B2B) transactions and are not fit to deal with the new realities – B2C transactions and C2C transactions. Some of the Customs procedures are not designed to enable risks to be measured or to accommodate small enterprises and consumers, whose trade operations are more sporadic than large and mid-size companies, and whose trade compliance capacities are more limited. They may not enable Customs to undertake proper risk assessments on the ever-increasing number of parcels. To guide administrations in developing strategic and operational frameworks for e-commerce or enhance existing frameworks, the WCO developed a Framework of Standards on Cross-Border E-Commerce[3] as well as other guidance material further enriching the Framework such as definitions of certain terms used in the instrument, technical specifications, flow charts, business models and case studies, brought together into an E-Commerce Package. Some of the key provisions of the Framework are presented below. RISK IDENTIFICATION Given that each administration has its own priorities, the nature of the risks need to be established with other relevant government agencies as well as ways to identify shipments of illicit or prohibited/restricted goods purchased via e-commerce channels. Moreover, Customs should, where appropriate, share information related to these risks with other Customs administrations, in order to assist them in improving their ability to determine risk indicators and analyse risks. ADVANCE ELECTRONIC DATA The existence of de minimis reporting thresholds means that shipments falling under a certain value are exempted from some documentation. The identity of the receiver is required, but that of the buyer, which may differ from the receiver, may not be required, especially in cases of consolidated manifest-based simplified clearances. This makes it harder to screen importers for wrongdoing. Nor is the HS commodity code required in all cases; a written description is deemed sufficient. This somewhat incomplete information or the unavailability of advance electronic information constrains Customs authorities’ ability to analyse risks and target suspicious shipments. The key to ensuring effective and efficient management of cross-border e-commerce lies in access to timely and accurate information, ideally from its source. The Framework stipulates the exchange of advance electronic data for effective risk management between Customs and parties to a transaction, as well as the use of data analytics and other cutting-edge technologies to identify suspicious transactions, including the use of non-intrusive inspection (NII) equipment during inspections. As key intermediaries in the cross-border e-commerce chain, e-platforms/marketplaces, express carriers and postal operators could play a significant role in providing timely and accurate advance electronic data to Customs, carrying out due diligence on their customers (sellers/buyers) and on goods being sold/bought and conveyed, making consumers, the public and other stakeholders aware of the various regulatory requirements, and mutually exchanging risk profiles, where possible. This may require establishing an electronic interface with the Customs IT system, and the realignment/adjustment of business processes to effectively meet the new regulatory requirements, based on the Framework’s standards. PLACI A lot of shipments are transported across borders by postal operators or by express courier services using the air transport mode. To deal with the security threats associated with air cargo and mail, some countries now request what is called “Pre-loading Advance Cargo Information (PLACI)”[4] to be submitted to them for all air shipments, prior to loading onto the aircraft. The WCO adopted standards for the submission of PLACI by various entities in the air cargo supply chain, including postal operators and express courier services, and added them to its SAFE Framework of Standards to Secure and Facilitate Global Trade in 2015. POSTAL CONTEXT Given the largely manual processing environment in the postal sector and the lack of electronic advance data (EAD), there are greater challenges in terms of timely and effective risk management of potential risks (e.g., safety and security), as well as efficient release and clearance. In order to assist Customs administrations and postal operators in moving forward with EAD implementation, the WCO and the UPU have developed, among other tools, joint Guidelines on the Exchange of Electronic Advance Data between Posts and Customs[5] and a joint WCO-UPU Customs-Post EDI Message. Going forward, the WCO and the UPU are developing joint WCO-UPU guidelines on data capture and data quality in the international mail environment. While continuing to support Customs and postal operators in moving towards EAD, the UPU and the WCO also jointly train their Members in order to strengthen their capacity in effectively tackling drugs and related risks in the mail mode. For example, they recently conducted joint regional workshops focused on safety, security and opioids/drugs around the word. DATA ANALYTICS Some Customs administrations are already using data analytics tools, artificial intelligence and machine learning to better deal with risk assessing the many packages they are faced with every day. This best practice with regard to the application of data analytics in risk assessment, prediction and targeting continues to be shared through WCO committees and publications, in order to help other administrations leapfrog technological advancements. In this arena, there are also potential collaboration opportunities between Customs administrations and logistics operators to leverage synergies and domain expertise.  For example, an MoU should be signed between Customs and express couriers and postal operators for curbing illicit trade, for the identification of potential risks or unusual and suspicious patterns, and for implementing controlled deliveries. Customs administrations should also share relevant information, where possible, with trusted e-commerce stakeholders to ensure the most effective partnership between public and private sector targeting efforts. For example, sharing information on repeat offenders with e-commerce stakeholders enables them to close offenders’ accounts and remove their products. Also, to some extent, sharing non-nominal information on concealment methodology, routing or sensitive goods with e-commerce stakeholders could enable them to identify potentially risky shipments and report such to Customs. INTER-AGENCY COOPERATION Customs’ cooperation with other relevant agencies is particularly important for identifying and interdicting illicit and non-compliant goods moving through e-commerce channels. The Framework also encourages Customs administrations to work with other relevant government agencies to establish procedures for analysing and investigating illicit cross-border e-commerce activities, with a view to preventing and detecting fraud, deterring the misuse of e-commerce channels, and disrupting criminal organizations. The dynamic e-commerce environment often requires real-time response or intervention by all relevant government agencies (including ministries and agencies responsible for agricultural, food and environmental safety) to ensure that legitimate goods are rapidly cleared and risks effectively managed with minimal intervention and delay. Additionally, governments should establish cooperation frameworks between and among various national agencies through relevant electronic mechanisms, including a Single Window, as appropriate, in order to provide a cohesive and coordinated response to safety and security risks stemming from cross-border e-commerce, thus facilitating legitimate trade. Cooperation between Customs administrations and other law enforcement agencies, with the support of relevant e-commerce stakeholders, should be enhanced, enabling them to carry out joint investigations at the national and international level. This cooperation may further extend to the exporting country where the relevant parties are located. PARTNERSHIP WITH THE PRIVATE SECTOR Customs administrations should work in partnership with e-vendors/platforms/marketplaces to detect online transactions of illicit goods, to detect and combat Customs fraud, and to strengthen efforts (e.g., legislative frameworks) to initiate appropriate actions against parties who engage in online trade in contraband. Another potential way forward could be to expand and promote authorized economic operator (AEO) programmes in the e-commerce environment as a means to further enhance supply chain security. Currently, most AEO programmes are not open to e-commerce platforms or marketplaces and to postal operators. COMMUNICATION There is clearly a need to disseminate information on safety and security risks as well as the responsibilities associated with cross-border e-commerce through comprehensive awareness-raising, communication, and education and outreach programmes targeting the different actors in the industry, e-platforms/marketplaces, carriers, and the public. CONCLUSION Customs administrations are urged to implement the Framework of Standards on Cross-Border E-Commerce, and can count on the support of the WCO Secretariat while doing so. They are also encouraged to share their experiences on the standards contained in the Framework that they have decided to implement. Indeed, with not only revenue, but also national security and safety at stake, it is more than time for Customs authorities across the globe to take forceful action. VIEW ARTICLE #WCO #customs #compliance #smallparcels #ecommerce #safe #standards #postal #crossbordertrade #gtdwchina #customsmodernization #globaltrade #internationaltrade #trade #china #chinatrade

We are honoured to welcome Ricardo Treviño Chapa, Deputy Secretary General of World Customs Organization as Keynote Speaker #GTDWChina in Shanghai, 16 - 18 June 2020. Mr Treviño will also be participating in a panel discussion on #SingleWindows - Discussing Outcomes, Challenges, Lessons Learnt and the Way Forward. We invite attendees from Customs & Tax Authorities, Ministries of Trade/Economy/Finance, IP, Police & Judiciary Authorities, Heads of Brand Protection, Heads of Trade & Customs Compliance to register for this capacity building event for FREE. Please register through globaltrade@kwconfex.com For more information: Event website: https://lnkd.in/fsbyGpp Programme: https://lnkd.in/famagUz #globaltrade #internationaltrade #crossbordertrade #customs #customsmodernisation #paperlesstrade #WCO #tradesecurity #bigdata #AI #interoperability #collaboration

Asia Pacific Regional Economic Outlook in Singapore today. Despite slower growth at 5% in 2019 and 5.1% in 2020, #Asia remains the world’s fastest growing region, contributing more than 70% to global growth. VIEW REPORT Headwinds from prolonged global policy uncertainty, distortionary trade measures, and growth deceleration in the economies of important trading partners are influencing economic growth in Asia and the Pacific. Although the region is still the world’s fastest growing major region, contributing more than two-thirds to global growth, near-term prospects have deteriorated noticeably since the April 2019 World Economic Outlook, with risks skewed to the downside. Growth in Asia is expected to moderate to 5.0 percent in 2019 and 5.1 percent in 2020 (0.4 and 0.3 percentage point lower than projected last April, respectively). A marked deceleration in merchandise trade and investment, driven by distortionary trade measures and an uncertain policy environment, is weighing on activity, particularly in the manufacturing sector. Loosening monetary policy in key advanced economies and, correspondingly, easing financial conditions, are mitigating the impact of slower growth on Asian economies, but could add to financial vulnerabilities in the region. External downside risks to the outlook stem from a possible further deepening of US-China trade tensions, weaker-than-expected growth of key trading partners, higher oil prices, and a disorderly Brexit. Risks within the region include a faster-than-expected slowdown in China, a deepening of regional tensions such as Japan’s and Korea’s bilateral relationship, rising geopolitical risks, and increased incidence of natural disasters. Considering the expected deceleration in growth, macroeconomic policies should use existing fiscal and monetary policy space to smooth domestic demand where warranted. Financial sector policies should be adjusted proactively to ensure that loosening financial conditions do not fuel a further buildup of financial stability risks. Reducing firm and household leverage should be a priority in countries where exposures in these sectors are of concern. The cyclical slowdown also highlights the urgency to pursue structural reforms to lay the foundation for high, inclusive, and environmentally sustainable economic growth in the medium term, where the imperatives include further trade liberalization, including reducing nontariff barriers to services trade, and relaxing investment restrictions; sustained investment in people, by upgrading human capital while empowering women and youth; policies to stimulate the labor supply, including higher female labor force participation; reducing infrastructure gaps and enhancing regulatory frameworks; and more ambitious measures to mitigate the drivers of climate change while building fiscal buffers to adapt to the increasing incidence of natural disasters. This Regional Economic Outlook also covers two separately published thematic studies (IMF 2019a, 2019b). The first study investigates how Asian policymakers approach the management of international capital flows. While capital flows are generally beneficial, it finds that capital flows can be large, volatile, and disruptive for recipient economies. Policymakers have made extensive use of foreign exchange interventions to cushion the impact of volatile capital flows on the exchange rate, particularly where balance sheet mismatches are prevalent and where financial markets are shallow. Monetary policy has been deployed in response to inflation and growth shocks and in reaction to US interest rates, the exchange rate, and credit growth. Similarly, macroprudential and capital flow management measures have responded to a variety of external, domestic macro, and domestic financial stability considerations. Evidence thus suggests that Asian countries deploy their toolkits to achieve a multiplicity of objectives when faced with external financial shocks. This data-driven analysis can contribute to ongoing reflections about how to manage volatile capital flows and exchange rates in Asia and elsewhere. The second thematic study investigates how to further strengthen economic growth in South Asia, which accounts for one-fifth of the world’s population and contributes more than 15 percent to global growth. With 150 million new labor market entrants expected through 2030, a successful, high-quality, and job-rich growth strategy is needed to harness the demographic dividend and increase potential growth. To achieve these goals, South Asia will need to strengthen agricultural productivity and promote the sustainable expansion of manufacturing and higher-skilled services. Greater focus on domestic revenue mobilization can allow for increased priority spending and fiscal consolidation, further trade and foreign direct investment (FDI) liberalization, and investment in people. #gtdwchina #globaltrade #financialoutlook #asia #asiapacific #asean #economicgrowth #trade #investment #fdi

Firms in the United Arab Emirates produce cigarettes worth billions of dollars annually. It's no doubt a lucrative business, but overseas smuggling has been causing rising tax losses elsewhere. At a bustling tobacco trade fair in Dubai business is brisk. In a large hall near the near the shimmering Burj Khalifa skyscraper, buyers examine cigarettes, raw tobacco leaves and the latest vapes, before negotiating deals with the sellers. But the real business takes place 45 kilometers south from here, in the Jebel Ali free trade zone, a vast dusty industrial site stacked with factories and warehouses adjacent to one of the world's busiest blue water ports. A custom-controlled site, visitors need special passes to access the free zone, while many of the goods produced here are exported immediately, never passing through the UAE domestic market. Here more than 20 factories are churning out cigarettes in their billions, and other tobacco products. It's big business: In 2018 the UAE exported cigarettes worth €3 billion ($3.34 billion, 12 billion dirhams), making it the country's third-biggest nonoil export behind gold and raw aluminum. But according to international agencies and numerous reports, much of what is produced in the Emirates is destined to be smuggled into overseas markets and sold illegally without tax. Considerable losses In Europe, cigarette smuggling and other forms of illicit trade in tobacco products are estimated to cause a €10 billion loss to the EU and national budgets every year, says the European Anti-Fraud Office (OLAF). Illicit cigarettes in the EU come from a variety of sources, and can even be manufactured inside the EU in illegal factories while internationally, cigarettes are sourced across East Asia. But two countries  — Belarus, on the EU's eastern border and the UAE — stand out. "Smuggling of Belarusian cheap whites and transit and illicit production activities in the free zones in the UAE remain of particular concern," said an OLAF spokesperson. A study of the Maghreb region carried out by KPMG concluded that of the 13 billion contraband cigarettes consumed there in 2016, 7.4b billion —well over half — were believed to originate from trademark owners based in UAE free trade zones. Cigarette factories can also be found in a handful of other free zones around the world, but the UAE is believed to be the world leader, with one estimate putting production in the free zones at 60 billion cigarettes a year. "Essentially this is the biggest concentration of free zone manufacturers in the world here," says Andy Carter, an investigator with Japan Tobacco International (JTI), one of the big tobacco companies whose sales are affected by illicit trade. "Everybody knows that [the cigarettes they produce here are] manufactured for smuggling," Carter told DW in an interview in Dubai. "But they're manufactured quite legally, and it's only probably at the point of entry that the consignment documents are flipped, and it all becomes toys or furniture." Carter is referring to what is known in the industry as "illicit whites" or "cheap whites:", that is cigarettes that are sold into some markets through legitimate supply chains, but which are also smuggled in vast quantities into other markets and sold there illegally, without tax. The cigarettes often have names that mimic established brands, and may be of high quality, even manufactured in state-of-the-art factories, though testing of some illicit cigarettes in the UK has also found traces of arsenic, pesticides and rat poison. One UAE-based expert told DW that the majority of the production that takes place in free zones in the UAE may be entirely lawful, but that the issue is "not straightforward." What about stricter controls? If the production is completely legal in the UAE, then "It may be that really what is needed is better controls in relation to what is imported into the country of destination," said the expert, who declined to be named citing political sensitivities. But if illegal activity is taking place within free zones, one factor is that people in the trade are "very smart at avoiding enthusiastic law enforcement," he said. "There is possibly also a lack of application of law enforcement powers that is also contributing to some of that activity continuing," he said. A representative from the Jebel Ali Free Zone Authority (Jafza) did not respond to requests for comment. JTI's Carter says that while the UAE authorities are very helpful when it comes to combating counterfeit cigarettes, but when it comes to the illicit whites it's a different story. Even when there is evidence that companies are "playing games," such as shipping out used tires and declaring that they are cigarettes to balance their books (used tires have a similar weight), authorities are typically unwilling to take action, says Carter. "The authorities seem reluctant to upset the apple cart," he says. Authorities are also often reluctant to share information on companies operating in the free zones with international authorities — information that could help with cross-border investigations of supply chains, said Howard Pugh, head of Europol's excise fraud team, dealing with tobacco, alcohol and oils. Local free zone manufacturers contacted by DW denied any knowledge of illicit sales. Rajesh Rohra of Global Tobacco FZCO, a manufacturing company based in the Jebel Ali free zone which produces brands including Richman that have been seized in their millions by customs authorities in Europe, denied any knowledge of how his company's products could end up being smuggled, even suggesting that the Richman brand may itself have been counterfeited. The representative of another company, Orchid Tobacco, said its products are mainly sold in Europe and Russia, but that they sell their cigarettes to traders, who in turn sell it to local distributors. "We are dealing with traders," he said. But Carter believes that factories that are selling cigarettes which are then smuggled are fully aware of what takes place. He says they've even seen marketing material such as umbrellas or carrier bags supporting a cigarette brand in a country where that brand isn't legally sold. Huge profits While Hollywood movies often portray the dangerous world of drug smuggling, the illegal cigarette trade is not similarly glamorized. Still, with a single pack of cigarettes costing as little as 20 cents to manufacture, the profits can be enormous. A container load of cigarettes bought for anywhere between €50,000-€150,000 can be sold in the EU for as much as €1.5 million, says Pugh. Meanwhile, compared with selling drugs the penalties for cigarette smuggling are paltry. Law enforcement officers will typically need to add charges such as money laundering or tax evasion to make the penalties have more teeth, notes Pugh. The dirty money from illicit cigarette sales creates problems of its own, bolstering organized crime groups in the EU who will resort to violence to protect their businesses — including beatings and murder — as well as corruption, extortion and money laundering he says. There have also been links to funding of terrorism, including in Bulgaria, where a shisha factory was being operated by two former "Islamic State" commanders, before being raided in 2016. Terror groups have also been known to smuggle cigarettes to earn income. "Cigarette smuggling is a source of revenue for organized criminal groups from Europe and beyond, and there are indications that in some instances it is also linked to financing terrorism. Fighting the illicit tobacco trade is therefore also key to protecting the security of the EU," said the OLAF press office in response to emailed questions. Free zones implicated in smuggling To bring cigarettes into a market such as the EU illicitly, traders often pay a cat-and-mouse game with customs authorities, moving products from port to port — favorites include Port Said in Egypt, Misrata in Libya, or Famagusta in Northern Cyprus where they may be unloaded and repackaged, making them difficult to trace. Weakening of governance structures in countries such as Libya has also facilitated smuggling across the Mediterranean. The OECD is currently studying options for clamping down on illicit trade through free zones, which — despite their attraction for smugglers — are seen as vital cogs in the wheels of international trade, creating jobs in both developed and developing nations. The Jebel Ali Port is itself a noted transshipment hub for illicit cigarettes and for counterfeit goods. In 2018 the World Customs Organization (WCO) carried out an intelligence operation to tackle "diversion and misdeclaration (switching) of tobacco consignments as they moved through free zones." The UAE is also amongst the worst countries when it comes to counterfeit and pirated goods more generally. A 2016 report from the OECD noted that the UAE was the third top "provenance economy" of counterfeit goods entering the EU between 2011-2013, behind only Hong Kong and China. VIEW ARTICLE #gtdwchina #amazon #counterfeits #fightthefakes #fakes #illicittrade #brandprotection #trade #ecommerce #smallparcels #integrity #supplychain #supplychainsecurity