Transcript 글로벌 시대의 경제: Korea: The Hard Way

Trade Facilitation and
Customs Reform in Korea
Junsok Yang
The Catholic University of Korea
[email protected]
1
Trade Facilitation in Korea
• Why Trade Facilitation?
• How?
– Regulatory Reform
– “e-customs” and “e-trade”
• Political Economy of TF
• Overall Lessons
2
Why Trade Facilitation?
• Long Term Factors
– Korea is dependent on trade
• Trade volume is greater than 100% of GDP
120
Exports
100
80
60
Imports
40
20
Total Trade
0
197019721974197619781980198219841986198819901992199419961998200020022004200620082010
3
Why Trade Facilitation?
• Long term reason
– Export competitiveness requires timely
and inexpensive imports
70
60
50
40
raw material
30
capital goods
imports used for exports
20
10
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
4
Why Trade Facilitation?
• Long Term Reasons
– Completion of UR
– Bad reputation of Korea Customs Service
5
Why Trade Facilitation?
• Short Term Reasons
– Asian financial crisis
• Need to make markets more market consistent and
efficient
• Need to increase export earnings (which require imports of
raw and intermediate materials)
– Regulatory Reform (1998-1999)
• Cut half of all regulations
– Make Korea a ‘logistics hub’ of North Asia
– E-Government project
• Increased trade contributed significantly to
post-crisis recovery
6
How?
• Regulatory Reform
• Use of IT
– “e-customs” and “e-trade”
• Mutually complementary
– In fact, both are necessary
– Regulatory reform is a pre-requisite
(necessary condition) to successful use of IT
7
Trends in customs clearance
before the financial crisis
• Unified List (1980s)
– Lists all import requirements in one document
• Reform of Import Clearance System (1996)
– From permit to self-declaration system
– KCS moved toward post-entry investigation
– Post clearance payment of duty
8
Regulatory Reform for Customs
Clearance
• Regulatory Reform of 1998-1999
– Cut existing regulation by one-half
– Establishment of Regulatory Reform Commission
and examination of new and existing regulations
(including customs regulation)
9
Number of Regulations: Customs
Administration
180
160
140
120
100
Old Series
80
New Series - All Regs
60
New Series - Major Regs
40
20
0
10
Regulatory Reform for Customs
Clearance
• Additional regulatory reform from 2003 to make
Korea a ‘logistics hub’
– Task force of 172 people including KCS, government and
private representatives
• Large and small enterprises, customs brokers and related
agencies, academics, NGOs
– Examine existing laws and regulations from the
“customer’s” point of view
• Monthly payment of taxes for good firms
• 3S program (Slim, Specialization, Service-Oriented)
– More officials, more authority for people “on site”
• Deadlines for clearance
– 15 days for regular / 5 days for on-dock “immediate” delivery
• One stop service centers for clearance delays
– Savings of 2.2 trillion won (1.9 billion USD)
11
Savings from Reduction in
Clearance Time
(9.6 days to 4.5 days), billion won
Items
Savings
Reductions in warehousing costs
320.2
Increased cargo processing capacity at ports
1249.1
Streamlining the process for cargo in transit and transshipments
17.3
Increased volume of cargo in transit and transshipments
148.2
Increased availability of empty containers, lessening the need
73.9
for “excessive imports”
Increased use of automatic notification procedures for cargo
unloading
Streamlining the process for express consignments
24 hour, around-the-clock clearance at Incheon Airport
Elimination of fees for arrivals outside normal working hours
Reduction in warehousing (storage) fees
231.6
1.2
54.0
1.6
83.2
12
Costs as Percentage of Sales for
Firms in Korea, US and Japan
16.0
14.0
1 2 .9
1 1 .1
12.0
10.0
8.0
Korea
1 2 .5
9 .2
9 .0
6 .5
6.0
7 .3
6 .1
5 .5
1999
2001
US
Japan
9 .9
9 .7
7 .5
7 .5
5 .0
4 .8
4.0
2.0
0.0
1997
2003
2005
13
Evolution of Korean Trade and
Customs Administration
(Green line: exports, Green line: imports,
Yellow line: number of traders;
Red line: number of customs officers)
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E-customs and E-trade
• First Stage (1980s – 2003)
– EDI / VAN established (1994-1998)
• Preparation from 1980s
• World’s first 100% electronic clearance system
• Open only to limited number of firms
– Technical (non-Internet based EDI) and trust reasons
– Paperless customs clearance system (1997-2001)
– Establishment of infrastructure (2001-2003)
• Second Stage (2003- )
– KCS: “e-customs”
– Private and Public cooperation: “e-trade”
15
Timeline of Introduction of IT to
Customs / Cargo Clearance
Date
1989
1990
1991
Event
Korean government initiates “Comprehensive Trade Automation Plan”
Comprehensive Trade Automation Task Force created within KITA
enacts “Trade Automation Act”;
Korea Trade Network (KTNET) is established by KITA
1992
Korea Customs Service designates KTNET as sole customs automation service provider
1994
1996
initiates electronic customs clearance system for exports
initiates electronic customs clearance system for imports
KTNET provides logistics service through MFCS
realizes a 100% electronic customs clearance system (VAN/EDI)
EDI/VAN service expanded to include the Internet
E-commerce law passed; Electronic signature law passed
External trade law amended to define and allow e-trade
National e-Trade Committee, chaired by the Prime Minister, is established
BPR/ISP for e-Trade Process Innovation
Korean government enacts ‘e-Trade Facilitation Act’
‘e-LC service’ is launched for the 1st time in the world
e-Trade Service Project,2nd stage is completed
uTradeHub is launched
e-Trade Service Project. 3rd stage is completed
1997
1999
2001
2003
2004
2005
2006
2008
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First Stage
• EDI/VAN to Internet
– 1996: EDI-based Cargo Selectivity System
– 2001: 100% of procedures for export and
import declaration were automated
• Saved 81% of export related paperwork costs
and 79% of import related paperwork costs
• Limited use to 352 firms with good records –
but system underutilized, so in 2000 raised
the number of eligible firms to 2589.
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Second Stage
• Customs “e-customs” and “u-customs”
– E-Government Initiative
• Reinforce Korea as a “connected” nation
• Emphasize G2G and B2G
– Invisible and ubiquitous customs
– Internet based single window (from 2004)
• Currently 14 agencies are connected
– Customs network expanded to include
traders and related industries (e.g.
transportation and logistics)
• ERP networks established
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E-Customs
• KCS initiative
• “E-customs, U-Customs, World Best
Customs 2012+”
– Internet portal site and UNI-PASS (2005)
• Customs clearance
– Internet based single-window
• 14 agencies linked through the window
– Continuous cooperative projects and innovation
• IATA e-freight project
• RFID technology for real-time tracking
• Enterprise Resource Planning with larger firms
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UNI-PASS
• Korean Customs e-clearance system
• Unified Service
– One Stop Service
• Export / import clearance
• Duty payment, drawback and requirement
confirmation
• Global standards
– Access to real time cargo processing
information
– Ubiquitous connection
– Non-stop cargo flow
20
Components of e-clearance
21
UNIPASS Trade Community
22
UNI-PASS Diagram
23
Results of UNI-PASS and
e-clearance
• Operated by CUPIA
• Single Window handles 92% of work related to
export / import confirmation
• 35 types of cargo tracking information available
• Cost savings estimated at 3.8 trillion won (3.3
billion USD)
• 110,000 participants
– Government agencies, firms, shippers, customs
brokers, warehouses, etc.
• Interested in exporting UNI-PASS
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Cost Savings from e-clearance
Time and cost saving
Introduction of the internet and the Single
Window
Reduction in and predictability of cargo
processing time
Saving warehouse fees and improving
efficiency of port operation
Other ripple effects
Total
690 billion
Won
19.9 billion
Won
1214.2 billion
Won
1156.2 billion
Won
798.2 billion
Won
3878.5 billion
Won
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Second Stage
• Ministry of Knowledge Economy and
KITA: e-trade
– “e-trade” is “trade whose transactions take
place wholly or partially through information
processing equipment … and electronic
information network.”
• Encompasses customs clearance, financial
payments, transportation and insurance
• Encompasses traders, government, transportation
firms, financial institutions
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E-Trade
• KITA and KTNET Private Initiative:
UTradeHub
– With backing from Ministry of Knowledge
Economy
• 2003: National e-Trade Committee (Public – Private
Initiative)
• Legal infrastructure in place
– Electronic documents and security
• CTradeWorld Portal Site on line in 2004
• UTradeHub on line in 2008
• Linking B2G and B2B
– Expected savings: 2582 billion won
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UTradeHub
Owner / Trading Co.
Trade Leads &
Overseas Ads
Single Window
e-Market Place
e-Biz Site
Trade Information Site
Credit Evaluation
Portal
Financial Institution
KFTC
SWIFTNet
The Bank of Korea
Banks
Foreign Exchange
Gateway
u Trade Hub
Marketing
Foreign
Exchange
Credit Evaluation Co.
Korea Export
G4C
e-Service
Network
Logistics
Customs
Settlement
Data Warehouse
Insurance Corporation
e-Trade Document Repository
License &
Certificate
Union / Association
KCCI
Quarantine Station
Insurance Company
Private Institution
Logistics
Shipper / Airliner
Forwarder
CY,Bonded Warehouse
KLNET
KILC
National BPR/ISP
Customs
Messaging Hub
Korea Customs Service
Customs Broker
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The future
• Closer ties between service provider (“customs”)
and customer (“businesses”)
– Enterprise Resource Management
– Increased use of RFID tracking
• Strategy to Advance Global Customs
Administration
– Increase cooperation between customs authorities
and border control authorities world-wide
• Authorized Economic Operator (AEO) approval
– Facilitate trade to / with FTA partners
• increase protection against IPR piracy and harmful
products
– Win-win partnership between customs and
customers
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Korean SMEs and Trade
• 3 million SMEs in Korea
– 99.9% of total number of firms
– 87.5% of total employment
• But SMEs account for only 32% of total exports…
– And the percentage has been falling
• SMEs tend to export less processed goods than larger
firms and have less manpower and expertise to deal
with customs clearance
• Latest initiatives aim to reduce burdens to SMEs
– FTA tariff database
– Assistance with rules of origin documentation for SMEs
– Assist SMEs with new products for export
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Political Economy of Trade Facilitation
• What made Korea favorable to TF?
– Importance of trade (perceived and actual
– Korea’s desire to open and advance Korea’s
economy
• OECD accession, UR
–
–
–
–
–
–
Bad perception of KCS
Desire for reform
Environment favorable to regulatory reform
IT ‘wiring’ of Korea
Logistics hub of north Asia as a policy goal
Increasing use of benchmarks
• Strong political and bureaucratic support for
these initiatives
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Results of TF
• Number of regulations by customs
– 156 (1998) to 51 (2008.2), 35 (2012.9)
• Cost and time savings
– KCS Uni-Pass e-clearance system: 3878.5 billion won
• Import clearance time: 2 days (1990s) to 1.5 hours
• Export clearance time 1 day to 1.5 minutes
– KITA e-trade system: 2582.3 billion won
• Doing Business Indicator
– 8th of 183 countries (2011)
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Doing Business Surveys
2006
2007
2008
2009
2010
2011
Colombia
(2011)
Documents to Export
5
5
4
4
3
3
6
Signatures to Export
3
Time to Export (days)
12
Cost to Export (US$)
n.a.
Documents to Import
8
Signatures to Import
5
Time to Import (days)
12
Cost to Import (US$)
n.a.
Rank
n.a.
n.a.
n.a.
n.a.
n.a
n.a.
n.a.
12
11
8
8
8
14
780
745
767
742
790
1770
8
6
6
3
3
8
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
12
10
8
8
7
3
1040
745
747
742
790
1700
28/175
13/178
12/181
8/183
8/183
99/183
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Observations
• Tying customs clearance network to firms’ internal
network for interconnection and synergy
– Enterprise Resource Planning;
– UTradeHub “user solutions”
• Not only form submission, but real-time tracking of
forms and cargo
– Drastic cuts in time required for documentation
• Process often slows to wait for paper forms from
other countries
• Firms still feel need for customs brokers
–
–
–
–
Some technical details are still difficult for SMEs
Still some need for physical visits
Form of “outsourcing”
Reduced costs of customs brokers
• Allow volume processing
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Lessons for Other Countries: General
TF
• Trust must be built between customs and the
private sector
– Real progress did not take place until trust (but
verify) risk-based approaches were implemented
• Reforms require close cooperation between
regulatory agencies and the private sector
– Enough trust built up to allow ERP
• Adoption of IT must be a part of
comprehensive customs procedure reform
– Regulatory reform more important than “e”
• Usefulness of e-trade will increase
exponentially when more countries join, and
more countries use international standards
35
1.
2.
3.
4.
5.
6.
7.
Lessons for Other Countries: ECustoms and E-Trade
Adopting IT to cargo clearance must be a part of
a comprehensive customs procedure reform
Legal framework must accompany the adoption
of IT and e-trade
Single network and single standard may be more
useful than variety
Keep it simple
The e-trade system and paperless trade system is
meant to be used by the widest number of
people
Trust must be built between SMEs and
government agencies
Usefulness of e-trade will increase exponentially
when more countries join
36
TF and the Current Economic Crisis
• Trade can contribute to recovery from
crisis
– But increased competition in international
markets mean firms must lower costs –
including customs clearance costs
• IT can lower costs
– Including costs due to corruption
37
Thank you
38
Notes
• For further information, please refer to the
following papers:
– "Case Studies on Regulation Reform in APEC
Countries: Study on Korean Customs and BorderRelated Trade Reforms" (in process) World Bank and
APEC
– Small and Medium Enterprises (SME) Adjustments to
Information Technology (IT) in Trade Facilitation: The
South Korean Experience by Junsok Yang, ARTNeT
Working Paper Series, No. 61, January 2009
Available at:
http://www.unescap.org/tid/artnet/pub/wp6109.pdf
– Introduction to UNI-PASS
• Accessible from http://english.customs.go.kr
– UNI-PASS
• Accessible from http://www.afact.org
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