E-Trade (Paperless) Korea, Innovation 2007 The Present and Future of Korea’s e-Trade (Paperless Trading) Capacity Building Workshop on Trade Facilitation

e-Trade (Paperless) Korea, Innovation 2007 e-Trade (Paperless) Korea, Innovation 2007

The Present and Future of Korea’s The Present and Future of Korea’s

e-Trade (Paperless Trading)e-Trade (Paperless Trading)

Capacity Building Workshop on Trade Facilitation Implementation for Asia and the Pacific Region

March 18, 2005, Kuala Lumpur, Malaysia

Dr. Yoon Say Jeong, Secretary General

e-Trade Facilitation Center

KITA (Korea International Trade Association)

e-Trade (Paperless) Korea, Innovation 2007 e-Trade (Paperless) Korea, Innovation 2007

Table of ContentsTable of Contents

1. Brief History of e-Trade(paperless Trading) in Korea

2. Current Status of Korea’s e-Trade

3. Background of innovating e-Trade strategy in Korea

4. Organization

5. Goal & Strategy

6. To-be Model of e-Trade Service (1/2)


8. Roadmap of 3-year Innovating plan

9. e-Trade Service (Phase 1) – e-L/C System (for Exporter)

10. e-Trade Service (Phase 1) – Conceptual Model

11. Lessons Learned

12. Future work : International Cooperation

e-Trade(Paperless) Korea, Innovation 2007 e-Trade(Paperless) Korea, Innovation 2007

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In 1989, Korean government initiated “Comprehensive Trade Automation Plan”

In 1991, Korea enacted “Act on Trade Automation” and Ministry of Commerce & Industry (currently MOCIE) made an “Agreement on Trade Automation” with Korean Customs Service

In 1991, Korea Trade Network (KTNET, Capital :US$75 million) was established by the investment of private sector (Korea International Trade Association, 100%)

Korea Customs Service designated KTNET as sole Trade Automation Service Provider Korea realized a 100% electronic customs clearance system through both VAN/EDI and Internet

Major part of Trade Automation System is customs clearance, But it covers LC advice, logistics, finance and payments and other trade related B2B services

Samsung Electronics estimates that it has benefited US$800 million through Trade Automation System every year, reducing ordering time from 10 days to 2 days.


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Development stage

year1992 1999

Task and statistics

computerization

process computerizati

on

Paperless clearance

EDI clearance automation project for 6 years

commencement (’92)

EDI clearance automation project for 6 years

commencement (’92)

Trade statistics computerization

Trade statistics computerization

20011974

•Export clearance system(1994)•Import clearance system(1996)•Export cargo system(1997)•Import cargo system(1998)•Customs duty back system(1997)

•Export clearance P/L system(1995)•Import clearance P/L system(1999)•Export automatic clearance system (2000)

• Electronic fund transfer for

duty(1999)•Electronic Value added tax receipt (2001)

Business Process

computerization

P/Lㆍ automatic clearance system

Diverse Initiatives in Clearance and Cargo Management



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2. Current Status of e-Trade in Korea

Bonded Warehouse

Trader

Customs Broker

Inspection Co

Air Line

Other Government Agency

Bank

KCS

KTNET

* KCS : Korea Customs Service MFCS : Manifest Consolidation System

MFCS

100% of Customs Clearance and Logistics


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3. Background of Innovating Korea’s e-Trade System

Realization of the National Realization of the National Future e-Trade ModelFuture e-Trade Model

The launch of a 3-year e-Trade

facilitation plan

Realize seamless e-trade service by

connecting effectively with government and related organizations

Demands for innovation on

overall process of trade

Give the opportunity to innovate whole trading process with the new IT

technology

The core task for e-government

blueprint

Issue guidelines on national e-trade future

model


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4. Organization

Vision : e-Trade Korea, Innovation 2007Organization : National e-Trade Facilitation Committee, July 2003e-Trade Process Innovation BPR/ISP : December 2003 ~ June 2004 e-Trade Service (Phase 1) : December 2004 Private e-Trade Facilitation CommitteePrivate e-Trade Facilitation Committee ~ December 2005

National e-Trade Facilitation CommitteeNational e-Trade Facilitation Committee

Chair : Prime MinisterSecretary : Ministry of Commerce, Industry and Energy

PlatformW/G

FinanceW/G

Logistics/Customs

W/G

LegalW/G

MarketingW/G

GlobalW/G

Administrative CommitteeAdministrative Committee

Chair : Vice Minister of MOCIE

PublicPublic PrivatePrivate

e-Trade Facilitation Center(KITA)

Chair : Ex-minister of MOST

Private e-Trade Facilitation CommitteePrivate e-Trade Facilitation Committee


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5. Goal & Strategy

Process Innovation Information Strategic Planning

Legal Structure Global Network

Current Process Analysis & To-be Process Modeling - Marketing - Financial Settlement - License/Certificate - Insurance - Logistics - Trade Declaration

e-Trade Platform Design Standard Integration & Interface Action Plan (2004~2007) e-Trade Facilitation Center : PMO

Legal System on e-Trade Institutional Model Incentive & Community Supporting System Bilateral/Multilateral Agreement on International Collaboration

International Collaboration Mutual Recognition on Global e-Trade APEC, WCO, UN/CEFACT, PAA, EU IST, ASEM, Asia PKI

Internet Based Internet Based National e-Trade National e-Trade

InfrastructureInfrastructure

1111 Seamless Seamless e-Trade e-Trade ServiceService

2222International International

Collaboration for Collaboration for Cross Border Cross Border

Paperless TradingPaperless Trading

3333

Acceleration Acceleration of e-Trade of e-Trade

CommunityCommunity

4444


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Trade Automation Trade Automation (Trade Network)(Trade Network)

AS-ISAS-IS

① 1:1 Networking by Wholly Responsible Company, Breaking Online Process Flow

② Submission of Same Document Repeatedly to Several Parties

③ Exchange of Online Document between Trading Partners, but Submission of Offline Paper Document to Third Party

...

①

②

③

②

2nd WhollyResponsible

Company

2nd WhollyResponsible

Company

KTNETKTNET

CustomsService

TO-BETO-BE

① Seamless e-Trade Service on Single-Window ② One Submission, No Multiple Submission for Same Online Document and provide diverse customs service

(EDI, Web) ③ Guarantee of Online Document Originality Exchanged on Central e-Trade Repository under the law

④ Global Networking on National e-Trade Infrastructure

②

④

Global e-TradeGlobal e-Trade(e-Trade Platform)(e-Trade Platform)

e-Trade Infrastructuree-Trade Infrastructure

③

e-Trade ServiceMarketing

Financial Settlement

License/Certificate

Logistics

Declaration

Messaging Hub

e-StandardRegistry

e-DocRepository

License/CertificateAuthority

Trading Company

Trading Company

Bank

Bank

Trading Company

Trading Company

③

License/CertificateAuthority

CustomsService

Bank

LogisticsCompany

GlobalNetwork

e-Trade Platform

①


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e-Trade Platform

eMarketPlaceeMarketPlace

Credit Credit Evaluation Evaluation CompanyCompany

Marketing

BankBank

Credit Credit CardCard KFTC

Insurance Insurance CompanyCompany

CustomsService

National Logistics Single Window

DocumentStandard

Trading Company(Including SME)

e-TradeSingle Window

Global e-Trade Hub

Global Networking

CertifiedCertificateAuthority

FinancialSettlement

License/CertificateInsurance

Insurance Insurance CompanyCompany

StandardizationAgency



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8. Roadmap of 3-year innovating plan

Phase2(’06)

• Upgrade Core Infra fulfilling Seamless e-Trade Service Implementation

License/Certificate & Marketing support system

• Interface with Related Parties

Phase1(‘04-’05)

• Building Core Infra of e-Trade Platform

• Standardizing documents e-Trade document circulation system

ebXML based document standardization

• Reform related Laws and Systems

• Upgrade User’s e-Trade System Environment

e-Trade solution for SME

• Establish Global Network

Phase3(’07)


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9. e-Trade Service (Phase 1) – e-L/C System (for Exporter)

L/C by EDI L/C by EDI

Goal : Advise L/C by EDI

Process : Advise L/C online (EDI) (75,000 by EDI out of 600,000 SWIFT transaction) Print out Advised L/C on Beneficiary side Presentation of Printed Paper L/C for Negotiation Endorse the Balance on Nego Circulate Endorsed Paper L/C

Goal : No more Paper L/C Presentation

Support : e-L/C Life Cycle Management e-L/C Negotiation History Management e-L/C Balance Management

Advise, Amend

Transfer

Nego

e-L/C

Exporter

2nd Beneficiary

Opening Bank

Negotiation Bank

Advising Bank

e-L/C Consolidation & Circulation System


AS-ISAS-IS TO-BETO-BE

KTNETMessaging Hub

KTNETMessaging Hub

Exporter

L/C EDI

Print Out

Opening Bank

1st Negotiation Bank2nd Negotiation Bank

Advising Bank


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10. e-Trade Service (Phase 1) – Conceptual Model


Trading Company

MessagingMessagingHubHub

e-Recordse-RecordsRepositoryRepository

(Pilot)(Pilot)

ServiceServicePortalPortal

ServiceServicePortalPortal

WebWebServices Services

WebWebServices Services

BalanceManagement

CirculationManagement

KFTC

Advising Bank

e-RecordsCirculation

e-L/C(Advise, Amend, Transfer, Nego)

ebXML on VPN

Red : New System by June 2005Red : New System by June 2005

Blue : Existing SystemBlue : Existing System

L/C Opening Bank

Negotiating Bank

The world’s first The world’s first e-L/C systeme-L/C system

- Prevention of Re-key - Certification of Contents - Keeping Transaction history

PurposePurposeSystemsSystemsRepository e-L/C system


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11. Lessons Learned

Strong leadership is a critical factor in the successful implementation of paperless trading. Close inter-ministry cooperation among regulatory parties is necessary.

Modernization of customs procedure, system is most important step

To hear voices from business community is important because paperless trading is not only technical but also cultural issue to business community.

It is essential that support from international organizations related to e-trade standard/ technology and developed countries should be provided to developing countries for realizing global paperless trading


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Participate in paperless trade activities such as APEC, ASEM, WTO, and PAA etc.

- Korea successfully held the 1st APEC PPP(Public-Private Partnership) Dialogue under ECSG meeting in SOM I, February 2005

- Korea has been worked closely with PAA (Pan Asia eCommerce Alliance) member countries to make e-Trade networks in Asia

Korea has experience in building Paperless Trade System since 1991

We would like to share Korea’s 14-year-experience with other countries

12. Future work : international Cooperation


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Dr. Yoon-Say Jeong Dr. Yoon-Say Jeong Secretary General Secretary General

e-Trade Facilitation Centere-Trade Facilitation Center

Contact Information

Email : [email protected] Phone : 82-2-6000-5433 Fax : 82-2-6000-2307

Thank you

Documents

E-Trade (Paperless) Korea, Innovation 2007 The Present and Future of Korea’s e-Trade (Paperless Trading) Capacity Building Workshop on Trade Facilitation