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UNECE Trade Commission. 5th session.
Priority needs in trade facilitation, regulatory cooperation and agricultural development in
Kazakhstan
Geneva, Switzerland18 June, 2012
Oleg Samukhin [email protected]
Business Process AnalysisBusiness Process Analysis
• Business Process Analysis helps pinpoint Business Process Analysis helps pinpoint particular problems faced by Tradersparticular problems faced by Traders
• Two Large Exporters were selected:Two Large Exporters were selected:– Producer of Candies and BiscuitsProducer of Candies and Biscuits– Producer of Flour, Pasta and BiscuitsProducer of Flour, Pasta and Biscuits
• Companies have operations in 2 different Companies have operations in 2 different corners of the country, which results in regional corners of the country, which results in regional differences in:differences in:– Speed of controlSpeed of control– Arrangement of transportArrangement of transport
Scope of BPA study in KazakhstanScope of BPA study in Kazakhstan
Products
Export markets Modes of transportTrade
financingCIS FTA Non-CIS Rail Road Other
Flour
Pasta
Biscuits
Candies
Core Business Processes and Core Business Processes and Stakeholders in export by RailStakeholders in export by Rail
For all shipments
Not for all shipments
Core Business Processes and Core Business Processes and Stakeholders in flour exportStakeholders in flour exportProcesses
Stakeholders
Core Business Processes and Core Business Processes and Stakeholders in export by RoadStakeholders in export by Road
Core Business Processes and Core Business Processes and Stakeholders in export by RoadStakeholders in export by RoadProcesses
Stakeholders
Importer’s Bank
Exporter’s Bank
1. BUY
2.4. Load Cargo
2.1. Arrange Road Transport
2.2. Obtain Certificate of
Origin
2.6. Get Customs Clearance
2.7. Send Documents to
Importer
3. PAY
Importer
Exporter
Exporter’s Bank
Chamber ofCommerce
Road Carrier
Customs
2.5. Pay for Road Transport
2. SHIP
2.3. Obtain Phytosanitary
Certificate
PhytosanitaryInspection
Use Case Diagram.Use Case Diagram.Export by Road Export by Road to the EUto the EU
Importer’s Bank
Exporter’s Bank
1. BUY
2.3. Load Cargo
2.1. Arrange Rail Transport
2.2. Obtain Certificate of
Origin
2.5. Get Customs Clearance
2.6. Send Documents to
importer
3. PAY
Importer
Exporter
Exporter’s Bank
Chamber ofCommerce
Railways
Rail car operator
FreightForwarder
Customs
2.4. Pay for Rail Transport
2. SHIPUse Case Diagram.Use Case Diagram.Export by RailExport by Railto the CISto the CIS
Modes of Land Transport in Modes of Land Transport in Export-Import operationsExport-Import operations
Mode Main use
Rail Export of minerals Export to Central Asian RepublicsTransport of low value goods to/from Russia
Road Import-export of consumer goods, equipment, food from/to the EUImport of consumer goods from ChinaImport-export to/from Kyrgyzstan and Tajikistan (bi-passing Uzbekistan)
Pipeline Oil Gradually replacing rail deliveries in tank cars
Trade flows. ExportTrade flows. Export
Astana
st. Dostyk
Khorgos
Kordaist. Lugovaya
st. Sary-Agach
Fuels,
grain,
flour
Oil, metals, grain
Oil, metals, grain
Trade flows. ImportTrade flows. Import
Astana
st. Dostyk
Khorgos
Kordaist. Lugovaya
st. Sary-Agach
Equipment,
consumer
goods, foodConsumer
goods, food,
equipment
Agricultural
products
SHIP: Arrange Rail SHIP: Arrange Rail TransportTransport
Reserve rail cars
Monthly railcar requirements
plan
Confirm dates
Exporter or Representative
National Railways
Rail cars available
Booking request
Acknowledge receipt
Rail car operator
Confirm provision of rail
cars
Schedule delivery of rail
cars
Schedule delivery of
private rail cars
Agree conditions with private car
operator
Booking request
Rail cars not available
• Rail cars not always Rail cars not always available => delays or available => delays or lost saleslost sales
• Private wagons are Private wagons are more expensive => loss more expensive => loss of profitof profit
• Rail companies not Rail companies not always acknowledge always acknowledge bookings, Traders have bookings, Traders have to get what is availableto get what is available
SHIP: Obtain Certificate of OriginSHIP: Obtain Certificate of Origin
• Chambers of Chambers of Commerce do Commerce do thorough examination thorough examination once a year, butonce a year, but
• Certificates have to be Certificates have to be issued for every issued for every shipmentshipment
• One company spends One company spends days, the other – days, the other – hours for obtaining hours for obtaining CoOsCoOs
Packing List
Exporter or Representative
Application to the Chamber of
Commerce
Review application and
documents
Prepare document for
the application
Chamber of Commerce
Approve and issue the
Certificate
Invoice
Application for the Expert
examination
Authorized expert
Warehousing note
Periodic (annual) documents
Certificate of Conformity
Recipes, technological
processCost of Goods Calculations Product
samplesCertificate of
Origin
Forward the Certificate to
Customs Broker
Business Process.Business Process.Obtain Phytosanitary Obtain Phytosanitary CertificateCertificate
• It is needed for Flour exportIt is needed for Flour export• It takes 3 steps in 3 It takes 3 steps in 3
different locationsdifferent locations• But 3 steps take only few But 3 steps take only few
hourshours• Certificates are mostly Certificates are mostly
received based on the received based on the Producer’s lab reportsProducer’s lab reports
Exporter or Representative
Product sample
Make analysis and issue results
Laboratory examination of product sample
Phytosanitary Inspection
Sampling Report
Authorized Inspector
Analysis reportLaboratory
examination of product sample
Product sample
Application form
Analysis report Examination in city inspection
Examination report
Application for the Certificate
Examination report
Application form
Analysis report Phytosanitary certificate
Receive the Certificate
SHIP: Load, Pay, SHIP: Load, Pay, Ship cargo and Ship cargo and documentsdocuments
• Rail cars have to be Rail cars have to be checked and repaired checked and repaired by Tradersby Traders
• Payment for services Payment for services of foreign Rail of foreign Rail companies have to be companies have to be done through freight done through freight forwarders forwarders
Order
Exporter or Representative
Railways
Commercial documents,
Customs declaration, Certificates
Prepare SMGS consignment
note
Freight Forwarder
Pay for international
transport
Load rail cars
Provide rail car for loading
Chamber of Commerce
Confirm loading of goods
Dispatch confirmation
report
Check and repair rail cars
SMGS Consignment
note with Customs stamp
Pay for domestic part of transport
Take rail cars for delivery
SHIP: Do Export SHIP: Do Export Customs Customs ClearanceClearance
• Declarations are Declarations are prepared prepared electronically, but electronically, but must be printed must be printed and stampedand stamped
• Payment for Payment for declarations are in declarations are in EUR, which is not EUR, which is not always convenient always convenient for Tradersfor Traders
Packing List
Exporter or Representative
Transaction certificate
Prepare and print Customs
Declaration
Prepare documents for the application
Customs
Check, register and stamp documents
Invoice
Customs registry card
Customs Broker
Certificate of Conformity
Sales Contract
Customs Declaration
Pay and Submit Customs Declaration
with exporter and brokerage documents
Exporter’s transport and
commercial documents
with customs stamp
Collect Customs Declaration directly from Customs or from Customs
Broker
Consignment note
Certificate of Origin
Phytosanitary Certificate
Time-procedure Chart: Export of CandiesTime-procedure Chart: Export of Candies
• Getting Getting Certificate of Certificate of Origin Origin sometimes sometimes can be the can be the critical path critical path activityactivity
1.1 – BUY: Conclude sales contract1.2 – BUY: Get Transaction Certificate2.1 – SHIP: Arrange Rail Transport2.2 – SHIP: Get Certificate of Origin
2.6
1.1
2.3
2.22.11.2
2.3 – SHIP: Load Transport2.4 – SHIP: Pay for Transport2.5 – SHIP: Get Customs Clearance2.6 – SHIP: Send Goods and Documents
#, process
Day
1 2 3 4 5 6 7 8 9
2.4 2.5
5
10
15
5 days
2 days 2 days3 days
1 day 1 day 1 day
4-15 days
9
Export of Flour, PastaExport of Flour, Pasta
• Time to Arrange Time to Arrange transport cannot be transport cannot be forecastedforecasted
• The whole process The whole process duration depends on duration depends on availability of rail availability of rail wagonswagons
• Export procedures Export procedures take only one daytake only one day
1.1 – BUY: Conclude sales contract1.2 – SHIP: Get Transaction Certificate2.1 – SHIP: Arrange Rail Transport2.2 – SHIP: Get Certificate of Origin
2.7
1.1
2.32.2
2.1
1.2
2.3 – SHIP: Get Phytosanitary Certificate2.4 – SHIP: Load Transport2.5 – SHIP: Pay for Transport2.6 – SHIP: Do Customs Clearance2.7 – SHIP: Deliver Cargo and Documents
#, process
Day
1 2 3 4 5 6 7 8 9
2.4 2.5
5
10
15
20
25
5 days
2 days
3-10 days
1 day 1 day 1 day
7-25 days
1 day162.6
1 day
Narva - Ivangorod
Koidulla – Kunichina Gora
Vaalimaa - TorfianovkaNujamaa - Brusnichnoe
Terespol - Brest
Medidnkai – Kamenny Log
Terehova - Burachki
Kukuryki - Kozlovichi
Kuznitsa Bialostoka - Bruzgi
Salchininkai - Beniakoni
Silene - Urbany
Grebneva - Ubylinka
Luhamaa - Shumilkino
Imatra - Svetogorsk
Bobrowniki - Berestovitca
Road crossings Road crossings between Customs between Customs Union and the EUUnion and the EU
• Export to the EU is Export to the EU is done by road done by road transport through transport through RussiaRussia
• Queues up to several Queues up to several days at the bordersdays at the borders
• Excessive control on Excessive control on Customs Union BCPsCustoms Union BCPs
• Risk Management is Risk Management is not duly appliednot duly applied
RecommendationsRecommendations
• Border Crossing by Road should be facilitated Border Crossing by Road should be facilitated through use of Risk Management systems and full through use of Risk Management systems and full implementation of relevant Transport Conventions implementation of relevant Transport Conventions (TIR and Harmonization Convention 1982)(TIR and Harmonization Convention 1982)
• Rail transport is important for export of Kazakh Rail transport is important for export of Kazakh products and needs reformsproducts and needs reforms
• Simplification of procedures for certificates and Simplification of procedures for certificates and permits and electronic single window is very permits and electronic single window is very important for exporters and critically important for important for exporters and critically important for importersimporters
Specific RecommendationsSpecific Recommendations
• Phytosanitary certificate: Phytosanitary certificate: – Eliminate unnecessary stepsEliminate unnecessary steps– Issue certificates on the basis of periodic Issue certificates on the basis of periodic
inspections of Producers’ production and inspections of Producers’ production and management systems and Producers’ management systems and Producers’ laboratory test resultslaboratory test results
– Implement electronic submission of documentsImplement electronic submission of documents
Specific RecommendationsSpecific Recommendations
• Certificate of Origin:Certificate of Origin:– Within CIS allow both the certificates issued for Within CIS allow both the certificates issued for
a particular shipment (like it is done now) and a particular shipment (like it is done now) and periodic certificates for a particular product periodic certificates for a particular product (such certificates can be copied and added to (such certificates can be copied and added to shipments the same way as the Certificates of shipments the same way as the Certificates of Conformity)Conformity)
– Simplify documentary requirements and reduce Simplify documentary requirements and reduce timetime
– Prepare CoO on basis of periodically submitted Prepare CoO on basis of periodically submitted data. Implement electronic Certificatesdata. Implement electronic Certificates
Specific RecommendationsSpecific Recommendations
• Customs clearance:Customs clearance:– Collect customs fees in national currencyCollect customs fees in national currency– Consider waiving fees for selected list of Consider waiving fees for selected list of
exported goodsexported goods
• Currency control:Currency control:– New law eliminated one document, but did not New law eliminated one document, but did not
eliminate the procedure eliminate the procedure – New regulation (will become effective since 1 New regulation (will become effective since 1
July 2012) imposes similar requirements of July 2012) imposes similar requirements of traders as the previous onetraders as the previous one
– These requirements may need further revisionThese requirements may need further revision
Specific RecommendationsSpecific Recommendations
• Payments and Trade Financing:Payments and Trade Financing:– Although use of trade financing instruments is Although use of trade financing instruments is
the importers’ decision, Exporting country can the importers’ decision, Exporting country can promote their use and benefit from increased promote their use and benefit from increased tradetrade
– Letters of Credit and other trade financing can Letters of Credit and other trade financing can be promoted through banks, professional be promoted through banks, professional associations, freight forwarders, etc.associations, freight forwarders, etc.
UNECE Trade Commission. 5th session.
Priority needs in trade facilitation, regulatory cooperation and agricultural development in
Kazakhstan
Geneva, Switzerland18 June, 2012
Oleg Samukhin [email protected]
