In this three-part series, digital trade expert Craig Atkinson, CITP addresses key questions and practical considerations related to technology-enabled cross-border interaction among buyers, sellers, intermediaries, and governments. Article based on an interview by FITT’s Pamela Hyatt.

Craig Atkinson is the Founder and Director of Lexmerca International Trade and a Trade Development Specialist with the International Trade Centre (ITC), the joint agency of the United Nations (UN) and the World Trade Organization (WTO). His roles focus on addressing legal-technical challenges that affect global trade.

Active in the field of digital trade, Craig participates in the World Economic Forum’s TradeTech community and in projects with multiple international organizations, academic institutions, technology foundations, and standards bodies.

Academically, he is a Non-Resident Fellow with the World Trade Institute (WTI) as well as a Research Affiliate with the Singapore Management University (SMU) Centre for AI and Data Governance and the SMU Centre for Computational Law. Professionally, Craig has been a FITT Certified International Trade Professional (CITP) since 2011.

What is a ‘Single Window’ for trade regulation?

In the first article in this series, ‘Single Windows’ were described as exemplifying the digitalization of goods trade. Aside from being known as the most impactful class of ‘TradeTech’, what is a Single Window?

The answer is found in the ambitions of ‘digital trade facilitation’: government measures to simplify, harmonize, and modernize trade formalities and procedures to allow for cross-border paperless exchange between actors in international supply chains.

According to United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Recommendation 33, a Single Window (SW) is a ‘facility’ that “allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements”.

An electronic SW environment links government bodies – Customs and other government agencies (OGAs) like ministries of health, agriculture, and finance – for online application, issuance, and exchange of trade-related permits/certificates.

Private stakeholders include traders, agents, customs brokers, carriers, forwarders, ports, freight terminals, and commercial banks. As documents (or data) is in electronic form, they only require ‘single’ submission and leading systems utilize ‘rules engines’ for compliance automation.

While Singapore is credited with deploying the first SW in 1989 – TradeNet for Business-to-Government (B2G) exchange and the more recent Networked Trade Platform (NTP) extension to facilitate Business-to-Business (B2B) transactions – other countries have implemented projects for paperless trade via Single Window.

Note: Singapore is not a typical case. Above, ‘Trade Permit’ is used for Customs declarations. Yet, if goods require permits from other OGAs when submitting a ‘Trade Permit Application’ to TradeNet, the application is a ‘single’ submission for other OGAs to process and provide permits. Unlike the SWs of most countries, traders/agents using TradeNet do not have to apply for each permit separately.

How do Single Windows solve problems?

Borders represent a ‘labyrinth’ of paper that must be exchanged between private actors and government agencies through manual processes.

In reaction, Single Windows lower certain barriers to trade compliance – identifying, preparing, submitting, and coordinating documents – by creating a public-private interface to overcome what the Organisation for Economic Co-operation and Development (OECD) calls “sludge”: unjustified friction that affects satisfaction, trust, and access to government services.

As institutional arrangements, networks, and platforms, SWs generate observable results that make trade faster and less costly as well as more safe and secure. In offering the highest standard of public service delivery, a Single Window for trade is considered a ‘beau ideal’ by the World Customs Organization (WCO).

As SW is a ‘whole-of-government’ facility, Customs is just one of the involved regulatory agencies and its authority is limited to import/export approval and permitting.

Though Customs is often a lead agency for SW, it does not have legal power to override other OGAs. Even if a SW neither eliminates nor diminishes the role of any regulatory agency, simplification through a single point of entry mitigates duplication, ‘re-keying’, and other data-related issues while enabling consistent data reuse.

Significant benefits arise for trade logistics and economies: across studies on the impact of Single Window, costs fall for all actors (i.e., traders, intermediaries, and governments), trade grows between countries with SWs, and the public sector improves its revenue mobilization/collection capacity.

For example, in the United States, government agencies and traders have realized benefits with the Automated Commercial Environment (ACE). In 2021, the platform reduced transaction processing by 795,000 hours for private actors, assisted process automation for 269 forms/document types, and led to $2.7 billion USD in efficiencies.

How can Single Windows contribute to inclusive trade?

Single Windows are inclusive because, as a whole-of-government interface that is usually free (or low cost), they allow for micro, small, and medium-sized enterprises (MSMEs) to interact with governments with less or no need for intermediaries (e.g., agents and brokers).

A single channel of interaction lowers effort and administrative costs of compliance with documentation and increases accuracy/speed of submission and processing, helping small businesses to better participate in international trade.

For example, In Costa Rica, a study by Volpe Martincus et al. estimated the impact of the gradual phase-in (2007-2016) of an electronic SW, Ventanilla Única de Comercio Exterior (VUCE CR). Adoption of VUCE was associated with increased and more frequent exports by businesses using the system, larger shipments, and greater numbers of exporters, especially MSMEs located in non-central areas.

Such outcomes are particularly important in industries and sectors with specific or complex regulations. For instance, to meet Sanitary and phytosanitary (SPS) requirements for food safety, pest mitigation, or disease prevention, SW facilitated trade in agricultural goods has moved toward processing of electronic SPS certificates.

Are there different kinds of ‘Single Windows’ for trade regulation?

The short answer: no. The term ‘Single Window’ is frequently mis-used. In digital trade facilitation, it’s important to follow UN/CEFACT standard terminologies. Five ‘must’ features differentiate SWs for national trade regulation.

Source: Adapted from UN/CEFACT 2017

Given the strict criteria provided by Recommendation 33, true SWs are realized by a country as a ‘National Single Window’ (NSW).

At their core, NSWs are a B2G interface, but some systems have evolved to further allow for B2B transactions. Under Article 10.4 of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), member governments “shall endeavour to establish or maintain” a NSW. Article 10.4 is also the most frequently requested area of TFA-related technical assistance.

Under Article 23.1, a national trade facilitation committee (NTFC) is usually the appropriate cross-government agency/mechanism to guide and monitor NSW establishment.

Going beyond the scope of UN/CEFACT Recommendation 33, NSWs can be interlinked for Country-to-Country exchange as a ‘Regional Single Window’ (RSW).

However, these systems are not ‘facilities’ in the same sense as the Single Window definition: RSWs are Government-to-Government (G2G) focused and implemented under international frameworks as a collaborative system of NSW networks.

Additionally, and not to be conflated with a SW for trade regulation, there are many ‘sector-specific’ platforms, such as an airport Cargo Community System (CCS) or a maritime Port Community System (PCS).

The International Maritime Organization (IMO) defines a Maritime Single Window (MSW) as a “one-stop service environment”: a vessel operator-to-port interface for maritime procedures (e.g., port entry/departure declaration and security reports) between private and public actors. The amended Annex to the IMO FAL Convention makes MSW mandatory for ports.

In some cases, a ‘unified’ PCS can be considered MSW.

Which governments have established a Single Window?

Hundreds of Single Windows have been deployed and are at different stages of maturity. With more than ten years in operation, some SWs are relatively mature and cover all the OGAs in their respective country, such as Indonesia (Indonesia NSW, INSW), Singapore (NTP/TradeNet), and South Korea (UNIPASS/uTradeHub).

Those already deployed, but in in progress toward covering all OGAs, include Canada (Single Window Initiative, SWI), Chile (Sistema Integrado de Comercio Exterior, SICEXChile), Costa Rica (VUCE CR), Kenya (Kenya TradeNet), New Zealand (Trade Single Window, TSW), Pakistan (Pakistan Single Window, PSW), Peru (VUCE PERÚ), and the US (ACE).

Other jurisdictions are continuing to strengthen their bases for SW, including Australia, Bangladesh, the Maldives, and the United Kingdom (UK). For example, under the Single Trade Window (Preparation) Regulations and the Electronic Trade Documents Act (ETDA) (see FITT coverage), the UK is planning its NSW.

Taking stock of initiatives globally, the WTO Trade Facilitation Agreement Facility (TFAF) indicates that, at 56%, SW is the TFA measure with lowest ​implementation rate.

Source: Author based on WTO data (2024)

Regionally, Association of Southeast Asian Nations (ASEAN) members have established the ASEAN Single Window (ASW) and technical collaborations; the Pacific Alliance has connected its member NSWs; and the European Union aims to enhance ‘digital cooperation’ under the Single Window Environment (SWE) regulation.

Why do governments and the private sector need to work together?

More than a technology project, SW initiatives represent major ‘reform’ and require whole-of-government cooperation internally as well as collaboration externally with the private sector to realize a fully-fledged, evolved, SW environment. A Single Window and its suite of services truly represent a ‘virtual enterprise’.

Implementation of a SW requires planning and the creation of a legal-institutional framework, followed by business process analysis/design, document simplification/standardization, data harmonization, platform piloting, and phased deployment.

Despite the variety of implementation or operational models, all stakeholders should be aware of the types of decisions to be made at each phase:

• Develop internally: The public sector is made up of different agencies must coordinate the roll-out and functioning of SW with their own staff and resources. For governments, it’s important that services – Customs, finance/treasury, health, agriculture, – work harmoniously, regardless of the internal model(s).
• ‘Buy off the shelf’: Procure hardware, software components, and/or services.
• Engage in public-private partnerships: Any combination of options at different phases of implementation and/or operation of a Single Window.

What are some key resources for planning and deployment?

There are many implementation guides and even a ‘ChatGPT’ for Single Window. Key resources include:

• Under the auspices of the United Nations Economic Commission for Europe (UNECE), UN/CEFACT provides core standards and guidance, such as Recommendation 33 (establishing SW), Recommendation 34 (data simplification/standardization), Recommendation 35 (legal framework), the Reference Data Model White Paper, a technical note on terminology for SW, and the SW Assessment Methodology (SWAM).
• The WCO Compendium on Building a Single Window Environment (g., Volume 1 Part 1, Volume 2, and the supplement), WCO Data Model, and Data Harmonization Guidelines.
• The United Nations Trade and Development roadmap for building a SW.
• The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and its Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT) provide a planning/implementation guide and expert Neelima Pamulapati has developed comprehensive case studies on legal frameworks for SW. Other important UNESCAP guides focus on Business Process Analysis and Data Harmonization/Modeling.
• The Asia-Pacific Economic Cooperation (APEC) SW implementation guide.
• With significance for Regional Single Window, UN/CEFACT Recommendation 36 provides guidance required for the interconnectivity and interoperability of two or more SWs, APEC has produced a study on SW systems’ international interoperability, UNESCAP provides a paper on ‘e-trade’ through the ASEAN Single Window, and UN/CEFACT is developing guidelines on establishing RSW.

How are you engaging with Single Window-related efforts?

Cross-border regulations are constantly changing and digital public infrastructure (DPI) must be agile. In certain situations, rules and requirements can change by the minute.

Taken as a whole, the contributions have been to advance Single Window design in support of greater engagement by software development and business communities.

Although ‘greenfield projects’ and ‘legacy system’ integrations face difficulties, prospects exist for SW ‘rules engine’ (re)design in the short-term and new thinking on the long-term viability of systems.

Everything is deeply interconnected and ‘global value chains’ (GVCs) depend on streamlined interactions between people through computer technologies. Single Windows should empower MSMEs to capture value in GVCs through ‘interlinking’.

Any trade professional, especially a CITP, may consider informing SW deployment and upgrading. The next article in this series examines relevant innovations and how a Single Window frontend/backend paradigm can be ‘flipped’ for optimal human communication, interoperability of systems, and impact.

The post Simplifying International Trade with Single Windows appeared first on Trade Ready.

If customs and border clearance processes have you scratching your head, you’re not alone. The process of ensuring your products safely and efficiently clear international customs and border security is often complex, and frustratingly, it can differ significantly from country to country.

The good news is, there is a wealth of tools, resources, and service providers that can help you navigate these processes and ensure your products get to your customers as expected.

Knowing what’s involved and where you need to do your due diligence is essential to ensure you don’t lose customers and revenue to customs delays.

Governments use exporting and importing customs and border security clearance processes to monitor trade, collect revenue and prevent criminal and terrorist activity. These processes also provide data that assist governments in assessing the state of their economies and the need for regulatory changes. Here’s what you need to know.

Why the complexity?

As countries continue to move towards integrating their economies and removing trade barriers, the regulatory processes of exporting and importing should become easier, however that does not remove the need for continued collection of data, therefore documentation will continue to play an important role in exporting and importing clearance processes.

Given the number of countries in the world, it is impossible to offer one set of guidelines that would cover all eventualities, especially because requirements and procedures can change frequently. However, due to the WCO and the adoption of international recommendations for customs and border security practices, there are some common activities required of exporters and importers.

Exporting clearance process activities

• The exporting clearance process will differ depending on several variables:
• The trade regulations of the exporting and importing countries
• Type of goods being exported, e.g. restricted, food products
• Free trade agreements currently in force
• Level of customs and border security agency’s use of information and communication technology, e.g. Electronic Data Interchange (EDI)

With consideration of the above variables, typical activities for obtaining clearance for exporting could include all or some of the following:

• Registering with customs and border security agency, e.g. obtain export/ import business number
• Determining country of origin for the goods being exported
• Ensuring product is exportable, i.e. not a prohibited good or service
• Ensuring product is allowed into importing country
• Determining HS code for product
• Filing export declaration, if required
• Obtaining export licences or permits, if required
• Obtaining product-specific/packing certificates and import specific documentation
• Determining shipping method and identifying reporting time frame
• Submitting export declaration and other documentation to customs and border security agency prior to shipping, if required
• Shipping goods as agreed upon with importer
• Providing certificate of origin and other documents to importer or importing country’s customs and border security agency
• Keeping export records for required time period

The responsibility for the cost and completion of these tasks will vary depending on the sales contract agreement, usually defined by the agreed upon Incoterms® rules.

It is to the mutual benefit of both the importer and exporter if they help each other complete the export clearance process.

Want to learn more about managing your company’s supply chain and logistics to mitigate risks? Chech out the FITTskills Global Value Chain online course!

Rules, regulations and policies to consider

There are other factors that must be considered when exporting goods, including:

International export regulations

Most countries have some form of export control. For example, 41 countries are signatory members of the Wassenaar Arrangement, which was established in 1996 to establish controls over sales of arms and dual-use products and technologies.

The control lists covered by the Wassenaar Arrangement cover a wide range of goods and technologies, including protective clothing, materials used in aircraft construction, metal alloys, many chemical compounds, submersible vehicles, robots designed for underwater use, telecommunications equipment, satellite components and many forms of software.

In order to export any of the controlled products or technologies, certain procedures must be followed.

The importing company will often have to assist the exporter to obtain an export licence from its government, usually by providing an import certificate or other documentation.

Where an export licence or permit is required, both the importing and exporting companies need to consider the time it will take to obtain exporting and importing licences/permits when planning delivery schedules. The importing company must also include clauses in its agreements to require the exporter to obtain all required licences.

Exchange control licences

Most countries also have some form of foreign exchange control, i.e. controls over the amounts of foreign currency in their economies. This means that exporters may have to provide proof that they will be paid by the importer in a specific currency before they will be permitted to export valuable products. Importers may also require a licence from the exporting country to convert payments into local currency to pay exporters. Importers should check whether this is necessary because otherwise delays might result while exporters wait for payment.

Some countries require payment to be made by specific means, such as a letter of credit. Some governments also impose strict payment regulations on all foreign trade contracts in order to ensure payment.

Export quotas

Export quotas are restrictions imposed by a government on the amount or number of goods or services that can be exported annually. The purpose is to ensure that domestic prices of this good or service do not increase because of exports. Importing companies must make sure there are no foreign government quotas that could make their purchase agreement unsustainable.

Export documentation

Standard export transactions require that the exporter provide standard documentation to accompany shipments of goods:

• Commercial invoice
• Bill of lading or transport document
• Export declaration
• Packing list
• Insurance documentation
• Certificate of origin

Documentary requirements can vary significantly, due to the specifics of a transaction or shipment, as well as the payment and financing arrangements, which may be based on the tendering of documents by the exporter, depending on the agreed mechanism of settlement.

To learn more about managing customs documents, check out the FITTskills Document Management online workshop. Keep your business running efficiently by recording, filing and storing everything you need to maintain efficient day-to-day operations.

Additional documents may be required IF:

In addition to this standard list of documents, some export trades might require additional documents because of complications or the nature of the goods being transported.

These documents include the following:

Export licences or permits: Either general (permitting any good to be exported, usually for shipments exceeding a specific value) or specific (required for restricted or controlled goods).

Dangerous goods declaration: A statement about the contents and emergency handling of a dangerous goods shipment.

Exchange control document: A declaration that the payments received for the shipped goods follow regulations.

Inspection certificates: A certificate confirming that certain products (including packing materials) have been inspected for safety or conformity purposes.

Consular invoices: Invoices provided by the importing country’s consulate located in the exporter’s country approving the shipment for import.

It is important that the information on documents is complete, consistent, and accurate, whether electronic or hard copy.

Intellectual property registration

When exporting to another country, it may be necessary to ensure that intellectual property is protected.

It is prudent to check and register patents, trademarks, and copyright in the importing country to prevent infringement.

Despite efforts, protection will depend on how rigorous the importing government’s regulations are, as well as the level of enforcement.

The post Getting your exports across the border – Here’s how customs clearance processes work appeared first on Trade Ready.

Operating a business will always involve some level of risk. When operating a business venture on an international scale, the risks typically become higher in number and more complex in nature.

Conducting proper due diligence is always a good first layer of protection against some of those risks, but is often not enough on its own. International businesses need to focus on mitigating some of the more prevalent risks inherent in conducting business abroad.

Protecting your paycheck internationally is a whole different ballgame

In my experience, one of the highest risks encountered by international entrepreneurs is the risk of non-payment.

What if I ship my product over to the buyer but never get paid? In a domestic scenario, for instance, where both companies are located in Ontario, Canada, the process would be fairly straightforward.

Typically, the unpaid seller will send a formal demand letter asking for the monies owed. If the payment still isn’t made, you would then start a lawsuit in the Ontario Superior Court to attempt to obtain a judgment in your favour, which would allow you to legally collect the monies owed to you by seizing the assets of the buyer.

But what happens if the seller is a Canadian business and the buyer is halfway across the world in China, for example? How do international businesses protect against the risk of non-payment when the transaction and/or the parties are located in different areas around the globe?

Always start with an ironclad contract

In a previous blog, I highlighted the importance of both an arbitration clause and a governing law clause in an international contract as a means to protect your business abroad.

To recap, if a dispute arises between a Canadian seller and a buyer in China, the courts will look to the contract to determine the right course of action. The contract is king.

The governing law clause will dictate which laws will apply to the matter, whether they are Canadian, Chinese, or from another third party altogether.

The arbitration clause will outline the agreed upon process for dispute resolution between the parties. Although these clauses provide certainty in terms of process and help avoid costly disputes, the specific risk of non-payment highlighted in the example above can be mitigated even further. This is done through a widely used instrument of international payment called the Letter of Credit.

The LOC could be the best tool in your arsenal

The Letter of Credit, also commonly known as the LOC, is considered to be one of the most secure instruments to reduce the risk of non-payment in international transactions, and is widely used by international businesses in their daily operations.

As an example, in the scenario above where a Canadian seller of widgets is shipping goods to a buyer in China, the Chinese buyer would request the LOC from their bank, and that bank then undertakes to pay the Canadian seller upon presentation of certain documents to the bank.

The LOC is like an insurance policy for the seller, in the sense that it guarantees payment to the seller when the proper documents are presented.

The seller is guaranteed payment one way or another, regardless of other events like bankruptcy or civil strife in the buyer’s country that could otherwise make it difficult to transfer payment from buyer to seller.

If the buyer is unable to make the payment, the bank will cover the outstanding amount.

Get your documents in order

It is important to keep in mind that the issuing bank will only release the funds to the seller when it presents certain documents, including:

• a certificate of origin;
• an inspection certificate;
• a bill of lading;
• an insurance certificate;
• a commercial invoice;
• and a packing list

As long as the seller provides the necessary documents and they are compliant, the bank releases the funds to the seller. Therefore, the LOC is one of the best tools for exporters or sellers to use to reduce the risk of non-payment in international transactions.

The seller is assured to receive payment for the goods shipped provided they meet the conditions listed in the LOC in terms of presenting the required documentation to the bank, thus mitigating one of the biggest risks to exporters in global trade. Don’t trade without it!

Have you ever been faced with issues of non-payment? How did you resolve the issue and move forward?

The post The one thing that will guarantee you get paid in international business deals appeared first on Trade Ready.