roadBlockMobile
brand logo

The National Single Window: Paving the way for paperless trade

10 Jan 2022

By Mithara Fonseka and Kavishka Indraratna  In 2016, Sri Lanka ratified its Trade Facilitation Agreement (TFA) with the World Trade Organisation (WTO), and in 2017, a Secretariat was established for the National Trade Facilitation Committee to drive much-needed trade reforms in the country. Currently, the rate of Sri Lanka’s implementation commitments under the TFA stands at 34.9% with a timeframe ranging from 2017-2030 (1).  Reforms include the Trade Information Portal, streamlining customs processes, and revamping the systems for post-clearance audit. However, progress of one of the key reforms, the National Single Window (NSW), has been stalled. Deviating from the initial timeframe of completing the Single Window in December 2022, the target date has been delayed to 2030 (2).  The NSW, a globally recognised trading portal, acts as a one-stop shop for exporters and importers where customs documents, permits, registrations, and other information can be submitted online at once. The definition of a Single Window, as provided by the UN/CEFACT Recommendation No. 33, is as follows: “A Single Window is defined as a facility that allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.” (3). Putting such a reform on the back-burner will only delay Sri Lanka’s transition to a system of streamlined, paperless trade processes and therefore, acts as an impediment to local and foreign investment.  Why should Sri Lanka implement a NSW? Sri Lanka has been underperforming in global trade rankings, where we sometimes rank in the bottom 50 countries. According to the Ease of Doing Business in 2020, in the trading across borders pillar, Sri Lanka ranks 96 out of 190 economies (4). While several of Sri Lanka’s indicators perform better than the South Asian average, there is significant room for improvement. When comparing with Organisation for Economic Co-operation and Development (OECD) standards, Sri Lanka takes 72 hours for border compliance regarding imports and 48 hours for export documentary compliance, whereas the OECD average stands at 8.5 and 2.3 hours, respectively (5). Lengthy customs procedures and multiple inspections impede efficiency.  Meanwhile, we ranked 94 out of 160 countries under World’s Bank 2018 Logistics Performance index (6) and 103 out of 136 for the World Economic Forum’s 2016 Enabling Trade Index (7). Notably, one of the indicators from the Enabling Trade Index, the Customs Services Index, which considers factors such as clearance of shipments via electronic data interchange and the separation of physical release of goods from fiscal control (8), we rank 116 out of 117 countries (9). A lack of transparency, inter-agency co-ordination, and lengthy cumbersome processes contribute to Sri Lanka’s poor trade environment. An average trade transaction can involve over 30 different agencies and upto 200 data elements, a lot of which have to be repeated (10). There is, thus, an evident need to streamline trade processes through digitisation, creating a business-friendly environment that supports small businesses as well as foreign investors.  A background into the NSW In 1989, the Government of Singapore introduced the world’s first NSW, known as Tradenet. It took two years for the model to become operational and has now become one of the most advanced models in the world. Since then, many countries have adopted similar models and a NSW has become a critical tool in facilitating efficient and paperless trade. The annual survey conducted by the UN on trade facilitation identified that almost 74% of countries surveyed in the Asia Pacific region have to some extent engaged in creating a NSW (this includes countries which are only in the pilot stage) (11). While a NSW is universally known for promoting the transition from paper-based to electronic customs processing, each window developed by a country is unique and varies according to the context of the country. For example, in Chile and Malaysia, the NSW enables traders to submit their export and import declarations, manifests, and their trade-related documents to customs authorities electronically (12). In Korea and Hong Kong, private sector participants including banks, customs brokers, insurance companies, and freight forwarders are also connected through the portal (13). Single entry, single submission, standardised documents and data, sharing of information (information dissemination), centralised risk management, coordination of agencies and stakeholders, analytical capability, and electronic payment facilities (14) are some of the key functions included in a Single Window. In Sri Lanka, the World Bank did several studies on the NSW, identifying different operational models, best practices, and a final blueprint document was given to the Government and Sri Lanka Customs (SLC) in July 2019 (15). However, since then, there has been no news of progress. While many countries including Sri Lanka are keen to emulate Singapore’s pioneering model, a lack of clear targets and timelines deteriorate the chances of implementing such a system. The mutual benefits of a NSW Businesses in countries without an integrated trade system find it difficult to compete in the international arena given the time and money spent to simply get clearance. Streamlining the entire process from start to finish in a manner that’s comprehensive and transparent, sans bureaucracy, has a number of positive effects for traders. It was estimated that Singapore’s TradeNet saved its traders around $ 1 billion per year (16). Korea’s uTradeHub allowed its business community to save approximately $ 818.9 million (17). These were savings from the use of e-documents, automated administrative work, and information storage and retrieval with the use of ICT. A Single Window automatically simplifies the compliance requirements traders face.  In Mozambique, traders benefited from faster clearance times, where through the NSW, the time was reduced from three days to a few hours (18). Meanwhile, Thailand’s NSW transformed the customs clearance turnaround time (measured as per declaration) to 95% in five minutes (19). Using a single portal has enabled traders to avoid visiting multiple agencies and simply submit an application at their convenience from any location. NSW has supported businesses through the removal of unnecessary costs, time, and red tape – factors which tend to act as key deterrents to small businesses as well as foreign enterprises.  The NSW system has similarly provided noteworthy cost savings for government entities involved in trade. Singapore Customs has claimed that for every US dollar earned in customs revenue, it only spends one cent, implying a profit margin of 9,900% (20).  In Hong Kong, trade facilitation measures have provided them with Hong Kong $ 1.3 billion in annual savings (21). The NSW has also reduced revenue leakages which may arise through transit. For example, Mozambique is a transit country to Swaziland, South Africa, Zimbabwe, Zambia, and Malawi (22). By expanding their NSW to include value-added services such as GPS tracking of consignments in transit, automatic detection of breaches in consignment, and deviation from assigned transit corridors, the NSW prevents revenue leakages and the opportunity for corruption, maximising revenue collection. The NSW has further led to productivity and efficiency improvements. A Single Window has enabled authorities to handle a larger volume of applications with much more ease.  Mozambique, which used to face infrastructural weaknesses, through the implementation of its single window, is able to handle roughly 1,500 custom declarations per day (23). Shifting to paperless customs processes would reduce costs for inventory and assist in improved resource allocation as personnel would not be required for trivial and mundane tasks such as preparation and cross-checking of numerous documents. In totality, a fully digitised system provides government agencies with the means to do away with inefficiencies that hold back the speed of document processing, approval, communication, and inspection stages. Further contributing to efficiency, a NSW has also facilitated the dissemination of data through multiple agencies ranging from border control authorities, freight forwarders, customs brokers, shipping agents, banks, and so on. As a result, there is improved inter-agency co-ordination and increased transparency. Apart from a substantial increase in government revenue, the NSW will contribute to an improved business environment in Sri Lanka. The domino effects include an upward movement in the country’s global rankings, incentives for foeign direct investment (FDI) and local business as well as global recognition.  Driving forces for implementation While the NSW on the surface seems like an IT-based innovation, it is rather a platform for inter-agency and private sector collaboration. As the NSW is a system which requires involvement from government, the private sector and the transport community, it is crucial to ensure inter-agency collaboration. Ensuring public-private sector participation, introducing mandates, and a steering committee to oversee implementation is crucial in developing such a system. The system as a whole is one that constantly evolves with no end stage. It requires continuous maintenance, support, and enhancement. This should be supplemented by the appropriate legislation, disclosure, and publishing, backed by training and airtight data security policies. Thus governance of the NSW needs to be executed appropriately so that new technologies, techniques, and new modes of trade can be leveraged. In best-performing nations, a Single Window is not considered a single system but rather “a combination of trade-related platforms that serve various trade communities and modalities” (24). This has enabled leading countries such as Singapore and Hong Kong to facilitate seamless trade by building an environment of interoperable trade systems. (Kavishka Indraratna is a Research Analyst at the Advocata Institute. She can be contacted at                        kavishka@advocata.org. Mithara Fonseka is a Researcher at the Advocata Institute. She can be contacted at mithara.advocata@gmail.com. The Advocata Institute is an independent public policy think tank. Learn more about Advocata’s work at www.advocata.org.)  ………………………………………………………………………………………. The views and opinions expressed in this article are those of the author, and do not necessarily reflect those of this publication. References: (1) WTO, Trade facilitation Agreement Database, https://tfadatabase.org/members/sri-lanka. Accessed 6 January 2022. (2) WTO, Trade facilitation Agreement Database,10.4-Single Window, https://tfadatabase.org/members/sri-lanka/technical-assistance-projects/article-10-4 (3) United Nations, UN/CEFACT, “Recommendation and Guidelines on establishing a Single Window: to enhance the efficient exchange of information between trade and government”, Recommendation No.33, (2005), https://unece.org/fileadmin/DAM/cefact/recommendations/rec33/rec33_trd352e.pdf. Accessed 6 January 2022. (4) World Bank Group, “Doing Business 2020”, Economy Profile Sri Lanka, Comparing Business Regulation in 190 Economies,(2020), https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sri-lanka/LKA.pdf. Accessed 6 January 2022. (5) World Bank Group, “Doing Business 2020”, Economy Profile Sri Lanka, Comparing Business Regulation in 190 Economies,(2020), https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sri-lanka/LKA.pdf. Accessed 6 January 2022. (6) World Bank Group, “Logistics Performance Index 2018”, (2018), https://lpi.worldbank.org/international/scorecard/radar/254/C/LKA/2018#chartarea. Accessed 6 January 2022. (7) World Economic Forum, “The Global Enabling Trade Report 2016, Enabling Trade Rankings”, (2016) https://reports.weforum.org/global-enabling-trade-report-2016/enabling-trade-rankings/#series=CUSTSERVIND (8) World Economic Forum, “Enabling Trade Index 2016”, (2016) https://www3.weforum.org/docs/WEF_GETR_2016_report.pdf. Accessed 6 January 2022. (9) World Economic Forum, “The Global Enabling Trade Report 2016, Enabling Trade Rankings”, https://reports.weforum.org/global-enabling-trade-report-2016/enabling-trade-rankings/#series=CUSTSERVIND. Accessed 6 January 2022. (10 ) Johns, M. “Trade facilitation reform in Sri Lanka can drive a change in culture”, World Bank Blogs, 2017 https://blogs.worldbank.org/endpovertyinsouthasia/trade-facilitation-reform-sri-lanka-can-drive-change-culture. Accessed 6 January 2022. (11) UN ESCAP, “Digital and Sustainable Trade Facilitation in Asia and the Pacific 2021”, (2021) https://www.unescap.org/sites/default/d8files/knowledge-products/UNTF%20Report.pdf. Accessed 6 January 2022. (12) UN ESCAP, “Single Window Planning and Implementation Guide”, https://www.unescap.org/sites/default/d8files/5%20-%201.%20Introduction_0.pdf. Accessed 6 January 2022. (13) UN ESCAP, “Single Window Planning and Implementation Guide” https://www.unescap.org/sites/default/d8files/5%20-%201.%20Introduction_0.pdf Accessed 6 January 2022. (14) UN ESCAP, “Single Window for Trade Facilitation: Regional Best Practices and Future Development” https://www.unescap.org/sites/default/files/Regional%20Best%20Practices%20of%20Single%20Windows_updated.pdf. Accessed 6 January 2022. (15) Central Bank, Annual Report 2019, External Sector Developments and Policies, Chapter 5, (2020), https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2019/en/9_Chapter_05.pdf. Accessed 6 January 2022. (16) UNECE, “Trade Facilitation Implementation Guide, Singapore case study”, https://unece.org/fileadmin/DAM/cefact/single_window/sw_cases/Download/Singapore.pdf. Accessed 6 January 2022. (17) United Nations ESCAP, “Single Window Implementation: Benefits and Key Success Factors”, (2012), https://unnext.unescap.org/sites/default/files/switajik-sangwon.pdf. Accessed 6 January 2022. (18)  UNECE, “Trade Facilitation Guide, Single Window Implementation in Mozambique”, https://tfig.unece.org/cases/Mozambique.pdf. Accessed 6 January 2022. (19)  UNECE, Trade Facilitation Implementation Guide, Interagency Collaboration for Single Window    Implementation: Thailand’s Experience, https://tfig.unece.org/cases/Thailand.pdf. Accessed 6 January 2022. (20) United Nations, Single Window Planning and Implementation Guide, (2012) https://www.unescap.org/sites/default/files/0%20-%20Full%20Report_5.pdf. Accessed 6 January 2022. (21) United Nations, ESCAP, Single Window Implementation: Benefits and Key Success Factors https://unnext.unescap.org/sites/default/files/switajik-sangwon.pdf. Accessed 6 January 2022. (22) UNECE, “Trade Facilitation Guide, Single Window Implementation in Mozambique”, https://tfig.unece.org/cases/Mozambique.pdf. Accessed 6 January 2022. (23) UNECE, “Trade Facilitation Guide, Single Window Implementation in Mozambique”, https://tfig.unece.org/cases/Mozambique.pdf. Accessed 6 January 2022. (24) United Nations, ESCAP, Single Window for Trade Facilitation: Regional Best Practices and Future   Development, (2018), https://www.unescap.org/sites/default/files/Regional%20Best%20Practices%20of%20Single%20Windows_updated.pdf. Accessed 6 January 2022.


More News..