What the Single Window Concept Really Means for Traders

UNCEFACT Recommendation 33 defines Single Window as “ 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. If information is electronic, then individual data elements should only be submitted once “ and, whilst this should be accepted as the accurate definition, there are several variations on the theme and visions about the extent to which Single Window operations should apply. The concept of an importer or exporter sending one electronic message to the Single Window platform to initiate an export or an import process is sound and serves to reduce the monetary and time cost of exporting and importing. Such costs can, and frequently do, increase the cost of importing whilst reducing the profitability and competitiveness of exporting. These costs are measured annually on a country by country basis in the IFC Ease of Doing Business Report under the Trading Across Borders heading. The report is a widely used indicator for would be investors and exporters, Consequently, the Single Window concept is considered one of the most effective global trade facilitation tools.                                          

It is a reality that a group of importers and exporters in Europe, asked “what is a single window?”, would probably point to the glass object on the wall. Conversely, ask the same questions to a similar group in most developing countries and they will very likely respond to the effect that it is an electronic platform which acts as a delivery and distribution hub for trade related information required for import and export activities. The reason for the knowledge differential is firstly because developing countries and regions tend to have over bureaucratic Customs and regulatory regimes and therefore trade facilitation tools, such as Single Window, have a larger relative impact. Secondly, there are fewer legacy systems which aids implementation of a Single Window environment involving multiple stakeholders across public and private sectors. Finally, the principal donors, such as The World Bank, DFID USAID and EU regularly fund the planning and implementation of Single Window within ‘aid for trade’ initiatives.  

UNCEFACT 33 intimates that the Single Window should electronically connect the national import and export related regulatory agencies. For example, an importation of controlled drugs may necessitate generation of a customs import declaration, the application and issuance of an import licence and advice to a standards and / or health agency. Manually, this would require three or four documents whilst, in the Single Window environment, only one declaration would need to be made electronically into the hub. Many stakeholders have a much wider vision for Single Window applications, typically involving the connection of banks, insurance companies, port / airport authorities, inspection companies, freight forwarders / clearing agents and carriers into the system. This is clearly a good long- term vision which would revolutionise international trade procedures. However, implementation of Single Window is not a quick process. Typically, an implementation plan will involve a significant programme incorporating document and procedure harmonisation, business process re-engineering, training and capacity building – followed by the ICT, hardware and software, roll-out. The latter is often considered the easiest part of the process!  The ‘4 Ps’ have to be considered – People, Processes, Policy, Platform.

Single Window has recently been implemented by the US Customs and Border Protection Agency. They stated, prior to Single Window "Forty-seven agencies are involved in the trade process and among these agencies, nearly 200 forms are required for imports and exports. The current processes are largely paper-based and require information to be keyed into multiple electronic systems. As a result, importers and exporters are often required to submit the same data to multiple agencies at multiple times". This clearly articulates the requirement for Single Window environments even in the most developed economies.  

It is probably true to say that, at least initially, developing countries do have most to gain from Single Window. However, what is good for the importer is often advantageous for the exporter. Single Window, by reducing the time and cost of importing, improves profitability for the importer. This has two potential consequences for the seller, the likely-hood of increased trading volumes, that is larger and / or follow-on orders, and also less pressure on price.  In developed economies the dream, which has been discussed since the 1970s, in which an exporters completes one electronic master document which generates all internal commercial documents,  shipping instructions, export customs declaration,  insurance document, transport document  and certificate of origin would become a reality within a Single Window environment.  Further concepts for Single Window include regional versions, such as that being rolled out in the ASEAN community. It should be recognised that the requirement for Single Window is recommended within the WTO Trade Facilitation Agreement which also requires good cross-border customs to customs co-operation, as does the WCO SAFE Framework. The latter requirement could be facilitated through Single Window systems, for example enabling the export customs declaration to automatically, with small adjustments, become the import declaration. What is there not too like?!      

Article written by Jon Walden - Associate of Strong & Herd LLP

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