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Blockchain technology within the context of Trade Single Windows

Trade Single Windows (SW) are a single electronic interface where exporters and importers can submit regulatory and commercial documents to Ministries and other cross-border regulatory agencies, as well as private stakeholders with trade-related functions (e.g. Chambers of Commerce, insurance companies, banks, etc.), so reducing the costs related to the preparation and submission of paperwork required for completing an international transaction.

The last edition of the World Bank’s “Doing Business” survey, calculates that Sub-Saharan African importers spend on average 98 hours on paperwork for a consignment, as opposed to only four hours in Thailand and one hour in Canada and Sweden, where traders use to transmit digital documents to cross-border regulatory agencies through SWs.

The main advantage of SW is that exporters and importers can avoid spending time filling out paper documents, re-entering the same data multiple times for the regulatory purposes of different entities, and visiting government agencies in person to secure signatures and stamps. Many studies reveal that electronic single windows have helped to reduce the document processing times in border agencies up to half and to cut trade compliance times up to one-third. Moreover, they have determined an overall improvement in transparency and user experience for border clearance.

Article 10.4 of the WTO Trade Facilitation Agreement (TFA) calls for Member States “to endeavor to establish or maintain a single window, which enables traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner.”

Introduced in the late 1980s by countries like and Singapore (TRADENET system) and Sweden, such systems have tremendously proliferated in recent years, receiving a push with the adoption of the TFA, which entered into force in 2017. Many countries however, especially developing countries, are facing significant problems in their implementation, like as:

  • agencies’ long response times;
  • incomplete digitalization of trade documents and persistence of paper: in many countries, all of some of the documents electronically transmitted to the SW also need to be accompanied by their paper-based versions, because of the lack of electronic signature laws of other legislation or regulation giving legal force and ensuring the authenticity of electronic documents;
  • redundancies (need to submit the same data multiple times to different authorities).

 

Other challenges that can hinder the functioning of such systems are the lack of interoperability among the IT systems of the entities integrated into the Single Window, the persistence of outdated processes and the limited visibility and traceability of shipped goods (regulatory agencies interconnected to the SW, like Customs, only in marginal cases have also the capability to trace goods in supply chains, verify their origin, and detect anomalies/fraudulent patterns).

The Word Economic Forum, with the White Paper “Windows of Opportunity: Facilitating Trade with Blockchain Technology“, explores the application of the blockchain technology within the trade single windows, indicating how their implementation can be fast-tracked through this new technology, which at the moment still has an experimental nature.

Blockchain is a database that retains information on all transactions on a ledger visible to all stakeholders. Blockchain is being implemented and piloted in various industry and government sectors, such as logistics, supply-chain management, customs and border regulatory processes (in this regard, the possibilities offered by such technology have been analysed by a recent WCO study), cross-border payments and trade finance.

The White Paper draws on the expertise of more than 80 project community members globally across various industry sectors, government agencies, intergovernmental organizations and academic institutions as well as in civil society.

 

 

 

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