By Martin Palmer, Hurricane Modular Commerce Ltd
In today’s globalized world, data has emerged as the cornerstone of international supply chains. It plays a pivotal role in every aspect of the process, starting from sourcing commodities, identifying customers, selecting the most efficient transportation methods, ensuring compliance with regulations, calculating, and collecting duties and taxes, invoicing, risk management, and more.
However, while data is indispensable for these operations, obtaining complete and accurate data remains a challenging pursuit. Often, due to time constraints or negligence, data is not recorded correctly at the first instance, leading to multiple iterations and extra efforts to rectify the errors, which in turn cause delays, additional costs, and dissatisfaction among customers and regulatory authorities.
For years, global organizations like the United Nations (UN), World Trade Organization (WTO), World Customs Organization (WCO), and the International Chamber of Commerce (ICC) have been urged by the private sector to improve cross-border trade facilitation. In response, the concept of a Single Window (SW) or Single Trade Window (STW) has gained traction as a promising initiative to enhance trade facilitation on a global scale. The SW is envisioned as a central platform allowing all parties involved in trade and transport to submit standardized information and documents through a single entry point to fulfil import, export, and transit regulatory requirements. One crucial aspect of the Single Window is that electronic data elements should only be submitted once, promoting efficiency, and reducing redundancy.
The potential benefits of implementing a successful Single Window project are multifaceted. For governments, it could lead to increased revenue, better compliance with rules, efficient resource allocation, and improved trade statistics. Economic operators, such as traders, stand to gain from faster clearance times, a more transparent and predictable process, and reduced bureaucratic hurdles. Customs administrations could witness improved staff productivity through upgraded infrastructure, increased customs revenue, a more structured and controlled working environment, and enhanced professionalism. On a national scale, the Single Window can foster improved transparency, better governance, and reduced corruption by minimizing opportunities for physical interactions.
However, the success of such initiatives hinges entirely on the availability of complete, accurate, and timely data. Unfortunately, there is still a reluctance or a lack of awareness among exporters to provide essential information, such as goods descriptions, customs codes, and values, at the point of origin for international transactions. This data deficiency not only affects international trade and the profitability of companies but also has serious consequences for various societal aspects.
One crucial area impacted by data inadequacy is the environment. Complete and precise data is essential for achieving environmental targets. For instance, inaccurate data on hazardous materials being transported can lead to environmental hazards during the transportation process. Additionally, timely data is critical for monitoring and mitigating the impact of trade-related activities on ecosystems and natural resources.
Safety and security are also profoundly influenced by data quality. Security programs like the USA’s Air Cargo Advanced Screening (ACAS) and the EU Import Control System (ICS) rely heavily on accurate and timely data to identify goods that may pose risks to importing countries. Through advance data screening, potential threats can be identified even before the goods arrive, allowing authorities to take appropriate action. In contrast, goods with incomplete or incorrect data may be denied export or delayed upon arrival.
Moreover, data plays a pivotal role in denied or restricted party screening. Accurate information is essential for ensuring that products or entities associated with sanctioned or prohibited parties are not allowed to cross borders.
Revenue collection is another aspect where data accuracy is paramount. Proper data reporting helps governments ensure that appropriate duties, taxes, and fees are collected, preventing revenue leakage and bolstering public funds.
Furthermore, customer satisfaction heavily relies on smooth and efficient trade processes. With accurate data, customs clearance can be expedited, leading to quicker delivery of goods and ultimately happy customers.
In conclusion, data is the lifeblood of international trade, and its importance cannot be overstated. Complete, accurate, and timely data not only facilitates trade and improves profitability but also has far-reaching implications for the environment, safety, security, revenue collection, and customer satisfaction. Embracing data quality as a top priority will pave the way for more efficient, transparent, and sustainable global trade practices.
The data-driven age demands a clear data strategy for customs and regulatory authorities worldwide. Regulatory authorities should acknowledge the value of data, work to standardise their data management practices, and consider the potential benefits of public-private partnerships. By doing so, regulatory authorities can harness the power of data to enhance security, streamline operations, and foster economic growth.
