“Single Window is defined 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”
UN/CEFACT RECOMMENDATION No. 33
ISPS Port Community System brings Ukraine closer to world standards
This fall was marked by a significant eventfor the business community as regards the implementation of procedures to facilitate international trade and transport: the introduction of the Port Community System (ISPS), i.e. a product based on the Single Window concept. As you know, on September 20 this year the Port of Odessa presented the first stage of the ISPS. Those who took part in the presentation had the first-hand experience of the system itself and its place in the port operating system, and learned about the prospects for its further implementation.
Great impetus to the further workflow optimization, simplifying transport and customs procedures at ports of entry, was given by the Law “On Sea Ports of Ukraine” and several amendments to the relevant legislation.
The versatility of this project is recognized by numerous specialists at the Port of Odessa, the Ministry of Infrastructure, Administration of Ukrainian Sea Ports, South Customs, Ministry of Revenues, etc. Our reporter had the opportunity to meet a person who, together with experts of his company, has advocated for this project: Deputy Chairman of the Interagency Working Group on Introduction of Single Window - Local Solution, established on the instructions of Prime Minister Mr Mykola Azarov, the President of PLASKE JSC Mr Oleg Platonov.
From experiment to industrial exploitation
Mr Platonov summarized the process of implementing electronic document based on Single Window - Local Solution, launched two years ago in the port of Odessa. The first stage of the ISPS introduced on September 2 this year, is six software and hardware modules providing information support for the entire chain of import goods passing through the waters and the port area. Four modules have been implemented so far, and the rest will be implemented by the end of this year. ISPS is now operated only within the Odessa port for containerized cargo exported from the port by road. First support for the port community system was provided by the order of the Ministry of Infrastructure as of 18.10.2012 No 622, which gave the legal status to electronic shipping documents. Commercial operation was made possible by CMU Decree as of 07.03.2013 No 553 “On Amending the Resolution of the Cabinet of Ministers as of May 21, 2012 No 451”. This document makes it possible to connect other ports of Ukraine to the ISPS.
“This document (Resolution No 553) has a clear target: to shift the entire document flow relating to the movement of goods through ports to the electronic version. It is not just about the goods in containers, but also other types of cargo. The first document of the first stage of the ISPS was electronic manifest, ensuring a high level of information protection, which acts as of September 2 this year in the port of Odessa. Software developer for ISPS is PPL 33-35 company, created under a contract between the port and PLASKE JSC for the implementation of the Single Window.
The system accepts data formats, as required for the work of state institutions and used in international transport processes, and focuses on the use of digital signature.
Illichivsk Port is the next one to implement the ISPS, they are preparing now. In the future, ISPS will be introduced by other ports,” Mr Platonov said. Electronic clearance of containers transported by rail, started by the Port of Odessa, also constitutes the first stage of the ISPS. Finalization of the flowsheet (temporary order) for containers transported by rail will significantly expand the ISPS internal capabilities.
As noted by Mr Platonov, the program is ready for operation. Technological part (flowsheet) is still agreed between AUSP, PPL 33-35 and rail group of port main control. Nevertheless, some freight forwarders working with the port already use the software. The model of the electronic manifest for rail containers still resembles an initial stage of clearance of goods for road transport, i.e. paper and electronic versions are used. In the near future, after the new technology is agreed, the paper version would be deleted.
Another component of the first phase of the ISPS is information support for transshipment mode (simplified form of clearance for containers within one checkpoint - Ed.). The Port of Odessa works with this kind of goods for 3 years already.
Law applies to everyone without discrimination
The process of implementing the ISPS, as any start-up, is quite difficult. Shipping agents are reluctant to use the proposed document management system, citing the fact that they already have a developed system of data exchange with their principals.
“We made it possible to solve this problem: we suggested lines and operators to use converters to convert any data format, used in business practice, in the desired system. Agreement on the exchange of information between the administration of the port of Odessa with regulatory authorities, public authorities, which is being prepared for signing, provides this issue. Until recently, there was no need for such an agreement, as the ISPS functioned in an experimental mode. But after the adoption of the CMU decree No 553, the requirement to have agreements on exchange of information between administrations of all domestic ports and all transporters has become mandatory.
Therefore, in parallel with the organizational and technical measures for the preparation of commercial operation of the ISPS, the draft agreement was prepared and posted on the website for discussion (http://www.singlewindow.org),” Mr Platonov explained.
ISPS great benefit is that it established common rules for everyone. Use of the system does not only provide freight forwarders and shippers with a high level of security of the presented information, but eliminates the need to queue. Nevertheless, Mr Platonov notes, if the freight forwarder insists on using paper documents, it is possible to use the free service rendered by the port, where his paper manifest will be transferred into the electronic version.
One reason of the reluctance to use the ISPS by shipping lines may also be that all transactions made through the ISPS become transparent. “Many marketers select convenient technologies and principles of operation, which they do not want to change, as they think the national legislation is not adjusted to their usual technologies and principles. But the exchange of information with the public authorities must be in a form legitimized by the state,” Mr Platonov insisted.
Free Practice receives a high level of security
As the President of PLASKE JSC explained, ISPS separate module (there are six modules) covers transactions for obtaining permission to unload the vessel in the port (so called “Free Practice”), including the transfer of advance information on goods to regulatory authorities for further risk analysis. As you know, the free practice regime operates in Odessa port since 2010. The ship gets to the dock and its unloading begins before the Commission comes.
However, that application of free practice did not provide a high level of liability for decision-making process. Customs officials and other regulatory bodies made a simple mark in the application, putting no signature. In the near future, data processing would be automated, ensuring a high level of security and personalization of decisions. After the introduction of this ISPS module, the ship’s captain will receive permit for cargo operations in an electronic record with an electronic signature by regulatory bodies before Commission comes.
Next, there is the introduction of three modules: the presentation of unloading results, cargo owner’s statement about the possibility of export of cargo from the port area, and finally the implementation of all kinds of control and removal of cargo from the port. All these modules are already fulfilled and require coordination with all services.
“Implementation of the free practice module is expected in January 2014. This is partly due to the fact that the next year for Ministry of Revenues is the Year of Customs. Serious consideration will be given to the modernization of border crossing points in Ukraine. Such a task was set by the President and the government,” Mr Platonov stated.
Postaudit replaces border controls
Customs was the first body, that supported the initiative of the Ministry of Infrastructure and the port of Odessa on the implementation of the electronic manifest. One of the main advantages of electronic manifest for customs is the ability to pre-monitor possible risks, which corresponds to the new Customs Code. According to the PLASKE President, Customs Code of Ukraine is better than Codes of some European countries, not to mention the former Soviet Union ones, as the best practices of the EU customs legislation were taken in regard.
The terms “single office”, “single window” prescribed in the new Customs Code, are not just well-known to transporters, but are widely used in practice. Single office means all the regulatory bodies are located in the same room. Single window means that freight documents are submitted only once to one place, and due to organized system of information exchange, all transporters are able to share information.
There is another “one stop shop” concept, which is widely used in European countries. According to Oleg Platonov, “one stop shop” is usually used in road crossings on the border between the two states, for example, Germany and France. “In this case, the customs officer requests their colleagues from the neighboring state to carry all kinds of controls (border, environmental, phytosanitary, scanning, weighing, etc.), and at the same time, he trusts the results of this monitoring without duplicating them on its territory. In Ukraine, it is still difficult to implement, since control services are in different places. But in the long term we need to focus on the introduction of such a control system,” Mr Platonov says.
Despite all these innovations, corresponding to the best world standards, sometimes in the ports there are situations that are interpreted ambiguously by transporters. In this case, we are talking about the recently introduced 100% screening of containers in Odessa and Illichivsk ports, resulting in the congestion of vehicles. This problem, as explained by Mr Platonov, was announced during a recent meeting of the Public Council under Ministry of Revenues by Minister Alexander Klimenko. According to him, any idea can be discredited, including the use of various forms of container control (scanning, weighing, etc.).
“Controls, carried out in the ports now, are defined by the Customs Code of Ukraine. However, according to the minister, the screening process was not correctly organized in the field. Properly organized system of risk analysis designed to identify illegal activities of economic operators should still lie at the heart of this process. When all the modules of the Single Window are introduced, it will be possible to randomly choose containers for scanning, as it is practiced in the majority of ports in the world. And now the Ministry of Revenues is temporarily forced to inspect the entire volume of containers passing through the port.
However, Mr Klimenko considers it possible to change the order for well-established companies. In particular, such market participants should make a deposit (payment to the budget) to have the postaudit. If the price of the marketed goods is understated or overstated, the cargo owner must reimburse the difference in the budget. There are plans to establish a mechanism for signing the agreement obliging the economic operator to pay a deposit, so that at the checkpoint his goods would not be under various forms of control,” Mr Platonov explained.
According to PLASKE President, the state is focused on the deregulation of state control. In other words, the permit system is replaced by the controlling one. Economic operator has full freedom. But according to the law, the state may at any time check his work. Customs procedures at checkpoints also comply with such a system. In conclusion, Mr Platonov revealed important information: the government has set a goal to modernize the transport system, so that it was not the appendix to the Customs Union or the European transport system, but an independent system capable of providing services to all interested marketers. If this serious and responsible task is performed, Ukraine will stand at completely different level in international arena.
OVRUTSKAYA Tatiana
