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     2018-11-03 09:11      来源:CNW Academic Journal

中外學術學刊 (the CNW Research Journal) 1:3-29 (2018)


Road of Hong Kong Special Administrative Region to Trade Single Window A Comparative Study with America and Canada


by

Dr. Gryphon Sou

Founding Senior Fellow, World Institute of Sustainable Development Planners

Part-time Instructor, Open University of Hong Kong

Adjunct Associate Professor, Gratia Christian College

Visiting Professor, City University of Macau

 

 

In April 2016, the Government of Hong Kong Special Administrative Region commenced a 3-month public consultation on the establishment of a Trade Single Window.  With reference to the World Bank’s Doing Business Report 2014, 73 economies have developed Single Windows of sorts.  With the local Government Electronic Trading Services (GETS), Hong Kong is considered as having a partial Single Window for Trade by the World Bank.

 

The former Financial Secretary mentioned in his Speech for the 2016-17 Budget that the local Government would set up a dedicated office to coordinate with the relevant departments, engage the industries and prepare the detailed design and implementation program for a Trade Single Window.  The local Government expects that the first phase of a genuine Trade Single Window would be launched in 2018.

 

The Author of this Paper is a Canadian previously worked in the World Customs Organization.  He wishes to study the Consultation Paper and compare the possible road of the local Government to a Trade Single Window with that of the Canada and United States.  Findings of this Study may be contributory to the local Government’s initiative.

 

Keywords: Advance Cargo Information, Incremental Approach, Integrated Approach, Needs Assessment Exercise, Trade Single Window.




SYNOPSIS

 

United Nations Center for Trade Facilitation and Electronic Business (UNCTFEB) defines a 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 fulfill all import, export, and transit-related regulatory requirements.  If the information is electronic, then individual data elements should only be submitted once.” (UNCTFEB, 2005).

 

World Customs Organization (WCO) describes a Single Window as “a cross border, intelligent, facility that allows parties involved in trade and transport to lodge standardized information, mainly electronic, with a single-entry point to fulfil all import, export and transit related regulatory requirements.” (WCO, 2009, 2011, 2014 & 2016).

 

World Trade Organization (WTO) promotes a Single Window “enabling 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.  In cases where documentation and/or data requirements have already been received through the Single Window, the same documentation and/or data requirements shall not be requested by the participating authorities or agencies except in urgent circumstances and other limited exceptions which are made public.” (WTO, 2017).

 

Asia -Pacific Economic Cooperation (APEC) proposes to make it an objective to develop a Single Window system within each APEC economy by 2020 (APEC, 2010 & 2017).  Its Sub-Committee on Customs Procedures of APEC also promotes international interoperability amongst the systems within APEC.

 

 

ESTABLISHMENT OF TRADE SINGLE WINDOW

 

To maintain Hong Kong’s competitiveness in international trade and position as a regional logistic hub, the Government of Hong Kong Special Administrative Region needs to further develop its various initiatives in facilitating the meeting of Business-to-Government (B2G) document requirements (CEDB, 2016).  One of the initiatives is the establishment of a full-fledged Trade Single Window following international development.

Currently, a great many B2G trade document requirements are being met by conventional paper means, for instance, over the counter or by mail.  Regardless of the availability of electronic services or otherwise, stakeholders have to deal with each and every government agency separately as may be required at different points of time.  The fragmented approach is not conducive to the efficient processing of the import and export trade.  It also takes a toll on the trading community as well as the government agencies.

 

Status Quo

 

Hong Kong is known as a free port in the world.  However, there are 51 trade documents required for the submission to the Government in the import, export and transhipment of goods in Hong Kong.  These documents include Import and Export Declaration (TDec), Cargo Manifests, Advance Cargo Information (ACI) of different forms, as well as licenses, permits and other documents required for goods that are subject to specific controls or schemes (CEDB, 2016a-b).

 

Submission of these documents is to meet regulatory requirements for a number of public policy reasons, such as statistics, levies and duties, anti-smuggling, public safety and health, and security purposes.  In the 2016-17 Budget Speech, the former Financial Secretary announced that the Government planned to set up a Trade Single Window on an Informational Technology (IT) platform for the one-stop lodging of all 51 B2G documents for all trade declaration and customs clearance purposes.

 

Capital Cost

 

The development of a full-fledged Trade Single Window is a mega project involving substantial capital investment.  Stemming from experience, its Capital Cost should be over USD100 Million.  It is planned that the Customs and Excise Department (C&ED) would operate the Trade Single Window upon its implementation and run an Operation Center to look after future day-to-day maintenance and operation.

 

The Trade Single Window Operation Center is expected to possess the technical capacity to facilitate and interface with Business-t0-Business (B2B) platforms operated by the private sector and connections with single windows of other economies (Government to Government – G2G) if desirable.

 

In accordance with the public policy, fees charged by the Government should in general be set at levels adequate to recover the full cost of providing the goods or services, unless otherwise justified.  Along this line of thinking, Participating Government Agencies (PGAs) will review the existing fees for their services as well as justifications for those currently free-of-charge services.  PGAs have to identify possible cost savings with a view to achieving full-cost recovery as far as possible in the new Trade Single Window B2G environment.

 

Policy makers of the Government are neutral in the change of the submission mode to be brought by the Trade Single Window (TSW) itself but such change should not attract a new fee.  Exact Capital Cost (Non-Recurrent) and the Running Cost (Recurrent) of a Trade Single Window is yet estimated.  However, significant financial input is evitable due to the scale of the TSW Project.

 

Scale of TSW Project

 

In 2016, a dedicated Project Management Office (PMO) was formed.  It is headed by a supernumerary Directorate officer at the D2 level and under the Commerce and Economic Development Bureau (CEDB), Government of Hong Kong Special Administrative Region.  The PMO comprises four units of 16 non-directorate officers:

 

1. Policy and Legal Unit

2. Business Process Unit

3. Information Technology Unit

4. Resources, Planning and Administration Unit.

 

Manpower input to the PMO is tabulated in Figure 1 whereas the Annual Staffing Cost of the PMO is approximately USD3.3 Million:


Figure 1: Manpower Input to the Project Management Cost

Post

Head at D2 Level

16 Non-Directorate

Notional Annual Salary Cost at Mid-Point

USD253,518

USD1,941,277

Full Annual Average Staff Cost  (Salaries + Staff On-Cost)

USD357,140

USD2,944,482

(Source: CEDB, 2016)

 

Non-directorate civilian and disciplinary officers working in the foregoing Units are originated from CEDB, C&ED the Office of Government Chief Information Officer (OGCIO), Efficiency Unit (EU) and Department of Justice (DoJ).  They are experts in policy-making [CEDB], public and Customs administration (CEDB/C&ED), compliance and enforcement [C&ED], service delivery and management [EU], information technology [OGCIO], and legal matter [DoJ].  Head of the PMO provides policy steer and plays a leadership role in the sophisticated coordination work amongst internal and external stakeholders.

 

Internal stakeholders are identified to be nine government agencies under the policy steer of six policy bureaux.  They are involved in the 51 B2G documents which contain more than 5,000 data items.  Putting all these under one Trade Single Window Information Technology (IT) platform requires review, reconciliation, alignment and rationalization of many procedures and business processes.

 

These procedures and processes are always entrenched in legislative provisions.  Pilot study reveals that the Trade Single Window is of relevance to 14 principal ordinances and 14 pieces of subsidiary legislation under the Laws of Hong Kong.  Other than the legal impact, the challenges also include alignment of departmental practice and culture, migration of their existing IT infrastructure developed over time, and harmonization of departmental data sets.


ROAD OF HKSAR TO TSW

 

The scale of the TSW Project is rare, if not unprecedented, in the local Government (CEDB, 2016a-b).  Commerce and Economic Development Bureau also describes TSW a mammoth policy and IT exercises.  With an initial annual cost of a PMO over USD3.3 million, the PMO aims to roll out the Trade Single Window in three phases (Figure 2):

 

Figure 2: Roll-out of Trade Single Window in Three Phases

Phase 1

Phase II

Phase III

2018 the earliest

Q4/2021 the earliest

Q4;/2023 the earliest

14 B2G Documents

Legislative Amendments are not required

Soliciting Voluntary Use

Cultivating Early By-in of the Stakeholders

26 more B2G Documents

Legislative Amendments are required

Mandating 14+26 B2G Documents

Import & Export Declaration (TDec)

Cargo Reports

Migrating to International Trade Single Window

(Source: CEDB, 2016)

 

Government Electronic Trading Services

 

Since 1997, Government Electronic Trading Services (GETS) have been implemented in Hong Kong.  GETS is a front-end electronic service mandatory for the trading community to submit commonly used trade documents:

 

2 Import and Export Declaration (TDec)

2 Certificate of Origin

2 Dutiable Commodities Permit

2 Cargo Manifest (Air and Sea Mode)

 

As for Cargo Manifest, there are four statements:

 

1. Statement One Cargo Manifest (Sea Mode) – upon demand

2. Statement Two Cargo Manifest (Air Mode)

3. Statement Two Cargo Manifest (Sea Mode)

4. Voluntary Electronic System for Cargo Manifest (EMan) Statement One Submission Scheme for Ocean Going Vessels


For the Ocean-Going Vessels (OGVs), carriers may submit Advance Cargo Information (ACI) at the master (more general) level under the “voluntary” EMan Statement One Submission Scheme for the OGVs.  Sea freight forwarders may submit ACI at the house (more detailed) level under the E-Sea Customs Clearance Scheme (e-SCC Scheme) on a “voluntary” basis.  For the River Trade Vessels, carriers may submit ACI under the “voluntary” ACI for RTVs Scheme too.

 

In the Hong Kong International Airport, air cargo operators submit electronic information of imported goods to the Government on a “voluntary” basis for Customs clearance purposes under a computerized Air Cargo Clearance System (Sou, 2003 & 2004).  For speedy clearance, all cargo operators including courier services providers readily use this electronic system.  As regards road cargoes, shippers submit electronic ACI as “stipulated” by the Import and Export (Electronic Cargo Information) Regulation, Laws of Hong Kong.

 

To this end, one can see that the prevailing trade practices embrace both “mandatory” and “voluntary” elements.  The local Government’s current contracts with the Service Providers of GETS will run until end 2018.  After that, the Government proposes to continue the GETS model as a tide-over arrangement (CEDB, 2016a-b) before the new Trade Single Window takes over in 2024, i.e., end of Phase III.

 

In 6 years (2019 – 2024), the Government prepares for the full and mandatory implementation of the Trade Single Window in 2024.  At the Government’s option, Trade Single Window project is subject to two years of possible extension.  With the rolling out of Phase I in 2018 the earliest, Trade Single Window project is expected to cover some 90 million transactions per annum.  This is over four times of the annual transaction volume of GETS for the time being (CEDB, 2016a-b).  Naturally, there may be increase or decrease of the local trade volume from 2019 t0 2024.

 

Obviously, implementation of Phase II and Phase III (Figure 2) are subject to the passage of relevant legislative proposals mandating the use of the Trade Single Window.  Further, the Project is also subject to the funding approval in good time.  CEDB expects to commence each Phase with a transitional period of not less than 12 months.

 

This is the 20th Anniversary of the Hong Kong Special Administrative Region.  In the last decade, we witnessed the procrastination of large scale projects due to political indifference.  Filibustering always hinders the legislative and funding approvals.  For a mega project like Trade Single Window, we are doubtful whether the phasing and transactional arrangements are realistic and achievable.


RESEARCH METHOLDOY

 

Literature Review (Abrahamson, 1983, Jennings, 1993; Leedy, 1994; Westmeyer, 1981) has been applied as a research method in this study.  There is another method called Comparative Study (Babbie & Wagenaar, 1989; Easterby-Smith et.al., 1991; Ely, 1991; Lodge & Tursky, 1981; Margot, 1991; Tesch, 1990; Vaus, 1996) to be interchangeably used in this paper.

 

With reference to the World Bank Group’s Doing Business Report in 2014, 73 economies have developed Single Windows or sorts.  Eighteen of them have put in place a Single Window which links all relevant government agencies electronically and the remaining 55 only do so partially (Doing Business, 2013-16).  With the GETS, Hong Kong is considered as having a partial Single Window by the World Bank Group.

 

United States and Canada in the North American Region are regarded by World Bank Group as economies with Single Windows.  On the contrary, United Kingdom in the European Union is not on the Single Window List of the World Bank’s Doing Business Report 2014.  Studying these countries’ situations may throw light to the significance and applicability of Single Windows.



Canadian Experience

 

Single Window Initiative of Canada was an initiate steered by the Canada Border Services Agency (CBSA).  The initiative aimed at the changing border management environment (Lawson, 2009) that was characterized by:

 

2 exponential growth of importation and exportation of new commodities.

2 increased responsibility to protect Canadians from threats to health, safety and security.

2 increased other government agencies requirements (7/24 service).

2 shift to paperless environment or Customs interface (full Electronic Data Interchange).

2 Need to effectively balance security whilst supporting economic prosperity via facilitated processes to ensure the free flow of known or low risk goods.

 

CBSA is responsible for border management regarding all Customs issues as well as Immigration enforcement, and Food, Plant and animal enforcement at the border, mainly connecting with the United States on land.  CBSA provides integrated border services whilst facilitating the free flow of persona and goods thus ensure compliance with all Canadian government program requirements.  The following statistics reflect CBSA’s past capacity (Lawson, 2009):

 

Figure 3: Capacity of CBSA whist embarking on Single Window Initiative

Capacity

Statistics

Legal

Administer 90+ Acts and Regulations on behalf of other government agencies

Integrated Border Services

1,200 Points of Service across Canada

39 International Locations

8,891 km of border with the United States

243,000 km of Coastline

Points of Entry or Exit

119 Land Border Crossings

13 International Airports

3 Major Marine Ports

Staffing

13,000 Employees

7,200 of which are Uniformed Border Services Officers

Cargo Handling

Over 12 million commercial release each year

6,500,000 Trucks

186,000 Marine Vessels

43,000 Rail Movements

5,500 Cargo Planes

(Source: Lawson, 2009)

 

CBSA is the lead agency in developing a more efficient, effective and integrated approach to collection and consolidating all Government of Canada Advance Cargo Information (ACI) required on all imported goods, and eventually exports.  Vision of its Single Window Initiative is:

 

2 Being the single-entry point for electronic submission of all government agencies’ regulatory requirements.

2 Elimination of paper-based reporting.

2 Provision of 7/24 service for Electronic Data Interchange or other government agencies’ release request.

 

CBSA’s Single Window Initiative is consistent with the World Customs Organization data model and international standards.  Its key features are listed out in Figure 4.

 

Figure 4: Key Features/Points of CBSA’s Single Window Initiative

Key Feature

Key Point

Advance Cargo Information (ACI)

CBSA to receive all ACI electronically.

ACI to be available to other government agencies for risk assessment and admissibility recommendations.

Risk Assessment

CBSA and other government agencies to quantify risk through electronic assessment of ACI.

Pre-Approval

CBSA to encourage the expansion of programs supporting identification of low risk, legitimate supply chain parties and commodities before their arrival.

Harmonization

CBSA to support international harmonization of data and border processes within the WCO framework.

Various Programs & Models

Based on other government agencies’ needs

Passive Mailbox – for periodic data transfer.

Pre-Approval Program – for specific imports by registered trade partners after risk screening.

Active Admissibility – for admissibility decision by other government agencies through electronic data exchange.

Active Permit Verification – for automated verification of permits, certificates or licenses.

Integrated Targeting – for automated risk assessment on other government agencies’ parameters.

Shared Systems  for other government agencies’ access to the CBSA systems to recommend an admission decision.

(Source: Lawson, 2009 & WCO, 2017)


Road of CBSA’s Single Window Initiative (1997-2017)

 

CBSA started Single Window development in 1997.  Under an Incremental Approach, CBSA invited five government agencies to start from scratch:

 

1. Canadian Food Inspection Agency (CFIA)

2. Department of Foreign Affairs and International Trade Canada (DFAIT) [later known as Department of Foreign Affairs, Trade and Development (DFATD)]

3. Natural Resources Canada (NRCan)

4. Statistics Canada (StatsCan)

5. Transport Canada (TC)

 

At that stage, CBSA collected and verified paper permits and certificates, detained regulated goods for inspection and/or supplied statistical and historical data on behalf of other government agencies.  Eight years later, CBSA formalized the Single Window Initiative which involved 11 government agencies representing 43 government programs.  In 2006, six more agencies were involved apart from CFIA, DFAIT/DFATD, NRCan, StatsCan and TC:

 

1. Health Canada (HC)

2. Environment Canada (EC)

3. Fishers and Oceans (FO)

4. Canadian Nuclear Safety Commission (CNSC)

5. Public Health Agency Canada (PHAC)

6. Industry Canada (IC)

 

Internally, the scope of participation resulted in a complex multi-level governance structure.  Externally, CBSA established links with the trade community and held regular consultations with national associations over the years.  CBSA with other government agencies and the trade community co-developed a Single Window framework: E-Commerce Solutions and Partnerships to facilitate Secure Trade.

 

By 2009, CBSA had over 25 years’ experience in conducting business electronically.  In other words, CBSA started its Single Window Initiative with such experience of half duration in 1997.  As mentioned before, Single Window Initiative was firstly commenced under an Incremental Approach.  A decade later, Integrated Approach was applied whilst taking some critical steps:

 

2 Collaborated vision of CBSA with its other government agencies partners.

2 Described long-terms goals of Canadian border management in an electronic commercial world.

2 Designed a communication tool for other government agencies to engage trade community in business transformation.

2 Coordinated an extensive legislative and regulatory review to ensure that other government agencies’ Acts would allow electronic data collection and sharing.

 

After all, CBSA led a rigorous Needs Assessment Process to help other government agencies map out (a) Current State, (b) Future State Requirement, and (c) Readiness to Implement (Figure 5).



Figure 5: Needs Assessment Exercise for Single Window Initiative

(Source: Lawson, 2009)

Through a series of Needs Assessment Exercise, CBSA discovered the following findings:

 

2 CBSA information currently collected did not meet 0ther government agencies’ operational requirements.

2 Harmonized System Code alone was inadequate for the other government agencies to identify commodities they were required to regulate.

2 Other government agencies were at varying levels of “information” sophistication, technical capability and legislative readiness.

2 Single Window Initiative should be phased to reflect other government agencies’ readiness.

 

With reference to the findings of Needs Assessment Exercise, CBSA was well aware of the self-readiness within the Government of Canada.  CBSA took the following steps:

 

1. Confirming other government agencies’ data requirements, business process and technology needs.

2. Analyzing the program or operational impacts for other government agencies.

3. Incorporating all business requirements or individual program needs into an Integrated Project Plan.

4. Finalizing legislative and regulatory review and estimated the timeline of legislative amendments.

5. Scheduling IT system procurement, testing for rollout and migration.

 

Status Quo of Canadian Single Window Initiative

 

Originally, CBSA targeted the earliest implementation date of Single Window as 2013.  However, it was procrastinated as the Single Window Initiative has to be refined continually until 2017.  Nonetheless, Government of Canada believes that Single Window development is desirable:

 

2 Extensive range of information and documentation for the compliance of import, export and transit related regulations is a “burden” to the trade community.

2 A Single Window interface to data management is contributory to the public service efficiency, and reduces costs for trade community and provides certainty for the cargo movement.

 

As of March 1, 2017, CBSA's Single Window Initiative streamlined the sharing of commercial import data between the Government of Canada and the trade community.  On April 1, 2018, the CBSA will decommission legacy other government agencies' release service options   It balances the needs of government agencies with today's globally competitive business environment.

 

Currently, there are nine participating government agencies representing 38 government programs.  CBSA has gone a long way from 1997 to 2017 (20 years) to accomplish the foregoing goals.  In the meantime, the Single Window Initiative of Canada has:

 

2 simplified import process

2 reduced paper burden.

2 decreased cost of doing business.


American Experience

 

Other than Canada, United States is another major country in the North American Region.  In the World Bank’s Doing Business Report 2014, United States (US) of America was regarded as an economy with Single Window in place (Doing Business, 2013).  In fact, work to develop a US Government Single Window started years ago but the ex-President Obama’s release of Executive Order 13659 helped breathed new life into the effort.

 

Mind you … World Bank’s Doing Business 2014 was published by the end of 2013 while US ex-President’s Executive Order 13659: Streamlining the Export/Import Process for America’s Businesses was actually released in 2014.  At that juncture, United States Customs and Border Protection (USCBP) had been developing the Single Window system for 15 years (USDOC, 2013).  In 2013, USCBP officials once estimated the Single Window system to be completed within the next 39 months, i.e., 2016.

 

A Jerky Way to US Government Single Window

 

US ex-President Obama’s Executive Order 13659 required the completion of the US national Single Window by December 2016.  In January 2017, the tycoon Donald Trump became the 45th President of the United States and rewrote the White House’s history.  We shall wait and see how the Executive Order 13659 of his predecessor would be realized eventually.  Historically, situation of United States is more complexed than its neighboring country, Canada.

 

Commanded by the White House, USCBP under Department of Homeland Security (DHS) is primarily responsible for developing and operating the technical foundation of the Single Window.  US Single Window project requires a remarkable amount of coordination and collaboration among dozens of government agencies (to be elaborated later in this Paper), each with different missions, requirements, and budgets.

 

International Trade Data System

 

Before the Executive Order 13659, a long-standing body called the International Trade Data System (ITDS) Board of Directors coordinated those interagency efforts.  The Board, chaired by officials of the Department of Treasury (US Treasury), worked to build a Single Window that fulfilled basic statutory requirement.  “Security and Accountability for Every Port Act of 2006 required a unified portal system known as “International Trade Data System” to collect and distribute standard electronic import and export data required by government agencies.

 

Under the auspice of Executive Order 13659, a Border Interagency Executive Council (BIEC) stood up in 2014.  Its membership included senior level officials from Departments of Agriculture, Commerce, Defense, Health and Human Services, Interior, Justice, State, Transportation, Treasury, an array of independent agencies, and representatives from the Executive Office of the ex-President.

 

BIEC defined strategic goals of a national Single Window and identified US laws, regulations and policies, or operations that hindered their achievement.  Simultaneously, DHS and other agencies finalized data needs across the US Government and ensured that the necessary legal frameworks were in place to enable on-time delivery of Single Window capabilities.



Complications of a National Single Window

 

Under the leadership of ITDS Board of Directors, agencies then reviewed all legal authorities for data requirements and initiated a coordinated regulatory and information collection amendment process to ensure that each agency could collect desirable data electronically.  While all relevant agencies agreed to the strategic goal of delivering a predominately electronic and automated Single Window, the ongoing exercise of translating existing paper forms to electronic data formats unearthed a few noteworthy complications (Brzozowski, 2014):

 

For instance, most agree that transitioning to electronic data elements (over paper forms) will promote information sharing among agencies, improve targeting and risk assessment, and facilitate the movement of legitimate trade by assisting government decision-making.  The transition is also intended to reduce the burden of compliance on industry and make the importing and exporting processes as simple and cost effective as possible.

 

However, DHS and other agencies must work to balance interests in obtaining more data with the strategic goal of minimizing and streamlining data requirements. In addition, any transition of information collection from paper to electronic data increases the level of required data entry (in the form of keystrokes) for filers.

 

Further discussion is needed to determine how the U.S. Government collectively can limit or even reduce the amount of data that will need to be “keyed in” by industry while at the same time leveraging the full range of Single Window technical capabilities to support broader document/information collections where necessary.

 

While the Single Window provides new technical capabilities for collecting and sharing data, it is much more than an IT development project.  Rather, the effort requires a fundamental change in the way that agencies work with each other and with the trade community and thereby requires intense collaboration.  Further, agencies and their stakeholders and/or trade partners should collectively develop common goals and a shared understanding of how “success” could be defined at different points along the way

 

Gradually, experts from within and outside of the US Government highlighted the dangers inherent in too reflexive or too sudden of a transition from manual and paper processes into a much faster electronic, automated trade environment.  Americans reclaimed, “The risk is that we ‘do bad things’ even faster, that we speed inefficiencies and trigger an avalanche of unintended consequences.” (Brzozowski, 2014).

 

BIEC tried to get the right people in the same room periodically, was to find the big policy, legal, and operational levers and figure out how much each needed to be pulled to achieve the national Single Window.  One exercise that yielded helpful results was a mini-table top meeting in which agencies walked through the importation process for a few different commodities.  The purpose was to identify specific “Pain Points,” areas where duplicative or even conflicting policies and processes among agencies slowed commerce and/or hindered enforcement efforts.  These Pain Points were mapped to those flagged by industry advisory committees and, after further assessment, turned into six “Strategic Solution Statements” (DHS, 2014):

 

1. U.S. agencies (particularly those with the ability to hold cargo at the border) should have access to, and use, advance information to target high-risk cargo prior to arrival or departure.

2. U.S. agencies should develop a harmonized identification mechanism for data elements (e.g., product, entity) included in the entry filing and message set.

3. U.S. agencies should build early system validations that electronically and automatically reject submissions of missing or inaccurate data.

4. U.S. agencies should develop mechanisms or capabilities to enhance communication of agency-specific risk factors, and build “business rules” in the system to automate targeting for common risk factors.

5. U.S. agencies should establish a coordinated, consolidated messaging capability to provide hold, detention and release status updates to trade.

6. U.S. agencies should establish a messaging capability that provides all appropriate agencies visibility to the final disposition and related enforcement actions.

 

Obviously, the devil of the foregoing Strategic Solutions was in the implementation details, in answering the questions of “How? Who? To what degree? In what instances?”  At that critical moment, US Government with the commitment of its presidency was struggling along the way to a national Single Window.  Roadblocks emerged and should be cleared with American determination and belief.

 

American Belief

 

Americans have the belief that the trade industry’s end goal, with respect to the Federal Government’s Single Window import-export system, should be to make the electronic filing process world-class and implement this system as quickly as possible to ensure efficient trade flows between the United States and its international trading partners (USDOC, 2013).  US has the vision of an Automated Commercial Environment (ACE) (Figure 6):



Figure 6: Benefits of Automated Commercial Environment

(Source: USCBP, 2017)

 

As of January 2017, USCBP announced that ACE was realizing the “Single Window” (Figure 7):

 

Figure 7: US Single Window under Automated Commercial Environment

(Source: USCBP, 2017)

FINDINGS

 

To this end, Critical Success Factors of Canadian Experience and governance structural roadblocks of American Experience may be of referential value. The former is inspiring whereas the latter is fascinating.  Canadian Single Window Initiative is successful with some contributory factors:

 

2 Single Window development is driven by program needs but not technology.

2 A strong governance structure is established with senior level commitment to resolve resolution.

2 Stakeholders’ buy-in is obtained promptly thus securing meaningful and strong support from all parties.

2 Partners are consulted appropriately

o CBSA with other government agencies and trade community

o Other government agencies with their clients and stakeholders

2 Requirements are timely defined through a series of internal and external Needs Assessment Exercise (Figure 5)

2 Policy is in place through legislative and regulative review.


Implications for Further Study

 

In contrast, Americans once came across roadblocks to a national Single Window in 2014 as many as 47 federal agencies had developed their own standards for imports and exports that impacted US supply chain.  Apparently, United States was the most onerous system of controls over trade in the world.  Perhaps, the White House was the only entity that had the ability to bring 47 agencies together to make the ITDS and so forth ACE work in an efficient and neutral manner.  White House was involved with the ITDS via the National Strategy for Global Supply Chain Security (NSGSCS).

 

We are particularly interested in how the Strategy Solutions (DHS, 2014) have been applied towards the announced success of US national Single Window.  This 3-year journey from ITDS to ACE (2014-2016) is worth an in-depth study.  Then, we could also learn more about the Critical Success Factors from the American Experience.  Besides, Singapore in the Asia Pacific Region is also a subject worth intensive study.

 

Singapore is comparable to Hong Kong as a significant port with busy land border crossings and their strategic locations make them become regional air and sea logistic hub.  Since 1989, Singapore has used its online Trade Net System to provide the trade community with a secure electronic means of submitting trade documents to all relevant government agencies.  Nowadays, traders can obtain import and export permits from the applicable 12 Singaporean government agencies within minutes from the time of submission.  Thus, Singapore can be a very good benchmark for the local Government in its development of Trade Single Window.

 

Conclusions and Recommendation

 

Canadian Experience reveals that Single Window takes time.  It takes 20 years from scratch to operational implementation.  Understandably, Single Window development is complex and multi-faceted.  We have to take into account:

 

2 Legislative or policy concerns

2 Technology capacity

2 Other government agencies’ competing or conflicting interests

2 Internal and external coordination and timing

2 Shifting government priorities

 

A strong lead agency is always essential.  Leading agency should be “strong, resourceful and empowered”.  Local Government’s and other government agencies’ commitment are also critical.  However, there is limited presence of other government agencies in the Trade Single Window Project Management Office (PMO).  Interestingly, we could only see the policy-makers, Customs, IT and Legal people in it.

 

In the local context, appropriate political and partner support is overly essential to the progress of Trade Single Window project.  Political parties in the Legislative Council and the Finance Committee would have much influence on the decision-making and fund-appropriation.

 

Full consultation (internal and external) is indispensable as it forges strong links with the other government agencies as well as the trade community.  Hitherto, the results of the public consultation 2016 have not been made known to the public.  It is also difficult to assess the possible impact of the Trade Single Window upon the community in which the trade partners consist of big companies to small and medium-sized enterprises.

 

Legislative and Regulatory review is fundamental.  In the local context, the existing legislation is inadequate for the Trade Single Window.  Therefore, a brand-new legislation should be drafted when legal authorities lay the foundation for a Trade Single Window.

 

American roadblocks in 2014 are of referential value.  It is inspiring if roadblocks could be easily and speedily removed for the implementation of a full-fledged Single Window for a big country in North American Region like United States.  Its neighbor, Canada painstakingly but successfully developed a Single Window mechanism for delivering a package of benefits and not just an electronic data handling system.

 

In European Union (EU), provision is being made through changes to the Community Customs Code for mandatory pre-shipment notifications so that consignments can be vetted and where appropriate intercepted at the external borders.  However, United Kingdom as one of the main players of EU regards International Trade Single Window as a concept not a proposition, and even a concept that is not widely understood.

 

In reality, it must be acknowledged that the United Kingdom already has a relatively sophisticated electronic environment for capturing and utilizing data relating international trade movements.  Interestingly, World Bank Group did not regard United Kingdom as an economy with Single Window for doing business.  Perhaps, a Single Window should help encourage businesses into international trade activities and reduce inadvertent non-compliance by providing a one-stop shop for access to all international trade information, currently scattered across a number of different government agencies.

 

According to British belief, understanding where businesses experience real problems in their trade activities has not just been valuable in pinpointing what drives Single Window initiative.  Meanwhile, business is dynamic; it has found ways of coping with the existing trade environment.  It has invested in systems and procedures which are designed to deal with the world.  Above all, it may be aware of what might be done to solve problems.  Big change in the trade practice may not necessarily improve the trade environment.  Instead, it may jeopardize business operation and trade community.

 

Against this background, it is equally productive to get trade views on where there is scope for improved international trade facilitation.  On this basis, it is of utmost importance to assess their genuine needs and readiness for a Single Window at varying level.  Again, Needs Assessment Exercises for different traders are indispensable in developing Trade Single Window.

 

The Way Forward



Chief Executive–elect with her cabinet would take the helm of the local Government in July 2017.  New Government’s stand on Trade Single Window is yet known.  Policy steered by the past power may be brought forward or shelved according to the new Government’s priorities.  Meanwhile, we have to wait and see what is going on.

 

Trade Single Window project is going towards its Phase I.  Phase I appears to be an application of Incremental Approach whereas Phase II may be regarded as the application of an Integrated Approach.  In between, a series of Needs Assessment Exercise should be in place.  Cost-Benefit Analysis can be used for budgeting and decision-making.  Feasibility Study would also throw light to the internal and external roadblocks ahead.

 

Finally, data-sharing is also an element to be considered.  Trade community is wary of having data shared between government agencies.  From the traders’ point of view, having to deal with multi-agencies creates complexity and increases the costs of compliance.  However, data protections need to be developed so that this data-sharing can occur.  The alternative is too costly and too cumbersome.

 

Local government agencies’ capability in data protection is somewhat questionable.  In 2016, two anonymous agencies and four functional departments of the Government of Hong Kong Special Administrative Region respectively encountered Cyber Attacks (Sou, 2017a-b).  Ironically, those victims of the local government were functional department responsible for (a) Customs & Excise Matter, (b) Public Health, (c) Food and Environmental Hygiene, and (b) Shipping and Port Control.

 

In 2017, Registration and Electoral Office informed that two notebook computers stored inside a locked room in the AsiaWorld-Expo in Chek Lap Kok were stolen.  One of the computers contained the names, addresses and Hong Kong Identity Card Numbers of about 3.78 million Geographical Constituencies electors in the 2016 Final Register (REO, 2017).  Author of this Paper is also one of the 3.78 million data subjects.

 

In the approach of the International Conference on the 20th Anniversary of the Establishment of HKSAR (May 19, 2017), Highways Department has just reported that an engineering and design firm contracted to work on part of the multibillion-dollar Hong Kong–Zhuhai–Macau Bridge had its computer system hacked on March 2, 2017.  Hacker locked the project files by Ransomware (Sou, 2017a-b).

 

While the local Government’s IT System has its own security components, anything installed by the Government over the last 20 years has incorporated various aspects of cybersecurity.  The result is a set of disparate system security measures, either in the form of hardware or software.  Moving to a Trade Single Window will require the trade community to agree on the necessary cybersecurity and data protection.  All the government agencies should have a common objective in this area that will drive them to an agreement on the necessary levels for cybersecurity across the various system platforms.

 

As planned, Trade Single Window will embrace data-sharing by multi-agencies of the local Government.  Its dynamic relational database will be expanded significantly in order to meet operational needs of various government agencies.  Naturally, information collection under a Trade Single Window could be termed Big Data (Sou, 2017a-b) which definitely required reliable information security solutions.  Thus, all relevant government agencies of Trade Single Window should prove that they are ready for sound Big Data Management under information security threat (Sou, 2017a).


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BIOGRAPHY

 

Prof. Gryphon Sou earned a Bachelor of Science in Engineering Degree from California Coast University, a Master of Administration Degree from Australian Catholic University, a Doctor of Management Degree from the International Management Center – Southern Cross University, Australia and a Doctor of Education Degree from the University of Technology Sydney.  In 2013, he worked as a Project Manager in the World Customs Organization (WCO).  He is now working as a Visiting Professor in the City University of Macau, an Adjunct Associate Professor in Gratia Christian College and a Part-time Instructor in Open University of Hong Kong.  He is a long-standing member of the World Organization of Building Officials (WOBO) in Special Consultative Status with the Economic and Social Council of the United Nations (ESCUN) and in Consultative Status with the United Nations Industrial Development Organization (UNIDO).  Recently, he is also assisting the local branch of United Nations Educational, Scientific and Cultural Organization (UNESCO HK) in the establishment of the World Institute of Sustainable Development Institute (WISDP).



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