How serious are we in fighting smuggling?

Governments and businesses are facing increased challenges as the supply chain continues to globalize and technologies advance. We have seen a dramatic increase in e-commerce with the surge in digital transactions. The impact from the growth in e-commerce cross border trade has prompted the need for regulations and requirements to strengthen control, safety and duty collection.

The International Chamber of Commerce has started collaborating with major international entities, such as the World Customs Organization, or WCO, ISO and Global GS1, among others, in adopting unified standards to ease global trade. The EU economies have adopted measures to address growing concerns on the rapid increase of e-commerce, specifically cross-border trade items creating an uneven playing field to the disadvantage of business commerce.

The EU is adopting the Global Shipment Identification Number, or GSIN for all parcels going through their borders. This GSIN conforms to the WCO requirement for a unique consignment reference number and has allowed EU to track the inflow of parcels and collect the approprate duties due.

The General Administration of Customs in China mandates that the product GTIN or Global Trade Item Number — the standard for product identification — is included as part of the Single Window Declaration. The verification of the GTIN is now required before any export is allowed entry into Chinese territory. During the pandemic, the US FDA required additional means to trace documents on frozen food and other goods to ensure safety against the possible entry of viruses.

With 30 percent to 50 percent of goods traded across international borders now using product identifiers and associated data as critical components of today’s supply chain, our government may need to get on board with this ecosystem in order to consume such data and be a more effective and efficient supply chain partner of the USA, EU, Australia, New Zealand, Japan, KSA, Russia and many more economies.

As for our Bureau of Customs, the use of unique codes adopted by several countries and millions of businesses around the world should be adopted and incorporated either in the import declaration and/or the national single window.

These codes are used globally to identify items, locations, services, logistics and many more. The following are suggested to be adopted and used: GTIN (global trade item number) for product identification, including services; GLN (global location number)  for companies that send and receive goods; SSCC (serial shipping container code) for logistics units such as containers; GDTI (global document type identifier) for documents; GINC (global identification number for consignment) for consignments; and GSIN (global shipment identification number) for shipments.

Using GTIN for product identification ensures better border management. Presently, the BoC uses HS Codes for content information of a container or shipment, however, the information retrieved is limited.

The GPC or Global Product Classification, an associated data with GTIN, provides for grouping and characterization of commodities that can improve product visibility, speed up border procedures, and provide information on product risk factors in greater detail than the HS Codes. Moreover, the system will enable the track and trace cross border traded goods from source to export destination.

While capacity building to get on board the system may take a number of months, the benefits are astounding. For one, business will have better and efficient inventory management where losses and wastage may be avoided. Likewise, the system allows for transparency that enhances trader-partner relationships and promotes trust in exporters’ brand.

Government, on the other hand, eases and speeds up border procedures and electronically monitors transactions and collects the correct taxes. Further, the ability to track and trace commodities from origin to destination and everywhere else in between the chain can identify counterfeiters, smugglers and hoarders. At the end of the supply chain are the consuming public. The transparency afforded in the supply chain ensures the safety and protection of consumers, as well as empowers them with informed choice prior to purchase.

Technology and globally accepted and utilized standardized codes for trade have been recognized by APEC since 2014. Why not pilot this sytem with imported agricultural products? An executive order can start the ball rolling.

Leave a Reply

Your email address will not be published. Required fields are marked *