Business (trade) Process Analysis for Trade Facilitation

Outline 1.What is Business Process Analysis and Why it is Required? 2.Examples of output from BPA Studies in WP3 2

What is a Business (trade) Process and it’s Analysis?  A Business Process is a collection of related and structured activities or tasks that produce a specific service or product.  Example -Obtaining a fumigation certificate for rice export -Applying and Issuing Process for a Certificate of Origin -Customs Clearance Process at the Border Point 3

What is.. ..a Business Process Analysis? An analysis and modelling of business processes for improvement, simplification and automation  Example -Documenting existing practice in an administration/company -Describing a “Standard Procedure” -Identifying quantitative indicators (time, cost, docs) -Recommending ‘to-be’ situation or TF measures 4

Supply Chain Complexity Source : Complex Networked Supply Chain [Harwick, 1999

Trade Movement – 3 Kinds of Flow Seller (Exporter) Buyer (Importer) Physical Goods Payment Customs Other-Government-Agencies Ship Agent Transport-Operators Terminal-OperatorCarriers Banks Information/Documents Freight Forwarders Cargo Insurance Farmers Post-Harvesters Traders Exporters Importers Traders Wholesalers Consumers

Why conduct a Business Process Analysis? 7 Business Process Analysis is a practical study  to understand attributes of business processes, and their relationships Who involved Procedures and Documents required Related Rules and Regulations Some quantitative indicators

What are benefits of Business Process Analysis? 8

1.1 Sales contract 2.1) Make advance payment 3.1) Obtain Export License 3.7) Deliver to port of departure for Customs examination 3.8) Examine commodity Exporter (or representative) Importer Exporter’s bank Importer’s bank ICD SAD Directorate of Trade, MOC Customs broker 3) Ship 3.11) Deliver shipping documents to buyer 1) Buy 2) Pay Use Case Diagram of Rice Export from Myanmar Customs department Port 3 rd party inspector Shipping line 3.10 ) Prepare required shipping documents for buyer 3.4) Declare CusDec 2 3.2) Arrange overseas shipping 3.3) Arrange pre-inspection and fumigation 3.9) Handle and load the goods onto the vessel 3.6) Stuff containers at warehouse 3.5) Collect empty container from ICD and deliver it to warehouse Bank Transporter Courrier FDA

Customs department at the port Exporter (or representative) 3.8.1Request for examination 3.8) Examine commodity Exporter (or representative) 3 rd party inspector Allow shipment Found incorrect 3 rd party inspector Port terminal 3.8 ) Examine commodity Found correct Register case file Order to the port Customs examination team Receive request Reviews case file Fumigate the containers after Customs examination Request for fumigation Receive the request for fumigation Port terminal Receive port challen, SI, and 103 challen Request for delivery Transporter Receive request to send the loaded Container to Customs yard Check the container against 103 challen Submit 103 slip, shipping instructions, & Port Challen Shipping Agency Department (SAD) Allow to load cargo Check with loading list and prepare mate receipt Examine the goods Port Customs SAD Transporter

Time-procedure Chart for Importing Animal Feed to Lao PDR 1. Check demand of import for animal feed by Livestock and Fishery Division, Customs and Trade Division 2 2. Certify of farm ’ s animal feed demand for importing5 3. Declare of import documents to custom office at the border point for approval 3 4. Pay import tax, fee and custom to treasury office2 5. Inspect of import goods by custom inspector at the checked point 1 6. Inspect of import goods by Agriculture Quarantine officers at the checked point 1 7. Trucks transport all goods to destination places1 8. Pay to the export representative2 TOTAL 17

Documents Required for Jute Bag Exports to India from Bangladesh Sl.ProceduresDocs Reqd. Details Documents List 1Receive order from the buyer, set the trade terms and finalize sales contract 6Proforma Invoice, Commercial Invoice, Export License, Offer Letter, Sales Contract, Copy of TT 2Contract inland transport agency1Transport Invoice 3Prepare export documents10Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT 4Transport to port of departureNilNone 5Obtain customs declaration from the customs authority at the land port (mainly by the C&F agent) 14Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT, Export Form, VAT and Source Tax Chalan, Bill of Entry 6Customs inspection and clearance16Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract, Transport Invoice, Copy of TT. “C” Form, Out Pass 7Border checkpoints16Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT, “C” Form, Out Pass

Economic impact of bottlenecks in business processes of cross border trade  Each additional day of delay (e.g. because of trade logistics procedures) reduces trade by at least 1% Source: Simeon Djankov, Caroline Freund, and Cong S. Pham. (2007). Trading on Time. Washington, D.C.: World Bank.  “ Direct and Indirect Cost from import/export- related procedures and required documents is about 1-15% of product cost.” Source: OECD. (2003). Quantitative Assessment of the Benefits of Trade Facilitation. Paris: OECD Publications 13