A country may aim to set up a paperless trade system pursuant to various trade agreements such the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) but may not yet have one. In that case, it is important to establish a legal basis for the implementation and operation of the paperless trade system. In other cases, the paperless trade system may be still at the planning and development stage, or a pilot project. In such instances, the legal readiness checklist may be read as an introduction to various legal issues that need to be addressed to operate a paperless trade system and as a tool to identify legal gaps.
The legal readiness checklist refers, where possible, to international legal standards, such as UNCITRAL texts, to facilitate the achievement of cross-border legal recognition and technical interoperability. In addition to international legal standards, a country may need to adopt multilateral, regional (such as ASW) or bilateral agreements to enable cross-border operation of its paperless trade system.
II.A.1 Does a dedicated paperless trade system, such as a single window, exist? If so, what legal instruments are used to establish and operate it? How do these instruments define the rights and obligations of the participants?
Many countries have established dedicated systems for the exchange of trade-related information in electronic form (here referred to as a “paperless trade system”). Most of them will refer to this system as a “single window”. However, single window may describe very different platforms, systems and environments, including outside the paperless trade context. United Nations Economic Commission for Europe (UNECE) Recommendation No. 33 contains a definition of single window for trade purposes.
“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 information is electronic, then individual data elements should only be submitted once”
Most trade single windows are built around the notion of submission of information from traders to regulatory agencies such as customs. However, the paperless trade environment may be more comprehensive (such as the TradeTrust system of Singapore that deals with both Business to Business - B2B and Business to Government - B2G exchanges); in the latter case, reference is made to a “national trade platform”.
Paperless trade systems, including single windows, require enabling laws and regulations. This question focuses on those laws and regulations that authorize establishment and operation of a paperless trade system. These laws also generally define the rights and obligations of all participants (such as importers, exporters, licensees, and licensing agencies) or some smaller sub-set of those participants. They may also specify if the system operator may be liable for its operations, and limitations of such liability. Alternatively, the liability of the system operator may be based on general rules.
Article 1(5) of the Electronic Trade Facilitation Act 2015 of the Republic of Korea is an example of law establishing a paperless trade system (called “electronic trade infrastructure”).
The term "electronic trade infrastructure" means an information system that intermediates, keeps and certifies electronic trade documents by systematically interlinking traders with trade-related agencies through information and communications networks.
In Australia, section 126D of the Customs Act 1901 (Cth) explicitly empowers the Comptroller-General of Customs to establish and operate the integrated cargo system (ICS).
126D. Comptroller-General of Customs to maintain information system
The Comptroller-General of Customs must establish and maintain such information systems as are necessary to enable persons to communicate electronically with the Department.
Section 126DB of the Customs Act 1901 (Cth) imposes the burden of proof on the traders who allege the misfunction of or failure to comply with official information technology requirements, or who say they have officially reported the failure.
126DB. Authentication of certain electronic communications
An electronic communication that is made to the Department and is required or permitted by this Act is taken to be made by a particular person, even though the person did not authorise the communication, if:
(a) the communication meets the information technology requirements that the Comptroller‑General of Customs has determined under section 126DA have to be met to satisfy a requirement that the person’s signature be given to the Department in connection with information in the communication; and
(b) the person did not notify the Department of a breach of security relating to those information technology requirements before the communication;
unless the person provides evidence to the contrary.
Important additional terms and conditions relating to paperless trade systems may be included in contractual agreements such as “end-user agreements” and “service-level agreements”.
II.A.2 Which government agencies participate in the paperless trade system? On what legal basis?
A paperless trade system may deal only with B2G exchanges (single window) or include also B2B exchanges (national trade platform). While the goal of a single window is to link all relevant public agencies, countries may implement it in phases, typically starting with those that are more often involved in import/export transactions. Additional government agencies may join the system at each subsequent phase.
The pace of expansion of the single window is set in legal and policy documents, which often also contain the basis for information-sharing. In the absence of a framework document, coordination between government agencies participating in the single window may be achieved with MoUs.
For e.g., Armenia’s single window system aims to offer mainly customs-related services at the initial stage and to later integrate import/export permit issuing agencies. The Presidential Decree of Uzbekistan No. UP-5582 about “additional measures for enhancement of customs administration and increase in efficiency of activities of bodies of the State Customs Service of the Republic of Uzbekistan” of 24 November 2018 requires that a single window be made available on customs terminals for all of the following functions: customs, banking, logistics, laboratory, phytosanitary, veterinary, sanitary, epidemiological ecological, certifications and other services.
II.A.3 Is there a central body tasked with setting up and managing the paperless trade system?
Often, a public entity is tasked with coordinating the design and implementation of the paperless trade system. If the paperless trade system is planned to be implemented in phases, that entity is responsible for coordinating the implementation of each phase.
The customs authority is often considered well suited to take the lead role as it often receives information on paper at the border posts. Private or semi-private entities may also be tasked with coordination functions, for instance when the paperless trade system is funded as a public-private partnership. In the latter case, special rules may address sharing data originating from law enforcement agencies or other agencies with the power to compel disclosure of information to them.
The coordinating agency may operate in consultation with a national coordinating committee, which may include private sector representatives.
The central coordinating body and related entities may have a dedicated budget for their activities. The availability of that budget may be particularly relevant when setting up the paperless trade system. Moreover, the operation of the paperless trade system may be self-funded (i.e. by fees from users) or rely on other financial support (or a combination of the two).