AEC Speeds Up National Single Window Development

The Thai Customs Department has joined forces with public and private organizations in boosting the customs service standard via the implementation of the National Single Window (NSW), an international database of customs services aiming for more efficient customs service procedures. At the same time, it is working to pave the way for the ASEAN-wide implementation of the ASEAN Single Window (ASW) to promote businesses within the ASEAN Economic Community (AEC) and with other trading regions of the world.

In this issue of AFL, we’re honored to have three airfreight logistics industry experts, Mr. Lertchai Phongsophon, Managing Director of Customs Clearance Services Limited and the Vice-President of the Thai Authorized Customs Brokers Association; Mr. Boontong Dechaprechachai, General Manager in Customs Clearance of Leschaco Customs Clearance (Thailand), and Mr. Anand Tinaphongse, Managing Director of Logistics Management Services Limited, join us in sharing their insights on the directions of the customs services and international trade within the AEC.

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Mr. Boontong Dechapreachachai, General Manager in Customs Clearnace Leschaco Customs Clearance (Thailand)

The ten Southeast Asian nations that have come together to form the AEC were driven by the intension to facilitate and expand the capabilities in trading among member countries. With the launch of AEC at the end of 2015, the common goal is to push for a single marketing and product base for the all members, which is expected to yield high profits. Joining the AEC allows member countries the free movement of logistics for easy transportation of industrial materials while upholding standardized production, workforce, and regulations throughout the community.

Standardizing Customs Regulations

In order to push forward development policies, each member country must maintain a common standard in trading and a digital database of customs services data to help AEC’s economical and trading potential thrive. In the past, each AEC member had their own trading policies and customs service procedures. These differences were most pronounced in each country’s customs regulations, procedures, customs tariff, and the definition of each type of goods. “Prior to the formation of AEC, each country had their own customs tariff. The tariff in some countries was a six-figure number, while in other places it was assigned as eight-figure. Furthermore, the definition of each type of goods shared no similarities whatsoever. However, AEC member countries are now starting to use a common customs tariff that results in the total tariff being checked out quickly and precisely thanks to the brainstorming and side-by-side progression of the country members’ Customs Departments. So now the logistics business owner and customs clearance services entities can adjust to the newly announced customs tariff that is made standardized worldwide.” said Mr. Boontong.

Developing a Unified System

The Thai Customs Department has been the pioneer in the implementation of the NSW system. The goal of the implementation is to create a focal point of information, not only for all the export and import indexes, but also information from other Thai public entities, such as the Ministry of Commerce, Ministry of Agriculture and Cooperatives, Ministry of Industry, Department of Industrial Work, Food and Drug Administration, etc. The data would be fed into the system by each business’ representative, and may include the invoice, the inventory, and the import and export licenses. The data of the related public entities would also be fed to the Customs Department, who would be able to precisely check for any corrections, missing paper work, or if the shipment was authorized correctly. The NSW, once implemented, will be able to save time and hassle in processing both data and paperwork.

คุณเลิศชาย พงษ์โสภณ กรรมการผู้จัดการ บริษัท Customs Clearance Services

Mr. Chailert Phongsophon, Managing Director Customs Clearance Services Limited

However, the implementation of the NSW in Thailand has yet to proceed as smoothly as it should. This is due to many organizations’ lack of database development and preparation for an interdepartmental convergence. Currently the customs clearance process is done in a combination of both digital and manual work. Business representatives and logistics providers have recently acknowledged the changes from the Customs Department’s announcement, such as the adjustment of the customs tariff and paperwork, and the implementation of the eCustoms in the clearance process.

Mr. Lertchai said, “I have faith that, in the future, the procedures of the customs clearance will become truly paperless. Right now, we’re still in the middle of a transition. We’re starting to go digital, but at the same time we still need the paperwork. The way I see it, for all procedures to go fully digital will take quite a while. This is due to the limitations of the laws and acts of legislation of each public entity. To be able to truly transit into full digital processing, it will take a lot of adjustment of these regulations and the willingness from each stakeholder. This will result in Thailand and the AEC being able to smoothly conduct business and turn a profit.”

The full launch of the AEC will be beneficial to many, including the import-export businesses, the representatives of the logistics service providers, and others throughout the region. This is due to the new tax regulations that allow for a freer movement of goods with the exemption of the cross-border taxes. The export and import within the region will be able to be conducted more smoothly than in the past.

The Benefits of a Unified System

Mr. Chailert remarks on the impact of an integrated system implementation on the customs clearance service providers, “The customs clearance service providers can still apply their expertise and move forward with the paperwork processing for their clients, including the customs clearance of imported goods. They need to remember that no matter how much development the Customs Department will have gone through, there will always be a need to process the paperwork for the import-export procedures for record’s sake.” Mr. Boontang expressed his opinion on the opportunity AEC has that could derive from the convergence of ASW, as well as the customs clearance procedures, “Today, the import procedure starts when the goods have reached Thai shores. This new project to connect the databases will allow the customs information to arrive at the end destination before the ship has even docked. There will also be no need to repeatedly fill out forms if we could converge all the member countries’ customs database. Basically, all procedures will go much more smoothly.”  Mr. Anand also spoke of the benefits of the AEC’s launch and the implementation of NSW, “For logistic service providers in Thailand, they will benefit from a smoother flow of goods, both inbound and outbound, domestically and internationally. This will also be true for exporting and importing of goods between the AEC nations.”

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M.r Anand Tinaphongse, Managing Director Logistics Management Services Limited

Future Plans with ASW

Mr. Anand sees the development of the ASW as a milestone for Thailand in proving itself a strong logistics industry center, as well as an overall business gain for AEC members. “Thailand’s strategic advantage is that we are situated in the center of the region, and are able to access the neighboring nations easily via both the ocean and airfreight carriers. This helps us in being the center of distribution and forwarding to the rest of the region and beyond. Additionally, we are equipped with the Suvarnabhumi Airport that has the potential to be developed into a logistics center with the same capacity as the Singaporean Changi Airport. Today, Suvarnabhumi Airport offers both direct and connecting flights with the major airports around the globe for both the commercial and airfreight flights. The success of the NSW’s and the ASW’s implementation will definitely put the AEC nations to the frontline of world’s international trading zone.”

However, the language barrier is still a real challenge for the ASEAN member countries where each country communicates mostly in its own native language. Paperwork is still required to be translated into the local language. Another limitation is the definition of the different types of goods and the declaration of each type of goods. These issues are what the logistics businesses agree that the government of each member country needs to work on the most. Once each member country in the AEC is able to stabilize their NSW and get together to develop the ASW for the common business goal; the AEC will have moved up in the world’s market, and truly become a top industrial and trading region.

In order for the AEC to achieve its goal in becoming the world’s market and the production plant, it needs to reach the convergence of digital data and the same level of standardization throughout the region as soon as it can. Today, many of the member countries’ customs clearance procedures are still in the transitional stage. However, the diversity of the goods and the preparedness of the businesses still kindles the hope that each AEC member will be able to achieve their own NSW and that they will work together to achieve the ASW for the greater good of the community in the world market arena.