Digital Transformation in Least Developed Countries for Efficient and Safe Cross-Border e-Commerce and Customs Clearance

The session shed light on the urgent need for digital transformation in the worlds poorest countries to facilitate efficient and safe cross-border e-Commerce and customs clearance. With the results of “parcelisation of trade”, posts have played a pivotal role, together with customs, in the implementation of relevant provision of the Trade Facilitation Agreement (TFA). From 2021, to enable pre-arrival processing, the mandatory provision of data will become part of the regulatory landscape for packets exchanged through the global postal network. In order to help Least Developed Countries (LDCs) and Developing Countries (DCs) to comply with the new regulation, UNCTAD and the Universal Postal Union (UPU) in 2020 have launched an effort in 22 LDCs to facilitate the clearance of postal packages.

The panelists said that facilitation of efficient cross-border e-commerce and digital transformation is a timely step for post-pandemic recovery in LDCs and building back better strategies. There is an increased awareness that e-commerce can be a solution for meeting the challenges brought by the pandemic. The digital readiness of developing countries is to be looked into and should be developed by a multi stakeholder partnership. The development communities need to engage more in this area and they should come together, rather than doing small projects here and there. Vanuatu serves as a proof of the effort in 22 LDCs to facilitate the clearance of postal packages through the exchange of pre-arrival/pre-departure information between postal operators and customs administrations, launched by the UNCTAD and the Universal Postal Union in 2021.

The speakers noted that for the successful implementation of the project, postal operators need to focus on measuring compliance in terms of volumes of items containing data, and the quality of that data (e.g. correct postcodes, valid addresses, provision of HS tariff codes, meaningful declarations, etc.). These metrics should also consider source segmentation (i.e. whether the items/data come from commercial or social customers, SMEs, large businesses, etc.).

The discussion highlighted that, before 2021, when data was provided in advance, countries with automated processes such as Canada, the US, the UK, were able to process incoming items with EAD much faster than those without data (performance improvements ranging from 40% to a factor of 10). After 2021 with the new regulations, items without EAD may be subject to severe delays or may be declared inadmissible. Electronic advising ahead of the sending of postal items will be critical in meeting various legal requirements taking effect in 2021, established for example by the US, EU, China and Russia. If the countries cannot comply with this rule, they might not be able to dispatch postal items containing goods to a large number of UPU member countries.

On the panel were Mr. Roy Mickey Joy – Director General of Trade, Vanuatu; Ms. Shamika N. Sirimanne – Director of the Division on Technology and Logistics, UNCTAD; and Mr. Siva Somasundram – Director of Policy, Regulations and Markets, UPU; Mr. Stanley Trief – Manager, Vanuatu Electronic Single Window Project; Ms. Sophia Fogarty – General Manager, Dynamic Vanuatu; Mr. Constantin Ciuta – ASYCUDA Senior Customs Adviser, UNCTAD; Mr. Javier Garcia – Customs Programme Expert, UPU; Mr. Andrew Liunamel – CEO Vanuatu Post; and Mr. Alessandro Vitale – eT Ready Programme Management Officer, UNCTAD; Mrs. Luisa Letlet – Principal Trade Development Officer, Ministry of Tourism, Trade, Industry, Commerce and Ni-Vanuatu Business; and Mr. Walter Trezek – Chair UPU Consultative Committee, UPU.