This Tuesday, October 8, 2024, experts and authorities from the Federative Republic of Brazil met at a seminar organized by the Latin American Integration Association (ALADI) to discuss "The challenges of interoperability and risk management in trade facilitation«.
The seminar included two panels in which specialists presented Brazil's progress in integrating the Single Window for Foreign Trade (VUCE). Schemes for risk management were also explored, including declaration systems and advance transmission of data.
The opening of the seminar was in charge of the Christian Leroux, Undersecretary of the Free Trade Area of ALADI and Rafael Vieira Lima Laurentino, Head of the Department of Physical and Digital Integration of ALADI. Both highlighted the importance of the webinar to “strengthen the exchange of experiences and generate greater spaces for dialogue within the ALADI framework.”
Afterwards, a very interesting panel took place with the participation of Tiago Barbosa, General Coordinator of Trade Facilitation and Manager of the Foreign Trade Single Window. Barbosa stressed that “Brazil has made significant progress in optimizing its foreign trade thanks to the implementation of its Single Window for Foreign Trade, known as SISCOMEX.” This system, which simplifies both exports and imports, has received international recognition, especially from the World Trade Organization (WTO).
The portal, which was launched in 2014, allowed all export processes to migrate to digital format in 2018, and in 2023 the same process began for imports, with a deadline until December 2024 to complete the transition. Barbosa highlighted that this project in Brazil is based on three fundamental pillars: the review of processes, the updating of the legal framework and the intensive adoption of technology.
Barbosa stressed that cooperation with the private sector has been fundamental to the success of the project, with more than 1,500 companies and 10,000 participants contributing to mapping processes and eliminating bottlenecks.
“The impact of the Single Window has been notable,” Barbosa said. A study by the National Confederation of Industry of Brazil, published in 2021, revealed a significant reduction in the time of commercial operations. Regarding the import time, it was reduced from 13 to 5 days, and the export time from 17 to 9 days, which has generated a cost reduction of 9% for exports and 7% for imports, translating into savings of 40,000 billion dollars for the private sector.
Barbosa also highlighted the role of technology in improving the efficiency of foreign trade. The use of artificial intelligence (AI) for tax classification since 2017 and the implementation of blockchain for the secure exchange of information between countries are just some of the tools that have allowed processes to be optimized.
Today, within the Brazilian Single Window, all importers have access to advance cargo processing, allowing goods to arrive almost entirely free of charge at the time the vessel docks or the plane lands. How is this achieved? Through the interoperability of the single windows and through mutual recognition agreements, which are related to Authorized Economic Operators.
Barbosa highlighted the agreements of this type that Brazil has established with countries such as China, the United States and Mexico. At a regional level, with Argentina, Bolivia, Chile, Colombia, Paraguay, Uruguay, Peru and Guatemala. “These agreements allow for pre-arrival processing of cargo, which means that the goods can be released almost immediately after their arrival,” he explained. In addition, he explained that they have the B-Connect tool, based on blockchain technology, which allows for the exchange of certificates, customs declarations, transit declarations, electronic phytosanitary certificates and the ALADI COD.
Concluding his presentation on Brazil's vision regarding trade facilitation and the development of the Single Window, Barbosa stressed that “interoperability between single windows is the next step that the Brazilian State is prioritizing.”
The conference was then addressed Gustavo Lacerda Coutinho, a risk management expert certified by the World Customs Organization (WCO) and current special coordinator for customs risk management at the Special Secretariat of the Federal Revenue Service of Brazil. Coutinho explained the importance of risk management in the customs field. “This issue, which is fundamental for international trade, has allowed customs to find a balance between control and trade facilitation,” he said.
“The biggest challenge facing customs is ensuring that goods comply with established regulations without becoming a barrier to trade. This is where risk management comes into play, an approach that allows prioritizing the inspection and control of those operations that represent the greatest risk, while facilitating trade for operators that comply with regulations,” he explained.
A key concept he introduced was the OECD Compliance Pyramid, which divides operators into different levels based on their willingness to comply with regulations. From the criminals at the top of the pyramid to the fully compliant operators at the bottom. For the different levels of the pyramid, different risk management strategies apply: from strict monitoring for those who fail to comply, to facilitation for those who operate transparently and regularly.
Lacerda Coutinho stressed the importance of advance information for risk planning and trade facilitation. He explained that early receipt of cargo data and declarations allows customs to prepare their operations with greater precision, reducing inspection time and speeding up the clearance of goods. In Brazil, a regulation has already been implemented requiring cargo data to be sent at least 48 hours in advance, which has significantly improved the process.
The presentation also covered the growing challenge posed by international shipments, such as those made by courier companies such as DHL or FedEx, which have increased exponentially since the pandemic. In this regard, Lacerda Coutinho highlighted the importance of countries adopting electronic messaging systems to obtain advance information on these shipments, improving inspection capacity and reducing manual workload.
To close his speech, Lacerda Coutinho emphasized that risk management in customs should not be based solely on the negative history of operators, but also on their good practices. The AEO (Authorized Economic Operator) Program and the implementation of single windows, which allow for advance declaration, are crucial steps towards trade facilitation and improvement in customs processes.
“With these tools, the Brazilian Federal Revenue Service has managed to establish a more efficient and effective system that not only reduces risks, but also promotes faster and safer foreign trade,” he said.
The seminar concluded with thanks to the participants and special recognition to the outstanding speakers of both panels. In addition, it was announced that the entire event would be available on ALADI's official YouTube channel. "This is a highly relevant topic and will be key in the Third Trade Facilitation Meeting, which we are organizing in collaboration with the WTO. Digitalization will be the central pillar, marking the direction in which foreign trade is headed, which is moving decisively in that direction," the senior ALADI official added.
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