Business Process Analysis For Agricultural Trade Facilitation. Myanmar

Transcription

1 National Stakeholder Consultation Meeting Business Process Analysis For Agricultural Trade Facilitation in Myanmar Prepared by Aung Khin Myint Christian Ksoll Theingi Lwin Yangon, Myanmar 7 May 2013

2 Overview Objective and Methodology Rice Exports from Myanmar to West Africa (sea) Business process analysis Bottlenecks in rice export process Recommendations Discussion of findings Mango Exports from Myanmar to China (land) Business process analysis Bottlenecks in mango export process Recommendations Discussion of findings Palm Oil Import from Malaysia to Myanmar (sea) Business process analysis Bottlenecks in mango export process Recommendations Discussion of findings

3 Objective and Methodology Objective: BPA is the first technical step in preparing for trade facilitation measures including paperless trade and Single Window implementation Methodology Desk research Interviews with Government officials, private sector associations, individual private sector firms

4 How MNC, Exporters, Importers and logistics professionals assess institutions and processes? Concerned about the quality of telecommunications and IT infrastructure Concerned about the quality of the physical transport infrastructure (ports, roads, warehouses) Satisfied with customs Satisfied with other border government agencies Satisfied with private logistics services Concerned with frequent solicitation of informal payment Satisfied with transparency of border processes Imports cleared and delivered as scheduled

5 RICE

6 Use Case Diagram of Rice Export 3) Ship 3.1) Obtain Export License Ministry of Commerce (Directorate of Trade) Private Bank MCB Customs department ICD 3.2) Arrange Shipping (maritime) Feeder line &/or Box operator 1) Buy 1.1) Conclude Sales Contract 3.3) Arrange pre-inspection and fumigation Transporter 3 rd party inspector Importer 2) Pay Exporter (or representative) 3.4) Declare CusDec 2 3.5) Terminal Procedure and Customs Exam at Port Customs broker 2.1) Make advance payment Port Customs Importer s bank Exporter s bank 3.6) Arrange Berthing of Vessel Ship MPPA 3.7) Arrange Port Clearance for Vessel Departure 3.8) Prepare shipping documents Revenue Department SAD DMA UMFCCI MPA

7 1.1) Conclude Sales Contract Exporter (or representative) Importer Get price quotation and sales terms Not acceptable Exporter (or representative) 1.1) Conclude sales contract Importer Quotation Review if quotation is acceptable Cancel Acceptable Price Negotiation FOB CY(for container) FOB STOWED(Conventional) Prepare the shipment of goods Confirm the intent to purchase Purchase order Acknowledge the purchase order Proforma Invoice Receive Proforma Invoice

8 2.1) Make advance payment (via Telegraphic Transfer) Exporter (or representative) Exporter s Bank Importer s Bank Importer Exporter (or representative) Importer 2.1) Make advance payment (via Telegraphic Transfer) Request to make payment Receive request to make payment Exporter s Bank Importer s Bank Acknowledge payment notification Apply to withdraw payment Receive payment notification Prepare to make payment Notify about payment Make payment Term TT Selling price 5 7 $ less than LC term. Bank Processing time. Application Letter Receive application Issue export credit letter with bank seal Receive payment and export credit letter Issue payment Prepare the shipment of goods

9 3.1) Obtain Export License Myanmar Citizen Bank (MCB) Exporter (or representative) Prepare documents & online application Ministry of Commerce (MOC) Receive application and documents at the PAC Exporter (or representative) 3.1) Obtain Export License MOC MCB Cover Letter Sales contract (Original) or Profoma invoice (Original) Statement of Usage (Original) Representative Card (Copy) Requirements are not met Reviews accuracy & completeness Requirements are met Give order to make payment at MCB Receive payment and notify MOC Make e-payment Receive notification (or receipt) of payment Issue hard copy of online application at PAC Submit hard copy to Export section in Nay Pyi Taw Receive hard copy, price assessment & history by Export section Requirements are not met Case scrutinized at EICC Requirements are met Approve Export License application ONLINE Application Collect Export License Issue Export License by Export section

10 3.2) Arrange overseas shipping Transporter Inland Container Depot (ICD) Feeder shipping line and/or box operator Exporter (or representative) Shipping Agency Department (SAD) Prepare to collect empty container Receive 102 challen, shipping instructions, and booking note Not available Review of shipping instructions Consistent Issue booking note, release order, and 102 & 103 challen Inquire transporter about available truck Not consistent Prepare shipping instructions Receive booking note, 102 & 103 challen Receive release order Receive booking note, 102 & 103 challen Move to ICD to collect empty container Make payment for container operation Check container and documents Available Issue payment order for container operation charges Receive booking note, 102 & 103 challen with SAD endorsement Send 102 challen, shipping instructions, and booking note to transporter Register and provide seal on booking Note,102 & 103 challen Receive payment and issue gate pass Transport empty container Loading of container at warehouse

11 3.3) Arrange Pre Inspection Exporter (or representative) 3 rd party inspector Exporter (or representative) 3.3) Arrange Pre- Inspection 3 rd party inspector Prepare documents Not consistent Forwarding Letter Shipping Instructions Receive documents Product sample Make inspection payment Issue Payment order Receive payment Test sample Consistent Receive pre-inspection certificate Issue pre-inspection certificate

12 3.4) Declare CusDec 2 Exporter (or representative) Prepare online application Private Bank Customs department Check accuracy and completeness at PAC Exporter (or representative 3.4) Declare CusDec 2 Private Bank Customs department Prepare documents for Central Registration section Printed online application form Export License (Original) Booking note (Original) Shipping Instruction (Original) Commercial Invoice (Original) Packing List (Original) Pre-shipment Inspection Certificate (Original) Receive payment order Make payment Deliver sealed case file to terminal Customs Receive payment Issue payment receipt Print online application Requirements are not met Determine if documents meet the requirements Requirements are met Receive Export Declaration number Obtain Free Foreign Export (FEE seal) serial number and stamp for export duty exemption Buy payment order for X-ray fees Register cargo (by HS code) at Classification section Receive payment notification Check documents & assess for exemption by Export Appraising Group Record trade volume at Computer section Check data entry & close the documents with seal by Export Appraising Group Issue sealed case file

13 Transporter Transporter delivers loaded container to terminal Port terminal Review documents Exporter (or representative) Request for delivery of loaded container Prepare for security card Shipping Instructions National Registration Card Request for fumigation 3.5.1Request examination of goods Sealed case file from Customs headoffice (ED, EL, Invoice, Packing List) (Original) 3 rd party inspector Receive the request for fumigation Customs department (at port) Receive documents Register case file Check Export License & duty Shipping Agency Department (SAD) Issue security card Receive terminal charges Review documents and issue gate pass Weigh container at export container yard Verify documents and Customs seal Complete challen as in shipping instructions for terminal charges Make payment Terminal charges; (lift on/lift off; cargo inspection & labor fees) Prepare to obtain gate pass for container Paid challen 103 challen Shipping instructions (Copy) Equipment interchange receipt Prepare documents for terminal operation procedure Fumigate the container(s) after Customs Examination Arrange X-ray of cargo (random selection) Assign Customs exam group (Group A to J) Found correct Examination of goods Found Incorrect Case file is sent back to the Customs department Sealed container Transport container to the container terminal Load the cargo onto the vessel 103 challen Prepare cargo loading list based on mate receipt

14 3.6) Arrange Berthing of Vessel Ship Shipping Agency department (SAD) Myanmar Port Authority (MPA) Exporter (or representative) Prepare berthing application Exporter (or 3.6) Arrange representative) vessel berthing Ship MPA SAD Prepare ship documents before arrival Last port clearance Bill of Lading (copy)/import Cargo Manifest/Stowage plan Ship s particular Ship s general declaration Receive documents Receive estimated tme of arrival (ETA) from ship Check port disbursement account Application Letter Crew list Ship s stores declaration Issue tender notice of readiness for discharging Cargo declaration Crew s effects declaration Declaration on berthing list Passenger list Dangerous goods manifest (if any) Arms & ammunition list Maritime declaration of health Receive berthing permit Receive & check ship documents on arrival Issue berthing permit & arrange pilot Vaccination list Port itinerary list Check cargo documents of consignee/shipper Berthing of vessel

15 ESTIMATED PORT Disbursement Account 15

16 Ship Issue documents Last port clearance Ship registry International tonnage certificate International load line certificate Safety radio certificate (with Form R) Safety construction certificate Safety equipment certificate (with Form E) International oil pollution prevention certificate (with Form A) International ship security certificate International sewage pollution prevention certificate International air pollution prevention certificate Ship sanitation control exemption certificate Safety management certificate Continuous synopsis record Shore-based maintenance agreement Ship oil pollution emergency plan Safe manning certificate Document of compliance International anti-fouling system certificate All officers competency with STCW endorsement Crew list Shipping Agency Department (SAD) Receive and forward ship documents Department of Marine Agency (DMA) Receive request Receive ship documents Issue outward clearance certificate Customs department Receive request Issue payment order Receive payment Issue light dues receipt Exporter (or representative) Request for Certificate of tax clearance & light dues and outward clearance Receive payment order & make payment Receive tax clearance, light due & outward clearance certificate Request for port clearance certificate Revenue department Receive request Issue income tax clearance Receive documents Light dues receipt Certificate for outward clearance Income tax clearance Issue port clearance certificate (Form C) Receive port clearance certificate

17 3.8) Prepare Shipping Documents Ship Issue Bill of Lading Request Bill of Lading Receive Bill of Lading Exporter (or representative) Request Phytosanitary certificate and fumigation certificate Receive Phytosanitary certificate Myanmar Paddy Producer Association Union of Myanmar Federation of Chamber of Commerce & Industry (UMFCCI) Ministry of Agriculture Receive request & issue phytosanitary and fumigation certificate Prepare invoice & packing list Request for recommendation letter for Certificate of Origin & pay recommendation fee Receive request & recommendation fee Receive recommendation for Certificate of Origin & prepare application for Certificate of Origin Export License (Copy) 3.8.6Issue Recommendation of Country of Origin Requirements are not met Invoice & Packing List (Copy) CusDec 2 (Copy) Bill of Lading (Copy) Make payment for Certificate of Origin Receive Certificate of Origin Review documents Issue payment order Requirements are met Receive payment & issue Certificate of Origin Collect shipping documents and Certificate of Origin

18 Figure 9782: Graphical Overview of the Time Required to Export Rice to West Africa Time in days Time Chart for the Export of Rice to West Africa Total Time 12 days 10 1 day 1.1 Conclude Sales Contract 2 days (1 3 days) 1 day 2.1 Make Advance Payment 1 hour 1 day 1 day 3.1 Obtain Export License 3 days 1 day 3.2 Arrange Shipping (Maritime) 2.5 hours 1 day 3.3 Arrange pre Inspection and Fumigation 1 day Declare CusDec hours 3 days 3.5 Terminal Procedure and Customs Exam at Port 5 hours 1 day 3.6 Arrange Berthing 1 day 3.7 Arrange Port Clearance for Vessel Departure 1 day 2 days 3.8 Prepare Shipping Documents 2 days Process 2 days IS IT REALLY ONLY 6 DAYS??? PLEASE ALSO CHECK IF THE PROCESSES IN PARALLEL CAN REALLY BE DONE IN PARALLEL!!! CHECK HOW LONG THE PAYMENT TAKES Assumptions: Cash is paid immediately after the sales contract is concluded (buyer has the enough working capital to make the payment) Exporter starts obtaining Export License immediately after the payment is made (not payment received)

19 Process Costs in Export of Rice to West Africa by Ocean freight 1.Buy Processes Cost (in MMK) Cost (in USD) 1USD = MMK Conclude sales contract 2. Pay 2.1 Make advance payment 1) Transfer cost MMK 10,000 2) Withdrawal cost $ Ship 1) USD$ ) USD$ Obtain Export License MMK 4,000 MMK 60,000 Travelling expense to Nay Pyi Taw 3.2 Arrange Shipping (Maritime) MMK 85, ,000 (total transport costs) Lift on/off charges: MMK 9000 (ICD1) MMK (ICD2) MMK 6000 (MIP) (Laden) USD$ 4.70 USD$ USD$ USD$ (ICD1) USD$ (ICD2) USD$ 7.06 (MIP) 3.3 Arrange pre-inspection and fumigation MMK 18,000 USD$ ) Declare CusDec 2 X ray fee: MMK 20,000 USD$ ) Terminal Procedure and Customs Exam at Port MMK 110,000 USD$ ) Arrange Berthing of Vessel 3.7) Arrange Port Clearance for Vessel Departure Light due payment <MMK 5,000 (in cash) >MMK 5,000 (with cheque) 3.8) Prepare shipping documents 1 50 ton = MMK 6,000 USD$ 7.0 <USD$ 6.0 (in cash) >USD$ 6.0 (in cheque)

20 Rice s Stakeholders Stakeholders Core Business process

21 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Ship Ministry of Commerce Importer s Bank Prepare to make payment Importer (or representative) Exporter s Bank Unacceptable Cancel Review if quotation is acceptable Acceptable Confirm The intent to purchase Purchase order Receive Proforma Invoice Receive request to make payment Notify about payment Make payment Receive payment notification Receive application Issue export credit letter with bank seal Issue payment Exporter (or representative) Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department Get price quotation and sales terms Quotation Prepare The shipment of goods Acknowledge the purchase order Proforma Invoice Request To make payment Acknowledge payment notification Apply To withdraw payment Application Letter Receive payment & export credit letter Prepare the shipment of goods a

22 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Ship Ministry of Commerce Receive Application & docus at the PAC Reviews accuracy & completeness Requirement are met Give order To make payment at MCB Receive Notification (or receipt) of payment Issue hard copy of online application at PAC Receive hard copy, price assessment & history by Export section Case scrutinized at EICC Requirement are met Approve Export License application Issue Export License by Export section Importer s Bank Importer (or representative) Exporter s Bank Exporter (or representative) a Requirement are not met Prepare documents & online application Requirement are not met Cover Letter Sales contract (Original) Or Profoma invoice (Original) Statement of Usage (Original) Make e-payment Submit hard copy to Export section in Nay Pyi Taw Collect Export License b Representative Card (Copy) Myanmar Citizen Bank Receive payment and notify MOC Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department

23 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Prepare to collect empty container Receive 102 challen, shipping instructions, and booking note Move to ICD to collect empty container Make payment for container operation Transport empty container Inland Container Depot Check container and documents Available Issue payment order for container operation charges Receive payment and issue gate pass Ship Review of shipping instructions Consistent Issue booking note, release order, &102 & 103 challen Ministry of Commerce Importer s Bank Importer (or representative) Exporter s Bank Inconsistent Not Available Exporter (or representative) b Prepare Shipping Instructions Inquire transporter About available truck Receive booking note, 102 & 103 challen Receive booking note, 102 & 103 challen with SAD endorsement Send 102 challen, shipping instructions, and booking note to transporter Loading of container at warehouse c Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department Receive release order Receive booking note, 102 & 103 challen Register & provide seal on booking note,102 & 103 challen

24 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association Not consistent 3 rd Party Inspector Receive documents Issue Payment order Receive payment Test sample Consistent Issue pre-inspection certificate Transporter Inland Container Depot Ship Ministry of Commerce Importer s Bank Importer (or representative) Exporter s Bank Exporter (or representative) c Prepare documents Forwarding Letter Shipping Instructions Make inspection payment Receive pre-inspection certificate d Product sample Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department

25 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Ship Ministry of Commerce Importer s Bank Importer (or representative) Exporter s Bank Exporter (or representative) Myanmar Citizen Bank Shipping Agency Department Private Bank d Prepare online application Prepare documents for Central Registration section Requirements are not met Printed online application form Export License (Original) Booking note (Original) Shipping Instruction (Original) Commercial Invoice (Original) Packing List (Original) Pre-shipment Inspection Certificate (Original) Receive payment Receive payment order Make payment Deliver sealed case file to terminal Customs Issue payment receipt e Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department Check accuracy & completeness at PAC Print online application Requirements are met Receive Determine Export if documents meet the requirements Declaration number Obtain Free Foreign Export (FEE seal) serial number & stamp for export duty exemption Buy Payment Order for X-ray fees Register Cargo(by HS code) at Classification section Receive payment notification Check docs & assess for exemption by Export Appraising Group Record trade volume At Computer section Check data entry & close the docs with seal by Export Appraising Group Issue sealed case file

26 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Receive the request for fumigation Fumigate the container(s) after Customs Examination Found Correct Transporter Inland Container Depot Transporter delivers loaded container to terminal Ship Ministry of Commerce Importer s Bank Importer (or representative) Exporter s Bank Exporter (or representative) f Request for delivery of loaded container Request for fumigation Prepare for security card 3.5.1RequestExamination of goods Sealed case file from Customs head office (ED, EL, Invoice, Packing List) (Original) Shipping Instructions National Registration Card Complete Challen as in shipping instructions for terminal charges Make payment Terminal charges; (lift on/lift off; Cargo Inspection & labor fees) Prepare to obtain gate pass for container Paid challen 103 challen Prepare Shipping instructions documents for (Copy) Equipment terminal operation interchange receipt procedure 103 challen Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Review documents Issue security card Receive terminal charges Review documents & issue gate pass Weigh Container at export container yard Verify documents & Customs seal Transport Container t o the container terminal Prepare cargo loading list Based on mate receipt Load the cargo onto the vessel g Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department Receive documents Register case file Check Export License & duty Arrange X-ray of cargo (random selection) Assign Customs exam group (Group A to J) Examination of goods Found incorrect Case file is sent back to the Customs department Sealed container

27 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Ship Ministry of Commerce Importer s Bank Importer (or representative) Prepare ship documents before arrival Last port clearance Bill of Lading (copy)/import Cargo Manifest/Stowage plan Ship s particular Ship s general declaration Crew list Ship s stores declaration Cargo declaration Arms & ammunition list Crew s effects declaration Maritime declaration of health Passenger list Vaccination list Dangerous goods Manifest (if any) Port itinerary list Exporter s Bank Exporter (or representative) g Prepare berthing application Application Letter Myanmar Citizen Bank Shipping Agency Department Receive berthing permit Receive & check ship documents on arrival Check cargo documents of consignee/shipper Berthing of vessel h Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Receive documents Receive estimated time of arrival (ETA) from ship Check port disbursement account Issue tender notice of readiness for discharging Declaration on berthing list Issue berthing permit & arrange pilot Department of Marine Agency Revenue Department

28 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Ship Ministry of Commerce Importer s Bank Importer (or representative) Exporter s Bank Exporter (or representative) Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department h Receive request Issue documents Request for Certificate of tax clearance light dues & outward clearance Receive request Receive request Last port clearance International tonnage certificate Ship registry International load line certificate Receive & forward ship documents Receive payment order & make payment Issue payment order Safety radio certificate (with Form R) International ship security certificate Safety construction certificate Safety equipment certificate International sewage Pollution Prevention certificate (with Form E) International air International oil pollution prevention pollution prevention certificate certificate(with Form A) Crew list Receive ship documents Receive payment Receive tax clearance, light due & outward clearance certificate Issue income tax clearance Issue light dues receipt Issue outward clearance certificate Ship sanitation control exemption certificate Safety management certificate Continuous synopsis record Shore-based maintenance agreement Request for port clearance certificate Ship oil pollution emergency plan Safe manning certificate Document of compliance International anti-fouling system certificate All officers competency With STCW endorsement Light dues receipt Certificate for outward clearance Income tax clearance Receive documents Receive port clearance certificate Issue port clearance certificate (Form C) i

29 Ministry of Agriculture Union of Myanmar Federation of Chamber of Commerce & Industries Receive request & issue phytosanitary and fumigation certificate Review documents Requirement are met Issue payment order Receive payment & issue Certificate of Origin Myanmar Paddy Producer Association 3 rd Party Inspector Transporter Inland Container Depot Receive request & recommendation fee Issue Recommendation of Country of Origin Requirement are not met Ship Ministry of Commerce Importer s Bank Importer (or representative) Issue Bill of Lading Exporter s Bank Exporter (or representative) Myanmar Citizen Bank Shipping Agency Department Private Bank Customs department Port Terminal Terminal Customs Myanmar Port Authority Department of Marine Agency Revenue Department i Request Bill of Lading Request Phytosanitary Certificate and fumigation certificate Receive Bill of Lading Receive Phytosanitary certificate Request for recommendation letter for Certificate of Origin & pay recommendation fee Prepare Invoice & packing list Receive recommendation for Certificate of Origin & prepare application for Certificate of Origin Export License (Copy) Invoice & Packing List (Copy) CusDec 2 (Copy) Bill of Lading (Copy) Make payment for Certificate of Origin Receive Certificate of Origin Collect shipping docs & Certificate of Origin j

30 Recommendations Financial services and banking system Access to finance Financial instruments Transportation and Logistics (cost) Port facility Port facilities and infrastructure Service at ICDs Berthing Customs Electronic submission vs. manual processing Appraisal process Incoterms: FOB vs. CIF Metrology and Standardization Use of standard units Ensure calibration across the country Seminar MOC+FINANCE+TRANSPORT+AGRI Branded rice Markets

31 Electronic Country of Origin

32 Clients UMFCCI Online Go to eco application website at Click on Apply eco now button Fill the UMFCCI s Member ID and download C/O pdf form Fill the pdf form with require information Send to umfcciecoo@gmail.com with attached pdf form Come to UMFCCI C/O office with required documents on next day Get the payment slip and paid at the cashier Collect the C/O documents with received Received from clients & save to ReceivedCOfile folder Run UMFCCI form tools to generate Certificate ID and QR Code Check the information Print out the form and stamped the form Get signature of authorized officer on C/O form Reply to clients that C/O form is ready Export C/O form to JPG file and upload to server eco workflow diagram Certified C/O form copy is available online to verify

33 Guide to issue eco at UMFCCI

34 eco Website

35 UMFCCI Form Tool

36 Announcement of eco

37 MANGO

38 Use Case Diagram of Mango Border Trade Export 2) Ship 2.1) Arrange land transport to auction center Transporter (from Mandalay to Mile105) Grower 1) Buy 2.2) Arrange auction North-East Gate Fruit Co., Ltd BTOS Parties Importer 1.1) Participate in Auction Exporter (or representative 2.3) Application for BTOS procedure Myanmar Citizen Bank Customs department (Mile 105) 3) Pay 2.4) Enter BTOS Application Ministry of Finance 3.1) Make payment Importer (or representative) Exporter 2.5) Arrange Transport to China Customs department (at the border) 2.6) Border Crossing Customs department Transporter (China) (from Mile105 to China) Ministry of Rail

39 1.1) Participate in Auction Exporter (or representative) Importer (trader) Exporter (or representative) 1.1) Participate in Auction Importer (trader) Sale to highest bidder Make bid (based on quality and quantity) No Legal contract Selling CIF Kyea gaung Accept the bid

40 2.1) Arrange Land Transport to Auction Center Transporter Exporter (or Representative) Grower (or Broker) Exporter (or representative) 2.1) Arrange transport to auction center Transporte r Grower (or Broker) Buy and collect mangos Sort by quality Sell mangos Pack by carton box RISK=Transport, price, market, accident Perishable cargo all kind of risk Arrange truck and prepare for loading the mangos Transport cargo to auction center Ask driver to prepare for loading Arrange loading the goods onto the truck

41 2.2) Arrange Auction Exporter (or representative) Importer Exporter (or representative) 2.2) Arrange Auction Importer Sort by grower name Make ID card at auction gate Bidding Offer price at auction shelf Price accepted complete auction

42 2.3) Application for BTOS procedure Exporter (or representative) North-East Gate Fruit Co., Ltd Exporter (or representative) 2.3) Application for BTOS procedure North-East Gate Fruit Co., Ltd No Choose whether to use an agent Yes Apply for Export License Request to apply for Export License Receive request Follow BTOS procedure Make service payment Receive payment Follow BTOS procedure

43 2.4) Enter Border Trade Online System (BTOS) Application Exporter (or representative) Ministry of Commerce Ministry of Finance Myanmar Citizen Bank (MCB) Customs department Requirements are not met Prepare PIAC application entry& submit Cover Letter with company letterhead Sales contract (Original) Proforma Invoice (Original) Packing List Representative Card Company Registration Card Certificate of Export/ Import Registration Special Power (or) General Power Border Merchants member ID card Balance statement of the Myanmar Economic Bank Receive Export Declaration Form of Vehicle check from Ministry of Rail Application form for Export License with Export PIAC registration Member card of Union of Myanmar Muse-Namkham Border Trade Chamber of Commerce MMK 6 stamps Recommendation letters from concerned Ministries (If necessary) Receive payment request Make Payment Receive Export License Requirements are met Check application Issue Export License Data entry for Export Declaration at PIAC Enter & print Manifest at PIAC Update case file at PIAC and transfer Export Declaration Calculate commercial tax Request payment Receive payment notification Issue tax payment receipt Receive commercial tax Issue payment notification Check and update Export Declaration Print Export Declaration Inspect cargo at Customs yard

44 2.5) Arrange Transport to China Importer Transporter Importer 2.5) Arrange transport to China Transporter Provide address Request address to discharge the cargo Discharge the mangos at agreed address

45 2.6) Border Crossing Exporter (or representative) Transporter North-East Gate Fruit Co., Ltd Customs (Myanmar) Ministry of Rail (Motor Vehicle Inspection) Customs (China) Hire truck to deliver the mango to Kyae Kaung Prepare documents to inspect the goods Load the mango to a smaller truck Prepare documents to inspect the goods Export License Customs (Myanmar) 2.6) Border crossing North-East Gate Fruit Co., Ltd Export License Export Declaration Export Declaration Reviews documents and inspect mangos In case no agent is used Allow to pass the border checkpoint gate Check the truck engine Bring goods to Chinese Border Apply Import License Issue License Allow to pass the Chinese border gate

46 3.1) Make payment Exporter (or representative) Importer Exporter (or representative) 3.1) Make payment Importer Request for payment Receive cash payment Make cash payment in Muse

47 Time Required to Export Mangos to China Time Chart for the Export of Mango to China Time in days 20 Total Time 2.1 Arrange Land Transport to Auction Center 6 hours 2.2 Arrange Auction 4 hours 1.1 Participate in Auction 1 hour 17 days 2.3 Application for BTOS procedure 2 hours Enter BTOS Application 1 day 2.5 Arrange Land Transport to China 2 hours 2.6 Border Crossing Procedure 2 hours 3.1 Make payment 7 days max. 14 days days 7 days 1 day 1 day 1 day 1 day 1 day day 1 day Process Assumptions: Cargo is ready to load at the exporters premises Cash payment minimum four days (up to max. 14 days)

48 Process Costs in Export of Mango to China by Land Processes Cost (in USD) Cost (in MMK) 1USD = MMK850 1.Buy 1.1 Auction 2. ship 2.1 Arrange land transport to auction center MMK 3000/box USD$ Arrange auction 5% of total value (broker fee) 5% of total value (broker fee) 2.3 Application for BTOS procedure???? (apply himself) MMK 50/box (hire agent) 10,000 Yuan/year (Signboard fees) 1 cent Yuan/box (Shelf fees) 2.4 Enter BTOS Application MMK 5, % commercial tax of export value 2.5 Arrange Transport to China 2.6 Border Crossing MMK 80/ box USD$ 0.1/box 3. Pay 3.1. Make advance payment Total Costs?????????????? (apply himself) USD$ 0.06/box (hire agent) 10,000 Yuan/year (Signboard fees) 1 cent Yuan/box (Shelf fees) USD$ 6 + 5% commercial tax of export value

49 Mango s Stakeholder Stakeholders Core Business process

50 Recommendations Strengthen contractual relationships Payment Risks Acceptance of cargo Force majour Exchange rate Insurance coverage outside Myanmar Competition in logistics services at the border???you HAVE TO PUT OTHER POINTS YOU LIKE TO MENTION HERE

51 PALM OIL

52 Use Case Diagram of Palm Oil s Import 2) Ship 2.1) Prepare Import Recommendation application Government Agencies FDA MOC MFTB & MICB MPA SAD 1) Buy 1.1) Sales contract 2.2) Obtain Import Recommendation 2.3) Obtain Import License 2.4) Make Storage Contract MCB Customs department MEC Immigration Onboard Parties Port Customs Exporter 2.5) Open Letter of Credit UOB River Police 3) Pay 3.1) Present Bill of Lading, commercial documents Importer (or representative) 2.6) Declare CusDec 1 (PAPP) 2.7) Obtain Delivery Order Private bank PESO Quarantine Oil terminal Exporter s Bank 3.2) Establish payment Importer s Bank 2.8) Arrange Berthing 2.9) Discharge Cargo (After Berthing of Exam, Inspection, Testing, Taking sample) 2.10) Finalize CusDec 1 Feeder line and/or Box Operator Customs broker Asia World Port Terminal Storage tank owner Ship Quality and Quantity Survey MITS PHTA & CRO

53 1.1) Conclude Sales Contract Exporter Importer (or representative) Importer (or representative) 1.1) Conclude sales contract Exporter Prepare quoted price and term of trade Quotation Request for quotation Review if quotation is acceptable Not acceptable Cancel Acceptable Confirm the intent to purchase Purchase order Prepare the shipment of goods Acknowledge the purchase order Proforma invoice Receive Proforma invoice

54 2.1) Prepare for IR application Importer (or representative) 2.1) Prepare for IR application Exporter Sample (3 Liters)

55 2.2) Obtain Import Recommendation Importer (or representative) FDA Importer (or representative) 2.2) Obtain Import Recommendation FDA Prepare documents Cover Letter Application Form Certificate of Analysis (copy) Factory Manufacturing License Certificate of Specification Document review by FDA Requirements are met Requirements are not met Application accepted Company Registration & Import/ Export Registration Sample (3 Liters) Health certificate (Copy) Issue payment order Receive payment Receive payment order & Make payment Send Certificate to Nay Pyi Taw to obtain signature of FDA officer Test sample Rejected Decision Collect Import Recommendation letter Accepted Issue Import Recommendation letter 4 10days

56 2.3) Obtain Import License (pre arrival of vessel) Importer (or representative 2.3) Obtain Import License MOC MCB Myanmar Citizen Bank (MCB) Receive e-payment and notify MOC Importer (or representative) Prepare documents & apply for Import License at Myanmar Trade Net (online) Cover Letter Sales contract (Orig.) or Profoma invoice (Original) Statement of Usage FDA Import Recommendation Health Certificate of exporting country Representative card Prepare and make e-payment Submit hard copy to Import section in Nay Pyi Taw Ministry of Commerce (MOC) Receive Import License application at PAC Requirements are not met Review accuracy & completeness Requirements are met Issue payment order Receive notification about payment Issue hard copy of online application by PAC Receive online letter, assessment of price & history by Import section Receive payment Make license payment via e-payment Case scrutinized at EICC Receive notification about payment Approve Import License application Collect Import License Issue Import License by Import department

57 2.4) Make Storage Contract Importer (or representative) Myanmar Economic Cooperation (MEC) Importer (or representative) 2.4) Make Storage Contract MEC Inquire about tank storage availability Respond to inquiry Unacceptable Review contract terms Provide storage contract terms Acceptabl e Agree to make contract for oil storage

58 2.5) Open Letter of Credit Importer (or representative) Importer s Bank (Issuing/Corresponding) Exporter s Bank (Advising/Accepting) Exporter Importer (or representative) Importer s Bank 2.5) Open Letter of Credit Exporter Exporter s Bank Apply for Letter of Credit Cover Letter Import License Sales contract OR Proforma invoice Application form Bank Book (Copy) Receive shipping documents Shipping documents Not approved Review documents Approved Issue Letter of Credit Receive Acceptance of LC Receive shipping documents If discrepancies Scrutinize shipping documents No discrepancy Provide shipping documents Process payment Receive and accept Letter of Credit Does not accept LC Accept Letter of Credit Scrutinize LC Receive acceptance of LC from exporter Notification of acceptance Receive shipping documents Review & accept No shipping documents Yes Deliver shipping documents Receive credit Make payment Receive notification about Letter of Credit Accept Letter of Credit Notification of LC acceptance Ship commodity Present /negotiate shipping documents Ship on board Bill of Lading Commercial invoice Health Certificate Packing List Receive credit

59 2.6) Declare CusDec 1 (pre arrival of vessel) Importer (or representative) Prepare online application Prepare documents for Central Registration Section Private bank Customs department Check accuracy and completeness at PIAC Print application Importer (or representative 2.6) Declare CusDec 1 Private bank Customs department Cover Letter for PAPP & DD Online Application Form (hard copy) CusDec1 Import License ( copy) Bill of Lading (copy) Commercial Invoice (copy) Packing List (copy) Certificate of Origin (copy) Requirements are not met Determine if documents meet the requirements Requirements are met Stamp central registration number Send the documents to Import section for noting Register cargo (by HS code) at Classification section Buy payment order for Customs duty & commercial tax Receive payment order and make payment Issue payment order Receive payment and issue receipt Calculate Customs duties at Valuation section & record at Assessment section Record trade volume at Import section Acknowledge payment of Customs Duty and commercial tax by Cash Account section Deliver sealed case file to Customs at the port Close import declaration & other documents with seal Issue sealed case file

60 2.7) Obtain Delivery Order (With BL original) Importer (or representative) Shipping Agency Department Importer (or representative) 2.7) Obtain Delivery Order SAD Prepare Documents Cover Letter Bill of Lading (Original) Special Power letter NRC of Agent & Principal Incorrect Receive Documents Scrutinize Documents Correct Sign Delivery Order Receive Delivery Order Issue Delivery Order

61 2.7) Obtain Delivery Order (Without BL original) MICB/ MFTB Importer (or representative) 2.7) Obtain Delivery Order SAD Shipping line and/or box operator MICB/MFTB Issue Bank Guarantee Importer (or representative) Request Bank Guarantee Prepare Documents Shipping Agency Department Feeder shipping line and/or Box operator Cover Letter Letter of Indemnity (Bank Guarantee) Bill of Lading (Copy) Special Power letter NRC of Agent & Principal Requirements are not met Receive Documents Scrutinize documents Requirements are met Request to issue a Tele-Delivery Order Issue Tele- Delivery Order Receive Tele- Delivery Order Sign Delivery Order Receive Delivery Order Issue Delivery Order

62 Ship Shipping Agency department (SAD) Myanmar Port Authority (MPA) Importer (or representative) Asia World Port Terminal Storage tank owner Prepare berthing application Request for storage tank Accept request for storage tank Prepare ship documents before arrival Last port clearance Bill of Lading (copy)/import Cargo Manifest/Stowage plan Ship s particular Ship s general declaration Receive documents Request to make payment Receive payment Receive estimated time of Arrival (ETA) from ship Application Letter Letter for available storage tank Delivery order Pay conservancy charges Pay wharfage charges Request to make payment Receive payment Issue storage tank Permission letter Crew list Ship s stores declaration Cargo declaration Check port disbursement account Crew s effects declaration Passenger list Issue tender notice of readiness for discharging Dangerous goods manifest (if any) Arms & ammunition list Maritime declaration of health Vaccination list Port itinerary list Receive berthing permit Receive & check ship documents on arrival Berth vesslel along Side at the Htee Ten Oil tstorage tank yard Declaration on berthing list Issue berthing permit & arrange pilot Check cargo Documents of consignee./shipper

63 2.8 Arrange Berthing AWPT Importer (or representative) 2.8 Arrange pre-berthing & berthing MPA Ship SAD Storage tank owner

64 ESTIMATED PORT D/A 64

65 2.9) Examine, Inspect, Test, Take Sample and Discharge Cargo Customs department (at port) Receive case file with brake bulk order Imported commodity is inspected by Customs Determine if the goods are acceptable Release cargo Myanmar Inspection and Testing Service (MITS) Requirements are met Requirements are not met Determine if the documents meet requirements Draft survey and tank inspection Discharge to storage tank Take sample for FDA, PTAC, CRO Seal tank bar Receive FDA test result by fax Importer (or representative) Deliver case file with brake bulk order to Customs at port Cover Letter Application Form Commercial Invoice (copy) Packing List (copy) Import License (copy) Import Recommendation Send samples to respective agencies Application Form Certificate of Analysis (Copy) Health Certificate from exporter Certificate of Specification Billing of Lading Commercial Invoice Packing List Import License (copy) Request the inspection & testing of goods Application for Certificate of Testing Central Research Organization (CRO) / Post Harvest Technology Application (PHTA) Requirements are not met Determine if documents meet requirements Requirements are met Test the sample Issue Certificates Food and Drug Administration (FDA) Requirements are not met Review documents if the goods are fit for human consumption Test the sample Fax test result Requirements are met Unseal tank bar Receive certificate from CRO and PTAC Receive FDA certificate & direct delivery from storage tank Issue Fit for Human Consumption Certificate

66 2.10) Finalize CusDec1 Importer (or representative) Customs department 2.10) Finalize CusDec Prepare documents to finalize CusDec Receive documents Receive case file from onboard Customs Importer (or representative) Customs department Completed CusDec1 Import License (Original) Note by noting section Bill of Lading (Original) Bill of Exchange (Original) Final Assessment Commercial Invoice (Original) Packing List (Original) Close case file Certificate of Origin (Original) FDA Certificate (Original) Issue CusDec1 for Importer Receive CusDec1 for record

67 Palm Oil s Stakeholders Stakeholders Core Business process

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69 Process Costs in Import of Palm Oil from Malaysia by Ocean Freight 1. Buy Processes Cost (in USD) Cost (in MMK) 1USD = MMK ) Conclude Sale Contract 2. Ship 2.1 Prepare Import Recommendation Application 2.2 Obtain Import Recommendation MMK 35,000 40,000 USD$ Obtain Import License MMK 5,000 (online application) Min. MMK 50,000 (Depending on import value) MMK 60,000 Transport cost to Nay Pyi Taw USD$ 6 (online application) Min. USD$ 59(Depending on import value) USD$ 71 Transport cost to Nay Pyi Taw 2.4 Make Storage Contract 2.5 Open Letter of Credit 0.125% of Invoice + Bill (Euro 50/bill or equivalent USD amount) 2.6 Declare CusDec 1 (PAPP) Customs duty 5% of import value Commercial tax 5% of import value Bank charges 0.1% of Customs duty (maximum MMK 30,000) 0.125% of Invoice + Bill (Euro 50/bill or equivalent USD amount) Customs duty 5% of import value Commercial tax 5% of import value Bank charges 0.1% of Customs duty (max USD$ 35) 2.7 Obtain Delivery Order 2.8 Arrange Berthing MMK 25/ton (conservancy) USD 3/ton (wharfage) MMK 25/ton (conservancy) USD 3/ton (wharfage)

70 Process Costs in Import of Palm Oil from Malaysia by Ocean Freight 2. Ship Processes Cost (in USD) Cost (in MMK) 1USD = MMK Discharge Cargo (After berthing of exam, inspection, Testing, Take sample) MMK 0.6/viss or MMK 367/ton (for all tests FDA, CRO, PHTA) USD$ /viss or USD$ 0.50/ton (for all tests FDA, CRO, PHTA) 2.10) Finalized CusDec1 3. Pay 3.1 Present Bill of Lading (Commercial Document) 3.2 Establish Payment Total Costs??????????

71 General Recommendations Banking Facility system(instruments, tools) Transportation and Logistics (cost) Port facility (Dry port ) (TIME) Stowage tank Customs (e-customs, NSW) (TIME) Strengthen contractual relationships Payment import 1 st. Risks Force majour Acceptance of cargo Exchange rate Insurance coverage inside/outside Myanmar Competition in logistics services at the border

72 General Recommendation Stakeholder s MOC SAD ICD Customs FDA Bank Short term Mid term Long term Simplify?? steps and To improve PAC Simplify?? Steps and To improve EPMS To improve current automation system Simplify??? Steps and to improve current e customs Simplify?? Steps. Introduce simple automation Increase banking facility with efficient automation Electronic Licensing Set up Marine net Before liberalize shipping agency Electronic container stowage plan and inspection skills Set up internal LAN and to improve automation To reorganize Private LAB test result Fully automation Tradenet Join NSW Port net Join NSW Join Port Net NSW system Expand hightech lab Join NSW O/Agencies Simple automation Customize automation Join NSW

73 Why Dry ports in Myanmar? Of 7 potential key sites, pre feasibility study of Mandalay Dry Port has been processed and intergovernmental agreements are ready for signing under UNESCAP Strategically located to be a prime Asian hub Asia Highway network and Trans Asian Rail (TAR) Network forms a land bridge connecting South East Asia, South Asia and China. Potential prime regional hub for continental South East Asia and Greater Mekong Sub region (GMS) Increasing Maritime traffics and trade Increasing trade between neighboring countries, especially Thailand and China Favorable regional developments and political reforms

74 Proposed location China-Myanmar Railway Corridor Planning

75 Proposed Dry Port site and Mandalay Merchandise Center

76 Project cost for Dry Port Total project development cost US$ 11,485,136 Annual operational cost US$ 456,454 (including labour, Fuel, Utility cost) FIRR of the project is 8.31%++ (estimated cash flows until end of year 2035)

77 Thank You! Questions? Aung Khin Myint Christian Ksoll fellows.org Theingi Lwin

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