Asia-Pacific Research and Training Network on Trade Analysis of Export and Import Processes of Selected Products in Thailand Somnuk Keretho Saisamorn Naklada ARTNeT Working Paper Series No 103/June 2011 ARTNeT Working Paper Series The ARTNeT Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about trade issues An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished ARTNeT working papers are available online at www.artnetontrade.org All material in the working papers may be freely quoted or reprinted, but acknowledgment is requested, together with a copy of the publication containing the quotation or reprint The use of the working papers for any commercial purpose, including resale, is prohibited Asia-Pacific Research and Training Network on Trade (ARTNeT) is an open regional network of research and academic institutions specializing in international trade policy and facilitation issues IDRC, UNCTAD, UNDP, ESCAP and the WTO, as core network partners, provide substantive and/or financial support to the network The Trade and Investment Division of ESCAP, the regional branch of the United Nations for Asia and the Pacific, provides the Secretariat of the network and a direct regional link to trade policymakers and other international organizations Disclaimer: The opinion, figures and estimates are the responsibility of the authors and should not be considered as reflecting the views or carrying the approval of the United Nations, ARTNeT members, partners or authors’ employers © ARTNeT 2011 ARTNeT Working Paper Series No 103/June 2011 Analysis of Export and Import Processes of Selected Products in Thailand Somnuk Keretho* Saisamorn Naklada** The summary of the paper was published as Keretho S and Nakala S ., " Analysis of Export and Import Processes of Selected Products in Thailand", ESCAP Studies on Trade and Investment, No 71, United Nations, Bangkok _ *Director and **Project Manager at the Institute for Information Technology Innovation (INOVA), Kasetsart University, Thailand, specializing in ICT-enabled innovation, trade facilitation and e-logistics initiatives including Single Window strategic planning and implementation Comments from anonymous referees and participants to the ARTNeT Research Team Meeting on Improving Regional Trade Procedures, October 2010 in Kuala Lumpur are gratefully acknowledged This work was carried out with the aid of a grant from the International Development Research Centre (IDRC), Canada, and is part of an ARTNeT Trade Facilitation Study on Improving Regional Trade Procedures and Process The support of the United Nations Economic and Social Commission for Asia and the Pacific is gratefully acknowledged The opinion figures and estimates are the responsibility of the authors and should not be considered as reflecting the views or carrying the approval of the United Nations, IDRC, ARTNeT or INOVA Any errors are the responsibility of the authors, who can be contacted at sk@ku-inova.org, and saisamorn@ku-inova.org Contents Introduction .5 Business process analysis in Thailand 6 Study method 8 I Business process analysis method 8 II Time/cost-distance method 9 Analysis of process of exporting auto spare parts from Thailand to India .10 I Steps involved in the process .10 II Key findings 12 III Time/cost-distance analysis 14 Analysis of the process of exporting sugar from Thailand to Bangladesh .16 I Steps involved in the process .16 II Key findings 19 III Time/cost-distance analysis 21 Analysis of process of importing raw materials into Thailand 23 I Steps involved in the process .23 II Key findings 26 III Time/cost-distance analysis 27 Recommendations 29 Annexes: BPA Charts 30 List of Tables Table 1: Quantity and value of sugar and auto parts exported from Thailand (2005-2009) Table 2: Summary of the export processes of four strategic products of Thailand (2008) Table 3: Summary of the import processes of four strategic products of Thailand (2008) Table 4: Summary of the export processes, documents and stakeholders involved in the export of auto spare parts from Thailand to India Table 5: Time, cost and distance for auto spare parts export from Thailand to India Table 6: Summary of the export processes, documents and stakeholders involved in the export of sugar from Thailand to Bangladesh Table 7: Time, cost and distance for the process of exporting sugar from Thailand to Bangladesh Table 8: Summary of the processes, documents and stakeholders involved in the process of importing raw materials (for producing electronic devices) into Thailand from China Table 9: Time, cost and distance for the import of raw materials (for producing electronic devices) from China into Thailand List of Figures Figure 1: Time-procedure chart of auto spare parts export from Thailand to India Figure 2: Time/cost-distance chart of auto spare parts export from Thailand to India Figure 3: Time-procedure chart of sugar export from Thailand to Bangladesh Figure 4: Time/cost-distance chart of sugar export from Thailand to Bangladesh Figure 5: Time-procedure chart for the import of raw materials (for electronic devices) into Thailand Figure 6: Time/cost-distance chart for the import of raw materials (for producing electronic devices) from China into Thailand Introduction Thailand’s exports include agricultural and industrial goods such as rice, processed and frozen food, electronics, fashion garments and textiles, automobiles and auto parts and accessories The export of jasmine rice, sugar, frozen shrimp, automobiles and auto parts has been a key contributor to economic growth Thailand has negotiated free trade agreements with Australia, China, India, Japan, New Zealand and the Association of Southeast Asian Nations (ASEAN) that have helped to increase the total value of its exports But other barriers to trade (administrative and procedural) may unnecessarily impede further growth Business Process Analysis (BPA) is a powerful tool that can help to identify these barriers and suggest ways to streamline trade processes As part of the Asia-Pacific Research and Training Network on Trade (ARTNeT) Regional Study on Improving Regional Trade Procedures and Processes, a BPA was conducted on Thai exports of sugar to Bangladesh and auto-parts to India, as well as imports into Thailand from China of raw materials used to produce electronic devices This paper presents the key findings of these analyses and offers some recommendations for streamlining export and import processes The study focused on the export of sugar and auto parts because, along with frozen shrimp and jasmine rice, these products are two of Thailand’s highest-performing exports and the quantity of the exports of these products grew rapidly between 2005 and 2009, as shown in Table The decision to analyze exports to Bangladesh (sugar) and India (auto parts) was also based on considerations of existing trade practices and market potential A BPA of Thailand’s two other high-performing exports – frozen shrimp and jasmine rice – has already been performed Table 1: Quantity and value of sugar and auto parts exported from Thailand (2005-2009) Products Year Sugar Quantity (ton) 1,419,417 Value (mil.bath) 14,437.50 Quantity (ton) 981,463 2006 Value (mil.bath) 13,151.60 Quantity (ton) 2,321,484 2007 Value (mil.bath) 25,383 Quantity (ton) 2,015,012 2008 Value (mil.bath) 21,733.50 Quantity (ton) 2,694,467 2009 Value (mil.bath) 35,503.40 Source: Thailand Automotive Institute 2005 Auto parts Spare parts O.E.M Part Body Part Component Part -Total units not specified 6,462.11 70,328.58 4,100.74 -Total units not specified 6,677.28 80,489.32 5,026.38 -Total units not specified 39,910.06 72,432.02 8,115.21 -Total units not specified 71,493.36 61,320.34 11,007.91 -Total units not specified 14,665.70 86,225.42 12,531.84 The study examined the processes involved in the import of raw materials (for electronic devices) in order to give due attention to both sides of trade transaction, and to illustrate the complex procedural requirements and interactions between the agencies that sustain global supply chains Office of Agricultural Economics http://www.oae.go.th/ Thailand Automotive Institute http://www.thaiauto.or.th/statistic/vehicle_and_part_export.asp Section of this paper elaborates upon the benefits of BPA as a basis for the development of a national Single Window by reviewing a prior BPA of Thai imports and exports Section describes the BPA and time/cost-distance methods used for this study Sections and examine the processes involved in the export of sugar and auto parts, and Section examines the processes involved in the import of the raw materials used in the production of electronic goods The paper concludes by listing some recommendations for streamlining processes and procedures Business process analysis in Thailand Simplification of documentary requirements and trade procedures (including commercial, transport, regulatory and financial procedures); and their alignment with international standards has a significant impact on the performance of businesses and can consequently enhance competitiveness both at the organizational and national levels Thus, such simplification of processes and procedures can serve as a means of trade facilitation Prior to the selection of trade facilitation measures, it is crucial to have a good understanding of the existing or “as-is” conditions of business processes and information flows throughout the international supply chain All attributes of the import and export processes and information flows, including activities required to complete the processes, relevant stakeholders, related laws, rules, regulations and documents, as well as their relationships, need to be duly recognized and understood In 2008, Thailand conducted, as part of the Data Harmonization and Data Modeling for Single Window e-Logistics Project, a BPA of the export and import processes relating to eight strategic products The four export products selected for analysis were frozen shrimp, frozen chicken, durian and automobiles The four import products selected for analysis were tuna fish, beef, grapes and auto parts The analyses concluded that exporting of the selected products from Thailand required between 11 and 16 steps and importing of the selected products required between and 10 steps The analyses also revealed that certain of these steps, especially those relating to documentation requirements, imposed higher time costs than others Unified Modeling Language (UML), Use Case Diagrams, and Activity Diagrams were used to illustrate the processes The Activity Diagrams clearly showed the existence of bottlenecks and redundancies in activities and data requirements These results guided subsequent improvements in the business processes relating to the selected products The summaries of the export and import processes for the selected products are shown in Table and Table 3 UNNExT, UNESCAP, UNECE (2009) Business Process Analysis Guide to Simplify Trade Procedures, Bangkok: UNESCAP Data Harmonization and Data Modeling for Single Window e-Logistics Project (2008) commissioned by Ministry of Information and Communication Technology, and researched by Institute for Information Technology Innovation, Kasetsart University, Thailand Table 2: Summary of the export processes of four strategic products of Thailand (2008) Export process Frozen shrimp Frozen chicken Buy √ √ Ship 2.1 Quality assurance √ √ 2.2 Arrange Transportation √ √ 2.3 Obtain export permit √ √ 2.4 Obtain insurance √ √ 2.5 Customs declaration √ √ 2.6 Pack goods and inland √ √ transportation 2.7 Inspection at the loading √ station 2.8 Export process √ √ 2.9 Prepare document for √ √ importation 2.10 Request for cutoff from raw materials list 2.11 Report production process 2.12 Report exportation 2.13 Request for tax/duty return in compliance with the specific laws 2.14 Request for excise duty return/waiver Pay √ √ Remarks: √ that process is required for that product - that process is not required for that product Durian Automobiles √ √ √ √ √ √ √ √ √ √ √ √ √ - - √ √ √ √ - √ - √ - √ √ - √ √ √ Table 3: Summary of the import processes of four strategic products of Thailand (2008) Import process Tuna Beef Grapes Auto parts Buy √ √ Ship 2.1 Prepare documents before √ importation 2.2 Obtain approval of raw materials release 2.3 Prepare documents required √ √ for importation 2.4 Obtain insurance √ √ 2.5 Request for berthing √ √ 2.6 Request for unloading cargo √ √ containers from vessel 2.7 Inspect cargo √ √ 2.8 Release cargo √ √ Pay √ √ Remarks: √ that process is required for that product - that process is not required for that product √ √ - √ - √ √ √ √ √ √ √ √ √ √ √ √ √ √ Study method I Business process analysis method This study of export and import processes was conducted based on the Business Process Analysis Guide to Simplify Trade Procedures (2009), jointly developed and produced by United Nations Network of Experts for Paperless Trade in Asia and the Pacific (UNNExT), United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), and United Nations Economic Commission for Europe (UNECE) A BPA is recommended as the first step towards implementing trade facilitation measures related to simplification, harmonization, and automation of trade procedures and documents A BPA is used to visualize the documentation requirements and interactions between agencies that are necessary to facilitate a particular supply chain and to explain how to perform each step in the context of legal regulations, policies, and related trade and electronic commerce orders BPAs involve examining the documentary and regulatory requirements of trade processes and reveal information flows, bottlenecks and redundancies in the activities and documents necessary to complete trade transactions The results of a BPA can also enable further data harmonization and data modeling to support the development of e-logistics, as in the case of Thailand Conducting a BPA also involves collecting the documents and data items used in trade transactions According to the UN/CEFACT International Supply Chain Model, business processes are analyzed and categorized into three process areas: Buy-Ship-Pay, as follows: Buy – Activities concerning the conclusion of trade terms and establishment of a sales contract Ship – Activities concerning the arrangement of inland and cross-border transportation and other actions necessary to meet regulatory requirements in both exporting and importing countries, such as: - Obtaining an export permit - Arranging transport - Arranging for inspection and fumigation - Obtaining cargo insurance - Providing a customs declaration - Collecting empty container(s) from yard - Packing container(s) - Transferring cargo to the port of departure - Clearing goods through customs - Handling containers at the terminal and stowing them in a vessel - Preparing documents required by the importer - Verifying the accuracy/authenticity of the exported cargo Pay – Activities concerning claims for payment of goods This study focused on the procedures necessary to export auto spare parts and sugar from Thailand to India and Bangladesh, and to import raw materials (for electronic products) from China The processes cover all activities in the international trade transaction, which range from the establishment of commercial contracts, through the arrangement of inland and cross border transportation and export formalities to meet regulatory requirements, to the payment for the purchased cargo UNECE (2006) Background Paper for UN/CEFACT Symposium on Single Window Common Standards and Interoperability, Geneva: UNECE Due to the fact that the mode of transport, terms of delivery and terms of payment can vary, the following assumptions were made for the study of the export products, except for the mode of payment: Ship: The exporters choose ocean freight as a mode of transport, as it is one of the cheapest and most convenient ways to transport goods overseas Cost, Insurance, and Freight (C.I.F): The exporters arrange and absorb the costs of shipping their cargo to the ports of destination Full Container Load (FCL): It is assumed that the whole container is intended for a single consignee For simplicity, the analysis of export processes traces the operation of a sole exporter for each product Container Yard (CY) Container Service: For simplicity, it is assumed that CY/CY container service is used Under CY/CY container service, the carrier delivers an empty container to the exporter’s premises for loading and brings the loaded container back to the container yard At the container yard, the container waits to be loaded onto the vessel No unpacking or modification is made Mode of Payment: Payment by remittance after shipment is applied to the case of auto parts export while a letter of credit (L/C) is used as a method of payment for the case of sugar export Following the BPA Guide, the United Nations Centre for Trade Facilitation and eBusiness (UN/CEFACT) Unified Modeling Language was used to represent the results of the analyses in the form of diagrams Diagrams communicate the results better than text, by helping to compare and identify key steps and by suggesting ways to integrate procedures consistently The UML Use Case Diagram is used to illustrate core business processes of exports and imports of the selected products It lists all main process participants, business processes, and the relationships among them The diagram shows that the scope of analysis covers all activities in the international trade transaction, which includes commercial procedures, transport procedures, regulatory procedures, and financial procedures As noted above, the core business processes are organized according to the UN/CEFACT International Supply Chain Model: “Buy-Ship-Pay” To comply with regulatory requirements, the movement of cargo that involves transport procedures and regulatory procedures is classified as a “Ship” activity II Time/cost-distance method Based on the premise that the unit costs of transport may vary between modes, the time and cost associated with the transport process was studied using the time/cost-distance method developed by UNESCAP This method enables comparison and evaluation of competing modes of transport operating on the same route and comparison of alternate transit routes Thus, by looking at the cost and time characteristics of every section along a transit route, the time/costdistance model identifies any inefficiencies and isolates bottlenecks along a particular route The technique of business process modeling is used for documenting business processes where each element of the business process is represented by graphical notations Two types of Unified Modeling Language (UML) diagrams, namely Use Case Diagram and Activity Diagram, are used as a set of standard graphical notations for business process modeling The UML use case diagram illustrates the high-level business processes and actors associated with each of them It serves as a frame of reference for further elaboration of business process modeling work The Activity Diagram, on the other hand, describes activities, inputs, and outputs associated with each business process listed in the Use Case Diagram UNESCAP http://www.unescap.org/ttdw/common/TFS/ImprovingTx/VV1/All/Introduction-Time-Cost.asp The UNESCAP time/cost-distance method is based on the graphical representation of data collected with respect to the cost and time associated with the transit transport process The vertical axis of the model represents the time and cost incurred, while the horizontal axis represents the distance travelled from origin to destination Analysis of the process of exporting auto spare parts from Thailand to India Auto spare parts are considered a key industrial export in terms of their impact on economic growth The total export value of auto spare parts from Thailand increased rapidly between 2005 and 2009 and the export of auto spare parts generates an annual income of about USD 400 million According to the Thai Trade Centre Chennai of the Department of Export Promotion in the Ministry of Commerce, exports of auto spare parts are expected to continue rising, with India being a major market The study of the process of exporting auto spare parts from Thailand to India limited the scope of analysis to the delivery of a full container-load (20 foot and 40 foot containers) of auto spare parts from Thailand by maritime transport to the port of destination in India (Delhi/Mumbai) under CIF terms, with the payment being made by remittance after shipment I Steps involved in the process The BPA of the process of exporting auto spare parts from Thailand to India found that there are a total of eight procedures involved These procedures are described below 1) “Buy” Process 1.1 Issue and validate the purchase order Upon establishment of a deal or contract, the importer issues a Purchase Order to the exporter The exporter then validates the Purchase Order If it contains incorrect information, the exporter will return the document to the importer for modification Otherwise, the exporter will proceed to check the stock 2) “Ship” Process 2.1 Allocate and package If the items are in stock, the exporter pulls them from the inventory Ship labels, cartons and other documents such as packing slips and packing lists are prepared for the items to be packed for shipment But if the exporter cannot find the items from the inventory, he/she sends orders to suppliers to produce and deliver products to the exporter The suppliers then confirms receipt of the documents The exporter allocates products based on the orders, prepares purchase confirmation and replies to the importer By the end of this process, the products are ready for movement The Federation of Thai Industries (2010) Car Manufacturers Export Record 1995-2009, Automotive Industry Club 10 Topic Description Bureau as follows: o Notification of vessel berthing (after berthing within 24 hours via computer system) o Notification of vessel entering port city o Ship Particular o Ship’s Document o Crew List o Last Port Clearance (Original) o CLC Certificate (In case of loading oil tanks with weight exceeding 200 tons) o Certificate of Fitness (In case of loading dangerous goods, LNP/LPG, or chemical substances) Shipping agent submits a Pilot Requirement Form to the pilot station so that it will assign an authority to pilot a vessel to berth Upon completion, the pilot authority will issue the document of “Entering or Sailing or Shifting” to confirm the pilot operation Shipping agent submits to PAT the following documents: o Application for Vessel Entering the Port Area o Inward Container List o Cargo Manifest In case of online submission, the documents could be submitted by hours in advance before vessel entering port while the paper documents could be physically submitted by hours in advance before vessel entering port Shipping agent submits an Application for Services to PAT to request for tug and other related services Shipping agent submits documents to Customs Dept o Notification of vessel entering port city o Cargo Manifest Post-Conditions Remarks Vessel berthing at port Submission of next vessel berthing schedule could be made before the 15th date of each month while the allocation of berthing slots will be made on a daily basis In case of loading the dangerous goods, the shipping agent or representative submits a Dangerous Goods Declaration to declare the goods list in compliance with the International Maritime Dangerous Goods Code (IMDG-Code) at the Dangerous Goods Control Unit at the Bangkok Port by hours before vessel entering port It is noted that the Cargo Manifest submitted earlier to PAT will be precise for 80% while the one submitted later to Customs Dept will be 100% precise A3-8 2.3 Unload goods from vessel Figure 8: Use Case Diagram showing the relationship between the “unload goods from vessel” process and stakeholders in the import of raw materials into Thailand ud Import of raw material for producing electronic devices _ Shipping Agent Unload goods from vessel Importer/Representative Port Authority Customs Dept A3-9 Figure 9: Activities in the “unload goods from vessel” process for the import of raw materials into Thailand ad Unload goods from vessel _ Shipping Agent Port Authority of Thailand Customs Dept Initial Activity _ Prepare docs Record and send data via EDI system Notification of goods transfer and loading containers _ Acknowledge Final Activity Lay plan for goods transfer and _ storage Wait for Goods Inspection Final Activity Transfer goods Provide equipment/tools Inspect goods Arrange containers in the provided area _ Record goods transfer and _ storage Discharged Report (Tally Sheet) Record port use and services _ Report of Port Use & Services Final Activity A3-10 Table 4: Description of the “unload goods from vessel” process for the import of raw materials into Thailand Topic Process Name Stakeholders Pre-Condition Activities Description Unload goods from vessel Post-Condition Remarks Shipping Agent Government Agencies o Customs Dept (Computer System) o Port Authority of Thailand Vessel entered the port Shipping agent sends the data of inward container list and cargo manifest via EDI system to the Customs Dept and Port Authority of Thailand (PAT) Shipping agent submits a Notification of goods transfer and loading containers to PAT for laying plan for goods transfer and storage PAT provides tools/equipments for goods transfer PAT inspects goods as per their container types and hazard and arranges the goods containers in the provided area After that PAT records goods transfer and storage information and then issues the Discharged Report (Tally Sheet) together with the report of port use and services Goods containers are transferred to the yard The transfer of goods onto the vessel will be done by the shipping agent while the transfer of goods already unloaded from the vessel will be done by the PAT In case of Less than Container Load (LCL) containers, the shipping agent must ask for permission from the PAT and the Customs Department to open the containers With approval of customs, the PAT and the shipping agent arrange for authorities to open the containers and make records onto Tally Sheets, which will be exchanged between the PAT and the shipping agent for evidence The goods can then be transferred right away without being moved to the PAT’s warehouse 2.4 Declare goods to customs Figure 10: Use Case Diagram showing the relationship between the “declare goods to customs” process and stakeholders in the import of raw materials into Thailand ud Import of raw materials for producing electronic devices Declare goods to Customs Importer/Representative Customs Dept Figure 10: Use Case Diagram Showing Relationship between the “Declare goods to Customs” Process and Stakeholders in the Import of Raw Materials for Producing Electronic Devices to Thailand A3-11 Figure 11: Activities in the “declare goods to customs” process for the import of raw materials into Thailand ad Declare goods to Customs _ Importer/Representative Customs Dept Initial Activity Submit docs to Customs send [Incorrect docs and/or duties/taxes] Invoice Packing List receive Check and verify docs Import Declaration [Correct docs and/or duties/taxes Receive declaration number Issue no of import declaration and confirm duties Import Declaration [no duties/taxes] [have duties/taxes] Final Activity Receive duty payment Pay the import duties/taxes Issue a payment receipt Payment receipt Indicate declaration status Number of declaration Receive docs Final Activity A3-12 Table 5: Description of the “declare goods to customs” process for the import of raw materials into Thailand Topic Process Name Stakeholders Pre-Condition Description Declare goods to Customs Activities Post-Condition Remarks Importer/Representative Government Agency o Customs Dept (Computer System) Importer registers to the e-Customs (paperless) system to become an e-Customs formality performer In case of assigning a customs broker as a representative, he/she has to get permit from the Customs Dept to become an e-Customs formality performer Importer submits documents to request for exemption on import duties/taxes as follows: o Invoice o Packing List o Import Declaration Customs Dept checks and verifies documents and duties If those documents found incorrect, the importer has to resubmit them Customs Dept issues declaration number and confirm import duties to the importer Importer receives the import declaration number and prints out the declaration Meanwhile, if any duties and taxes, they must be paid to the Customs Dept Importer received the import declaration and paid the duties If an import declaration submitted through the paperless system needs some amendments, the importer has to be fined as per the Customs’ requirements A3-13 2.5 Arrange goods for inspection Figure 12: Use Case Diagram showing the relationship between the “arrange goods for inspection” process and stakeholders in the import of raw materials into Thailand ud Import of raw materials for producing electronic devices Arrange goods for inspection Shipping Agent Importer/Representative Port Authority Haulage Figure 12: Use Case Diagram Showing Relationship between the “Arrange goods for inspection” Process and Stakeholders in the Import of Raw Materials for Producing Electronic Devices to Thailand A3-14 Figure 13: Activities in the “arrange goods for inspection” process for the import of raw materials into Thailand ad Arrange goods for inspection _ Shipping Agent Importer/Representative Port Authority of Thailand Haulage Initial Activity Pay shipment cost to shipping agent Issue Delivery Order Original Bill of Lading «send» Delivery Order Request for Opening Goods Containers Request for Release of Goods Containers from Customs Custody Submit docs to PAT Check docs against EDI [incorrect data] Pay the service fee to PAT _ [Correct data] Delivery Container Slip «send» Wharf Receipt Receive docs «receive» Payment receipt Final Activity Prepare haulage Contact haulage Prepare docs for goods inspection Arrange containers for inspection «send» Take containers to inspection point Wharf Receipt Delivery Order «receive» Request for Opening Goods Containers Sign docs Request for Release of Goods Containers from Customs Custody «send» Slip Final Activity Wharf Receipt Delivery Order Receive docs Final Activity «receive» Request for Opening Goods Containers Request for Release of Goods Containers from Customs Custody A3-15 Table 6: Description of the “arrange goods for inspection” process for the import of raw materials into Thailand Topic Process Name Stakeholders Pre-Condition Activities Description Arrange goods for inspection Post-Condition Remarks Importer/Representative Haulage Shipping Agent Government Agency o Port Authority of Thailand Goods passed customs clearance Importer pays the shipment cost to the shipping agent and submits an original and copy of bill of lading to the shipping agent Shipping agent issues a delivery order and other related documents for the importer/representative as follows: o Delivery Order o Request for Opening Goods Containers o Request for Release of Goods Containers from Customs Custody Importer submits these documents to the port o Delivery Order o Request for Opening Goods Containers o Request for Release of Goods Containers from Customs Custody PAT checks documents against EDI system If incorrect, documents are returned to the importer for re-submission Importer pay the service fee to PAT PAT issues the following documents for the importer o Wharf Receipt o Payment receipt o Delivery Container Slip Importer sends the Delivery Container Slip to the haulage service so that the containers are taken to the inspection point Importer submits the following documents to PAT: o Wharf Receipt o Delivery Order o Request for Opening Goods Containers o Request for Release of Goods Containers from Customs Custody o Delivery Container Slip PAT signs all those documents and arranges containers for the haulage to take them for Customs’ inspection Goods containers are ready for inspection and release by Customs Dept Wharf Receipt from PAT in this process is considered an incomplete document A3-16 2.6 Inspect and release goods Figure 14: Use Case Diagram showing the relationship between the “inspect and release goods” process and stakeholders in the import of raw materials into Thailand ud Import of raw materials for producing electronic devices Inspect and release goods Port Authority Importer/Representative Haulage Figure 14: Use Case Diagram Showing Relationship between the “Inspect and release goods” Process and Stakeholders in the Import of Raw Materials for Producing Electronic Devices to Thailand A3-17 Figure 15: Activities in the “inspect and release goods” process for the import of raw materials into Thailand ad _ Inspect & release goods Importer/Representative Customs Dept Port Authority of Thailand Haulage Initial Activity Submit docs for inspection «send» Delivery Order Request for Opening Goods Containers Request for Release of Goods Containers from Customs Custody «receive» _ Inspect goods [reject] Final Activity Request for Inspection [passed] Approve the Release of Goods «send» Receive docs Customs’ instruction of goods inspection «receive» Delivery order (Kor Sor Kor 100) «send» Customs’ instruction of goods inspection Delivery order (Kor Sor Kor 100) Request for Release of Goods Containers from Customs Custody Request for Inspection «receive» Check docs Record declaration number Cut off inventory Deliver goods _Issue container slip for haulage «send» Container Slip/EIR or «receive» Take containers from port Cargo Slip Final Activity A3-18 Table 7: Description of the “inspect and release goods” process for the import of raw materials into Thailand Topic Process Name Stakeholders Pre-Condition Activities Description Inspect and release goods Post-Condition Remarks Importer/ Representative Haulage Government Agency o Customs Dept Goods are ready for inspection and release by Customs Importer submits to the Customs Dept the following documents: o Wharf Receipt o Delivery Order o Request for Opening Goods Containers o Request for Release of Goods Containers from Customs Custody o Request for Inspection Customs authority inspects goods With the case of rejection, the goods will be seized Customs Dept issues the documents for release of goods as follows: o Customs’ instruction of goods inspection o Delivery order (Kor Sor Kor 100) To receive goods, importer submits the following documents to PAT: o Customs’ instruction of goods inspection o Delivery order (Kor Sor Kor 100) o Request for Release of Goods Containers from Customs Custody o Request for Inspection PAT checks all documents, records the declaration number, cuts off inventory, and then issues the Container Slip/EIR for FCL containers or the Cargo Slip for LCL containers to be used as evidence by haulage when taking goods containers from the port Haulage takes goods out of the port Importer can take goods from the port Inspection of goods items will be done only upon Customs’ instruction Importer does not have to submit the Request for Opening Goods Containers and the Request for Release of Goods Containers from Customs Custody for inspection of LCL containers A3-19 Pay process Figure 16: Use Case Diagram showing the relationship between the “pay” process and stakeholders in the import of raw materials into Thailand ud Pay _ Importer Pay Importer’s bank Exporter Exporter’s bank A3-20 Figure 17: Activities in the “pay” process for the import of raw materials into Thailand ad Pay _ Exporter Exporter’s Bank Importer’s Bank Importer Initial Activity Request to open L/C send Check docs & financial condition Proforma Invoice receive Request for L/C [reject] [passed] Final Flow Open L/C Inform for L/C receipt _ Pay the fee L/C (Letter of Credit Receive L/C Deliver goods Final Flow Prepare docs as per L/C Reject payment send Commercial Invoice Packing List Inform payment rejection Insurance Policy Bill of Lading Health Certificate Other docs as specified in L/C Certificate of Origin [not compliant w/ condition] receive Claim payment [reject] Check docs [compliant w/ condition] Forward docs Check docs [not compliant w/ condition] Check docs [compliant w/ condition] [approve] Receive paymen t Final Activity Transfer money Transfer money Claim payment Make payment Receive docs Final Activity A3-21 Table 8: Description of the “pay” process for the import of raw materials into Thailand Topic Description Process Name Pay (payment made by Letter of Credit (L/C) Stakeholders Importer/Representative Pre-Condition Activities Exporter/Representative Banks o Importer’s Bank (as L/C Issuing Bank) o Exporter’s Bank (as L/C Advising Bank) Buyer and Seller agree upon sales contract and payment mode Importer/representative applies for Irrevocable Documentary Letter of Credit (L/C) with a bank that provides service to the importer, using the Proforma Invoice as attached document Importer’s bank checks documents and financial condition In case of no debt, the importer’s bank issues L/C with conditions specified by the importer in the application The importer’s bank as L/C Issuing Bank sends L/C to the exporter’s bank The exporter’s bank as L/C Advising Bank informs exporter/representative to receive the original L/C so that the goods delivery and other operation are done accordingly as specified in the L/C Exporter/representative pays the fee and receives the original L/C Exporter/representative delivers goods to importer Exporter/representative prepares documents as specified in the L/C Exporter/representative submits those prepared documents to receive the money from the L/C Advising Bank The L/C Advising Bank checks documents If those documents meet the conditions in L/C, the L/C Advising Bank sends them to the L/C Issuing Bank The L/C Issuing Bank checks documents If those documents meet the conditions in L/C, the L/C Issuing Bank transfers the money to the L/C Advising Bank within days and then informs the importer/ representative of its receiving those documents The L/C Advising Bank transfers money to the exporter Importer/representative makes payment and receive documents Importer/representative takes the documents to run the customs clearance process Post-Condition If those documents don’t meet the conditions in L/C, the L/C Issuing Bank informs the importer and considers the payment approval The bank will make payment only upon approval by importer/representative Exporter/representative (seller) receives payment through L/C A3-22