Paperless trade and PKI

1
Paperless trade and PKI
July 2004
2
Index

• Paperless Trade in Korea
• New Business Environment
• Paperless trade and PKI
• Global networking
• - PAA
• - e-Trade Hub
• - ASEM

3

• Paperless Trade in Korea

4
1. Key Initiatives of Paperless trade in Korea

• Government Initiatives
• Act on Promotion of Trade Business Automation
  Ministry of Commerce, Industry and Energy (Dec.
  1991)
• To improve trade process and national
  competence by reducing conventional processing
  time and cost through automation
• Scope of the Law
• Trade Administration, Foreign Exchange
• Establishment of Common e-Trade Platform KTNET
• KTNET adapt UN/EDIFACT for trade automation

5
1. Key Initiatives of Paperless trade in Korea

• Government Initiatives by Korea Customs Services
  (KCS)
• KTNET is designated as Customs Network Provider
  by Korea Customs Services (KCS, Nov. 1992)
• Scope of Customs Automation
• Customs Clearance, Cargo Management, Duty
  draw back

KCS
KTNET
Endowment of Exclusive Biz. Right to KTNET
ISP/BPR for Customs Automation
6
2. Networks of KTNET
Quarantine station
Korea Customs
Traders
Customs broker
Domestic banks
Financial Network
Foreign banks
Clearance Network
U.S customs
Trade administration
KTNET
Insurance Network
Insurance company
Global Networks
Shipping company
forwarder
ASEM
PAA
Air Lines
warehouse
7
3. Expansion of Service
Stage
INTEGRATION GLOBAL EXTENTION
MOVE to INTERNET

• Start of Global
• Service
• ASEM Paperless
• Trade Project
• PAA
• Kor-Jap
• e-Trade Hub

• C/O
• Letter of Guarantee
• Delivery Order

EXPANSION

• Import Clearance
• Manifest
• Duty Draw Back

COMMERCIAL SERVICE

• L/C, E/L, I/L
• Offer, Insurance
• Export Clearance

ESTABLISHMENT

• Act on Promotion
• of e-Trade
• Foundation of
• common e-Trade
• Platform

Period
2nd
1st
3rd
4th
5th
(19931996)
(19971998)
(19992002)
(2002)
(19901992)
8
4. e-Docs for Korean Local Companies
Total about 300 e-Docs
9
5. Benefits of Paperless Trade in Korea
Trade Volume (Unit Mil. US)
Cost Saving (Unit 100BWon)
Unit Mil.US/ KRW 100B
350
332,748
300
280,054
280,780
263,437
260,176
250
225,594
200
198,361
181.7
150
100
50
46.6
36.8
24.8
30.9
30.8
7.8
4.0
1994
1995
1996
1997
1998
1999
2000
SUM
10
6. Benefits of e-Trade - Individual Case (SEC)
SAMSUNG ELECTRONICS
10K
22K
4Mil.
17B
Purchase Amount
Handling Doc.
12weeks
4weeks
89
43
Short Purchase LT
Employees in Customs Clearance
25days
5days
17steps
53steps
620boxes
30boxes
Used Paper
Processing Time
11
6. Benefits of e-Trade - Individual Case (HMC)
Cost Saving in Purchase
Processing Cost
Comparison between Before and After of Adoption
of e-Trade in Individual Company
1020
90
100
100
8090
Before After
10
Price
Cost per each Transaction
Processing Time
Inventory Cost
Doc.Handling Capacity
75
2550
90
3.9 m
100
20days
5070
1.6 m
5days
Period
Handling Doc. Per PAX
Inventory Cost
12

• New Business Environment
• Paperless trade and PKI
• In
  PKI of view

13
1. Figures about Internet in Korea

• Internet Users
• 28 Million (63 of Total Population) 2002.12
• Public Certificates
• 9.1 Million Certificates (21 of Total
  Population) 2004.5
• Households Using Broad-band
• 10.4 Million (90 of Total Households) 2002.10
• Users of Internet Banking
• Corporate Over 400,000
• Private 16.9 Million (38 of Total Population)

14
1. Figures about Internet in Korea
Number of internet users
Place of internet usage
26Millions
(, internet users)
rate
thousands
80
15
Home Office School I-Café etc

• Remarks
• Super environments for e-Biz using internet and
  mobile
• Place using internet 80(home),
  -15(industry)

15
2. Features in the way of doing Biz.

• New way in Business

3 Major Characteristics of IT are Integration,
Collaboration and Globalization
16
2. Features in the way of doing Biz.

• New way in Business

2 required Characteristics of SECURITY and
EVIDENCE

• Security
• Authentication
• Credential validation
• Privacy and Integrity
• Authorization
• Non-repudiation
• Evidence
• Tracking and Ownership
• of e-Document
• Notary

17
3. KTNETs Service coverage - vision
Multi-channels
Single Window
Overseas
Trader
Global e-Trade Platform
Customers
VAN
Private VAN
Trade Process
Banks
Market Research
Payment
e-Trade Platforms
Global Link
Internet
Trader
Marketing
Logistics
Search/Translation CA/Payment
Internet
Negotiation
Declaration
e-MP
Contract
e-MP
Logistics
Traders
Intermediary
Insurance
Port Authority

• Credit Information
• Buyer/Seller Information
• Laws/Regulation
• Etc.

Customs
Agencies
18
3. KTNETs Service coverage - vision
? A variety of Enterprises ? A variety of
Applications ? A variety of Technologies
Single Window
e-Trade Platform
19
4. CASE e-C/O
Electronic Certificate of Origin (e-C/O)
E-C/O requester
E-C/O Verifier
E-C/O management system
C/O - C/O is an alternative to the
declaration or the certification and legalization
of the commercial invoice. - based on the rule
of the country of origin (produced, manufactured,
) expectations of e-C/O - fast circulations
of document - effective process (reissuing,
) - simple issuing and validation process,
20
4. CASE e-L/G
Letter of Guarantee, Delivery Order ( L/G,D/O)
L/G, D/O - Problems with original papers
(lateness) Importer can not take the
cargo without original paper expectations
- Avoidance of regal problems about the delivery
process - Improvement of inconvenience dealing
agreement - Automation of complex trade process
21
4. CASE DVCS
Data Validation and Certification Server (DVCS)

• DVCS service
• - Validate the contents, documents
• - Include CRLs(directory), OCSP, TSA core PKI
  Infra
• Main functions
• - CPD Certification of Possession of Data
• - CCPD Certification of Claim of Possession
  of Data
• - VSD Validation of Digitally Signed Document
• - VPKC Validation of Public Key Certificates
• Standard
• - IETF RFC 3029 Internet X509 PKI Data
  Validation Certification Server

22
5. Scenario of Paperless trade using PKI
Global
E-Trade Documents Authority
PAA
ASEM
Backup
Restore
DB
Gov Sectors
AuthCode
Ref
Token
Profile
TradeSign Accredited CA
Chamber, Association
Access Control
23
Global networking PAA, e-Trade Hub, ASEM
24
Overview of Global e-Trade Service

• International Cooperation Projects for Global
  Paperless Trade Service

Korea-EU (ASEM)
Korea-Japan
PAA
25
PAA Project

• Cross Border Paperless Trade Service using PKI
  PAA (Pan Asian e-commerce Alliance)

26
Building up Electronic Highway of the Region

• Infrastructure for the Seamless e-Trade in Asia

• Birth 2000 Oct.
• 8 Nationwide Trade Network Companies in Asian
  region joined to built Global Online Super
  Highway for B2B e-Commerce

• PAA members

• Business KTNET(Korea), CIECC(China),
  Tradelink(Hong Kong), TradeVan(Taiwan),
  CimsonLogic(Singapore), TEDI(Japan),
  DagangNet(Malaysia) and TEDMEV(Macau)
• Certification TradeSign(for KTNET),
  DigiSign(for TradeLink), TaiCA(for TradeVan),
  IDSafe(for CrimsonLogic), JetsCA(for TEDI),
  TrustGate(for DagangNet)

27
The expected economical effect of PAA
Trade Volume of PAA 575.5 Bil.(Yr. 2000)
Activation of Trade within PAA

• Provision of Information Infrastructure for PAA
• Increase of Transaction Customer Satisfaction

225.3 Bil.
Korea
Japan
China
Market Size of Paperless Trading 60 Bil. /
yr.
51.2 Bil.
117.1 Bil.
Hong Kong

• About 10 of General Administration Cost in
  Import/Export

54.5 Bil.
Taiwan
80.3 Bil.
Direct Effect Save 6 Bil./yr. Within PAA
Members
Malaysia
47.1 Bil.
Singapore
Indirect Effect Tremendous Increase
Productivity, Value Save Inventory, Labor Cost,
etc
Trade Volume in 2000 2001(Source IMF, 2001)
28
Features of PAA

• Features of PAA

• Regular Steering Committee Meeting (4 times/year)
• 5 Working Groups
• Cross Border Transaction Service, Mutual
  Recognition of PKI, Portal (Traders Directory),
  Cargo Tracking, Financial Fulfillment
• ebXML Standard for Common Framework

29
Korea-Japan Paperless Trade Project

• History

• 2000. 9 Adoption Paperless Trade in the
  Korea-Japan summit meeting

• 2000.10 Korea-Japan government meeting for
  Korea-Japan e-Trade
• Network project (MOCIE, METI)

• 2002. 3 Completion of electronic
  document(I/V,P/L,B/L info) Transmission
• test for the 1st project
  between end-users

• 2002.11 1st Public and private Joint meeting
  for Korea-Japan paperless trade

• 2003. 3 2nd Public and private Joint meeting
  for Korea-Japan paperless trade

• 2003. 4 Real trade electronic documents
  transaction (I/V, P/L, B/L advice,
• Mill P/L) based on ebXML
  standard

30
Pilot for Korea-Japan Paperless Trade Project

• Pilot User Hyundai Motors

• 4 electronic documents Invoice, Packing List,
  Bill of Lading Advice, Mill P/L have been
  standardized and transferred successfully in Feb,
  2003
• 4 documents are scheduled to be transferred for
  real transaction of pressed coil from April 1st,
  2003 between Hyundai Motor and Mitsubishi Corp.
• For safety of transaction, Secure channel and
  Digital Certificate are applied

Hyundai Document Format
Mitsubishi Document Format
KTNET
TEDI
PAA Standard
Hyundai Motor
Mitsubishi Corp.
I/V, P/L B/L adv, Mill P/L
Translation
Translation
31
Mile stones of ASEM Paperless Trade P/J

• October 2001 Approved as the official
  Cooperation Program for
• Activating Paperless Trade Between Asia and
  Europe in the 1st ASEM
• TFAP e-Commerce meeting.
• July 2002 ASEM Senior Officials Meeting on
  Trade and Investment
• (SOMTI, Indonesia). Setting up ASEM paperless
  trade Action Plan
• by 2004 as essential feature on the basis of
  ASEM Paperless Trade P/J.
• August 2002 Starting pilot system between
  Korea (Hyundai Motor) and
• Germany (Bosch)
• September 2002 Reporting the project progress
  in the 2nd ASEM TFAP
• e-Commerce Meeting in Helsinki, Finland.
• December 2002 Completion of Exchanging Test EDI
  FILE(C/I, P/L,
• DESPATCH NOTICE)
• April 2003 First meeting with French
  Government(Mission for Digital
• Economy)

32
Mile stones of ASEM Paperless Trade P/J

• June 2003 Second meeting with French
  Government(Mission for Digital
• Economy) German Government.
• Meeting with DAKOSY, Germany, CB, France and
  SITPRO, UK to discuss
• Biz. Partnership and Application for EU
  Commissions IST Program
• 2003. 6.26 7th Industrial Cooperative Committee
  meeting between
• France and Korea in Seoul, Korea
• August 2003 LOI with DAKOSY (Germany)
• October 2003 2nd Bilateral Meeting on
  e-Commerce between Korea U.K.
• MOU with SITPRO
• November 2003 New Korean Participants- Daewoo
  Heavy Industries and
• Machinery Ltd., Ssangyong Motor, GM Daewoo and
  Volvo Construction
• Equipment Korea

33
HMC Bosch Pilot Project-Before
Manual Transaction
Automation
1. P/O via Fax
2. P/O key punching
Import Dept.
RBKR
RBDM
RBKR
RBDM
4. I/V via Fax
3. Printing I/V
5. Shipping Request
8. Payment Request
7. B/L via Fax
6. B/L via Fax
Finance Dept.
9. Payment Request
10. Payment
BADEN-WURTTEMBERGISCHE BANK
34
HMC Bosch Pilot Project-After
Manual Transaction
Automation
4. Order Approval
Import Dept.
RBKR
RBDM
RBKR
RBDM
3. P/O key punching
11. eB/L(info.)
5. I/V (EDI)
7. Shipping Request
12. Payment Request
2. P/O(EDI)
6. I/V(EDI)
Finance Dept.
1. P/O(EDI)
8. eB/L(Info.)
15. Deposit
9. eB/L(Info.)
10. eB/L confirm
13. Payment Request
14. Payment
BADEN-WURTTEMBERGISCHE BANK
35
Expansion Service and Participants
Korea
Germany
Real Transaction ( Invoic, Dispatch Notice )
GMCC
Forwarder
Messaging Center
Repository Center
Europe
Korea
BADEN-WURTTEMBERGISCHE BANK
Delphi
More than 20 Companies By 2004
BANK

• To Develop Docs

SIEMENS

• P/O
• Shipping Information
• Shipping Order
• Shipment Notice
• B/L Information
• Settlement Information
• Air Waybill

• Developed Docs

• Invoic
• Dispatch Notice

BERU
Expansion
INA
Invoic Invoice Packing List
36
Expansion Countries and Industries
ASEM Paperless Trade Infrastructure
Korea
France
Other Market
Other Market in EU
Asia Market
PAA
37
E-Trade HUB in ASIA KTNET !
Building Trust in your Business TradeSign !
Thanks You!
KTNET e-Biz Strategic division Hak-Hee Han
hhhan_at_ktnet.com 82-2-6000-2721