Leading by example

Switzerland: Global trade and digitization

While Brexit is stirring up the EU, the Swiss economy is operating successfully and the country’s digital agenda is pushing ahead. What can traders learn?

Insights on global trade and digitization

I’ve been following the articles in this blog for some time now – especially those on global trade developments and digitization. And I’m happy to be contributing here from now on. Allow me to introduce myself:

My name is Ingo Strasser – and I’m with AEB since February 2017. I have been working closely with my colleague Steffen, our team in Switzerland, and our international AEB network since then. And in July, I’ve officially started in my new role as General Manager of AEB Schweiz. Together with a great team of experts in Zurich, I’m looking forward to further developing our business in Switzerland. It’s an excellent outlook – our team is powerful, the business is in good shape, and even more importantly: current global trade and technology developments create exciting new business grounds and opportunities for us – and I’m very keen to tap them :).

My contributions here in this magazine will focus on topics around managing current global trade and digitization developments to the advantage of businesses across industry sectors. My previous roles at Ricola AG and Sonova AG (also known as Phonac AG), current projects and developments, and my personal involvement in ongoing digital government initiatives definitely deliver enough food for content :). Let’s get started.

Global trade models: the Swiss perspective

It’s the perfect time to add a Swiss perspective, don’t you think? My colleague Claire’s articles on Brexit are a good reminder for that – the last one came out end of June. It’s turbulent times for the UK – but also for the EU and everyone trading with the UK. And it just proves yet again: global trade is always on the move. Businesses must be prepared for change, and they must be flexible in aligning to new requirements or market conditions.

Switzerland, of course, is a successful economy outside of the EU. This means it serves as one of the current economic models that Brexit negotiators are looking at to decide what the best model going forward will be for the UK. More than 60% of foreign trade in goods in Switzerland is with the EU – and we are one of the last countries in Central and Western Europe to have a customs border in place. As a result, efficient customs management is crucial for Swiss businesses engaged in global trade in order to accommodate smooth and fast border crossing.

So basically, we Swiss know how to import and export ;). And this is not an arrogant attitude either – it’s a necessity for us!

Digital transformation projects in global trade

These days, it’s not only global trade that is dynamic, also technology advances keep businesses on their toes. Scattered IT landscapes across organizations and disruptive new business models that increase the pressure to offer new products and services are just two of the many challenges companies face in the global marketplace today. And ultimately, both things – global trade and digitization – must come together for genuine business improvement, added value, and future growth. And also in this area, it’s worthwhile casting an eye towards Switzerland:

Let me introduce DazIT. It’s the major IT modernization project by FCA, the Swiss Federal Customs Authority. As a central player in cross-border movement, the FCA strongly contributes to the competitiveness of Switzerland as a business location. And the authority has fully recognized the urgency of modernization, with local businesses and political circles calling for user-friendly and efficient solutions to fully benefit from the potential of modern information technology.

Digital fingerprint
Digital fingerprint

This refers especially to accelerating customs procedures and simplification of cross-border traffic. Approximately 750,000 people, 350,000 cars, and 20,000 heavy goods vehicles are crossing the Swiss border every day. Routine administrative work currently still puts a heavy strain on resources – both on the side of the authorities and businesses. This is why the DazIT project was brought into motion.

DazIT ambitions: what the transformation includes

Following the goal to simplify and accelerate border crossing, the DazIT transformation program aims to digitize all customs processes by 2026. The FCA wants to provide trading grounds where the completion of border formalities is possible swiftly and conveniently – regardless of time of day or where the declarant is located. This will ultimately reduce costs for businesses and increase cross-border security. The DazIT project will run from 2018 to 2026 and involve various stages. Overall, this is an ambitious and impressive CHF 400 million project.

One of the highlights of this program is the comprehensive approach and strong collaboration between government authorities, industry associations, and businesses across industry sectors – and sizes, with a particular focus on the often neglected small and medium-sized businesses (SME).

The preparation phase for this massive IT project was kicked off some time ago and I was lucky enough to get the chance to take an active part. Already in my previous job role – and continuing in my role at AEB – I got involved and participated in round-tables, workshops, and projects with a focus on improving tangible customs processes for international goods movements.

In detail, the overall transformation program under DazIT consists of seven projects:

The seven DazIT projects
The seven DazIT projects

Main objectives and new mandatory customs processes

Ultimately, all individual seven projects will come together to achieve and deliver the three main DazIT objectives:

  1. Complete digitization of business traffic, unleashing the full current potential to simplify internal and external business transactions while generating administrative savings.
  2. Customer-centricity and mobility to enable customers to access FCA contacts, services, and data anytime – and from anywhere.
  3. Agile and responsive organizational and technological setup to promptly align to new challenges in collaboration with national and international partners.

And each of the seven projects includes the development and rollout of new, digital processes throughout various stages and different phases. This also includes, for example, the new mandatory electronic assessment decisions (eVV) that will become mandatory starting March 1, 2018. This was announced by the FCA earlier this year.

At the moment, traders can still use paper formats for e-dec import customs declarations and NCTS export customs declarations. But as of March next year, the management of import processes will be subject to change and e-dec assessment decisions will only be issued electronically (eVV Import).

On the export side, traders are used to being issued only electronic assessment decisions (eVV Export) for many years now. But on the import side, this is a significant change that needs to be implemented in trader’s existing IT landscapes accordingly to ensure efficient management. 

Beyond the mandatory: tapping the potential of changes

These official developments around digitizing customs management clearly show that it’s time to act and upgrade existing global trade IT landscapes to master new requirements. But, businesses engaged in international trade should not only be guided by official new regulations or deadlines. Global trade and customs management harbor amazing potential to generate cost savings and increase performance levels in these digital times.

Leveraging new technological advances to optimize IT landscapes and implementing integrated customs solutions is crucial today to keep up with the competition and meet customer demands. It should be on top of management agendas to start working on optimizing global trade and customs processes – to ensure future success and not just because an official customs deadline is looming ahead.

Developments call for traders to modernize, too.
Developments call for traders to modernize, too.

We’ve offered various information events in Switzerland with hands-on workshops. For example, on the upcoming eVV changes and how to develop individual roadmaps for Swiss traders – the last one took place in June. Contact us if you would like to find out more about it and get information about upcoming sessions.

We also take an active part in the upcoming “Customs and Global Trade Workgroup Meeting” organized by VSUD, the association of Swiss organizations in Germany. This event takes place on September 6, 2017 in Basel and I will share insights on efficient management of preferential agreements and calculations. And as mentioned before, the Swiss government project DazIT also offers many opportunities for businesses to get involved and take an active part.

There is so much going on in global trade and there really isn’t any time to wait before taking action. I hope to see you at one of our upcoming events to discuss the topic further. And I look forward to your feedback and comments on my first post here – onXING, or LinkedIn.

Learn about digital Customs Management with AEB