Presentation at UPU Global Conference on Cross-Border Cooperation in an E-commerce World Nov 2019, Xiamen

1. Cross-border e-commerce,
trade facilitation and
simplification
UPU Global Conference on Cross-border Cooperation in an
E-Commerce World
Xiamen, China
26 – 28 Nov 2019
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2. Agenda
1. Weeding out Illegal content in postal articles and
parcels
2. Digitization and big data –
moving towards a paperless process &
into interoperability in postal supply chain
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3. Nuctech - Introduction
Founded in 1997
Staff : 5000+ personnel
Products : Exports to 160+ countries and regions
Nuctech Company Limited, originated from Tsinghua University, is a Global Leading
security inspection system manufacturer & solutions provider.
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4. For Container / Vehicle Inspection Category, Nuctech currently holds the
largest market share
Source : IHS Markit
Global Market Share
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5. 1. Weeding out Illegal content in
postal articles and parcels
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6. In Singapore , Immigration and Checkpoints Authority (ICA) officers screen up to 20,000 postal
articles for contraband, dangerous and prohibited items every day
Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
Total number of articles each year has gone up from
5.2 million in 2016 to 6.1 million in 2018.
In the same period, contraband cases detected
annually increased from about 14,000 to almost
17,000.
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Case of Singapore for Postal Articles

7. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
Officers have to quickly
make sense of the X-ray
images:
• Orange means the item
has a more organic
composition;
• Blue means it’s more
metallic.
• The darker the shade of
colour, the denser the
material is.
It is tiring watching the screens,
officers can only work for 30 to 45
minutes before swapping with a
colleague to prevent visual fatigue
from screening the sheer amount of
mail.
Due to the sheer volume of postal articles, officers must have
the ability to analyse X-ray image very quickly and accuracy
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8. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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9. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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10. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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11. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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12. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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13. Source : https://www.channelnewsasia.com/news/singapore/how-ica-weeds-out-illegal-mail-singpost-11962616
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14. Case of Thailand Customs for E-Commerce articles
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15. Case of China - International Express Inspection Centre
(Shenzhen)
China Customs has purchased 554 sets of CT scanners,
including 278 sets of express mail scanners deployed
at:
• Cross-border e-commerce sites: 20 sets
• Express Centre Business sites: 230 sets
• Post office sites : 28 sets 15

16. Case of China - Postal Inspection Application
Traditional collection
network
Self-service collection
network
Sorting centre A
Sorting centre B
Large distribution center
Civil aviation
inspection
Customs
inspection
CX4233T
CX10080T
CX100100TI CX150180SI
CX150180D
High speed
security
inspection
machine
CX100100D
CT
Multi-source
multi-view
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17. 2. Digitization and big data –
moving towards a paperless process &
into interoperability in postal supply chain
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18. Postal Trends
Source: IPU Annual Review 2018
IPC Cross-Border E-Commerce
Shopper Survey 2018 shown that
currently, 20% of consumers shop
online once a week, generating high
volumes of packages. With 40% of all
global packages coming from China,
it is vital that they are managed
efficiently by postal operators,
especially during peak periods..
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19. Digitalising the Postal Value Chain ….
Source: IPU Annual Review 2018
Customs declaration forms CN 22 and CN 23
• Typically presented to Customs as a hard copy form or image
that is physically reviewed for fiscal charging and risk targeting.
• Digitalisation of CN 22/23 data to have minimum information
required in EAD messages.
• Without the CN 22/23 information, Customs would not be able
to use the EAD to assess risk and to implement advance
customs decisions (pre-arrival/pre-loading); manual
intervention would be required for fiscal charging and risk
targeting purposes.
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20. Source: WCO–UPU Postal Customs Guide
Suggested Post-Customs modes :
Post could provide the documents (CN 22, CN 23, and
commercial invoice) or images of the documents to Customs for
inspection, rather than the physical items themselves.
Post could perform the customs primary inspection process,
based on procedural instructions and training from Customs.
Post could determine the duty to be collected, with Customs
validating the Post's process and identifying the tariff applicable.
Post could also act as a customs clearing agent, directly or
indirectly representing the declarant (typically the addressee). In
such a scenario, the Post would pay the duty and taxes to
Customs and in turn receive payment from the addressee.
Digital Postal Value Chain …. WCO Perspectives
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21. Source: WCO–UPU Postal Customs Guide
Digital Postal - Customs Control & Customs duty
• The Designated Operators (DOs) of the countries of origin
and destination shall be authorized to submit items to
customs control.
• Items submitted to customs control may be subjected to a
presentation-to-Customs charge. This charge shall only be
collected for the submission to Customs and customs
clearance of items.
• DOs which are authorized to clear items through the
Customs on behalf of customers; may charge customers a
customs clearance fee.
• DOs shall be authorized to collect customs duty and all
other fees from the senders or addressees of items, as
the case.
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22. Posts needs to prepare for challenges in analyzing
digital information for inspection and security
Source: IPU Annual Review 2018
Revenue Facilitation Security
Avalanche of Data Opportunities
Scanning devices and sensors
create a high-density
connections
Cloud technology enables
resource sharing
AI and Big Data brings out
value from information
• Structured
• Unstructured
• Semi-structured
• Batch
• Near-time
• Real-time
• Streams
Velocity Variety
Volume
• Transactions
• Records
• Tables, Files
• Terabytes
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23. WCO–UPU guidelines on the exchange of
electronic advance data (EAD)
Three flows of the EAD global postal model:
Flow 1: Origin designated operator (DO) is responsible for:
• the electronic capture of CN 22/23 content by the sender;
• the transmission of CN 22/23 content to the destination DO as early as
possible – at the point of lodging / prior to international outbound
dispatch.
Flow 2: Destination DO is responsible for providing the CN 22/23 data to
the destination Customs administration
Flow 3: Destination Customs administration conducts its initial assessment
(risky items, items attracting duty, etc.) and communicates the results to
the destination DO.
Source: WCO–UPU guidelines on the exchange of electronic advance data (EAD) between designated operators and customs administrations 23

24. Source: WCO–UPU Postal Customs Guide
Posts and Customs may agree to variants of the model
depicted above, for example:
– The Post could provide the documents (CN 22, CN 23, and
commercial invoice) or images of the documents to Customs
for inspection, rather than the physical items themselves.
– The Post could act on behalf of Customs for certain
operations :
• The Post could perform the customs primary
inspection process, based on procedural instructions and
training from Customs.
• The Post could determine the duty to be collected,
with Customs validating the Post's process and helping
the postal service with any difficulties in identifying the
precise tariff applicable to the item.
• The Post could also act as a customs clearing agent,
directly or indirectly representing the declarant (typically
the addressee). In such a scenario, the Post would pay
the duty and taxes to Customs and in turn receive
payment from the addressee.
WCO Perspectives
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25. Integrated Risk Management / Targeting System
Framework
ÜSeamless integration with
Border Authority and Port
Systems
ÜLeading Trade &
Transshipment Hub
ÜFlagging discrepancy
between permit and actual
clearance
ÜUpdate of clearance
ÜPre-clearance
ÜData Validation
ÜClearance Decision
Dashboard
ÜQuery on Clearance
information
ÜIntegration with customs
systems
Optional to Government
ALGORITHM
FUSION
ENGINE
Ü Text Analytics
Ü Predictive
Models
ÜHorizontal
Comparison
ÜVertical
Comparison
Ü Rule based
Targeting
Ü Rules
Management
Ü Performance
Management
Ü Risk
Configurations
Anomaly
Detection
Predictive
Analysis
Rule Based
Assessment
Feedback
Mechanism
Integrated Risk Assessment Platform Targeting System Framework
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26. Multi-Level Threat Assessment Frameowrk
MULTI-LEVEL THREAT ASSESSMENT FRAMEWORK
Automatically applies a combination of all approaches for permits on real time
RULES
Rules to surface
known fraud
behaviors
Examples:
ÜBased on country of
origin or known
traders configured
as high risk
ÜMismatch in HS
Code and UOM
etc.
ÜControlled
commodities,
specific HS Code
etc.
PREDICTIVE ANALYSIS
For complex patters to
identify attributes of
known fraud
behavior
Examples:
ÜAnalyze patterns
using models on
known fraud data
ÜIdentify co-relation
between key permit
fields and fraudulent
behavior
ANOMALY DETECTION
For un-known patterns
to surface unusual
(outliers) behaviors
Examples:
ÜValuation related -
Abnormal price of
goods compared to
peers
ÜCompany trading
patterns (vertical
and horizontal)
ÜCurrent utilization
inconsistent with
prior history
TEXT MINING
Leverage unstructured
data elements in
analytics
Examples:
ÜHorizon scanning for
open source data
based on permit
fields for risks on
security, fraud etc.
ÜHorizon scanning for
entities involved in
fraud
ÜStatic data elements
(e.g., address) used
for linking suspicious
activity
NETWORK ANALYSIS
Associative discovery
through automated
link analysis
Examples:
ÜTrader or company
personnel
associated to known
fraud
ÜCollusive networks in
supply chain
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27. CCTV
Monitors
Vehicle
tracking
X-ray /
CT Scanner
Postal Electronic Data
Structured / Semi-structured / Unstructured Data
IPU INTERCONNECT
Mobile
Terminals
Images Videos
INSPECTION SUPERVISION SURVEILLANCE
Big Data/AI
Centralized Risk
Platform
Cloud Platform
Equipment
Devices
Infrastructure
Voice
Post / Customs
Operations
Digital
Platform
Integrated Centralized Digital Information Platform
Explosive / Trace
Detectors
Sense Making Data
LOGISTICS
Postal Parcel
Data
Geolocation Info
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28. • X-ray image of multiple security points
• Conduct centralized supervision and focus
on review
• Integrate the latest AI recognition
algorithm to achieve fast and accurate
mapping
Improve
Reduction
…
Illegal Goods
Image Library
AI
Augmentation
Centralised Review + AI Augmentation
Scanner N
Scanner B
Scanner A
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29. AI Augmentation for Containerised Cargo
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Library sorted by vehicles type and model
Challenge
• No classification by
vehicles type and
model
• No classification by
cargo type
• No classification by
sized items type
• No classification by
sized items location
Library sorted by cargo type (HS codes)
Library sorted by sized items type and location
# Hatchback # VW Golf # Minivan # VW Transporter # SUV # MB ML
# Potato chips HS 1105 # Apples HS 0808
# Drugs # Truck # Floor # Tabaco # SUV # Tank 29

30. Access platform
Cross-border
park
Logistics
enterprise
Payment
enterprise
E-commerce
enterprise
Revenue
Inspection &
quarantine
China E-Port
Data Center
Customs cross
border import
and export
service system
China Customs
Information Center
物流监管平台
Local single
window platform
Order bill
Payment bill
Waybill
Inventory
Logistics supervision platform
• Interconnection of
Ministry
• Data Exchange
Customs clearance operation platform
Cross-border public
service platforms
Customs cross-border
import and export
supervision system
Integrated
Cross-border
Service Platform
Automatic comparison of
document flow and logistics flow
Clearance
Data
E-commerce
enterprise
E-commerce
platform
Import and
export data
Importer
Exporter
Foreign
Exchange
Example of China Cross-border E-commerce
Business Platform Architecture
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31. Integrated Solutions for Cross-Border E-Commerce
Order bill Payment bill
Inventory...
Waybill
Public service platform for
cross-border e-commerce
Platform interaction
Ministry-commission interconnection
Enterprise service
Data exchange
Clearance management
Registration Declaration Query
Customs clearance platform
Logistics supervision platform
Risk control
Release management
Inspection management
Duty collection
Intelligent inspection equipment
Intelligent inspection system
IOT terminals
Logistics monitoring system
Logistics warehousing system
Single window platform
Automatic comparison
of document flow and
logistics flow
Big data
Risk excavation
Trade statistics
Business statistics
Strategic decision-making
Anti-smugging assistance
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32. Thank You