UN/CEFACT is the United Nations Centre for Trade Facilitation and Electronic Business. It was established as an intergovernmental body of the United Nations Economic Commission for Europe (UNECE) in 1996 and evolved from UNECE’s long tradition of work in trade facilitation which began in 1957.
UN/CEFACT focusses on two main areas of activity to make international trade processes more efficient and streamlined, namely: trade facilitation and electronic business.
Trade facilitation involves the simplification of trade procedures (or the elimination of unnecessary procedures). This includes work to standardize and harmonize the core information used in trade documents, to ease the flow of information between parties by relying on appropriate information and communication technology, and to promote simplified payment systems to foster transparency, accountability and cost-effectiveness.
Electronic business, in the UN/CEFACT context, focuses on harmonizing, standardizing and automating the exchange of information that controls the flow of goods along the international supply chain. UN/CEFACT’s work on electronic business is driven by the understanding that goods cannot move faster than the processes and information that accompany them.
UN/CEFACT takes a total trade transaction approach to trade facilitation and associated electronic business, covering all the processes from initial placement of orders through to final payments. This is best illustrated through the UN/CEFACT Buy-Ship-Pay model of the international supply chain, which forms the basis of its work.
Governments, traders and consumers all benefit from having simpler and more cost-effective trade procedures. UN/CEFACT’s work is particularly relevant for developing countries, where the elimination of trade-related inefficiencies is many times more beneficial than the reduction or removal of tariff barriers to trade. In addition, UN/CEFACT’s work is of particular benefit to landlocked countries and countries distant from major markets. These countries experience challenges and constraints resulting from complex and inefficient procedures, including the creation of many additional costs in bringing goods to market. The gains from this work are considerable for small and medium-sized enterprises, for which the costs of compliance with various trade-related procedures are proportionally higher. This is particularly true in the case of low-value shipments, where the cost of administrative procedures represents a large proportion of total cost.