Core obligation. This measure requires Members to allow imported goods under customs control to be transported from the entry point to another customs office located within its territory, where the goods will be ultimately cleared. Transporting goods under customs control means that the goods are in the safe custody of customs staff, with appropriate controls including the customs seal and security, and they are not handed over to business before they reach the dry port. The use of the verb ‘shall’ suggests that the implementation of this provision is mandatory for Members. However, the addition of the qualifying words ‘to the extent practicable’ and ‘provided all regulatory requirements are met’ gives Members some room for flexibility. What is not covered? The TFA remains silent on whether additional fees and charges could be imposed on movement of goods under customs control. Moreover, the measure does not include any provision regarding facilities to trans- ship cargoes.
Core obligation. This measure aims at facilitating access to and dissemination of trade-related information in a cost- effective and easily accessible manner. Pursuant to Article 1.2 of the TFA, WTO Members have the obligation to make available through the Internet information and forms related to import, export and transit procedures, among other (see Scope of Information section below). Consequently, governments shall ensure that the covered information is uploaded and readily available to any traders, government or other interested party. As procedures and requirements may change over time, Article 1.2 also requests WTO Members to update their website(s) in order to provide the most accurate information to relevant stakeholders. Nonetheless, the obligation to update was to some extent neutralized by adding the terms “to the extent possible” and “as appropriate”. In other words, both terms bring some degree of flexibility in the compliance of the obligation to update. The term “to the extent possible” requires that WTO Members undertake serious efforts to update the information available on the Internet (Panel reports, EEC - Restrictions on Imports of Apples from Chile). In case of incompliance, the concerned WTO Member will need to prove that, in spite of its efforts, it was impossible to comply with it, taken into account the relevant circumstances on a case-by-case basis. While the use of the term “as appropriate” might induce a certain level of flexibility in meeting the update requirement, WTO Members remain obliged to comply with this requirement. According to WTO Panels “[t]he word appropriate, in its general dictionary sense, means especially suitable, proper. This suggests that “appropriate measures” are those that are suitable for achieving their purpose” (Panel reports in, Mexico-Telecom, EC-Tube or Pipe Fittings, US-Clove Cigarettes). Therefore, the term “as appropriate” leaves to WTO Members the choice regarding the suitable method to update the information on the Internet. Scope Pursuant to Article 1.2 of the TFA, WTO Members are obliged to upload into the Internet at least the following information:
Core obligation. The Article aims to regulate the system of imports and exports for specific purposes, including temporary import, goods imported for inward processing and outward processing. This provision is mandatory, subject to and consistent with the laws and regulations of the importing Member country. In specific cases, this will mean that domestic laws and procedures will be considered compliant. Temporary importation The release of goods, without payment of duties and taxes fully or partially, for importation for a predefined period of time and a predefined purpose, and export within a specific period, is allowed. Examples include samples or goods imported for exhibition that have to be returned home or large machinery imported for building a factory and returned after completion of works. It is imperative that these goods do not undergo any change while in the country of import. Goods imported for further processing This measure enables the conditional release of goods, without payment of duties and taxes, fully or partially eligible for drawback, imported for manufacturing, processing or repair and then for subsequent exportation. Examples of import inward processing include importation of accessories, zips and buttons to be attached to garments, which are meant for export. Temporary export The temporary export of goods for the purpose of manufacture or repair that are subsequently re-imported without payment of customs duties, in full or in part, is enabled. This applies to domestically produced or earlier imported goods. What is not covered? The measure does not require Members to allow such releases without any conditions or security and does not specify the type of conditions/guarantees upon which temporary admission, inward processing or outward processing may be allowed. The time lag for goods under inward processing or outward processing schemes or between the temporary import and the subsequent export of imported goods is not specified.
Core obligation. Each WTO Member is compelled to establish or maintain at least one enquiry point at national level. Unlike the SPS and TBT Agreements in which each member shall ensure the establishment of an enquiry point; the WTO TFA tempered the enforcement of this obligation by adding the phrase "within its available resources". In other words, the extent of the implementation would depend on the available financial, human, technical or technological resources of the concerned WTO Member. The measure aims at enhancing transparency and predictability through the fluent flows of information among WTO Members and relevant stakeholders. The objective is to provide easily accessible, precise and complete information in a timely and cost effective way. This measure also enhances compliance by preventing misunderstanding and solving doubts prior to the transactions (UNCTAD, 2011).
Core obligation. The measure introduces the obligation for all WTO Members to promptly publish trade-related information in a non-discriminatory and easily accessible manner in order to ensure that relevant stakeholders become acquainted with this information. The aim is that other WTO Members and traders affected, or others likely to be affected, by governmental measures imposing restraints, procedures, requirements and other burdens, should be given a reasonable opportunity to acquire reliable information about such measures and accordingly to protect and adjust their activities (Appellate Body Report, US-Underwear case). Timely, accurate and easily accessible information on trade legislation, applicable fees and tariffs, and related adjudicatory mechanisms is a critical element in establishing a transparent and predictable environment for improving international trade efficiency, Customs compliance, government revenues and foreign investments.
Core obligation. The measure aims at achieving effective Customs controls at borders through a reasonable and equitable balance between ensuring compliance and reducing costs and time to businesses. The measure also allows for a better allocation of human resources, increases Customs revenues, and improves compliance with laws and regulations (UNCTAD, 2011). Pursuant to Article 7.4, WTO Members are bound to set up or maintain a risk management system. Nonetheless, this obligation is neutralized by adding the term "to the extent possible". In light of this wording, WTO Members are compelled to set the broadest scope and the greatest content for risk management systems as far as their national resources allow. Once established, risk management systems shall operate on a non-discriminatory basis. In practice, WTO Members may differentiate goods, including means of transport, through risk analysis and selectivity criteria but, in any case, this process shall lead to an arbitrary or unjustifiable discrimination, or disguise restrictions to international trade. The rule seeks to ensure the application of risk management in good faith, avoiding abuse or misuse of this provision. Consequently, any requirement in Members' legislation for Customs to examine 100%, a fixed number or a minimum percentage of consignments, would generally not be compatible with risk management principles.
Core obligation. Article 6.2 requires WTO Members to limit the amount of fees and charges for customs processing to the approximate cost of the service rendered imposed on or connected to the specific export or import operation concerned. Fees and charges levied for services connected to customs processing Subparagraph (ii) specifies that fees and charges levied by a WTO Member do not necessarily need to be associated with a specific import or export transaction; nonetheless, such fees and charges should be collected for services which are closely related to customs processing of goods. What is not covered? The measure does not specify which are the relevant factors in determining the amount of fees and charges levied and is also silent on how payments should be made.
Core obligation. Members are required to impose fair penalties, proportionate and in a transparent way, for any breach of a customs law, regulation, or procedural requirement. It also requires Members to impose the penalty only on the person(s) responsible for that violation. There shall be no breach of trust and an incentive for imposition of penalty. Modalities for imposing penalties The penalties are determined on a case by case basis using only those specific facts and circumstances in which the breach arose. They must be proportionate with the magnitude and severity of the infraction and not disproportionately determined on arbitrary criteria. Conflict of interest Measures to avoid conflict of interest in assessment of duties and penalties must be maintained. Imposition of unduly harsh penalties must not become an incentive for cash rewards for the customs official. Providing complete information to the person Members have an obligation to provide the following information in writing to the person(s) who has breached customs laws, rules, regulations or procedures: • The nature of the breach and applicable law; and • The amount or range of penalty prescribed for the breached law. Voluntary disclosure by the person committing the breach When the person causing the breach voluntarily discloses the infringement before it is detected by the authorities, the TFA encourages Members to consider this as a potential mitigating factor in the process of determining the penalties. This specific provision is not mandatory but leaves the decision to Members. Penalties on traffic in transit The last paragraph of Article 6.3 makes clear that all the provisions contained in the Article must also apply to penalties imposed for breaches committed during traffic in transit. What is not covered? The text is silent on the criteria for defining the facts and circumstances which should determine the amount and range of penalties. The text is also silent on the processing times of penalties.
Core obligation. The measure requests WTO Members to quickly notify the importer or carrier when customs or other border agencies, such as the sanitary and veterinary authority, are detaining imported goods for inspection or further investigation. What is not covered? This measure sets no obligation to inform the competent authorities of exporting countries when detention of goods is taking place. Moreover, the measure does not state the modalities through which the information has to be provided to the importer or the carrier. The measure does not set out any obligation related to detention of goods declared for export. Benefits and opportunities for stakeholders Prompt information provided to the importer or their carrier will allow the trader to reduce costs of storage, demurrage and warehousing of imported goods. Enhanced accountability of customs and border agencies will improve private sector trust and compliance. Getting Down to Business: Making the Most of the WTO Trade Facilitation Agreement Implementation Implementation checklist The following checklist may be used to estimate the level of compliance with the measure: • There is a national implementation framework in place to ensure that importers (or carriers) are informed when goods are detained. • In practice, importers are informed in a timely manner when their goods are detained for inspection by customs or any other competent authority. Preparing a national implementation plan The following template may be used as a basis for a national implementation plan: Implementation sequence Actions suggested Preparatory phase Determine legal, procedural and technical needs for creating or improving the current detention notification system. Set-up phase Establish or improve the legal and institutional basis for an efficient notification system ensuring that information exchange between border agencies for detention-related procedures are functioning efficiently. Designate an agency/department responsible for providing rapid alerts to importers/carriers. Establish procedural steps for the notifications system, in particular the timeframes for notification. Connect the system to a risk-based assessment system (or to an existing risk management system) to establish evidence for required detentions. Management and follow-up phase Set up a mechanism for monitoring results of inspections to allow the prompt termination of alerts when no longer needed. Average time for implementation Between one and a half to two years. Lea...
Core obligation. Article 8 requires Members to ensure cooperation between border regulatory agencies at both the national and international level. National cooperation All national authorities and agencies responsible for border controls and procedures dealing with importation, exportation and transit of goods (such as those issuing licences and certificates, testing laboratories etc.) must cooperate with one another and coordinate their activities in order to provide a better end-to-end experience for traders. 84 Getting Down to Business: Making the Most of the WTO Trade Facilitation Agreement Shared border cooperation The Agreement also requires Members sharing a common border to cooperate, to the extent possible and practicable, with one another with the overarching aim of facilitating trade. While the following list of cooperation and coordination steps may be used as a starting point, countries are encouraged to explore other areas where they can contribute to improve traders’ experience: • Alignment of working days and hours; • Alignment of procedures and formalities; • Development and sharing of common facilities; • Joint controls; • Establishment of one stop border post controls. The ‘shared border obligation’ does not apply to Members who do not share a common border with a neighbouring country, e.g. independent island states such as the Pacific Island nations.9 What is not covered? There is no manifest requirement for harmonization of procedures and documentation requirements for different agencies that are involved in importation, exportation and transit of goods. Under the shared border obligation, the examples of cooperation given are only indicative and countries can agree on what additional measures are needed to ensure that trade facilitation is optimized. Benefits and opportunities for stakeholders Border agency cooperation is crucial to traders to help them predict and plan their operations and future trade activities, factoring in accurate times and process documentary requirements. There is also an opportunity for government agencies to use cooperation mechanisms to simplify processes and reduce documentary requirements to improve the efficiency and effectiveness of trade transactions, reduce the burden of compliance on traders and increase trade volumes. The reduction of bottlenecks will also improve supply chain security and limit the burden on existing infrastructure, including storage facilities and testing laboratories. Successful implementation wi...
