Technical Aspects of GATT Articles V, VIII and X and the UNECE Trade Facilitation Instruments UNECEU

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Technical Aspects of GATT Articles V, VIII and X
and the UNECE Trade Facilitation Instruments
UNECE-UNESCAP Capacity Building Workshop on
Trade Facilitation Implementation for Asia and
the Pacific Region17 18 March 2005, Kuala
LumpurMs Maria Misovicova, UNECE, Trade
Division

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Content

• Technical and Legal Aspects of Articles V, VIII
  and X of the GATT 1994
• UNECE/ UN/CEFACT Instruments available for
  implementation
• Capacity Building and Technical Assistance

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Current Environment

• Business needs (global supply chains) demanding
  speedy, secure and simplified procedures
• Trade Facilitation as a Policy issue, currently
  determined by
• Increased role in Trade/Economic Development
• TF in WTO (GATT Articles V, VIII X)
• Regional Initiatives (APEC Strategy, ASEAN Single
  Window Initiative)
• TF and Security

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WTO Trade Facilitation Negotiations

• OBJECTIVES
• shall aim to clarify and improve relevant
  aspects of Articles V, VIII and X of the GATT
  1994 with a view to further expediting the
  movement, release and clearance of goods,
  including goods in transit (July Package, Annex
  D)
• Recognizing Special and Differential Treatment
  (SDT) for developing countries and LDCs
• Entering into commitments related to their
  implementation capacities (CB and TA, investment
  in infrastructures...)
• Beyond traditional SDT (pure exemptions,
  transition periods, differentiated
  non-reciprocity)

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WTO Core Principles

• Most-favoured Nation (MFN) Treatment
  (non-discrimination, Art. I of the GATT1994)
• National Treatment (Art. III)
• Transparency (Art. X)

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WTO vs. UNECE different but complementary
approaches
WTO doing the WHAT of the international
trade Legally binding rules to be observed by
the countries, while respecting SDT
UNECE/ UN/CEFACT doing the" HOW of trade
facilitation delivering the solutions for
supply chain to facilitate international trade
and business processes (Trade and transport
facilitation conventions, standards,
recommendations, best practices and other
tools...)
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Article V obligations

• Article V of the GATT imposes obligations
  regarding traffic in transit
• The basic objective is to allow for freedom
  of transit through a country (paragraphs 2, 3, 4)
• Article V also imposes a non-discrimination
  requirement (MFN) (paragraphs 2,5,6)

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Freedom of Transit

• There is freedom of transit (through the most
  convenient route) for goods from one WTO member
  to another WTO member (para.2)
• There is a broad duty to prevent unnecessary
  delays or restrictions(para.3)
• Charges and regulations imposed must be
  reasonable (para.4)
• Traffic in transit is exempt from customs duties,
  a member can only impose charges commensurate
  with the expenses incurred (para. 3)

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Non-discriminatory Treatment (MFN)

• In respect of all charges, regulations and
  formalities in connection with transit there is
  an MFN requirement (para.3)
• No distinction can be made based on between
  traffic in transit on grounds of the ownership of
  the means of transport/goods, the
  origin/destination of the traffic etc. (para.2)
• Directly transported goods and goods which are
  transported via a third country should be treated
  equally by the receiving country (para. 6)

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Some issues raised on Article V (2002)

• Reduction, simplification and harmonization of
  documentary and data requirements, and procedures
  for transit, including risk assessment and
  limitation of physical inspection (CAN, EC KOR)
• Use of existing multilateral, regional and
  bilateral transit instruments or arrangements
  (CAN, EC)
• Note
• Great Importance for land-locked countries

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Article V UNECE Instruments available

• TIR Convention (Transport Internationaux
  Routiers)
• Multimodal
• Goods carried under the TIR procedure in approved
  and sealed road vehicles, combination of vehicles
  or containers is not subject to Customs
  examination, unless irregularities are suspected
• Reduces regular requirements of national transit
  procedures and physical inspections in transit
  countries
• Using a single standardized document Carnet

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Article VIII obligations

• Imposes an obligation on a WTO Member to limit
  the fees and charges being charged in connection
  with importation/exportation to the level of the
  approximate cost of the services rendered by it
  (paras. 1(a),4) AND recognizes the need to reduce
  them as to the number and diversity
• Requires WTO members not to impose substantial
  penalties for minor breaches of customs
  regulations or procedural requirements (para. 3)
• Recognizes the need to reduce the incidence and
  complexity of import and export related
  formalities and documentary requirements (paras.
  1(b), 1(c))

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Fees and Charges

• Requirement to limit the fees and charges to the
  approximate cost of the service rendered
• Applies to fees and charges connected with
  importation and exportation, with the exception
  of
• (i) import and export duties
• (ii) internal taxes applied at the border
• Therefore Article VIII applies to a residual
  category of fees and charges connected with
  importation or exportation, such as inspection
  fees (SPS), licensing fees etc.
• The charge does not represent indirect protection
  to domestic products or taxation for fiscal
  purposes

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Complexity of import and export formalities

• The best-endeavour statements (paras. 1(b) and
  1(c))
• These provisions recognise the need to
• minimise the incidence and complexity of import
  and export formalities
• decrease and simplify documentation requirements
• reduce the number and diversity of fees and
  charges imposed in connection with importation
• However, there is no legally binding commitment
  under these provisions, accordingly WTO Members
  retain their policy autonomy in this regard, but
  at the end of negotiations there might be some
  obligations

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Some issues raised on Article VIII (2002)

• Simplifying border-related documentation and
  increasing compatibility/ standardizing data
  required for release of merchandise by using
  existing international standards where
  appropriate and developing common data sets to be
  requested in the process of clearance (CAN, HKG,
  EC)
• Reducing excessive documentation and data
  requirements (COL, EC)
• Establishing a Single Agency for trade documents
  and data (COL, EC, JAP)
• Automation and use of ICT (COL, JAP, EC)
• Advance information (CAN, EC, JAP, KOR)

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Article VIII UNECE Instruments available

• United Nations Layout Key for Trade Documents
  (UNLK/ ISO 6422), Codes UN/LOCODE, Currency,
  Modes of Transport, ISO Country Code...
• Recommendation and Guidelines on establishing a
  Single Window (UN/CEFACT Recommendation 33)
• UN/CEFACT Recommendations 4 (TF Pro Committees)
  and 18 (Facilitation Measures related to Intl
  Trade Procedures)
• UN/EDIFACT, UN Trade Data Element Directory
  (UNTDED), UNeDocs
• New Benchmarking Guide, Single Window
  Repository, to be available in 2005

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Article X obligations

• Imposes obligations regarding
• Transparency/ publication requirement (para 1, 2)
• Impartiality in administration of laws,
  regulations and administrative rulings of general
  application (para 3)

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Transparency obligations

• There is a duty to promptly publish
• laws, regulations, judicial decisions and
  administrative rulings of general application
• Regarding
• the classification or the valuation of products
  for customs purposes
• rates of duty, taxes or other charges
• requirements, restrictions or prohibitions on
  imports or exports or on the transfer of payments
  therefor, or affecting their sale, distribution,
  transportation, insurance, warehousing

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Some issues raised on Article X (2005)

• WHEN to publish
• Currently to publish before starting applying
  certain measures and regulations
• Proposal a prior publication of the proposed
  measures and regulations to allow other WTO
  Members to comment on proposed the measures
• HOW to publish
• Currently no obligation to publish by particular
  means
• Proposal to make information available through
  Internet and to establish Single Entry Points for
  information
• Appeal Procedure
• Currently having guaranteed an appeal for any
  customs determination
• Proposal asking for interim measures during the
  appeal so that you do not collect any duties
  during that time
• Note Implications of the proposed measures
  (developing countries)

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Article X UNECE Instruments available

• UN/CEFACT Recommendations 4 (TF Pro Committees)
• Recommendation and Guidelines on establishing a
  Single Window (UN/CEFACT Recommendation 33)

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SUMMARY OF UNECE and UN/CEFACT TRADE
FACILITATION TOOLS

• Article V
• Transport and Transit Facilitation Instruments
  (TIR Convention, Harmonization Convention...)
• Article VIII
• Standards and tools for trade documents (UNLK,
  UNTDED, UNeDocs)
• Simplification and harmonization of trade
  procedures (Recommendation 33 - Single Window,
  Recommendation 4 - TF Pro Organizations,
  Recommendation 18 -Trade Facilitation Processes)
• Codes for International Trade (UN/LOCODE, Country
  Codes, Currency Code...)
• Automation and e-business instruments
  (UN/EDIFACT, UNeDocs, UNTDED...)
• Article X
• Single Entry Information Point Single Window
  Recommendation

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Implementation

• Capacity Building and Cooperation
• African Group (March 2005)
• Asia and the Pacific Region (March 2005)
• Other 13 regional workshops organized jointly
  with other 4 UN Regional Commissions under the TF
  Inter-regional Project (2005-2006)
• Global Facilitation Partnership (GFP) World
  Bank, UNCTAD, WCO...
• WTO

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Total intl organizations focus
WTO
WCO
ICC
UN/CEFACT
UNCTAD
ITC
AFACT
ISO
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Follow-up

• All UNECE Recommendations, codes, standards and
  publications are available for free on our
  website at
• www.unece.org/trade
• www.unece.org/cefact/
• www.unece.org/etrades/unedocs/

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THANK YOU !!! maria.misovicova_at_unece.org