APTTA Power Point

8/2/2019 APTTA Power Point

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AfghanistanPakistanTransit Trade Agreement

(APTTA)


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APTTA DRIVES TRADE

APTTA replaces the 1965 agreement

ATTA Afghanistan Transit Trade

Agreement

APTTA strengthens economic ties between

Pakistan and Afghanistan by ensuringfreedom of transit across both countries

TransitRequirements

Customs UnforeseenCircumstances

Oversight ofAgreement

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Afghanistan gains access to Indian andChinese markets via access to sea ports

and land crossing points

Sostto China - 1.2 billion Chinese.

Wagah In India - 1.1 billion Indians

Seaports at Karachi, Port Qasim and Gawadar

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Why is APTTA Important for Afghanistan?

Afghanistan is a landlocked country; access to sea and

to global marketsIncrease exports; speed up imports

Reduce delays at border

Modernize business practices and harmonizes

standards

Promote foreign investment and economic growth

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Why is APTTA Important for Pakistan?

Access to the markets of Central Asia and Iran

Stimulate employment and business inside

Pakistan as service and logistical businesses

support increased traffic

Lower transit costs

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Why is APTTA Important for the Region?

Improved regional stability

Stronger commercial relationships across borders

Makes the South Asian Free Trade Agreement

SAFTA easier and cheaper to implementlower

tariffs for Afghan goods across regionSuccessful implementation builds confidence trust

and hope across region

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APTTA Objectives:

Ensure effective administration of transit

transport and avoid unnecessary delays

Simplify, harmonize and increase transparency in

transit documentation and procedures

Promote freight transport

Minimize customs fraud and avoidance

Monitor the trade of chemicals to prevent their

diversion for illicit purposes

TransitRequirements



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Freedom of Transit Includes:

NO CUSTOMS DUTIES

No discrimination

Pre-settled routes along approved corridors

Free choice of type of vehicle: must stay on the

specified routes and exit within the specified time

No preferential treatment for national vehicles

Rates for ports and rail the same as those

applicable to nationals

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Freedom of Transit Includes:

COMMERCIAL PRESENCE

Freight forwarders and transport operatorscan establish offices in country of transit tosupport trade and transit activities

Mutual recognition of driving licenses &vehicle docs

Mutual recognition of inspection certificates

Enquiry points

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Freedom of Transit Prohibits:

An Afghan truck transiting through Pakistan

cannot deliver its goods in Pakistan and visaversa

Goods from a third country cannot bedelivered in the country of transit. e.g.

Chinese goods cannot be delivered in Pakistanby transiting Afghan trucks

No Indian goods on return trip

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Technical requirements

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Technical Requirements

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Four Protocols

1.International Carriage by Road of Goods andBaggage in Transit

2.Temporary Admission of Vehicles for CommercialUse

3.Customs Control and Transit Regime

4.Control of Precursors and Chemical Substancesused in the Illicit Manufacture of Narcotic Drugs orPsychotropic Substances

TransitRequirements



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Requirements for Transport Operators

Reliability

LicenseProof of competency

Financially solid

Nationally owned

Third party insurance

Temporary Admission Document (TAD)

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Temporary Admission Document TAD

Free

Provides evidence of temporary admission to hostcountry

Vehicles allowed to carry return cargo from the

territory of the other country: duty must be paid

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Temporary Admission Documents (TAD)Issued at point of entry- for a single carrier (not transferable)

Two types sea 15 days, land 30 days*

*Valid for 30 days recommended for adoption by APTTCA

An exit stamp within the time period dischargesthe TAD and ensures the return of the bankguarantee

Includes details of bank guarantee

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Bank Guarantee for Vehicle

Transporter must provide a bank guarantee to get

a TADBank guarantee must last at least 6 months fromdate of issue

The bank is jointly liable with the vehicle operator

for all import duties, taxes and interest on thevehicle if there is an irregularity or lack of timelydischarge of TAD

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Bank Guarantees: Updates

Two governments reduced guaranteeto 25% and then 10% of duties and

taxes on vehicle Banks are insisting on 100% of

duties and taxes of vehicle

Possibility of government guaranteescheme or bilateral carnets depassage

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Bank Guarantee

If the bank fails to pay

Failure to pay import duties by guaranteeing bankallows the Host Country to suspend the temporary

admission regime to all vehicles whose bank

guarantee is issued by the defaulting bank

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Requirements for VehiclesCertificate of Conformity

Identification Marks

Certificate of RegistrationRegistration Plate

Distinguishing Nationality Sign

Maximum Weight and Dimension

Maximum Axle Load

Tracking Device

Containerization

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Containerization

All transit goods to travel in containers of

international specifications

Three year grace period to convert to containers-until that time the cargo is allowed in

internationally verifiable standard of sealable trucks

Oversize and bulk cargo (not imported in

containers) transported in open trucks

Perishable goods in transit (like fruits and

vegetables) shall be transported in open trucks

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Requirements for Drivers

Multiple entry transit permit - drivers will be

issued multiple entry permits valid for 6

months, each stay not exceeding 15 days.

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Customs

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Simplification of Customs ProcessesHarmonize codes and descriptions of goods

Consolidate procedures to prevent redundancies

Risk management approach to reduce delays - upto 5% of the containers at the port of entry will be

examined unless irregularity is suspected

Share Information related to goods declaration,

authenticity of documents and seals etcRegular communication

Joint customs control at entry and exit points

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Levies and Charges

No duty or taxes on goods in transit

Allowable charges include: fees for weighing,

scanning, sealing tolls for bridges, roads,

tunnels and parking.

All charges must be reasonable and non-discriminatory

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Risk Management

Customs wont conduct routine physicalinspections of vehicle or cargo en route unless

they suspect an irregularity

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Customs Security on goods

Necessary for goods in transit

People who regularly transit customs shall be

entitled to lodge a revolving guarantee, valid for

at least one year

Guaranteeing organization is jointly liable withthe person who owes the money for duties and

taxes

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Customs Security: Updates

Not necessary for Afghan or Pakistani exports

Third country goods: Insurance or cash at Customs acceptable

Insurance not more that 1% for sensitive and 0.8% onnon-sensitive

10% of total value of goods in collateral

Insurance companies not accepting this and insist on

higher rates Possibility that both countries may agree on limiting

security to sensitive goods

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Customs SealsVehicles cargo compartment shall be sealed by

customs office of departure

Host country may place seals if desirable

If customs breaks seals to perform a physical

inspection, they shall place a new seal and record

this action in customs documents

Oversized goods are allowed in non-sealed

vehicles as long as goods are easily identified by

description to prevent substitution or removal

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Discharge of Transit and Inland CustomsClearance Documents

Documents discharged after:

Exit stamp placed on clearance document after

transit goods re-exported from country, or

Goods are placed under another Customs regime, or

Goods cleared for domestic use via payment of

duties and taxes

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Unforeseen Circumstances


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Unforeseen Circumstances

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Accidents or Unforeseen CircumstancesAccidents need to be reported to nearest Customs office

or other authority

Where goods are stopped in transit by an unforeseeable

major incident carrier must take precautions to preventthe goods from entering into circulation

Change of Itinerary

Must be due to circumstances beyond control

Inform host country customs who will designate an

alternative route

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Loss or Destruction of Vehicle en routeNo need to return vehicle if:

all duties paid

vehicle abandoned and accepted by Host Country or;

vehicle destroyed under Host Country supervision and

salvaged parts re-exported or duty paid

Loss, Destruction or Shortage of Cargo en Route

Payment of duties and taxes waived if customs believesthat goods destroyed or lost en route or are short because

of the type of product they are

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Oversight of Agreement


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Oversight of Agreement

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Afghanistan Pakistan Transit TradeCoordination Authority (APTTCA)

Oversees the agreement

Includes members of Government and private sector

from both countries

APPTCA:

Meets once every six months alternating

Decisions by consensus

Interpretation and implementation through

cooperation

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Resolving Disputes:Dispute settlement panels

Arbitration Tribunals include representatives from

both countries and an agreed neutral third country

Implementation

Arbitration Tribunal reviews the dispute

Decisions are final

Decisions within 30 days from date of referral to

Tribunal

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General Exclusions

No measure taken under the Agreementcould risk harming or destroying:

- Public morals

- Human, animal and plant life

- National treasures

- Security of territory

- Mutually agreed interests

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Ratification of the AgreementAPTTA enters into force 31 days after ratification

It lasts for five years and is renewed for another five

years automatically

Suspension of the Agreement

Each country can temporarily suspend in case of

emergencies affecting public health, public order and

national security

Countries must inform other before such suspension and

suspension will end as soon as situation returns to normal

TransitRequirements



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