SESSION 5 LEGAL ASPECTS OF TRADE FACILITATION · TFA Objectives Clarify and improve GATT Art. V, VIII and X Recognize LDCs' particular needs ... 10.2 Acceptance of Copies 10.3 Use

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SESSION 5 –LEGAL ASPECTS OF TRADE

FACILITATION

Alexandre Larouche-Maltais Senior Trade & Investment Expert

Conference Board of Canada

Jakarta, April 24-25 2018

Outline: Legal aspects of Trade Facilitation

2

1) TFA Structure

• Preamble, Substantive Provisions, S&D Treatment, and Institutional Provisions

2) S&D Treatment

• Categorization & Notification and other S&DT Provisions

3) Nature of Obligations

• Pyramid of commitments

TFA STRUCTURE

What is a treaty?

4

A binding instrument, which means that the contracting parties intended to create legal rights and duties;

Concluded by states or international organizations with treaty-making power;

Governed by international law;

In writing.

Source: United Nations Treatycollection

The 1969 Vienna Convention on the law of treaties:

"an international agreement concluded

between States in written form and

governed by international law."

TFA : From adoption to entry into force

5

Bali Agreement on Trade Facilitation

(1) legal scrubbing

(2) Adoption of the Protocol of

Amendement

Ratification and notification to the

WTO

Acceptation by 2/3 of WTO Members

Adoption Authentification Expression of consent Entry into force

Dec. 2013 July - Nov. 2014 In the process 22 Feb. 2017

135 Instruments of Acceptance deposited (As of 23 April 2018)

Indonesia ratified on 5 December 2017

TFA Structure

Trade Facilitation Agreement

PreambleSection I –

Substantive Provisions

Section II –Special and Differential Treatment

Section III –Institutional

arrangementsand final

provisions

TFA Objectives

Clarify and improve GATT Art. V, VIII and X

Recognize LDCs' particular needs

Recognize the need for cooperation on trade facilitation and customs

compliance

Art. V: TransitArt. VIII: Fees and FormalitiesArt. X: Publication and Administration of Trade

Preamble

TFA Structure







provisions

Art. Scope

Art. 1-5 Transparency

Art. 6-10Fees and

Formalities

Art. 11 Transit

Art. 12Customs

Cooperation


1.1 Publication

1.2 Information available through Internet

1.3 Enquiry Points

1.4 Notification

2.1.1 Opportunity to Comment on New and Amended Rules

2.1.2 Interval between Publication and Entry into Force

2.2 Consultations

3. Advance ruling

4. Procedures for Appeal and Review

5.1 Notifications for enhanced controls or inspections

5.2 Detention

5.3 Test Procedures

Transparency

Articles(1-5)


6.1 Disciplines on fees and charges…

6.2 Specific disciplines on Fees and Charges for Customs…

6.3 Penalty Disciplines

7.1 Pre-arrival Processing

7.2 Electronic Payment

7.3 Separation of Release from Final Determination…

7.4 Risk Management

7.5 Post-clearance Audit

7.6 Establishment and Publication of Average Release Times

7.7 Authorized Operators

7.8 Expedited Shipments

7.9 Perishable Goods

Fees & Formalities

Articles(6-10)


8. Border Agency Cooperation

9. Movement of Goods intended for import under customs control

10.1 Review of Formalities and Documentation Requirements

10.2 Acceptance of Copies

10.3 Use of International Standards

10.4 Single Window

10.5 Pre-shipment Inspections

10.6 Use of Customs Brokers

10.7 Common Border Procedures and Uniform Documentation Requirements

10.8 Rejected Goods

10.9.1 Temporary Admission

10.9.2 Inward and Outward Processing

Fees & Formalities

Articles(6-10)


11. Freedom of Transit

12. Customs Cooperation

Otherprovisions

TFA Structure







provisions

Special provisions giving developing

countries and LDCs special rights and

which give developed countries the

possibility to treat developing countries more favourably than other WTO Members.

Definition

Strengthened S&DT and

+ effective and operational

Special and Differential Treatment

13. General Principles

14. Categories of Provisions

15. Notification and Implementation of Category A

16. Notification of Definitive Dates for Implementation of

Category A and B

17. Early Warning Mechanism

18. Implementation of Category B and C

19. Shifting between Categories B and C

20. Grace Period

21. Provision of Assistance and Support for Capacity Building

22. Information on ASCB to be Submitted to the Committee

S&D Treatment

Articles(13-22)

TFA Structure







provisions

Institutions

MultilateralArt. 23.1 WTO

Trade Facilitation Committee

NationalArt. 23.2 National Trade Facilitation

Committee

SPECIAL AND DIFFERENTIAL TREATMENT


S&DT in WTO Agreements S&DT in TFA

• Longer implementation time periods

• Measures to increase trading opportunities

• Safeguard of trade interests

• Capacity building support to carry out WTO work, handle disputes, and implement technical standards, etc.

• Self-Categorization

• Timing of transition periods to be decided by individual country

• Category C commitments implementation linked with acquisition of implementation capacity

• Through provision of TA and CB including the financial assistance

Developing and LDCs having favourable treatment as compared to Developed Countries has been an ‘integral part’ of WTO

Extra Flexibility








provisions

Cat. Implementation

AImplementation upon

entry into force

B Transition period

CTransition period +

financial and/or technicalassistance

Categorization NOT possible !

Developing countries LDCs

• Notify to the Committee

up to one year after entry

into force

• And thereby be made an

integral part of the

Agreement

• Implement upon entry

into force

• Category A commitments

will then be made an

integral part of the

Agreement

Notifications of Category A

Indonesia notified Cat. A measures on

4 August 2018

Status of TFA Implementation in Indonesia

Notifications of Category A

5.5%

26.1%

49.9%

86.9%

46.3%

Indonesia Africa Asia & the Pacific Europe World

SHARE OF CAT. ABASED ON % OF ALL NOTIFIABLE ITEMS

Source: TFAdatabase.org

Timeline for developing countries’ notifications

TFA enters into force

• Notify categories A, B and/or C

• Indicative date for B & C

• TACB requirements for C

TFA + 1 year

• Provide definitive dates for category B designations

•Provide information on arrangements with Donors on TACB for category C

TFA + 2.5 years

• Provide definitive implementation dates for category C designations

• Inform of progress in TACB for category C

22 Feb 2017 22 Feb 2018 22 Aug. 2019

INDONESIA IS LAGGING BEHIND !

Notifications of Category B&C and “Not yet notified”

0.0%

10.4%15.1%

8.8% 10.0%

0.0%

13.8%

20.9%

4.3%

13.6%

94.5%

49.7%

14.2%

0.0%

30.1%

Indonesia Africa Asia & the Pacific Europe World

BASED ON % OF ALL NOTIFIABLE ITEMS

B

C

NYN

Source: TFAdatabase.org

If a Member experiences difficulties implementing by the definitive dates it established, it should notify the Committee:•Developing Countries: no later than 120 days before the expiration date

Notify new dates and indicate reasons for delay

Automatic extension: if it is the first request and:•Extension requested less than 1.5 years (developing)

Subsequent extensions submitted to the Committee which will give sympathetic consideration

Early Warning Mechanism

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Shifting between Cat. B and C Dispute Settlement – Grace Period

Developing members and LDC would

have option to shift between

categories

•Through notification to Committee

Shifting from B to C would contain

information on

•Technical Assistance

•Capacity building and

•Financial needs

Extension in time frame, if needed,

through Early waning Mechanism

• For Cat A measures

• Developing: 2y after entry into force

• LDCs: 6y after entry into force

•

• For Cat B&C measures

• 8 years after implementation of the provision for LDCs only

• Opportunity for consultation during the grace period

• For discussing issues relating to implementation

Other S&DT Measures

NATURE OF OBLIGATIONS

Obligation

Conditional

Obligation

Recommendation

Possibility or Option

Language of the

TFA provides for

4 different

levels of

commitments

1

2

3

4

Obligation

Conditional

Obligation

Recommendation

Possibility or Option

Mandatory and must be implemented as per description of the provision

Member has the discretionto implement or otherwise

Obligatory but the level of obligation has been 'watered down' by adding some

qualifying language

'Best endeavor' measure, it is encouraged that Member should

implement the measure.

Art. 7.2 Electronic Payment

Each Member shall, to the extent practicable, adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees, and charges collected by customs incurred upon importation and exportation.

Art. 7.6 Establishment and Publication of Average Release Times

Members are encouraged to measure and publish their average release time of goods periodically and in a consistent manner, using tools such as, inter alia, the Time Release Study of the World Customs Organization (referred to in this Agreement as the "WCO").6

Art. 7.2 Electronic Payment

Each Member shall, to the extent practicable, adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees, and charges collected by customs incurred upon importation and exportation.

Art. 7.6 Establishment and Publication of Average Release Times

Members are encouraged to measure and publish their average release time of goods periodically and in a consistent manner, using tools such as, inter alia, the Time Release Study of the World Customs Organization (referred to in this Agreement as the "WCO").6

7.4 Single Window

Members shall endeavour to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner.

23.2 National Committee on Trade Facilitation

Each Member shall establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement.

7.4 Single Window

Members shall endeavour to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner.

23.2 National Committee on Trade Facilitation

Each Member shall establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement.

10.1 Formalities and Documentation Requirements

With a view to minimizing the incidence and complexity of import, export, and transit formalities and to decreasing and simplifying import, export, and transit documentation requirements and taking into account the legitimate policy objectives and other factors such as changed circumstances, relevant new information, business practices, availability of techniques and technology, international best practices, and inputs from interested parties, each Member shall review such formalities and documentation requirements and, based on the results of the review, ensure, as appropriate, that such formalities and documentation requirements are:

(a) adopted and/or applied with a view to a rapid release and clearance of goods, particularly perishable goods;(b) adopted and/or applied in a manner that aims at reducing the time and cost of compliance for traders and operators;(c) the least trade restrictive measure chosen where two or more alternative measures are reasonably available for fulfilling the policy objective or objectives in question; and(d) not maintained, including parts thereof, if no longer required.

10.1 Formalities and Documentation Requirements

With a view to minimizing the incidence and complexity of import, export, and transit formalities and to decreasing and simplifying import, export, and transit documentation requirements and taking into account the legitimate policy objectives and other factors such as changed circumstances, relevant new information, business practices, availability of techniques and technology, international best practices, and inputs from interested parties, each Member shall review such formalities and documentation requirements and, based on the results of the review, ensure, as appropriate, that such formalities and documentation requirements are:

(a) adopted and/or applied with a view to a rapid release and clearance of goods, particularly perishable goods;(b) adopted and/or applied in a manner that aims at reducing the time and cost of compliance for traders and operators;(c) the least trade restrictive measure chosen where two or more alternative measures are reasonably available for fulfilling the policy objective or objectives in question; and(d) not maintained, including parts thereof, if no longer required.

Many thanks for your attention !

Documents

SESSION 5 LEGAL ASPECTS OF TRADE FACILITATION · TFA Objectives Clarify and improve GATT Art. V, VIII and X Recognize LDCs' particular needs ... 10.2 Acceptance of Copies 10.3 Use