WCO instruments proposed in the WTO negotiations Meeting of Core Group, African Group and Caribbean Group 8 November 2005, Geneva Kunio Mikuriya Tadatsugu Toni Matsudaira World Customs Organization (WCO)

WTO July Package - Annex D 9. Due account shall be taken of the relevant work of the WCO and other relevant international organizations in this area.

WCO instruments addressed in the WTO proposals HS (TN/TF/W/24, 45, 46, 52) Revised Kyoto Convention (TN/TF/W/ 30, 34, 36, 39, 42, 45, 46, 49, 50, 52, 53, 55, 58) Customs Data Model (TN/TF/W/ 18, 46, 57) Immediate Release Guidelines (TN/TF/W/ 10, 44, 45, 50) Time Release Study Guide (TN/TF/W/ 18, 45, 46) Istanbul Convention (TN/TF/W/ 30)

Compilation: L.1. Objective Criteria for Tariff Classification (TN/TF/W/43) Main Measure(s) Proposed • Require objective criteria for the tariff classification of goods. (TN/TF/W/24) Suggested Approach/Means • "... requiring the use of objective tests, and (...) requiring Members to adopt the World Customs Organization's Convention on the Harmonized Commodity Description and Coding System ('the HS Convention') "... establish criteria that classification decisions and any necessary tests should satisfy, such as objectivity, scientific basis, wide acceptance and impartiality." See also TN/TF/W/46

H S Universal economic language and code for transportable goods Used by over 190 countries and economies (120 Contracting Parties) Basis for tariff application, GATT tariff schedule, trade negotiations, trade statistics, implementation of border measures (quota, controls, etc) Periodic Review 5 year interval in principle, HS2002 as current version, HS2007 review work underway Uniform application assured by WCO HS Committee Interpretation (Explanatory note, Compendium of classification opinions) Dispute settlement (Recommendations) Technical assistance by WCO Secretariat HS infrastructure, advance rulings (classification advice)

Compilation: Release & clearance of goods, formalities, transit (TN/TF/W/43) K.1.(c) Risk Management Use risk management and risk analysis as defined in the WCO Revised Kyoto Convention Guidelines. (TN/TF/W/49) H.1.(d) Use of International Standards Recommendation to accede to the conventions administered by the World Customs Organization (WCO) which seek to harmonize and simplify customs procedures, in particular the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto Convention), … (TN/TF/W/30) M.3.(c) Disciplines on Transit Formalities and Documentation Requirements. "....give careful consideration to the possibility of acceding to international instruments relating to Customs transit if they are in a position to implement them. If this is not possible, when drawing up bilateral or regional agreements with a view to setting up international Customs transit procedure, they should consider the Standards and Recommended Practices of Annex E of the Revised Kyoto Convention of 1999." ( TN/TF/W/39).

Revised Kyoto Convention Originally adopted in 1973 and revised in 1999 Use of modern technology (automation) Use of modern techniques (risk management, partnership with trade) Legal structure Main body, General Annex (core principles), Specific Annexes (standards for specific procedures) Guidelines (guide for implementation, best practice) : constantly updated Entry into force on 3 February 2006 (accession by 40 members) Kyoto Management Committee Accession open to WCO/UN members Consistent with and complementary to the WTO rules

Measures covered by the WCO instruments Pre-arrival declaration Express shipment Post clearance audit Authorized traders Co-operation Automation Transit Publication of information Advance Rulings Appeals Fees Standardized and simplified documents Risk Assessment

Use of International Standards Compilation: H.1.(d) Use of International Standards Main Measure(s) Proposed • … Members should agree to use international standards and instruments as the basis for their import and export procedures and requirements (...) (TN/TF/W/46) Suggested Approach/Means • "The data set developed within the WCO data model, UN EDIFACT (UN Electronic Data Interchange for Administration, Commerce and Transport) and the UN Layout Key could be identified as basic reference points/standards [for using international standards as a basis for documentation and data requirements] (...), and WTO Members may wish to identify others. " Also see TN/TF/W/18; TN/TF/W/57

UN instruments UN Layout Key Revised Kyoto Convention UN/EDIFACT “… The paper format of the Goods declaration shall conform to the UN-layout key. …” Standardized trade documents in size, format, data elements (including customs goods declaration) UN/EDIFACT Electronic Data Interchange for Administration, Commerce and Trade

WCO Data Model Harmonized maximum data sets & their electronic message format to complete border procedures Effective & efficient tool for B2B, B2G, G2G exchange of information Compatible with UN/EDIFACT Interoperable with trade and transport Cover border measures other than Customs Supporting “Single Window” latest version: June 2005

Compilation: K.1. (b) Expedited Procedures for Express Shipments Main Measure(s) Proposed • "... an agreement on trade facilitation should promote the widespread implementation of the procedures of the WCO on Express Consignments" as the "international standard procedures for clearance of express goods." (TN/TF/W/45) Also see TN/TF/W/10 and 44

Immediate Release Guidelines Scope Shipments requested for immediate release Express consignment carriers, freight forwarders, and postal services Categorization of shipments into 4 categories Correspondence and documents Low value consignments with no duties and taxes Low value dutiable consignments High value consignments Procedures & dataset specific to each category Pre-arrival declaration& data processing

Compilation: F.2 Maintenance and Reinforcement of Integrity and Ethical Conduct Among Officials (a) Establishment of a Code of Conduct (b) Computerized System to Reduce/Eliminate Discretion (c) System of Penalties (d) Technical Assistance to Create/Build up Capacities to Prevent and Control Customs Offences (e) Appointment of Staff for Education and Training (f) Coordination and Control Mechanisms In particular, TN/TF/W/60 lists up WCO Arusha Declaration and implementation tools as important reference

Arusha Declaration Adopted in 1993 and revised in 2003 Leadership & commitment Simplification of procedures and automation Reduce opportunities for malpractices Adequate human resource management Recruit, training, rotation, remunerations etc. Partnership with private sector Tools for implementation (Model code of ethics and conduct, Integrity Self-Assessment Guide, Action Plan)

Capacity Building during negotiations Assistance in understanding of issues Information sheets for negotiators Promote customs involvement in supporting negotiators Identification of needs & priorities Self-assessment checklists (proposal-based checklists under consideration) WTO trade facilitation negotiations support guide (WB) Needs assessment questionnaire & inventory (WTO) Time release study

Capacity Building for implementation Enhance effectiveness and efficiency of customs administration to discharge its responsibilities in revenue collection, protection of society, security and facilitation of global trade Base Customs procedures on international standards and best practices A broad and comprehensive process that cannot be tackled on a narrow technical or single issue basis Connect capacity building needs and funding

Customs Capacity Building Strategy (adopted June 2003 by WCO Council) Lesson learned - Need for: Political will and commitment Greater ownership and participation of Customs personnel Accurate diagnosis of needs and country specific responses Realistic donor and government expectations Adequate resources (human and financial) Enhanced co-operation and coherence A more focused, coordinated and well-resourced approach, based on accurate diagnosis and using regional approach

WCO assistance in CB Assist in ownership approach Intervention at early stage Diagnostics Action planning Business case for funding to address donors Pool of experts Training material E-learning Collaborative efforts with other international organizations and donors Regional approach Regional Training Center Regional Office for Capacity Building, Asia Pacific Synergy with existing regional institutions and initiatives

e-mail: tadatsugu.matsudaira@wcoomd.org For more information www.wcoomd.org “Preparation for WTO trade facilitation negotiations” “WCO trade facilitation initiatives and simplification of customs procedures” Rue du Marché 30, 1210 Brussels Tel : + 32 (0)2-209-9353 Fax: + 32 (0)2-209-9493 http://www.wcoomd.org e-mail: tadatsugu.matsudaira@wcoomd.org