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US Outlines Benefits of Customs Rulings Program in New WTO Communique

On August 6th 2018, the US circulated a report on its custom rulings program in which it shared best practices with fellow WTO Members who are in the process of implementing the landmark Trade Facilitation Agreement. 

Commitments on advance rulings (set out in Section I, Article 3 of the agreement) ensure the facilitation of trade, promote transparency and consistency in customs operation and foster the participation of small/medium sized enterprises in global commerce.

In their report titled The Role of Advance Rulings and Administrative Procedures in TFA Implementation, the US states that 'the United States Customs and Border Protection's (CBP) rulings program provides the international trade community with a transparent and efficient means of understanding how CBP will treat a particular import once it arrives in the United States and also provides the trade community with mechanisms to interact with CBP even after a good has been entered'.

According the US, their advance ruling system is very effective due to the following:

Rulings are simple to obtain 
'An advance rulings regime requires that the Customs authority inform the public of the availability and requirements of advance rulings and makes them accessible. For a 21st Century customs operation, accessibility means availability on the internet. CBP delineates the requirements and other information about its rulings program in published regulations, available in print and online'.

Rulings are legally binding, ensuring that the importing community can rely on the decision 
'A ruling represents the official position of CBP with respect to the particular transaction or issue described therein and is binding on both CBP and the requester until modified or revoked. The principal benefit for the holder is the assurance that the decision will be applied at the border when the goods are imported'.

Rulings are published, and the rulings process is transparent 
'As part of the Customs Modernization Act, CBP is required to publish advance rulings. Since 2002, rulings have been published on the Customs Rulings Online Search System (CROSS), which is accessible via the CBP website or directly: http://rulings.cbp.gov'.

Protection of commercially confidential information 
'Since rulings are published, there must be a method to protect commercially confidential information. Requesters have the right to request that certain designated information provided as part of the ruling request be kept confidential and not included in the published ruling. In practice, CBP and the requester often discuss the specific requests to balance the need to have legally sufficient advance rulings while protecting information that is confidential.

Rulings set the customs practice throughout the United States for that good for all traders 
'In addition to being binding and timely for the requester, CBP rulings provide guidance to others in the trade community with the same merchandise. Because many rulings provide a detailed description of the merchandise and an in-depth discussion of the applicable law and the issues presented, they represent a rich resource for brokers, importers, and import specialists to understand how CBP will treat their merchandise. Technically, an advance ruling letter is only binding for the transaction described therein. However, if CBP determines that the merchandise is the same in all material respects to that described in the ruling, the ruling will apply'.

Effective external communication is essential 
'External communication with the trade community is also vital, especially with regard to a particular ruling letter. At CBP, importers may request a conference in writing, to discuss the issues in their request for an advance ruling, at the time the ruling request is filed. The conference affords the importer the opportunity to supplement the request with pictorial representations of the good or even a sample of the good. Conferences are scheduled to afford the parties an opportunity to freely and openly discuss the matters set forth in the advance ruling request before the ruling is issued'.

Effective communication within CBP 
'Within CBP’s Regulations and Rulings Directorate, the HQ and NCSD offices communicate on a regular and ongoing basis. Regulations and Rulings also frequently communicate with the CBP personnel located at the Centers of Excellence and Expertise on specific imports or compliance issues within a particular industry. In addition to teleconferences and email, internal communication at CBP is facilitated by the Automated Commercial Environment (ACE), the primary system through which the trade community reports imports and exports and the government determines admissibility, and which serves as the single window'.

The advance rulings system promotes uniformity and fairness 
'CBP actively engages the importing community before taking final action. It issues rulings and other decisions that importers can use for guidance for the merchandise described in the ruling, whether or not the ruling was issued to them. 

Requesters also have access to a judicial review of the advance ruling in the Court of International Trade (CIT). CIT decisions can be appealed to the Court of Appeals for the Federal Circuit, which is located in Washington, D.C., and then, in rare instances, may be considered by the Supreme Court of the United States. This robust system of judicial review provides a vital element of fairness to the trade community'.

According to the US, an advance rulings regime prioritizes openness, efficiency, and transparency and is a key aspect of a modern customs administration.

The full report can be viewed under TFA Article 3 resources