The Trade Facilitation Agreement

Traders from both developing and developed countries have long pointed to the vast amount of “red tape” that still exists in moving goods across borders, and which poses a particular burden on small and medium-sized enterprises. The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.  The Agreement will help improve transparency, increase possibilities to participate in global value chains, and reduce the scope for corruption.

The TFA was the first Agreement concluded at the WTO by all of its Members.  The Agreement entered into force on 22 February 2017 when the WTO obtained the two-thirds acceptance of the Agreement from its 164 Members.

TFA Articles

Section I contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It clarifies and improves the relevant articles (V, VIII and X) of the General Agreement on Tariffs and Trade (GATT) 1994. It also sets out provisions for customs cooperation. 

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Publication and Availability of Information Icon
Article 1

Publication and Availability of Information

1.1 Publication

1.1       Each Member shall promptly publish the following information in a non-discriminatory and easily accessible manner in order to enable governments, traders, and other interested parties to become acquainted with them:

(a)        procedures for importation, exportation, and transit (including port, airport, and other entry-point procedures), and required forms and documents;

(b)        applied rates of duties and taxes of any kind imposed on or in connection with importation or exportation;

(c)        fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit;

(d)        rules for the classification or valuation of products for customs purposes;

(e)        laws, regulations, and administrative rulings of general application relating to rules of origin;

(f)         import, export or transit restrictions or prohibitions;

(g)        penalty provisions for breaches of import, export, or transit formalities;

(h)        procedures for appeal or review;

(i)         agreements or parts thereof with any country or countries relating to importation, exportation, or transit; and

(j)         procedures relating to the administration of tariff quotas.

1.2       Nothing in these provisions shall be construed as requiring the publication or provision of information other than in the language of the Member except as stated in paragraph 2.2.

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Article 2

Opportunity to comment, information before entry into force and consultations.

2.1 Opportunity to comment and information before entry into force

1.1  Each Member shall, to the extent practicable and in a manner consistent with its domestic law and legal system, provide opportunities and an appropriate time period to traders and other interested parties to comment on the proposed introduction or amendment of laws and regulations of general application related to the movement, release, and clearance of goods, including goods in transit.

1.2  Each Member shall, to the extent practicable and in a manner consistent with its domestic law and legal system, ensure that new or amended laws and regulations of general application related to the movement, release, and clearance of goods, including goods in transit, are published or information on them made otherwise publicly available, as early as possible before their entry into force, in order to enable traders and other interested parties to become acquainted with them.

1.3  Changes to duty rates or tariff rates, measures that have a relieving effect, measures the effectiveness of which would be undermined as a result of compliance with paragraphs 1.1 or 1.2, measures applied in urgent circumstances, or minor changes to domestic law and legal system are each excluded from paragraphs 1.1 and 1.2.

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Article 3

Advance Rulings

3 Advance Rulings

1.  Each Member shall issue an advance ruling in a reasonable, time-bound manner to the applicant that has submitted a written request containing all necessary information. If a Member declines to issue an advance ruling, it shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision.

2.  A Member may decline to issue an advance ruling to the applicant where the question raised in the application:

(a)  is already pending in the applicant's case before any governmental agency, appellate tribunal, or court; or

(b)  has already been decided by any appellate tribunal or court.

3.  The advance ruling shall be valid for a reasonable period of time after its issuance unless the law, facts, or circumstances supporting that ruling have changed.

4.  Where the Member revokes, modifies, or invalidates the advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. Where a Member revokes, modifies, or invalidates advance rulings with retroactive effect, it may only do so where the ruling was based on incomplete, incorrect, false, or misleading information.

5.  An advance ruling issued by a Member shall be binding on that Member in respect of the applicant that sought it. The Member may provide that the advance ruling is binding on the applicant.

6.  Each Member shall publish, at a minimum:

(a)  the requirements for the application for an advance ruling, including the information to be provided and the format;

(b)  the time period by which it will issue an advance ruling; and

(c)  the length of time for which the advance ruling is valid.

7.   Each Member shall provide, upon written request of an applicant, a review of the advance ruling or the decision to revoke, modify, or invalidate the advance ruling.[1]

8.   Each Member shall endeavour to make publicly available any information on advance rulings which it considers to be of significant interest to other interested parties, taking into account the need to protect commercially confidential information.

9.   Definitions and scope:

(a)   An advance ruling is a written decision provided by a Member to the applicant prior to the importation of a good covered by the application that sets forth the treatment that the Member shall provide to the good at the time of importation with regard to:

                        (i)   the good's tariff classification; and

                        (ii)   the origin of the good.[2]

(b)   In addition to the advance rulings defined in subparagraph (a), Members are encouraged to provide advance rulings on:

                        (i)   the appropriate method or criteria, and the application thereof, to be used or determining the customs value under a particular set of facts;

                        (ii)  the applicability of the Member's requirements for relief or exemption from customs duties;

                        (iii)   the application of the Member's requirements for quotas, including   tariff quotas; and

                        (iv)    any additional matters for which a Member considers it appropriate to issue an advance ruling.

(c)        An applicant is an exporter, importer or any person with a justifiable cause or a representative thereof.

(d)        A Member may require that the applicant have legal representation or registration in its territory. To the extent possible, such requirements shall not restrict the categories of persons eligible to apply for advance rulings, with particular consideration for the specific needs of small and medium-sized enterprises. These requirements shall be clear and transparent and not constitute a means of arbitrary or unjustifiable discrimination.

 


[1] Under this paragraph: (a) a review may, either before or after the ruling has been acted upon, be provided by the official, office, or authority that issued the ruling, a higher or independent administrative authority, or a judicial authority; and (b) a Member is not required to provide the applicant with recourse to paragraph 1 of Article 4.

[2] It is understood that an advance ruling on the origin of a good may be an assessment of origin for the purposes of the Agreement on Rules of Origin where the ruling meets the requirements of this Agreement and the Agreement on Rules of Origin. Likewise, an assessment of origin under the Agreement on Rules of Origin may be an advance ruling on the origin of a good for the purposes of this Agreement where the ruling meets the requirements of both agreements. Members are not required to establish separate arrangements under this provision in addition to those established pursuant to the Agreement on Rules of Origin in relation to the assessment of origin provided that the requirements of this Article are fulfilled.

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Article 4

Procedures for appeal or review

4 Procedures for appeal or review

1.         Each Member shall provide that any person to whom customs issues an administrative decision[1] has the right, within its territory, to:

(a)        an administrative appeal to or review by an administrative authority higher than or independent of the official or office that issued the decision;

            and/or

(b)        a judicial appeal or review of the decision.

2.         The legislation of a Member may require that an administrative appeal or review be initiated prior to a judicial appeal or review.

3.         Each Member shall ensure that its procedures for appeal or review are carried out in a non-discriminatory manner.

4.         Each Member shall ensure that, in a case where the decision on appeal or review under subparagraph 1(a) is not given either:

(a)        within set periods as specified in its laws or regulations; or

(b)        without undue delay

the petitioner has the right to either further appeal to or further review by the administrative authority or the judicial authority or any other recourse to the judicial authority.[2]

5.         Each Member shall ensure that the person referred to in paragraph 1 is provided with the reasons for the administrative decision so as to enable such a person to have recourse to procedures for appeal or review where necessary.

6.         Each Member is encouraged to make the provisions of this Article

 


[1] An administrative decision in this Article means a decision with a legal effect that affects the rights and obligations of a specific person in an individual case. It shall be understood that an administrative decision in this Article covers an administrative action within the meaning of Article X of the GATT 1994 or failure to take an administrative action or decision as provided for in a Member's domestic law and legal system. For addressing such failure, Members may maintain an alternative administrative mechanism or judicial recourse to direct the customs authority to promptly issue an administrative decision in place of the right to appeal or review under subparagraph 1(a).

[2] Nothing in this paragraph shall prevent a Member from recognizing administrative silence on appeal or review as a decision in favor of the petitioner in accordance with its laws and regulations.

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Article 5

Other measures to enhance impartiality, non-discrimination and transparency

5.1 Notifications for enhanced controls or inspections

Where a Member adopts or maintains a system of issuing notifications or guidance to its concerned authorities for enhancing the level of controls or inspections at the border in respect of foods, beverages or feedstuffs covered under the notification or guidance for protecting human, animal, or plant life or health within its territory, the following disciplines shall apply to the manner of their issuance, termination or suspension:

(a)        the Member may, as appropriate, issue the notification or guidance based on risk;

(b)        the Member may issue the notification or guidance so that it applies uniformly only to those points of entry where the sanitary and phytosanitary conditions on which the notification or guidance are based apply;

(c)        the Member shall promptly terminate or suspend the notification or guidance when circumstances giving rise to it no longer exist, or if changed circumstances can be addressed in a less trade-restrictive manner; and

(d)        when the Member decides to terminate or  suspend the notification or guidance, it shall, as appropriate, promptly publish the announcement of its termination or suspension in a non-discriminatory and easily accessible manner, or inform the exporting Member or the importer.

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Article 6

Disciplines on fees and charges imposed on or in connection with importation and exportation and penalties

6.1 General Disciplines on Fees and Charges Imposed on or in Connection with Importation and Exportation

1.1.  The provisions of paragraph 1 shall apply to all fees and charges other than import and export duties and other than taxes within the purview of Article III of GATT 1994 imposed by Members on or in connection with the importation or exportation of goods.

1.2.  Information on fees and charges shall be published in accordance with Article 1. This information shall include the fees and charges that will be applied, the reason for such fees and charges, the responsible authority and when and how payment is to be made.

1.3.  An adequate time period shall be accorded between the publication of new or amended fees and charges and their entry into force, except in urgent circumstances. Such fees and charges shall not be applied until information on them has been published.

1.4.  Each Member shall periodically review its fees and charges with a view to reducing their number and diversity, where practicable.

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Article 7

Release and Clearance of Goods

7.1 Pre-arrival Processing

1.1.  Each Member shall adopt or maintain procedures allowing for the submission of import documentation and other required information, including manifests, in order to begin processing prior to the arrival of goods with a view to expediting the release of goods upon arrival.

 1.2.  Members shall, as appropriate, provide for advance lodging of documents in electronic format for pre-arrival processing of such documents.

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Article 8

Border Agency Cooperation

8 Border Agency Cooperation

1.         Each Member shall ensure that its authorities and agencies responsible for border controls and procedures dealing with the importation, exportation, and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade.

2.         Each Member shall, to the extent possible and practicable, cooperate on mutually agreed terms with other Members with whom they share a common border with a view to coordinating procedures at border crossings to facilitate cross-border trade. Such cooperation and coordination may include:

(a)        alignment of working days and hours;

(b)        alignment of procedures and formalities;

(c)        development and sharing of common facilities;

(d)        joint controls;

(e)        establishment of one stop border post control.

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Article 9

Movement of goods intended for import under customs control

9 Movement of goods intended for import under customs control

Each Member shall, to the extent practicable, and provided all regulatory requirements are met, allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared.

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Formalities connected with importation, exportation and transit
Article 10

Formalities connected with importation, exportation and transit

10.1 Formalities and Documentation Requirements

1.1       With a view to minimizing the incidence and complexity of import, export, and transit formalities and of 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.

1.2       The Committee shall develop procedures for the sharing by Members of relevant information and best practices, as appropriate.

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Article 11

Freedom of transit

11 Freedom of transit

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Article 12

Customs Cooperation

12 Customs Cooperation

1          Measures Promoting Compliance and Cooperation

1.1       Members agree on the importance of ensuring that traders are aware of their compliance obligations, encouraging voluntary compliance to allow importers to self-correct without penalty in appropriate circumstances, and applying compliance measures to initiate stronger measures for non-compliant traders.[1]

1.2       Members are encouraged to share information on best practices in managing customs compliance, including through the Committee. Members are encouraged to cooperate in technical guidance or assistance and support for capacity building for the purposes of administering compliance measures and enhancing their effectiveness.

2          Exchange of Information

2.1       Upon request and subject to the provisions of this Article, Members shall exchange the information set out in subparagraphs 6.1(b) and/or (c) for the purpose of verifying an import or export declaration in identified cases where there are reasonable grounds to doubt the truth or accuracy of the declaration.

2.2       Each Member shall notify the Committee of the details of its contact point for the exchange of this information.

3          Verification

A Member shall make a request for information only after it has conducted appropriate verification procedures of an import or export declaration and after it has inspected the available relevant documentation.

4          Request

4.1       The requesting Member shall provide the requested Member with a written request, through paper or electronic means in a mutually agreed official language of the WTO or other mutually agreed language, including:

(a)        the matter at issue including, where appropriate and available, the number identifying the export declaration corresponding to the import declaration in question;

(b)        the purpose for which the requesting Member is seeking the information or documents, along with the names and contact details of the persons to whom the request relates, if known;

(c)        where required by the requested Member, confirmation[2] of the verification where appropriate;

(d)        the specific information or documents requested;

(e)        the identity of the originating office making the request;

(f)         reference to provisions of the requesting Member's domestic law and legal system that govern the collection, protection, use, disclosure, retention, and disposal of confidential information and personal data.

4.2       If the requesting Member is not in a position to comply with any of the subparagraphs of paragraph 4.1, it shall specify this in the request.

5          Protection and Confidentiality

5.1       The requesting Member shall, subject to paragraph 5.2:

(a)        hold all information or documents provided by the requested Member strictly in confidence and grant at least     the same level of such protection and confidentiality as that provided under the domestic law and legal system of the requested Member as described by it under subparagraphs 6.1(b) or (c);

(b)        provide information or documents only to the customs authorities dealing with the matter at issue and use the information or documents solely for the purpose stated in    the request unless the requested Member agrees otherwise in writing;

(c)        not disclose the information or documents without the specific written permission of the requested Member;

(d)                    not use any unverified information or documents from the requested Member as the deciding factor towards alleviating the doubt in any given circumstance;

(e)        respect any case-specific conditions set out by the requested Member regarding retention and disposal of confidential information or documents and personal data; and

(f)         upon request, inform the requested Member of any decisions and actions taken on the matter as a result of the information or documents provided.

5.2       A requesting Member may be unable under its domestic law and legal system to comply with any of the subparagraphs of paragraph 5.1. If so, the requesting Member shall specify this in the request.

5.3       The requested Member shall treat any request and verification information received under paragraph 4 with at least the same level of protection and confidentiality accorded by the requested Member to its own similar information.

6          Provision of Information

6.1       Subject to the provisions of this Article, the requested Member shall promptly:

(a)        respond in writing, through paper or electronic means;

(b)        provide the specific information as set out in the import or export declaration, or the declaration, to the extent it is available, along with a description of the level of protection and confidentiality required of the requesting Member;

(c)        if requested, provide the specific information as set out in the following documents, or the documents, submitted in support of the import or export declaration, to the extent it is available: commercial invoice, packing list, certificate of origin and bill of lading, in the form in which these were filed, whether paper or electronic, along with a description of the level of protection and confidentiality required of the requesting Member;

(d)        confirm that the documents provided are true copies;

(e)        provide the information or otherwise respond to the request, to the extent possible, within 90 days from the date of the request.

6.2      The requested Member may require, under its domestic law and legal system, an assurance prior to the provision of information that the specific information will not be used as evidence in criminal investigations, judicial proceedings, or in non-customs proceedings without the specific written permission of the requested Member. If the requesting Member is not in a position to comply with this requirement, it should specify this to the requested Member.

7         Postponement or Refusal of a Request

7.1      A requested Member may postpone or refuse part or all of a request to provide information, and shall inform the requesting Member of the reasons for doing so, where:

(a)        it would be contrary to the public interest as reflected in the domestic law and legal system of the requested Member;

(b)        its domestic law and legal system prevents the release of the information. In such a case it shall provide the requesting Member with a copy of the relevant, specific reference;

(c)        the provision of the information would impede law enforcement or otherwise interfere with an on-going administrative or judicial investigation, prosecution or proceeding;

(d)        the consent of the importer or exporter is required by its domestic law and legal system that govern the collection, protection, use, disclosure, retention, and disposal of confidential information or personal data and that consent is not given; or 

(e)        the request for information is received after the expiration of the legal requirement of the requested Member for the retention of documents.

7.2       In the circumstances of paragraphs 4.2, 5.2, or 6.2, execution of such a request shall be at the discretion of the requested Member.

8          Reciprocity

If the requesting Member is of the opinion that it would be unable to comply with a similar request if it was made by the requested Member, or if it has not yet implemented this Article, it shall state that fact in its request. Execution of such a request shall be at the discretion of the requested Member.

9          Administrative Burden

9.1       The requesting Member shall take into account the associated resource and cost implications for the requested Member in responding to requests for information. The requesting Member shall consider the proportionality between its fiscal interest in pursuing its request and the efforts to be made by the requested Member in providing the information.

9.2       If a requested Member receives an unmanageable number of requests for information or a request for information of unmanageable scope from one or more requesting Member(s) and is unable to meet such requests within a reasonable time, it may request one or more of the requesting Member(s) to prioritize with a view to agreeing on a practical limit within its resource constraints. In the absence of a mutually-agreed approach, the execution of such requests shall be at the discretion of the requested Member based on the results of its own prioritization.

10        Limitations

A requested Member shall not be required to:

(a)        modify the format of its import or export declarations or procedures;

(b)        call for documents other than those submitted with the import or export declaration as specified in subparagraph 6.1(c);

(c)        initiate enquiries to obtain the information;

(d)        modify the period of retention of such information;

(e)        introduce paper documentation where electronic format has already been introduced;

(f)         translate the information;

(g)        verify the accuracy of the information; or

(h)        provide information that would prejudice the legitimate commercial interests of particular enterprises, public or private.

11        Unauthorized Use or Disclosure

11.1     In the event of any breach of the conditions of use or disclosure of information exchanged under this Article, the requesting Member that received the information shall promptly communicate the details of such unauthorized use or disclosure to the requested Member that provided the information and:

(a)        take necessary measures to remedy the breach;

(b)        take necessary measures to prevent any future breach; and

(c)        notify the requested Member of the measures taken under subparagraphs (a) and (b).

11.2     The requested Member may suspend its obligations to the requesting Member under this Article until the measures set out in paragraph 11.1 have been taken.

12        Bilateral and Regional Agreements

12.1     Nothing in this Article shall prevent a Member from entering into or maintaining a bilateral, plurilateral, or regional agreement for sharing or exchange of customs information and data, including on a secure and rapid basis such as on an automatic basis or in advance of the arrival of the consignment.

12.2     Nothing in this Article shall be construed as altering or affecting a Member’s rights or obligations under such bilateral, plurilateral, or regional agreements, or as governing the exchange of customs information and data under such other agreements.

 


[1] Such activity has the overall objective of lowering the frequency of non-compliance, and consequently reducing the need for exchange of information in pursuit of enforcement.

[2] This may include pertinent information on the verification conducted under paragraph 3. Such information shall be subject to the level of protection and confidentiality specified by the Member conducting the verification.