Article 10.1: Formalities and Documentation Requirements

Members shall periodically review formalities and documentation requirements to minimize their incidence, complexity, time, and cost


What is covered?

Core obligation

With a view to minimizing complexity of laws and procedures, each Member is required to review formalities and documentation requirements prescribed in connection with the release of imported, exported and transited goods. It should be jointly implemented by customs and other relevant border regulatory agencies.
The nature of this discipline is compulsory, and thus each Member is obliged to review such formalities and documentation requirements and, based on the results of the review, ensure that such formalities and documentation requirements are consistent with the criteria listed in the provision.
Consequently, the WTO Committee on Trade Facilitation shall develop procedures for sharing relevant information and best practices with other Members. The use of “shall” in this context refers to an obligation to implement in line with the legal text.

Member States are required to periodically review their formalities and documentary requirements for import, export and transit with a view of introducing better and less burdensome practices. More specifically, the periodic reviews should aim at ensuring that measures are geared towards the rapid release and clearance of goods and to reduce compliance costs and time for traders.
In addition, Member States are required to use the least trade-restrictive measures available and to eliminate those measures that are no longer needed. That is, if the circumstances giving rise to their introduction no longer exist or if they can be addressed in a less trade-restrictive manner. This is a particularly relevant consideration when conducting periodic reviews.

Scope

Pursuant to Article 10.1 of the Trade Facilitation Agreement (TFA), WTO Members base their review upon legitimate national policy objectives, changed circumstances, relevant new information, business practices (domestic and international), availability of techniques and technology and international best practices. This review shall be conducted alongside inputs from interested parties, namely in consultation with the business sector and traders.
With the intention of reducing time and costs of cross-border operations, WTO Members’ reviews should aim at ensuring that trade documentation and formality requirements are:

  • Minimized in incidence and complexity of operations;
  • Decreased and simplified;
  • Adopted and applied for quick release of goods;
  • Applied in a manner aimed at reducing time and cost of compliance for traders;
  • The least trade restrictive measure chosen; and
  • Not maintained if no longer required.

Costs

The administrative changes required for the simplification and standardisation of trade documents and formalities and the introduction of new aligned formats may involve costs for initial implementation and subsequent reviews. These would likely be related to the human capital necessary for carrying out analysis and studies on some existing procedures and related documents.

Further expenses could include professional expertise needed to produce a national set of aligned documents, any computer software needed for this process, and training of customs officials as well as users of aligned trade documents.

After the initial expenditure, additional spending would be limited and offset by the expected benefits. The Trade Documents Toolkit being developed by the UN Regional Commissions offers strong potential to be a valuable resource to provide technical assistance to trade facilitators .

What is not covered?

Article 10.1 leaves some other relevant implementation considerations to the discretion of the Member States. For example, the frequency of formalities and revisions requirements is not explicitly mentioned which means that each WTO Member enjoys the discretion on the frequency and time frame for conducting reviews.
The TFA remains silent on the institutions or agencies that should be in charge of the review, and the means and mechanisms for completing the process. However, the NTFC, in conjunction with appropriate governmental agencies, is expected to carry out the necessary assessment and monitor the accuracy and authenticity of the process.

(*) See UN-ECE’s Trade Facilitation Implementation Guide

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