Article 7.3: Separation of Release from Final Determination of Customs Duties, Taxes, Fees and Charges

Members must provide traders with an opportunity for the release of goods prior to final determination of the Customs debt if a surety is deposited.

What is covered?

Core obligation

In case all the regularity requirements are completed the Measure binds WTO Members to establish or maintain a mechanism whereby the goods can be released prior to the final determination of the customs duties, taxes, fees and charges.

Conditional release

To release goods prior to the final determination of customs duties, fees and charges, Members may prescribe the following conditions for such dispensation:

  1. The payment of customs duties and other dues, determined prior to the arrival of goods or at the time of the arrival of the goods, and a guarantee for any amount not yet determined; or
  2. A guarantee in the form of surety, deposit or other instruments, as provided in their laws and regulations. This part of the provision does not require payment of any part of the duties of customs or any other taxes, fees, or charges.

The use of the verb “may” indicates that, if deemed necessary, Members enjoy the discretion to make the prior release of goods conditional upon the two requirements listed above – although not mandatorily obliged to do it.

Scope of the guarantee

In case a guarantee is requested, the Measure requires Members to ascertain that the amount of such guarantee must not be greater than the amount that would be required to ensure the payment of the dues for the goods covered by the guarantee.

Once customs duties, taxes, fees and charges have been finally determined and paid – thus making the guarantee no longer necessary – the Measure requires Members to promptly discharge such guarantee.

Lastly, concerning guarantee disciplines, the Measure clarifies that Members may also require a guarantee for penalties and fines which are imposed when an offence has been discovered. Again, the use of the verb “may” opens to the discretion of Members to require the payment of a guarantee following the detection of an offence which requires the imposition of a monetary penalty.

The right to examine, detain, seize or confiscate goods

The last provision of Article 7.3 clarifies that the TFA does not touch upon Members’ rights to examine, detain, confiscate or seize goods in a manner which is not inconsistent with WTO obligations. Therefore, Members continue to enjoy their legitimate rights to examine or confiscate goods, if this is done compatibly with WTO commitments.

What is not covered?

Similar to all WTO agreements, theTFA does not create binding obligations on the procedure. The nature of guarantee has been defined to cover a long range of instruments .Besides this, no time limits have been prescribed ,e.g. to finalize assessment of the final payable amount Procedural details have been left to the relevant authorities of the Members.

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