Article 7.7: Trade Facilitation Measures for Authorized Operators

Operators who meet specified criteria to qualify as authorized operators are entitled to additional trade facilitation measures

What is covered?

Core obligation

Members shall provide additional trade facilitation measures related to import, export or transit formalities and procedures to operators – including traders and providers of logistics services, such as customs agents and freight forwarders – who qualify as “authorized operators” according to a set of specified criteria.
WTO Members who offer these additional trade facilitation measures through customs procedures generally available to all operators will not be required to set up a separate scheme.

Selection criteria

Prior to the granting of the status of “authorized operator”, Members countries are required to ensure that the beneficiaries meet some specific criteria, which must be associated with the compliance – or risk of non-compliance – with the requirements set in a Member’s law, regulation or procedure.

Members shall publish these criteria for selection of authorized operators, which shall not be conceived or applied in a manner to create unjustifiable discrimination between operators where the same conditions prevail, or to restrict the participation of small and medium enterprises in the scheme.

Though for transparency it is binding to publish the criteria, Members may introduce elements in the criteria to select authorized operators which may include the following conditions, as provided in paragraph 7.2:

  • Appropriate record of compliance with customs and other related laws and regulations;
  • Record management system for necessary internal controls;
  • Financial solvency and where necessary provision of sufficient security and guarantees;
  • Supply chain security.

In meeting these criteria, operators who have been granted the “authorized” status become “trusted”, as they possess a track record of full compliance which suggests that these operators will continue to adhere to their compliant behavior, therefore constituting a low-risk factor for customs and other border control authorities.

Additional facilitation benefits

Paragraph 7.2 of Article 7 clarifies that WTO Members are required to ensure that the additional trade facilitation measures advantageously provided to the authorized operators shall include at least three of the following seven measures:

  • Reduced documentary and data requirements as appropriate;
  • Fewer physical inspections and examinations as appropriate;
  • Rapid release time as appropriate
  • Deferred payment of duties, taxes, fees and charges;
  • Use of comprehensive or reduced guarantees;
  • A single goods declaration of all imports or exports in a given period, and
  • Clearance of goods at the premises of the authorized operator or another place authorized by customs.

This means that, once an operator meets the criteria to become authorized, the additional trade facilitation measures provided to him must include at least three of the above-mentioned beneficial measures, but nothing in this article precludes the possibility of a Member country to accord even more than three measures to authorize d operators, but without any discrimination.
Use of international standards
Contrary to the mandatory nature of the other provisions contained in Article 7.7, paragraph 7.4 encourages WTO Members to develop authorized operator schemes on the basis of international standards, except when such standards are inappropriate or ineffective means to fulfill obligations in Article 7 of the Agreement. The recourse to international standards, indeed, would ensure a consistent and harmonized approach in the development of operators’ schemes, and would enable Members to achieve mutual recognition based on common understandings.

As a best-endeavor measure, Member countries are only encouraged to implement this provision, thus enjoying discretion in the decision whether or not to have recourse to international standards.

Mutual recognition

Paragraph 7.5 contains an obligation that Members shall agree to negotiate, when approached for mutual recognition of authorized operators Schemes, to enhance the effect of trade facilitation character of the schemes.

Previously, the WCO SAFE Framework encouraged customs administrations to agree on the mutual recognition of authorized operators programme as part of the customs-to-customs network cooperation to strengthen and facilitate security of international supply chains and to avoid duplication of security controls and reporting requirements. However, in light of its non-binding nature, the SAFE Framework represented only a model for administrations to follow – on a voluntary basis – when envisaging measures and mechanisms to secure and ease the movement of goods. With the entry into force of the TFA, WTO Members are instead required to arrange mechanisms that allow recognizing the compatibility of another Member’s customs administrations’ authorized operator scheme.

Exchange of information

Finally, WTO members are obliged to share the full details of the authorized operator schemes in force with the WTO Committee on Trade Facilitation to ensure effective coordination and transparency.

What is not covered?

The Measure does not restrict a Member’s discretion to select authorized operators solely on the basis of the published criteria. Members are hence free to select authorized operators according to their unique national capacity and strategic priorities. This may entail developing the scheme with a greater focus on operators in specific sectors.

Moreover, the Measure does not provide specific details on the breadth of procedural simplification that should be achieved by the Members, leaving to their discretion, for example, to decide to what extent customs documentation is to be reduced.

Similarly, details addressing the application process enabling an operator to apply for such treatment – if he is selected based on the results of the risk-based automated system or through submission of a formal procedure – are not determined in the Article. There is also no stipulation or guidance on the fee structure for the provision of the service.

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