SESSION 5 – LEGAL ASPECTS OF TRADE FACILITATION Jakarta, April 24-25 2018 Alexandre Larouche-Maltais Senior Trade & Investment Expert Conference Board of Canada Partner: Project Executed by:
2 Outline: Legal aspects of Trade Facilitation 1) TFA Structure • Preamble, Substantive Provisions, S&D Treatment, and Institutional Provisions 2) S&D Treatment • Categorization & Notification and other S&DT Provisions 3) Nature of Obligations • Pyramid of commitments
TFA STRUCTURE
4 What is a treaty? A binding instrument, which means that the contracting parties intended to create legal rights and duties; The 1969 Vienna Convention on the law of treaties: Concluded by states or international organizations with treaty-making power; "an international agreement concluded between States in Governed by international law; written form and governed by international law." In writing. Source: United Nations Treaty collection
5 TFA : From adoption to entry into force Authentification Adoption Expression of consent Entry into force (1) legal scrubbing Ratification and Acceptation by 2/3 Bali Agreement on (2) Adoption of the notification to the Trade Facilitation of WTO Members Protocol of WTO Amendement July - Nov. 2014 22 Feb. 2017 Dec. 2013 In the process 135 Instruments of Acceptance deposited (As of 23 April 2018) Indonesia ratified on 5 December 2017
Art. V: Transit Art. VIII: Fees and Formalities TFA Structure Art. X: Publication and Administration of Trade TFA Objecti ctives ves Section I – Clarify and improve GATT Art. V, Substantive VIII and X Preamble Provisions Recognize LDCs' particular needs Recognize the need for cooperation on trade facilitation and customs compliance Trade Facilitation Agreement Section III – Institutional arrangements Section II – and final Special and provisions Differential Treatment
Preamble
TFA Structure Section I – Preamble Substantive Provisions Art. Scope Art. 1-5 Transparency Fees and Art. 6-10 Trade Formalities Facilitation Art. 11 Transit Agreement Customs Art. 12 Section III – Cooperation Institutional arrangements Section II – and final Special and provisions Differential Treatment
Substantive Provisions 1.1 Publication 1.2 Information available through Internet 1.3 Enquiry Points 1.4 Notification 2.1.1 Opportunity to Comment on New and Amended Rules Transparency 2.1.2 Interval between Publication and Entry into Force 2.2 Consultations Articles (1-5) 3. Advance ruling 4. Procedures for Appeal and Review 5.1 Notifications for enhanced controls or inspections 5.2 Detention 5.3 Test Procedures
Substantive Provisions 6.1 Disciplines on fees and charges… 6.2 Specific disciplines on Fees and Charges for Customs… 6.3 Penalty Disciplines 7.1 Pre-arrival Processing Fees & 7.2 Electronic Payment Formaliti ties 7.3 Separation of Release from Final Determination… 7.4 Risk Management Articles les (6-10) (6 10) 7.5 Post-clearance Audit 7.6 Establishment and Publication of Average Release Times 7.7 Authorized Operators 7.8 Expedited Shipments 7.9 Perishable Goods
Substantive Provisions 8. Border Agency Cooperation 9. Movement of Goods intended for import under customs control 10.1 Review of Formalities and Documentation Requirements 10.2 Acceptance of Copies Fees & 10.3 Use of International Standards Formaliti ties 10.4 Single Window 10.5 Pre-shipment Inspections Articles les 10.6 Use of Customs Brokers (6-10) (6 10) 10.7 Common Border Procedures and Uniform Documentation Requirements 10.8 Rejected Goods 10.9.1 Temporary Admission 10.9.2 Inward and Outward Processing
Substantive Provisions 11. Freedom of Transit Other provisions 12. Customs Cooperation
TFA Structure Definition Special provisions giving developing countries and LDCs Section I – special rights ts and Preamble Substantive which give developed Provisions countries the possibility to treat developing countries more favourably bly than Trade other WTO Members. Facilitation Agreement Strengthened Section III – S&DT and Institutional + effective and arrangements Section II – operational and final Special and provisions Differential Treatment
Special and Differential Treatment 13. General Principles 14. Categories of Provisions 15. Notification and Implementation of Category A 16. Notification of Definitive Dates for Implementation of S&D Treatment Category A and B 17. Early Warning Mechanism Articles 18. Implementation of Category B and C (13-22) 19. Shifting between Categories B and C 20. Grace Period 21. Provision of Assistance and Support for Capacity Building 22. Information on ASCB to be Submitted to the Committee
TFA Structure Institutions Section I – Preamble Substantive Art. 23.1 WTO Provisions Multilateral Trade Facilitation Committee Trade Art. 23.2 National Facilitation National Trade Facilitation Agreement Committee Section III – Institutional arrangements Section II – and final Special and provisions Differential Treatment
SPECIAL AND DIFFERENTIAL TREATMENT
Special and Differential Treatment Deve velopin ing g and LDCs s having ng favour urab able le treatm tment ent as s compared red to Developed Countries has been an ‘ integral al part ’ of WTO S&DT T in WTO Agreements ments S&DT T in TFA Extra Longer implementation time Flexibility • • Self-Categorization periods Measures to increase trading • • Timing of transition periods to be opportunities decided by individual country Safeguard of trade interests • • Category C commitments Capacity building support to implementation linked with • acquisition of implementation carry out WTO work, handle capacity disputes, and implement technical standards, etc. • Through provision of TA and CB including the financial assistance
Special and Differential Treatment Section I – Preamble Substantive Provisions Cat. Implementation Implementation upon Trade A entry into force Facilitation Agreement B Transition period Section III – Transition period + Institutional Categorization NOT C financial and/or technical arrangements Section II – possible ! and final assistance Special and provisions Differential Treatment
Notifications of Category A Developing countries LDCs • • Implement upon entry Notify to the Committee into force up to one year after entry into force • Category A commitments • will then be made an And thereby be made an integral part of the integral part of the Agreement Agreement Indonesia notified Cat. A measures on 4 August 2018
Status of TFA Implementation in Indonesia
Notifications of Category A SHARE OF CAT. A BASED ON % OF ALL NOTIFIABLE ITEMS 86.9% 49.9% 46.3% 26.1% 5.5% Indonesia Africa Asia & the Pacific Europe World Source: TFAdatabase.org
Timeline for developing countries’ notifications 22 Feb 2017 22 Feb 2018 22 Aug. 2019 TFA + 1 year TFA + 2.5 years TFA enters into force • Provide definitive dates • Provide definitive • Notify categories A, B and/or C for category B designations implementation dates • Indicative date for B & C • Provide information on for category C designations • Inform of progress in TACB for • TACB requirements for C arrangements with Donors on TACB for category C category C I NDONESIA IS LAGGING BEHIND !
Notifications of Category B&C and “Not yet notified” BASED ON % OF ALL NOTIFIABLE ITEMS 94.5% B 49.7% C NYN 30.1% 20.9% 15.1% 14.2% 13.8% 13.6% 10.4% 10.0% 8.8% 4.3% 0.0% 0.0% 0.0% Indonesia Africa Asia & the Pacific Europe World Source: TFAdatabase.org
Early Warning Mechanism If a a M Member ber experi perience nces difficul culti ties implementi menting ng by t the defini niti tive ve dates it e esta tabli blishe hed, it should ld notify y the Committee: tee: • Developing Countries: no later than 120 days before the expiration date Notify fy new w dates and indicate te reasons ns for delay Automa mati tic c exte tens nsion: on: if it is the first request and: • Extension requested less than 1.5 years (developing) Subseq eque uent nt exte tens nsion ons su submitted tted to the e Committee tee which ch will give sympatheti thetic c consider derati ation on
25 Other S&DT Measures Shifting between Cat. B and C Dispute Settlement – Grace Period Devel elop oping g members rs and LDC would • For Cat A measures have option on to shift t between een • Developing: 2y after entry into force categories ories • LDCs: 6y after entry into force • Through notification to Committee • Shiftin ting g from B t to C w would contain • For Cat B&C measures informa rmati tion on on • 8 years after implementation of the provision • Technical Assistance for LDCs only • Capacity building and • Financial needs • Opportunity for consultation during the grace period Extens ension on in t time frame, if n needed ded, through gh Early waning Mechanism sm • For discussing issues relating to implementation
NATURE OF OBLIGATIONS
1 Obligation Language of the TFA provides for 4 different Conditional 2 levels of Obligation commitments 3 Recommendation 4 Possibility or Option
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