Proposal for the FTAA Chapter on Customs Procedures
- GENERAL PRINCIPLES AND OBLIGATIONS
These would be fundamental principles which would govern the activities of customs administrations in fulfilling the FTAA objective of promoting growth and prosperity in the Hemisphere by facilitating trade. We suggest that the wording could reflect the following aspects:
- Transparency and Dissemination
- develop specific procedures and mechanisms to ensure clarity and predictability as to national requirements and procedures that affect international business operations and the timely clearance of goods
- ensure the availability of current and relevant information to the trading community on customs procedures and requirements in a prompt and easily accessible manner
- provide adequate and fair appeal procedures for redress of customs decisions
Facilitation and Simplification of Customs Procedures
- develop simplified procedures associated with the timely movement and clearance of goods and services to reduce the administration and cost burdens placed on the international trading community while maintaining appropriate enforcement capabilities
- ensure that customs procedures be clear and precise and only require the necessary information for the efficient performance of customs functions
- develop and adopt common customs procedures and international trade requirements, taking into account the implementation of existing international trade instruments and standards as a basis for their development
Effectiveness and Efficiency
- improve efficiency through the development and implementation of appropriate strategic plans with concrete organizational priorities and objectives
- develop methodologies (benchmarks) for periodically measuring progress to fulfilling these objectives
- implement mechanisms aimed at continuously modernizing customs procedures and practices
- expand the utilization of modern automated systems for clearance procedures and enforcement activities such as contraband detection and to improve risk management techniques
- develop automated customs systems that are compatible throughout the Americas to facilitate information exchange between administrations and the trading community
- provide a foundation for increased cooperation, technical assistance and exchanges of best practices
- foster greater cooperation among the customs and other border authorities (e.g., police agencies, border patrol, agricultural inspectors) on information exchange and data improvement
- formalize and implement established sets of procedures for the recruitment, management and training of personnel to ensure a high standard of service to the international trading community and establish a system of internal staff controls, including a regime of sanctions against employees proven to have compromised integrity standards
- consider areas for exchanges and modernization aimed at furthering the level of integrity associated with the international customs and trade environment (i.e., WCO Arusha Declaration)
- develop a Code of Conduct for each administration
Combating fraud and other customs-related illicit activities
- adopt mechanisms to detect and combat fraud and other illicit customs activities
- provide enforcement arrangements and penalty regimes for non-compliance which are expeditious and effective
- mechanisms to share information and data among administrations to improve enforcement
OTHER CUSTOMS PROCEDURES RELATED TO THE ENTRY OF GOODS
At this stage, the following elements are suggested for consideration. Others may be added based on ongoing discussions and policy decisions taken on other issues:
Rulings/Determinations and Advance Rulings on primary trade components such as classification, valuation, origin, tariff rate quotas, etc.
Review and appeal
Customs documentation - harmonization of data requirements
CUSTOMS PROCEDURES RELATED TO THE ADMINISTRATION OF THE ORIGIN REGIME
- DECLARATION AND CERTIFICATION
1.1 Declaration and Certification
A provision that establishes an invoice declaration for the purpose of an exporter certifying that a good being exported qualifies as an originating good (could include, but not necessarily be limited to the following):
- the invoice declaration to be completed and signed by the exporter of a good, in a official language of any of the Parties, on the basis of the exporter's knowledge of whether the good qualifies as an originating good, or its reasonable reliance on the producer's written representation that the good qualifies as an originating good.
- when required, a blanket invoice declaration prepared by an exporter could be applicable to multiple importations of identical goods that occur within a period specified by the exporter.
- an invoice declaration may not be required for low value commercial shipments, non-commercial importations or other waivers as may be established.
1.2 Obligations relating to importations
A provision that specifies:
- importer declaration, based on a valid invoice declaration, that the good qualifies as an originating good,
- importer possession of the invoice declaration at the time importer declaration is made,
- importer provision to importing Customs administration, upon request, of copy of the invoice declaration and shipping documentation for the good, and
- importer provision of corrected declaration and payment of any duties owing where the importer has reason to believe that a invoice declaration on which a declaration was based contains information that is not correct.
- Denial of preferential tariff treatment if the importer fails to comply with any requirement under this Chapter.
- Refund of duties paid where claim for preferential tariff treatment was made after the date of importation.
1.3 Obligations relating to exportations
A provision that specifies:
- exporter provision of a copy of the invoice declaration to its customs administration on request,
- written notification by exporter to recipients of invoice declaration of any change that could affect the accuracy or validity of the declaration, and
- compliance failure by exporter of any requirement of this Chapter subject to such measures as the circumstances may warrant.
1.4 Records and documents keeping requirements
A provision whereby:
- an exporter that completes and signs an invoice declaration to maintain for a specified period of time, all records relating to the origin of a good for which preferential tariff treatment was claimed, and
- an importer claiming preferential tariff treatment for an imported good to maintain for a specified period of time such documentation, including a copy of the invoice declaration, as may be required relating to the importation of the good.
1.5 Certifying entities
1.6 Format of the certificate of origin
THE ADMINISTRATION OF RULES OF ORIGIN
2.1 Uniform and consistent interpretation and application
2.2 Incorporation of modifications
2.3 Competent authorities
2.4 Advance rulings
A provision that provides for the issuance of written advance rulings as requested by an importer, exporter or producer (could include, but not necessarily be limited to, the following):
- based on the facts and information presented.
- concerning whether the good qualifies as an originating good.
- procedures for the issuance of advance rulings.
- ability of the customs administration to request supplemental information from the person requesting the ruling.
- issuance of ruling within a specified period of time.
- prospective application of advance ruling.
- modification or revocation of advance ruling:
- if based on an error,
- if change in the material facts or circumstances on which the ruling is based,
- to conform with a modification of the Rules of Origin Chapter, or
- to conform with a judicial decision or a change in domestic law.
- failure by advance ruling recipient to comply with the terms and conditions of the ruling subject to such measures as the circumstances may warrant.
2.5 Review and Appeal
A provision whereby the same rights of review and appeal of determinations of origin and advance rulings as given to importers shall be granted to any person:
- who completes and signs an invoice declaration for a good that has been the subject of a determination of origin, or
- who has received an advance ruling.
- The rights include access to:
- at least one level of administrative review independent of the official or office responsible for the determination under review, and
- judicial or quasi-judicial review of the determination or decision taken at the final level of administrative review.
VERIFICATION AND CONTROL OF ORIGIN
3.1 Procedures for verifying origin
A provision whereby, for purposes of determining whether an imported good qualifies as an originating good, the customs administration of the importing Party may conduct a verification by:
- written questionnaires to an exporter or a producer to obtain the information on which an invoice declaration was based,
- visits to the premises of an exporter or a producer to review the records and to observe the facilities used in the production of the good, or
- other agreed procedures.
Verification procedures could include, but not necessarily be limited to:
- prior written notification of verification visit to the exporter or producer whose premises are to be visited.
- denial/suspension of preferential tariff treatment if no cooperation/consent from exporter or a producer of good subject to the origin verification.
- exporter or producer of good subject to the verification to receive a written determination of whether the good qualifies as an originating good.
- pattern of non-compliance by an exporter or a producer may lead to denial of preferential tariff treatment to identical goods exported or produced by such person until that person establishes compliance with the Rules of Origin.
- a negative determination for a good due to a difference on tariff classification or value applied to the material(s):
- not to become effective until both the importer of the good and the person that completed the invoice declaration of the determination are notified in writing,
- not to be applied to an importation made before the effective date of the determination where an advance ruling or consistent treatment for the material(s) was given prior to notification of the determination, and
- the effective date of a negative determination to be postponed for a certain period of time where it is shown that the importer had relied in good faith on inaccurate rulings.
A provision whereby:
- the confidentiality of confidential business information collected for this Chapter to be maintained in accordance with the law and be protected from disclosure that could prejudice the competitive position of the persons providing the information, and
- the confidential business information collected for this Chapter may only be disclosed to those authorities responsible for the administration and enforcement of determinations of origin and of customs and revenue matters.
- Cooperate fully in the verification of invoice declarations and in the enforcement of customs-related laws.
- Cooperate in developing verification standards and a framework to ensure that determinations for imported goods are applied consistently.
- Exchange information to assist in the tariff classification, valuation and determination of origin of imported and exported goods.
- Give notification of any determination, measure or ruling that:
- establishes an administrative policy or principle that is likely to influence future determinations of origin, or
- changes the scope of an existing administrative policy, principle, precedential decision, regulation or rule of general application regarding determinations of origin.
- Establish mechanisms or an institutional arrangement to ensure uniform interpretation and administration of the Chapter.
- Maintain measures imposing criminal, civil or administrative penalties for violations of its laws and regulations relating to this Chapter.
Establish a Customs Procedures Group:
- a mechanism to establish common understanding and approach for customs procedures, requirements and regulations and their continuous improvement.
- interpretation of customs related articles in the agreement to manage ongoing issues and concerns that arise from the application of the agreement in technical customs areas.
- training and technical assistance.