WORLD TRADE
ORGANIZATIONG/C/W/407
29 July 2002
(02-4199)
Council for Trade in Goods Original:  English
TRADE FACILITATION ISSUES IN THE DOHA MINISTERIAL DECLARATION
REVIEW OF THE GATT ARTICLES
ARTICLE VIII
Communication from the World Customs Organization
The following communication, dated 25 July 2002, has been received from the World
Customs Organization.
_______________
I. INTRODUCTION
1. The WTO Doha Ministerial Declaration identified four areas related to Customs in its work
programme: Rules of Origin, Customs Valuation, Trade Facilitation and Capacity Building.  Of these
four topics, trade facilitation is a new agenda item for the WTO and its Council for Trade in Goods
(CTG) has started to review relevant aspects of Articles V, VIII and X of the GATT 1994.  The CTGhas also been tasked to identify the trade facilitation needs and priorities of Members.  We welcome
this undertaking by the WTO as this is an area that the WCO has been committing resources to and
supporting for the past 50 years.
2. As stated in our early submission on GATT Arti cle X (G/C/W/392), we see our role as being
complementary to the WTO in developing instruments to support the WTO rules.  All the legal
provisions and the principles in the WCO instrume nts are compatible with and complimentary to the
three GATT Articles referred to in the context of trade facilitation in the Doha Ministerial
Declaration.  The GATT Articles set out the high principles for formalities and procedures for
movement of goods, transit of goods and publication and administration of trade regulations.  On the
other hand, the instruments of the WCO, includin g the Kyoto Convention through its legal provisions
and implementation guidelines, provide the basis and practical guidance and information for theimplementation of these high principles.
3. The work programme of the Doha Ministerial Declaration on trade facilitation will be
beneficial for both the trade and Customs community.  With regard to Customs in particular, this can
provide for political will and commitment which is indispensable in pursuing Customs reform and thesimplification of procedures, thus ensuring predictability within the trade system and providing a
basis for good governance.   It will also encourage support and compliance from the trade community
for efficient and effective Customs operations, as the modern Customs approach is based on the
partnership with the trade community and other relevant sectors.  Moreover, as Customs is only a part
of the global trade chain, the WTO work will enable trade facilitation issues that are beyond Customscompetence to be properly addressed, as well.  The scope would include co-operation with other
border agencies, especially through joint intervention, which is very important to secure the smooth
flow of goods.  Finally, we expect that the work programme will result in appropriate resources beingG/C/W/407
Page 2
realigned for capacity building that could promote the Customs reform and modernization, which is
desired by both trade and Customs.
4. The WCO renews its pledge to contribute to the WTO process with its expertise in Customs
and is committed to co-operating with relevant stakeholders to work towards the common goal of
safeguarding revenue, protecting society, ensuring security, and facilitating trade.  Article VIII is
particularly relevant to the role that Customs can play in this regard.
II. ARTICLE VIII OF THE GATT 1994 AS REFLECTED IN WCO INSTRUMENTS
5. Article VIII of the GATT 1994 refers to fees and formalities connected with importation and
exportation. At the outset the WCO recognizes that this Article has a wide scope and that import and
export formalities and fees and charges would also relate to authorities and agencies other thanCustoms who are concerned with the importation and exportation of goods.
6. This paper clarifies, in so far as it relates to Customs, how the requirements of Article VIII of
GATT 1994, on fees and charges and procedures and formalities for importation and exportation and
penalties for minor breaches of Customs requirements, are dealt with in the Revised KyotoConvention and other WCO instruments.
7. The single WCO instrument which covers all the Customs procedures and formalities related
to importation and exportation of goods as well as other procedures is the International Convention on
the Simplification and Harmonization of Customs procedures (Kyoto Convention).  This Conventionwas substantially amended and the Revised Kyoto Convention adopted by the WCO in 1999 contains
international best practices and standards that provide predictability and efficiency that modern trade
and commerce requires.
8. The Revised Kyoto Convention and its provisions and other WCO instruments are completely
aligned with and respect the requirements that are set out in Article VIII (1) (a & c) of GATT 1994 in
so far as they can be addressed by the Customs.  These relate to the fees that are to be charged and the
procedures and formalities to be applied to the goods that are imported or exported.
9. Article VIII (2) of GATT 1994 requires a Contracting Party at the request of another
contracting party or by Contracting Parties to review  its operations in the light of the provisions of
that Article.  The Revised Kyoto Convention in Article 6 addresses this review mechanism through aManagement Committee consisting of Contracting Parties who consider the implementation of the
Convention, any measures to secure uniformity in  the interpretation and application and amendments
to the Convention.  Further Article 14 of the Revised Kyoto Convention provides for dispute
settlement on the interpretation and application of the Convention.
10. Article VIII (3) requires that “no contracting party shall impose substantial penalties for
minor breaches of customs regulations or procedural requirements.  In particular, no penalty in respect
of any omission or mistake in customs documentation which is easily rectifiable and obviously made
without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a
warning.”  The Revised Kyoto Convention contains a specific Standard covering this requirement ofArticle VIII and is dealt with later in this paper.
11. However, as is already noted earlier, Article VIII has a wider scope than Customs.  This is
demonstrated and amplified in the requirements set out in Article VIII (4) which extends the
provisions of Article VIII to the fees, charges, formalities and requirements imposed by governmentalauthorities beyond Customs , including those listed at (a) to (h) of that Article.G/C/W/407
Page 3
III. ARTICLE VIII AS SUPPORTE D AND ENHANCED BY THE PROVISIONS OF THE
REVISED KYOTO CONVENTION AND OTHER WCO INSTRUMENTS:
A. FEES AND CHARGES IN CONNECTION WITH IMPORTATION AND EXPORTATION ,
B. PROCEDURES AND FORMALITIES FOR IMPORTATION AND EXPORTATION ;
C. REVIEW OF LAWS AND REGULATIONS BY CONTRACTING PARTIES ; AND
D. PENALTIES FOR MINOR BREACHES OF CUSTOMS REGULATIONS AND PROCEDURAL
REQUIREMENT
A. ARTICLE VIII (1) ( A) - F EES AND CHARGES TO BE LIMITED TO THE APPROXIMATE COST OF
SERVICES RENDERED
(i) The issue of fees and charges being limited to the approximate cost of service rendered in the
context of the normal functions to be carried out by the Customs has not been specificallyaddressed in either the Revised Kyoto Convention or other WCO instruments.  This issue was
discussed and debated during the revision of the Kyoto Convention and it was found that
there were divergent practices across Customs administrations.  No single Standard could be
agreed on this issue that could be addressed in a legal provision of the Convention.  In view of
this, the Revised Kyoto Convention only addresses the fees and charges of services renderedto the functions carried out by the Customs outside designated hours of business and away
from Customs offices.
(ii) The General Annex which contains the core principles states in Chapter 3 – Clearance and
other Customs formalities, in Standard 3.2  the following :
“Standard 3.2
At the request of the person concerned and for reasons deemed valid by the Customs, the
latter shall, subject to the availability of resources, perform the functions laid down for thepurposes of a Customs procedure and practice ou tside the designated hours of business or
away from Customs offices.  Any expenses chargeable by the Customs shall be limited to
the approximate cost of the services rendered.”
(iii) Several specific procedures also have the same requirement specified in the Standard 3.2.  As
an example, when dealing with the formalities to be complied with prior to the lodgement of
the goods declaration which is covered by Specific Annex A, Chapter 1, Standard 13 relatingto charges makes this requirement clear and is reproduced below for information.
Specific Annex A – Arrival of goods in a Customs territory
Chapter 1 - Formalities prior to the lodgement of the Goods declaration
Charges
13. Standard
Any expenses chargeable by the Customs in connection with :
- accomplishment of Customs formalities prior to the lodgement of the Goods
declaration outside the designated hours of business of the Customs;
- unloading goods at a place other than the one approved for unloading; or
- unloading goods outside the designat ed hours of business of the Customs,
shall be limited to the approximate cost of the services rendered.G/C/W/407
Page 4
B. ARTICLE VIII (1) ( C) - R EQUIREMENTS FOR MINIMIZING THE INCIDENCE AND COMPLEXITY OF
IMPORT AND EXPORT FORMALITIES AND FOR DECREASING AND SIMPLIFYING IMPORT AND
EXPORT DOCUMENTATION
The requirements of Article VIII (1) (c) are addressed mainly by  the Revised Kyoto
Convention  as well as other WCO initiatives and instruments .
The General Annex of the Revised Kyoto Convention addresses the core procedural
requirements for documentation and release of goods and the simplification of these procedures.
Simplification of documentary requirements and procedures while exercising effective controls can be
enhanced when adequate security is provided to Customs and through the application of risk
management and information technology.
The relevant procedures and principles in the General Annex of the Revised Kyoto
Convention  described below enhance and supplement the requirements of Article VIII (1) (c)
(i) Formalities at Customs offices lo cated at a common border crossing
At most land borders, the Customs of neighbouring countries have a presence to ensure
compliance with import and export requirements.  Three Standards (3.3, 3.4 and 3.5 of the
General Annex) of the Revised Kyoto Convention provide for simplifying the formalities for
movement of goods at common border crossings so as to ensure that undue delays are
avoided.  Under these Standards it is required that:
- Where Customs offices are located at a common border crossing the Customs
administrations concerned are required to correlate the business hours and
competence of those offices
- Wherever possible the Customs administrations shall operate joint controls at
common border crossings.
- Where the Customs intend to establish a new Customs office or to convert an existing
one at a common border crossing, whenever possible they are required to co-operate
with the neighbouring Customs to establish a joint (juxtaposed) Customs office to
facilitate joint controls.
(ii) Standardization and simplification of the Goods declaration and supporting documents
The Goods entering or leaving a Customs territory have to be declared to the Customs for
further processing to ensure compliance with national laws.  Thus the Goods declaration is the
key document and the Revised Kyoto Convention has several Standards in Chapter 3 of the
General Annex concerning the clearance and other Customs formalities.  The requirements
have been simplified and have to also follow certain international standards.
The following are the provisions and requirements:
- the contents of Goods declaration have to be set out in national legislation ( Standard
3.11);
- the format of the Goods declaration has to conform to the UN Layout key in the paper
format and for automated clearance processes the format has to be based on
international standards for electronic information exchange.  These international
standards for electronic exchange of information are set out in the Recommendations
of the WCO which are updated regularly to be current with the requirements as
established in ISO codes and UNECE recommendations (Standard 3.11);G/C/W/407
Page 5
- Customs are required to limit the data in the Goods declaration to only such
particulars as deemed necessary for assessment and collection of duties and taxes,
compilation of statistics and the application of Customs law  (Standard 3.12 );
- Acceptance of provisional or incomplete Goods declaration and the tariff treatment to
be applied to such declarations to provide for quick release of goods ( Standards 3.13
and 3.14);
- Abolition of excessive documentation by limiting the number of copies of the Goods
declaration to be submitted and limiting the supporting documents for a Goods
declaration (Standards 3.15 and 3.16) ;
- Permitting the subsequent submission of supporting documents, including submission
by electronic means, to enable quick release of goods and not to require the
translation of the particulars of supporting documents except when necessary(Standards 3.17, 3.18 and 3.19) ; and
- Providing for the lodging and registering or  checking of Goods prior to the arrival of
goods to expedite the clearance of goods, permitting amendment and withdrawal of a
Goods declaration already lodged under certain circumstances (Standards 3.25, 3.27,
3.28, 3.29).
All of the above requirements are specified in the General Annex of the Revised Kyoto
Convention which requires that all Contracting Parties shall comply with these without
exception.  They are aimed at harmonizing, simplifying and reducing data requirements and
the formalities to be applied to a minimum so as to reduce the time taken for processing,
release and clearance of goods.
(iii) Procedures for authorized persons
Principles
The Revised Kyoto Convention provides for simplified release and clearance procedures for
traders who meet criteria specified by the Customs, have a record of compliance with
Customs requirements and a satisfactory system of managing their commercial records.
Compliance with Customs requirements includes all the elements associated with accurate
and correct declarations, adequate security is provided to meet obligations, timely duty and
tax payments, proper methods for tariff classification and country of origin claims and no
history of significant recurring errors or violations.
Through implementation and use of risk management programme, Customs can determine
which goods and which traders are generally in compliance with Customs law and thus pose a
low risk for control purposes.  These traders can then be approved for special or “fast track”
procedures that require little intervention by Customs for the release and clearance of theirgoods.  Such traders are referred to as “authorized persons” for the purposes of the Revised
Kyoto Convention.  This provision is especially  appropriate for traders who regularly import
or export goods.
The special procedures enumerated in Transitional Standard 3.32 of the Revised Kyoto
Convention that are granted to authorized persons will allow :
- release of the goods on the provision of the minimum information necessary to
identify the goods and permit the subs equent completion of the final Goods
declaration;
- clearance of the goods at the declarant's premises or another place authorized by the
Customs;G/C/W/407
Page 6
and, in addition, to the extent possible, other special procedures such as :
- allowing a single Goods declaration for all imports or exports in a given period
where goods are imported or exported frequently by the same person;
- use of the authorized persons’ commercial records to self-assess their duty and tax
liability and, where appropriate, to ensure compliance with other Customs
requirements;
- allowing the lodgement of the Goods declaration by means of an entry in the records
of the authorized person to be supported subsequently by a supplementary Goods
declaration.
Benefits
The special procedures outlined above are beneficial for both Customs and the trade.  They
facilitate the movement of goods, encourage compliance with Customs rules and enable moreeffective use of Customs resources.  They also promote the modern concept of a partnership
between Customs, traders and third parties within international trade.
Although Contracting Parties to the Revised Kyoto Convention must implement a programme
for special procedures in accordance with Transitional Standard 3.32, the procedures areapplied at the trader’s request.  They are clearly not mandatory upon all traders, particularly
as they are designed only for those who meet the qualifications to be authorized.
This very important Transitional Standard 3.32 of Chapter 3 of the General Annex on
Clearance and other Customs formalities is accompanied by detailed guidelines to assistCustoms administrations to understand and im plement the process of authorization
requirements as well as each of the special procedures.
(iv) Co-ordinated intervention
A co-ordinated intervention facilitates expeditious clearance of goods especially when
multiple agencies require to inspect goods.  Standard 3.35  of Chapter 3 of the General Annex
on Clearance and other Customs formalities requires that Customs should ensure that their
inspections are co-ordinated with other competent authorities and are carried out at the same
time.
In the interest of cost-effectiveness and efficiency to both governments and the trade,
Customs may give consideration to re-engineering its clearance process based on thisStandard.  It could establish an inspection service or compliance verification process that is
integrated with the other competent authorities th at have a vested interest in controlling the
movements of goods.  Such a convergence of controls into a single control to meet all
government requirements is an important trade facilitation measure .  It would concentrate
and optimize inspection expertise at designated (Customs) offices, and would be particularly
beneficial at locations that have a high volume of imports or exports requiring special
examination procedures.  To achieve the maximum efficiency and effectiveness for all
government compliance verifications, such high-volume locations that offer single controls
could provide clearances 24 hours, 7 days a week.G/C/W/407
Page 7
(v) Single Window
Flowing from the concept of co-ordinated interv entions is the next step, establishing a single
agency to allow traders to exchange information only once with a single official body,
preferably Customs, to fulfil all regulatory requirements related to an import or an export.
The WCO has recognized that one of the key strategic issues for the future would be thedevelopment of the concept of the “single window”.  It is envisaged that the main technical
committee dealing with procedural matters within the WCO in this regard will develop the
strategic and policy issues early next year and at the implementation level will be addressed
by other WCO initiatives such as the WCO Data Model.
In addition the WCO is also co-operating with the UNECE in its work towards the
development of a formal Recommendation to governments and business on the establishmentof a Single Window and a practical guide that is to accompany the Recommendation.
(vi) Simplification of procedures for release of goods
Chapter 3 of the General Annex on Clearance and other Customs formalities also sets out the
principles for:
-  release of goods as soon as possible (Standard 3.40),
-  prior permission to release the goods on the basis of a commercial or official
document when the Customs is satisfied that the declarant will subsequently
accomplish all the formalities for clearance (Standard 3.41) ,
-  release of goods before the results of an examination  (Standard 3.42 ), and
-  release of goods when an offence has occurred if goods are not liable for confiscation
or needed as evidence later (Standard 3.43) .
The text of Chapter 3 on Clearance and other Customs formalities is at Appendix I  to this
paper.
All of the above procedures for release of th e Goods, simplified procedures for authorized
persons etc. are facilitated when adequate security is provided  to ensure that the obligations to
the Customs will be met subsequently.  Security  for Customs purposes is an important part of
providing simple and facilitative procedures and is therefore dealt with in detail and as aseparate set of provisions in the General Annex of the Revised Kyoto Convention.
(vii) Security
Chapter 5 of the General Annex of the Revised Kyoto Convention contains the legal
provisions relating to Security.
A security or collateral is frequently required by the Customs to ensure that the declarant
discharges any obligations undertaken to Customs.  The primary aim of security is to secure
the payment of duties and taxes.  Security may also be required to ensure the fulfilment of any
other obligations the declarant or operator may have in regard to a Customs procedure orpractice or any other requirements that may be specified by Customs.  Security is also
essential when simplified procedures are implemented including those extended to authorized
traders.  National legislation must therefore enable Customs to take a security under any
appropriate procedure or practice.  Since providing a security is often expensive and the costs
of obtaining the security are normally added to the cost of the international movement of thegoods, it is essential that provisions relating to security be clear and transparent.  This willG/C/W/407
Page 8
enable the traders and the economic operators to  be informed of the requirements and the
financial liabilities involved in any transaction.
National legislation is therefore required to include provisions detailing the manner in which
the amount of security is determined, the forms in which it may be provided and the dischargeof the security once the obligations are fulfilled.  Uniform provisions also provide equality of
treatment to all operators throughout the Customs territory.  These are included in the 7
Standards of the Chapter 5 of the General Annex on Security, which are reproduced in
Appendix I  to this paper.  The legal texts provide for additional facilitation by providing for
waiver of security in certain cases and the acceptance of a general security for regular
importers/exporters who declare goods at different offices in the Customs territory. The legal
texts are accompanied by detailed implementation Guidelines.
(viii) Use of Risk Management techniques
The Revised Kyoto Convention has recognized the importance of the use of risk management
for analyzing and identifying high-risk consignments as well as a management tool for
efficient use of resources by Customs.  The Revised Kyoto Convention has a Chapter in theGeneral Annex, Chapter 6 – Customs Controls, which set out the Standards for application of
Risk Management which is accompanied by extensive implementation Guidelines.
Risk management can operate in any organization with manual or automated systems and its
application can range from the strategic to tactical level.  Whilst the overall risk managementprinciples remain the same for all administrations, each Customs Administration will need to
develop and refine its own individual risk management regime to meet national and
departmental objectives.  Such an approach has the potential to improve effectiveness and
efficiency and can help significantly in the ability to deploy resources towards the greatest
areas of risk. Risk management is supported by risk assessment which comprises of a seriesof technical processes intended to identify and quantify individual risks.
The Customs Control principles based on Risk Management also require Customs control
systems to use audit-based controls such as post clearance audit and traders systems audit .
The use of post clearance audit is of particular relevance since it provides a clear and
comprehensive picture of the transaction relevant to Customs and enables Customs to offer
trader facilitation in the form of simplified procedures (e.g. procedures for authorizedpersons).  This in turn facilitates the expeditious movement of goods at the border since the
controls can be carried out at a later stage.  Customs control and risk management also
supports the use of compliance measurement to determine the extent to which traders conform
to the Customs requirements.
(ix) Use of information technology
The Revised Kyoto Convention also recognizes the important role of application of
Information and Communication technology for more efficient clearance procedures,
effective implementation of risk management, uniform application of Customs law, efficient
revenue collection, effective data analysis and efficient production of external trade statistics.The Revised Kyoto Convention has a Chapter in the General Annex, Chapter 7 – Application
of information technology, which set out the Standards for Information Technology
application in Customs and is also is accompanied by extensive implementation Guidelines.
These Guidelines have been revised in March 2002 to take account of all the new
developments since the Guidelines were first adopted in 1999.G/C/W/407
Page 9
Both Risk Management and Information Technology  which have a horizontal application
for all areas of Customs work are being promoted through the development of Guides and
provision of Technical Assistance to assist administrations in developing capacity in these
areas.
Other WCO initiatives and instruments
The WCO Customs Data Model and the Immediate Release Guidelines are two other WCO
initiatives that expand and enhance the requirements of Article VIII (1) (c).
(x) The WCO Customs Data Model
The WCO Customs Data Model will establish a standard, international, harmonized data set
that will meet governments’ requirements for international cross-border trade and is geared
exclusively to the requirements of an automated environment.
Information and documentation are key elements in the control of international cross-border
trade. In today’s interconnected electronic environment these controls will increasinglyinclude information exchange prior to the ar rival of the goods in order to provide the
necessary level of security as well as acceptable release times.
Standardized and harmonized information requirements and procedures are essential to
establish the common understanding which allows for an effective and efficient exchange ofinformation between all parties involved in the international cross-border movement.  The
WCO Customs Data Model provides this common understanding on Customs information
requirements
The Data Model will also provide Contracting Parties to the revised Kyoto Convention with a
global Customs standard to implement provisions dealing with reduced data requirements and
electronic submission of declarations and supporting documents .
The WCO Customs Data Model is based on the basic principles and best practices of business
process modelling and includes the analysis and modelling of the procedures and processes
contained in the revised Kyoto Convention.  It is geared to the requirements of an automated
environment through the use of EDI and e-commerce technology.   The Customs Data Model
also covers simplified procedures as described in the revised Kyoto Convention. This includes
in particular a two-step-procedure at import, where Customs administrations release the goods
on minimum information required for control purposes and perform other administrative
responsibilities such as duty/tax collection and collection of trade statistics based on
complementary information submitted after the release of the goods.
The Customs Data Model also follows the concept of a seamless data flow, where export and
import data requirements are being aligned and the respective electronic declarations share
the same structure. This should allow traders to exchange information more economically and
enable the importer to utilize the export inform ation as the basis for the import formalities.
The WCO Customs Data Model will also aim at including other governmental regulatory
requirements in order to establish a single window environment.
Since the WCO Customs Data Model will be an important contribution to the facilitation of
international trade, the WCO is encouraging in ternational trade and transport associations to
become actively involved by making available the WCO Data Model for public review.G/C/W/407
Page 10
(xi) Guidelines for the immediate rele ase of consignments by Customs
One of the instruments developed by the WCO to meet the need for expeditious release of
goods was the Immediate Release Guidelines.  These Guidelines were developed in the
context of the express carrier industry to deal with the expeditious release of large volume of
small consignments.  However the principles of these Guidelines can address the expeditiousrelease of goods carried by any mode of transport and enable Customs to combine immediate
release with relevant and appropriate controls.
Under these Immediate Release Guidelines the Customs will generally grant immediate
release to all consignments, provided that the conditions laid down by Customs are met and
that the necessary information is communicated before the consignments arrive.  The advance
communication of that information is facilitated, in particular, through exchange of dataelectronically.  The Customs however retain the right to carry out spot or other checks using
risk management techniques and may require operators to provide facilities for Customs
officers where special attendance or attention is required to apply the procedure.
The Immediate Release Guidelines therefore supplement the principles set out in the legal text
of the revised Kyoto Convention.  The revised Kyoto Convention only specifies that the
Customs should limit the data required in the Goods declaration to only such particulars that
are deemed necessary for the assessment and collection of duties and taxes, compilation of
statistics and application of Customs law.  Detailing data elements in legal texts was not
considered practical since these requirements vary from country to country and from time totime, and could not be included in an obligatory General Annex that had to be applied without
any exceptions.
These Guidelines include information on the da ta elements to be required for clearing
different categories of goods and the conditions for the granting of immediate release byCustoms.  There are 4 categories of goods unde r these Guidelines and each category specifies
a minimum set of data to be provided to the Customs for requesting release, though the
Customs retain the right to require more information if necessary for their risk management.
The Categories of goods specified in the Immediate Release Guidelines are :1. Correspondence;
2. No value or low value, non-dutiable or non-taxable consignments;
3. Low value dutiable and taxable consignments; and
4. High value consignments.
The Guidelines detail an illustrative list of goods that are covered by each category but any
goods that are restricted are excluded from Categories 1 to 3.
The Guidelines reflect the principles applied by modern Customs administrations in providing
for immediate release of goods. If Customs is satisfied that the goods are in compliance with
the basic requirements of the procedure to be applied, the goods should be releasedimmediately to the operator. These Guidelines also offer a range of possibilities and solutions
enabling each administration to select the level of facilitation best suited to its own trade
patterns and compliance requirements.
Work is ongoing on agreeing a new set of data elements for the various categories of goods
under these Guidelines.G/C/W/407
Page 11
C. REVIEW OF LAWS AND REGULATIONS BY CONTRACTING PARTIES
Article VIII (2) of GATT 1994 requires a Contracting Party at the request of another
contracting party or by Contracting Parties review the operations in the light of the provisions of that
Article.
In the context of the Revised Kyoto Convention this would relate to ensuring the uniformity
in the interpretation and application of the Convention.  Two Articles in the Convention ensure this.
Article 6 establishes a Management Committee to consider the implementation of the Convention,
any measures to secure uniformity in the interpre tation of the Convention and its application and any
amendments that are proposed to the Convention.  Contracting Parties can request items to be
included for discussion by the Management Committee.  Additionally Article 14 of the Revised Kyoto
Convention provides for a dispute settlement mechanism which states that:
“Any dispute between two or more Contracting Parties concerning the interpretation or
application of this Convention shall so far as possible be settled by negotiation between them.
Any dispute which is not settled by negotiation shall be referred by the Contracting Parties in
dispute to the Management Committee which shall thereupon consider the dispute and make
recommendations for its settlement.
The Contracting Parties in dispute may agree in advance to accept the recommendations of
the Management Committee as binding.”
Through these two mechanisms it would be possible for a Contracting Party to request
through the Management Committee or between themselves a review of the operation of its laws and
regulations related to the Revised Kyoto Convention.
D. PENALTIES FOR MINOR BREACHES OF CUSTOMS REGULATIONS AND PROCEDURAL
REQUIREMENT
A single standard 3.39 of chapter 3 on clearance and other customs formalities in the
obligatory general annex covers this requirement as set out in Article VIII (3) and the text of the
provision is as follows:
3.39.   Standard ErrorsThe Customs shall not impose substantial penalties for errors  where they are satisfied that
such errors are inadvertent and that there has been no fraudulent intent or gross negligence.
Where they consider it necessary to discourage a repetition of such errors, a penalty may be
imposed but shall be no greater than is necessary for this purpose.
This Standard is supplemented by detailed Guidelines to assist the understanding and
implementation by Customs administrations, which is reproduced in Appendix II to this
paper.
IV. TECHNICAL ASSISTANCE
13. The WCO Technical Assistance Programmes, including dedicated assistance to individual
Members as well as regional seminars and other programmes, are available for WCO Members.
These are aimed at explaining the legal provisions, examining national legislation with a view to
making changes to provide for compliance with the revised Kyoto principles, and reviewing nationallegislation that is revised or in the process of being drafted.G/C/W/407
Page 12
V. ADDITIONAL INFORMATION
14. The legal texts of the revised Kyoto Convention and its implementation Guidelines and other
related instruments, such as the WCO Data Model, Guidelines for Immediate Release of
Consignments by Customs, are available on the WCO Web site: www.wcoomd.org
Texts and Guidelines on the General Annex to the Revised Kyoto Convention
are available on the WCO Web site at:
http://www.wcoomd.org/ie/En/Topics_Issues/FacilitationCustomsProcedures/kyoto/kyreport.htmlG/C/W/407
Page 13
Appendix I
CHAPTER 3
CLEARANCE AND OTHER CUSTOMS FORMALITIES
Competent Customs offices
3.1. Standard
The Customs shall designate the Customs offices at which goods may be produced or cleared.
In determining the competence and location of these offices and their hours of business, the factors to
be taken into account shall include in particular the requirements of the trade.
3.2. Standard
At the request of the person concerned and for reasons deemed valid by the Customs, the
latter shall, subject to the availability of res ources, perform the functions laid down for the purposes
of a Customs procedure and practice outside the desi gnated hours of business or away from Customs
offices.  Any expenses chargeable by the Customs shall be limited to the approximate cost of the
services rendered.
3.3. Standard
Where Customs offices are located at a common border crossing, the Customs administrations
concerned shall correlate the business hours and the competence of those offices.
3.4. Transitional Standard
At common border crossings, the Customs ad ministrations concerned shall, whenever
possible, operate joint controls.
3.5. Transitional Standard
Where the Customs intend to establish a new Customs office or to convert an existing one at a
common border crossing, they shall, wherever possible, co-operate with the neighbouring Customs to
establish a juxtaposed Customs office to facilitate joint controls.
The declarant
(a) Persons entitled to act as declarant3.6. Standard
National legislation shall specify the conditions under which a person is entitled to act as
declarant.
3.7. Standard
Any person having the right to dispose of the goods shall be entitled to act as declarant.
(b) Responsibilities of the declarantG/C/W/407
Page 14
3.8. Standard
The declarant shall be held responsible to the Customs for the accuracy of the particulars
given in the Goods declaration and the payment of the duties and taxes.
(c) Rights of the declarant
3.9. Standard
Before lodging the Goods declaration the declarant shall be allowed, under such conditions as
may be laid down by the Customs :
(a) to inspect the goods; and
(b) to draw samples.
3.10. Standard
The Customs shall not require a separate Goods declaration in respect of samples allowed to
be drawn under Customs supervision, provided that such samples are included in the Goods
declaration concerning the relevant consignment.
The Goods declaration(a) Goods declaration format and contents3.11. Standard
The contents of the Goods declaration shall be prescribed by the Customs.  The paper format
of the Goods declaration shall conform to the UN-layout key.
For automated Customs clearance processes, th e format of the electronically lodged Goods
declaration shall be based on international standards for electronic information exchange as prescribed
in the Customs Co-operation Council Recommendations on information technology.
3.12. Standard
The Customs shall limit the data required in th e Goods declaration to only such particulars as
are deemed necessary for the assessment and collection of duties and taxes, the compilation of
statistics and the application of Customs law.
3.13. Standard
Where, for reasons deemed valid by the Customs, the declarant does not have all the
information required to make the Goods declaration, a provisional or incomplete Goods declarationshall be allowed to be lodged, provided that it contains the particulars deemed necessary by the
Customs and that the declarant undertakes to complete it within a specified period.
3.14. Standard
If the Customs register a provisional or incomplete Goods declaration, the tariff treatment to
be accorded to the goods shall not be different from that which would have been accorded had a
complete and correct Goods declaration been lodged in the first instance.G/C/W/407
Page 15
The release of the goods shall not be delayed provided that any security required has been
furnished to ensure collection of any applicable duties and taxes.
3.15. Standard
The Customs shall require the lodgement of the original Goods declaration and only the
minimum number of copies necessary.
(b) Documents supporting the Goods declaration3.16. Standard
In support of the Goods declaration the Customs shall require only those documents necessary
to permit control of the operation and to ensure th at all requirements relating to the application of
Customs law have been complied with.
3.17. Standard
Where certain supporting documents cannot be lodged with the Goods declaration for reasons
deemed valid by the Customs, they shall allow production of those documents within a specified
period.
3.18. Transitional Standard
The Customs shall permit the lodgement of supporting documents by electronic means.
3.19. Standard
The Customs shall not require a translation of the particulars of supporting documents except
when necessary to permit processing of the Goods declaration.
Lodgement, registration and checking of the Goods declaration
3.20. Standard
The Customs shall permit the lodging of the Goods declaration at any designated Customs
office.
3.21. Transitional Standard
The Customs shall permit the lodging of the Goods declaration by electronic means.
3.22. Standard
The Goods declaration shall be lodged during the hours designated by the Customs.
3.23. Standard
Where national legislation lays down a time limit for lodging the Goods declaration, the time
allowed shall be sufficient to enable the declarant to complete the Goods declaration and to obtain the
supporting documents required.G/C/W/407
Page 16
3.24. Standard
At the request of the declarant and for reasons deemed valid by the Customs, the latter shall
extend the time limit prescribed for lodging the Goods declaration.
3.25. Standard
National legislation shall make provision for the lodging and registering or checking of the
Goods declaration and supporting documents prior to the arrival of the goods.
3.26. Standard
When the Customs cannot register the Goods declaration, they shall state the reasons to the
declarant.
3.27. Standard
The Customs shall permit the declarant to amend the Goods declaration that has already been
lodged, provided that when the request is received they have not begun to check the Goods
declaration or to examine the goods.
3.28. Transitional Standard
The Customs shall permit the declarant to amend the Goods declaration if a request is
received after checking of the Goods declaration has commenced, if the reasons given by the
declarant are deemed valid by the Customs.
3.29. Transitional Standard
The declarant shall be allowed to withdraw the Goods declaration and apply for another
Customs procedure, provided that the request to do so is made to the Customs before the goods have
been released and that the reasons are deemed valid by the Customs.
3.30. Standard
Checking the Goods declaration shall be effected at the same time or as soon as possible after
the Goods declaration is registered.
3.31. Standard
For the purpose of checking the Goods declaration, the Customs shall take only such action as
they deem essential to ensure compliance with Customs law.
Special procedures for authorized persons
3.32. Transitional Standard
For authorized persons who meet criteria specified by the Customs, including having an
appropriate record of compliance with Customs requirements and a satisfactory system for managingtheir commercial records, the Customs shall provide for:
- release of the goods on the provision of the minimum information necessary to identify the
goods and permit the subsequent completion of the final Goods declaration;G/C/W/407
Page 17
- clearance of the goods at the declarant's premises or another place authorized by the Customs;
and, in addition, to the extent possible, other special procedures such as :
- allowing a single Goods declaration for all imports or exports in a given period where goods
are imported or exported frequently by the same person;
- use of the authorized persons’ commercial records to self-assess their duty and tax liability
and, where appropriate, to ensure compliance with other Customs requirements;
- allowing the lodgement of the Goods declaration by means of an entry in the records of the
authorized person to be supported subsequently by a supplementary Goods declaration.
Examination of the goods
(a) Time required for examination of goods
3.33. Standard
When the Customs decide that goods declared shall be examined, this examination shall take
place as soon as possible after the Goods declaration has been registered.
3.34. Standard
When scheduling examinations, priority shall be  given to the examination of live animals and
perishable goods and to other goods which the Customs accept are urgently required.
3.35. Transitional Standard
If the goods must be inspected by other competent authorities and the Customs also schedules
an examination, the Customs shall ensure that the in spections are co-ordinated and, if possible, carried
out at the same time.
(b) Presence of the declarant at examination of goods3.36. Standard
The Customs shall consider requests by the declarant to be present or to be represented at the
examination of the goods.  Such requests shall be granted unless exceptional circumstances exist.
3.37. Standard
If the Customs deem it useful, they shall require the declarant to be present or to be
represented at the examination of the goods to give  them any assistance necessary to facilitate the
examination.
(c) Sampling by the Customs3.38. Standard
Samples shall be taken only where deemed necessary by the Customs to establish the tariff
description and/or value of goods declared or to ensure the application of other provisions of national
legislation.  Samples drawn shall be as small as possible.G/C/W/407
Page 18
Errors
3.39. Standard
The Customs shall not impose substantial penalties for errors where they are satisfied that
such errors are inadvertent and that there has been no fraudulent intent or gross negligence.  Where
they consider it necessary to discourage a repetition of such errors, a penalty may be imposed but
shall be no greater than is necessary for this purpose.
Release of goods
3.40. Standard
Goods declared shall be released as soon as the Customs have examined them or decided not
to examine them, provided that:
- no offence has been found;
- the import or export licence or any other documents required have been acquired;
- all permits relating to the procedure concerned have been acquired; and
- any duties and taxes have been paid or that appropriate action has been taken to ensure their
collection.
3.41. Standard
If the Customs are satisfied that the declarant will subsequently accomplish all the formalities
in respect of clearance they shall release the goods, provided that the declarant produces a commercial
or official document giving the main particulars of the consignment concerned and acceptable to theCustoms, and that security, where required, has been furnished to ensure collection of any applicable
duties and taxes.
3.42. Standard
When the Customs decide that they require laboratory analysis of samples, detailed technical
documents or expert advice, they shall release the goods before the results of such examination areknown, provided that any security required has been furnished and provided they are satisfied that the
goods are not subject to prohibitions or restrictions.
3.43. Standard
When an offence has been detected, the Customs shall not wait for the completion of
administrative or legal action before they release the goods, provided that the goods are not liable to
confiscation or forfeiture or to be needed as evidence at some later stage and that the declarant pays
the duties and taxes and furnishes security to ensure collection of any additional duties and taxes and
of any penalties which may be imposed.
Abandonment or destruction of goods
3.44. Standard
When goods have not yet been released for home use or when they have been placed under
another Customs procedure, and provided that no offence has been detected, the person concerned
shall not be required to pay the duties and taxes or shall be entitled to repayment thereof:G/C/W/407
Page 19
- when, at his request, such goods are abandoned to the Revenue or destroyed or rendered
commercially valueless under Customs control, as the Customs may decide.  Any costs
involved shall be borne by the person concerned;
- when such goods are destroyed or irrecoverably lost by accident or force majeure, provided
that such destruction or loss is duly established to the satisfaction of the Customs;
- on shortages due to the nature of the goods when such shortages are duly established to the
satisfaction of the Customs.
Any waste or scrap remaining after destruction shall be liable, if taken into home use or
exported, to the duties and taxes that would be appl icable to such waste or scrap imported or exported
in that state.
3.45. Transitional Standard
When the Customs sell goods which have not been declared within the time allowed or could
not be released although no offence has been discovered, the proceeds of the sale, after deduction of
any duties and taxes and all other charges and expenses incurred, shall be made over to those persons
entitled to receive them or, when this is not possible, held at their disposal for a specified period.G/C/W/407
Page 20
CHAPTER 5
SECURITY
5.1. Standard
National legislation shall enumerate the cases in which security is required and shall specify
the forms in which security is to be provided.
5.2. Standard
The Customs shall determine the amount of security.
5.3. Standard
Any person required to provide security shall be allowed to choose any form of security
provided that it is acceptable to the Customs.
5.4. Standard
Where national legislation provides, the Customs shall not require security when they are
satisfied that an obligation to the Customs will be fulfilled.
5.5. Standard
When security is required to ensure that the obligations arising from a Customs procedure
will be fulfilled, the Customs shall accept a general security, in particular from declarants who
regularly declare goods at different offices in the Customs territory .
5.6. Standard
Where security is required, the amount of security to be provided shall be as low as possible
and, in respect of the payment of duties and taxes, shall not exceed the amount potentially chargeable.
5.7. Standard
Where security has been furnished, it shall be discharged as soon as possible after the
Customs are satisfied that the obligations under which the security was required have been duly
fulfilled.G/C/W/407
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Appendix II
Guidelines to Standard 3.39 – Errors
During the process of supplying information to Customs by means of a Goods declaration,
supporting documents, a cargo declaration, or any other means, it is always possible that errors occur.
When errors in the information are accidental and they are not made on a regular basis, Customs may
normally give the opportunity to correct the mistake(s) and will take no further action such as
imposing a penalty.  Customs should nevertheless be able to expect that the declarant or trader has
taken reasonable care and acted in good faith in providing the information.  In some administrations,
when a declarant makes errors without exercising reasonable care in regard to the information he
supplies, such errors are not considered inadvertent or accidental.
The terms “penalty”, “inadvertent” and “gross negligence” in this provision are open to
different interpretation and application by Contracting Parties.  The provisions of GATT Article VIII
contain a reference to substantial penalties and provide a clear indication of the circumstances where
penalties could be imposed.  This Article states that “No Contracting Party shall impose substantialpenalties for minor breaches of Customs regulations or procedural requirements.  In particular, no
penalty in respect of any omission or mistake in Customs documentation which is easily rectifiable
and obviously made without fraudulent intent or gross negligence shall be greater than that necessary
to serve merely as a warning.”
Thus when a declarant is routinely careless or even abuses the confidence of Customs in
accepting the validity of the information supplied, Customs may take measures to discourage such
behaviour.  One measure would be the imposition of a penalty that is in proportion to the infraction or
abuse.  Other measures could be refusing the Goods declaration to be registered or not allowing
amendments to a Goods declaration that has already been registered.  The result would be thatCustoms would only register the Goods declarati on when it is correct and complete, without any
errors.  This can have a significant impact on a declarant who makes errors regularly since he will be
confronted with numerous checks of the Goods declarations, more frequent examinations of the
goods, and possible increasing penalties.
The following are some examples of the types of errors that could be addressed by
Standard 3.39.
• Inadvertent errors in the declared value of goods can occur as :
- errors in transcription;
- arithmetical mistakes in declarations or supporting documents;
- inadvertent omissions of elements of the dutiable value, such as inland freight abroad;
- inadvertent errors in the conversion of foreign currency; or- incorrect deductions, such as discounts, the inadmissibility of which is not within the
knowledge of the importer, and similar er rors arising from misunderstanding of the
principles laid down in the legal provisions relating to valuation for Customs
purposes.
• Provided that the nature and other physical characteristics of the goods have been properly
declared, an incorrect declaration of the tariff h eading may also be regarded as an inadvertent
error.
• A discrepancy between the quantity of goods shown in the freight declaration and the actual
quantity may be treated as an inadvertent error where it is due, for example, to a clerical error.G/C/W/407
Page 22
There may also be a limit such as a fixed sum and/or a percentage of the duties and taxes
chargeable below which an error is not subjected to penalties.
When the error involves liability to additional du ties and taxes, the amount of those duties and
taxes becomes chargeable in any case, whether or not Customs decides to issue a penalty.
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