The press is increasingly reporting concerns in industry of the potential for increased “red tape” in relation to movements of goods for customs purposes, if the UK was to be solely governed by WTO Rules if it fails to successfully negotiate a suitable arrangement with the EU on Brexit.
Whilst it is highly likely that, on leaving the EU, the customs procedural simplifications currently in place would remain in some form, perhaps this latest WTO Agreement, the Trade Facilitation Agreement (“TFA”) signed by the UK as a member of the EU, could go some way to calming fears in industry of post-Brexit burgeoning red tape.
The entry into force today (22 February 2017) of the TFA, which, amongst those signatory countries seeks to expedite the movement, release and clearance of goods across borders, confirms again the abiding aim of the WTO for Global trade facilitation reform creating a significant boost for commerce and the multilateral trading system as a whole.
Studies suggest that the TFA is likely to reduce trade costs, it is said by an average of 14.3 per cent, with developing countries having the most to gain. It is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47 per cent and 91 per cent respectively over the current average.
Implementing the TFA is also expected to help new firms export for the first time and, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20 per cent, with least developed countries (LDCs) likely to see an increase of up to 35 per cent, according to the WTO study.
The TFA’s 12 articles prescribe many measures to improve transparency and predictability of trading across borders and to create a less discriminatory business environment. The TFA’s provisions include improvements to the availability and publication of information about cross-border procedures and practices, improved appeal rights for traders, reduced fees and formalities connected with the import/export of goods, faster clearance procedures and enhanced conditions for freedom of transit for goods. Of particular note in this regard is Article 7 (1) of the TFA which provides that each Member shall adopt or maintain procedures allowing for the submission of import documentation and other required information, including manifests, in order to begin processing prior to the arrival of goods with a view to expediting the release of goods upon arrival. Additionally, each Member shall, as appropriate, provide for advance lodging of documents in electronic format for pre-arrival processing of such documents. The provision of this pre-arrival information is designed to enable the swift release of goods to market.
Further encouraging provisions exist in Article 7(3) aimed at separating disputes over duties or charges, from the clearance of the goods in that each Member has to adopt or maintain procedures allowing the release of goods prior to the final determination of customs duties and other charges if such a determination is not done prior to, or upon arrival, or as rapidly as possible after arrival and provided that all other regulatory requirements have been met such as the provision of security such as a guarantee.
The TFA will have to be taken into account as part of the transition process to a post-Brexit UK customs regime and, to be fully effective, it will have to be implemented throughout all the Member countries. However, if fully implemented, the TFA can only be a positive feature of the post-Brexit customs landscape.
