Trade Facilitation Agreement Implementation plan

Trade Facilitation Agreement Implementation plan
Syed Tanvir Ahmad Director Directorate General of Training & Research

Introduction At the WTO’s ninth ministerial conference, held in Bali, Indonesia from December 3-7, 2013, the ministers adopted the "Bali Package", a series of decisions aimed at, trade facilitation, among others. The most significant development at the conference was the adoption of the WTO Trade Facilitation Agreement that aims to expedite the movement, release and clearance of goods through Customs, including goods in transit. The new ATF is principally aimed at facilitating the international movement of goods by simplifying customs procedures.

Introduction Pakistan is currently in compliance with approximately 46% of its RKC obligations. The RKC lacks an effective mechanism for settling disputes or ensuring that its signatories comply with their obligations and therefore Pakistan’s non-performance of many of its RKC obligations has not had any repercussions. The new ATF is a WTO discipline that almost entirely, mirrors, the provisions found in the RKC. As a result, the overdue reforms in Pakistan’s customs regime will be the focus of substantially increased attention.

Scope of Agreement on Trade Facilitation
The WCO and WTO share the primary objective to facilitate international trade, therefore, the overall scope of the RKC and the ATF are nearly identical In addition the ATF also contains: Provision on how, upon entry into force of this agreement, each member shall implement its category ‘A’ commitments, Administrative and institutional arrangements for moving forward, Role of the WTO preparatory committee on trade facilitation, and Obligations of the member countries in implementation, substitution and change of provisions of category ‘B’ and category ‘C’ commitments.

OVERVIEW ARTICLE 1: PUBLICATION AND AVAILABILITY OF INFORMATION 10 - Sub Articles : 6 - Category A, 4 - Category B 2 - Category C ARTICLE 2: OPPORTUNITY TO COMMENT, INFORMATION BEFORE ENTRY INTO FORCE AND CONSULTATION 4 - Sub Articles : 4 - Category B ARTICLE 3: ADVANCE RULINGS 9 - Sub article - 9 Category C

OVERVIEW ARTICLE 4: APPEAL OR REVIEW PROCEDURES 6 - Sub Articles : 6 - Category A ARTICLE 5: OTHER MEASURES TO ENHANCE IMPARTIALITY, NON-DISCRIMINATION ANDTRANSPARENCY 4 M/O 5 - Sub Articles : 4 - Category A, 1 - MOC ARTICLE 6: DISCIPLINES ON FEES AND CHARGES IMPOSED ON OR IN CONNECTION WITH IMPORTATION AND EXPORTATION 12 - Sub Articles : 7 - Category A, 5 - Category B ARTICLE 7: RELEASE AND CLEARANCE OF GOODS 34 - Sub Articles : 10 - Category A, 6 - Category B 18 - Category C Article 8: Border Agency Cooperation 2 - Sub article - 2 Category C

OVERVIEW ARTICLE 9: MOVEMENT OF GOODS UNDER CUSTOMS CONTROL INTENDED FOR IMPORT: 1- Sub Articles : 1 - Category A ARTICLE 10: FORMALITIES CONNECTED WITH IMPORTATION, EXPORTATION AND TRANSIT 20 - Sub Articles : 7 - Category A, 4 - Category B 6 - Category C 3 - MOC ARTICLE 11: FREEDOM OF TRANSIT 12 - Sub Articles : 10 - Category A, 2 – MOC ARTICLE 12: CUSTOMS COOPERATION 22 - Sub Articles : 22 - Category B ARTICLE 13: INSTITUTIONAL ARRANGEMENTS 8 - Sub Articles : 8 - MOC

ARTICLE 1: PUBLICATION AND AVAILABILITY OF INFORMATION
Importation, exportation and transit procedures ,rates of duties and taxes, Fees and charges , Rules , Penalty, Appeal procedures, Agreements (A) Tariff Quotas (B) Information Available Through Internet Above Information (C) The forms and documents etc. (B) Enquiry Points (C) ( lot of work is required - call center, civil works, IT, HR, infrastructure, CRM software)

Article 1: Publication and Availability of Information
Current Status How to be Fully Compliant 1.1 Publication Each Member shall promptly publish the following information in a non-discriminatory and easily accessible manner in order to enable governments, traders and other interested parties to become acquainted with them: FBR publishes the Customs Act, the rules Customs General Orders, Tariff a two volume book on Pakistan Customs laws (only legal text) . It updated. However this still leaves a large number of stakeholders who do not get direct access to these amendments immediately. There needs to be a search engine developed for the FBR/Customs portal for the FBR/Customs portal which should facilitate the stakeholders to search for various words and subjects for example valuation, appeal and exemption for all the goods etc.

Current Status How to be Fully Compliant 1.1 Publication Fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit; At present the fees and charges are not published in a structured and consolidated format accessible to the trade or other stake holders. Such authority is available in the form of notifications and orders of FBR/Customs and the orders of collectors of Customs. Customs should identify all such fees and charges and publish a document which provides complete information about the relevant fees and charges. MOC to coordinate for other departments

Current Status How to be Fully Compliant 1.1 Publications - Tariff Quotas - B j. Procedures relating to the administration of tariff quotas. Quota monitoring procedure is to be devised. Detailed procedure is to be published by FBR/MOC. Presently there is no procedure. A committee may be constituted. Simultaneously, MOC to take lead role in the matter and to coordinate with FBR, SBP and all relevant ministries and to set timeline for this provision. WEBOC Quota monitoring module is to be developed and implemented through D.G R&A.

Current Status How to be Fully Compliant 1.2 Information Available Through Internet Each Member shall make available, and update to the extent possible and as appropriate, the description of its importation, exportation and transit procedures, The forms and documents required for importation into, exportation from, or transit through the territory of that Member, Contact information on enquiry points. All the information as stated above is available on the internet however an additional requirement here which points to a description of practical steps needed for import, export and transit. This is the weakest point in Pakistan as such documents etc. are not available in a consolidated manner with the exception of the latest transit rules. Detailed self-contained documents to be developed for imports, exports and transit which should be and the stakeholders should not have to refer to other Rules and procedures or even things like fees and other charges, to locate all these matters. Not provided on the FBR/FATE website. User friendly and easily understandable.

Current Status How to be Fully Compliant 1.2 Information Available Through Internet - B Members are encouraged to make available further trade related information through the internet, including relevant trade- related legislation and other items referred to in paragraph 1.1. Almost all the information is available FBR, MOC, TDAP (print, website) but dispersed and not easily accessible. Technically therefore, the availability of this information is not transparent. Pakistan is substantially compliant and only needs to provide information pertaining to imports, exports and transit provided in other legislations, for example plant quarantine and animal quarantine related information etc., on FBR/Customs website.

Current Status How to be Fully Compliant 1.3 Enquiry Points - C Each Member shall, within its available resources, establish or maintain one or more enquiry points to answer reasonable enquiries of governments, traders and other interested parties (in 1.1) Some information is available (FBR website, FATE wing, WeBOC user support) MOC to coordinated and propose the contact points to answer trade related enquiries. FAQs section may be added to the WEBOC information Portal. Help desks in custom houses, may also be created. Booklets are to be provided. FBR to provide necessary resources so that mechanism may be devised for creation of functional enquiry points and help desks in related departments which are involved in trade related processes/controls. (Call center, Civil works, IT, HR, infrastructure, CRM (software)

Article - A Current Status How to be Fully Compliant 1.4 Notification Each Member shall notify the Committee of The official place(s) where the items have been published The URLs of website(s) as well as the contact information of the enquiry points Published on the FBR/Customs website and in a book form by the private sector These publications should be available freely and extensively throughout Pakistan in book stores and Custom houses.

Article 2: Opportunity to Comment, Information Before Entry Into Force and Consultation
Article - B Current Status How to be Fully Compliant 2.1. Opportunity to Comment and Information before Entry into Force Opportunity to Comment and Information before Entry into Force . In Pakistan there is no provision in the law. We need take into account stakeholder comments and other relevant information before any law come into force. Drafted new law and procedure. 5 days for comments 10 days between issuance and enforcement. (Act, Rules, CGOs, Public Notice) 2.2. Consultations Each Member shall, as appropriate, provide for regular consultations between border agencies and traders or other stakeholders within its territory. Pakistan does not have any such regular arrangement or legal requirement in any law dealing with imports and exports. For this purpose the following laws need to be amended and new provisions introduced, for example the Customs Act, Imports and Exports Control Act, Drugs Act, Sales Tax Act Federal Excise Act etc.

Article 3: Advance Rulings
On the good's tariff classification (mandatory) Origin of the good (mandatory) method or criteria for customs value relief or exemption Any other information Requirement Applicant to submit a written request Time bound unless circumstances are changed publish minimum requirements for the application for an advance ruling Review the advance ruling Exceptions Case pending before any governmental agency, appellate tribunal or court Or decision already taken Revokes, Modifies or Invalidates provide written notice retroactive effect, it may only do so where the ruling was based on incomplete, incorrect, false or misleading information

Current Status How to be Fully Compliant 3.1 Each Member shall issue an advance ruling in a reasonable, time bound manner to an applicant on written request containing all necessary information. If a Member declines to issue an advance ruling it shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision. Pak definition is limited to classification rulings for PCT, therefore, the procedure relates only to the tariff classification. The scope of Article 3 is wider than even RKC Guidelines, and provides for advance rulings on additional issues also i.e. valuation, origin, quotas, requirements for exemption and “any additional matter” for which a Member Country considers it appropriate to issue an advance ruling. In order to be fully compliant Customs needs to introduce a new Provision in the Customs Act to enable FBR/Customs to formulate a comprehensive procedure which meets the requirements of WTO ATF.

Current Status How to be Compliant 3.3 The advance ruling shall be valid for a reasonable period of time after its issuance unless the law, facts or circumstances supporting the original advance ruling have changed. No provision in the existing law. Provision for Advance Rulings in Section 2 (ai) of the Customs Act, inserted vide Finance Ordinance 2002 that defines the “advance ruling”. The law needs a provision to cater situations as mentioned against Article 3.1. 3. 4. Where the Member revokes, modifies or invalidates the advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. Where a Member revokes, modifies or invalidates advance rulings with retroactive effect, it may only do so where the ruling was based on incomplete, incorrect, false or misleading information. There is no such provision in the law or the rules. The law needs a provision to cater for such situations as mentioned against Article 3.1.

Current Status How to be Fully Compliant 3. 5. An advance ruling issued by a Member shall be binding on that Member in respect of the applicant that sought it. The Member may provide that the advance ruling be binding on the applicant. There is no such provision in the law or the rules. The law needs a provision to cater for such situations as mentioned against Article 3.1. 3. 6. Each Member shall publish, at a minimum: the requirements for the application for an ruling, including the information to be provided and the format; b. the time period by which it will issue an advance ruling; and c. the length of time for which the advance ruling is valid.

Article 4: Appeal or Review Procedures
Current Status How to be Fully Compliant 4.1. Right to Appeal or Review Each Member shall provide that any person to whom customs issues an administrative decision has the right, within its territory to: a. administrative appeal to or review by an administrative authority higher than or independent of the official or office that issued the decision and/or b. judicial appeal or review of the decision. There is no simplified version of appeals in minor/small cases; and where a customs value has been determined under Section 25A by the Collector of Customs or Director of Valuation . FBR thinks it is compliant as two tier appeal mechanism is their. After section 195 of the Customs Act a new provision may be inserted, providing for revision in matters where an appeal or any other statutory remedy is not provided.

Article 5: Other Measures to Enhance Impartiality, Non-Discrimination and Transparency
Current Status Compliant 5.1. Notifications for enhanced controls or inspections Where a Member adopts or maintains a system of issuing notifications or guidance to its concerned authorities for enhancing the level of controls or inspections at the border in respect of foods, beverages or feedstuffs covered under the notification or guidance for protecting human, animal, or plant life or health within its territory. Proper notifications are issued to the customs border stations and the notifications are also published in the official gazette Relates to Ministry of Commerce. Pakistan is compliant 5.2. Detention Detention A Member shall inform the carrier or importer promptly in case of detention of goods declared for importation, for inspection by Customs or any other competent authority. Any detention of a consignment which needs inspection is promptly notified and the inspection is carried out without any delay because of the nature of the goods. Pakistan is compliant.

Article 5: Other Measures to Enhance Impartiality, Non-Discrimination and Transparency
Current Status Compliant 5.3. Test Procedures A Member may, upon request, grant an opportunity for a second test in case the first test result of a sample taken upon arrival of goods declared for importation shows an adverse finding. A second test is invariably allowed if the importer is not satisfied with the first test for good reason. Pakistan is compliant A Member shall either publish, in a non-discriminatory and easily accessible manner, the name and address of any laboratory where the test can be carried out or provide this information to the importer when it is granted the opportunity discussed above The names of the laboratories are well known, but these are not published or advertised. The names of laboratories should be published. However, the choice of a laboratory for retest should be with Customs. A Member shall consider the result of the second test in the release and clearance of goods, and, if appropriate, may accept the results of such test. Customs considers the results of second test where appropriate accepts such results

Article 6: Disciplines on Fees And Charges Imposed on or in Connection With Importation and Exportation Article Current Status How to be Fully Compliant 6.1. General Disciplines on Fees and Charges Imposed on or in Connection with Importation and Exportation The provisions of paragraph 6.1 shall apply to all fees and charges other than import and export duties and other than taxes within the purview of Article III of GATT 1994 imposed by Members on or in connection with importation or exportation of goods. There is no guideline in place or institutional mechanism under which all such fees are to be determined, reviewed or published for traders’ information. Pakistan is not compliant and needs to publish and advertise the fees and charges as above. These also need to be reviewed periodically including now. This is because most of the fees and charges were fixed many years ago.

Article 6: Disciplines on Fees And Charges Imposed on or in Connection With Importation and Exportation Article Current Status How to be Fully Compliant 6.2. Specific disciplines on Fees and Charges Imposed on or in Connection with Importation and Exportation Fees and charges for customs processing: i. shall be limited in amount to the approximate cost of the services rendered on or in connection with the specific import or export operation in question; and ii. are not required to be linked to a specific import or export operation provided they are levied for services that are closely connected to the customs processing of goods. In Pakistan the fees and charges are not compared to the approximate cost of the services rendered in connection with import or export operations. Generally Compliant

Article 6: Disciplines on Fees And Charges Imposed on or in Connection With Importation and Exportation Article Current Status How to be Fully Compliant 6.3 Penalty Disciplines Each Member shall ensure that penalties for a breach of a customs law, regulation, or procedural requirement are imposed only on the person(s) responsible for the breach under its laws. Penalties are imposed only for the breach of customs laws and regulations on the persons responsible for the breach of laws and regulations. Pakistan is compliant. The penalty imposed shall depend on the facts and circumstances of the case and shall be commensurate with the degree and severity of the breach. Section 156 (1) of the Customs Act imposes penalties commensurate with the degree and severity of the offence. Pakistan is in general compliance .

ARTICLE 7: PUBLICATION AND AVAILABILITY OF INFORMATION
Pre-arrival Processing Electronic payment Release of goods prior to the final determination of customs duties, taxes on guarantee or security A guarantee may be obtained for the penalties and fines that may be imposed. If offence is detected. Risk Management System Post Clearance audit Average Release Time Authorized Operator Expedited Shipment Perishable Goods

Article 7: Release and Clearance of Goods
Current Status How to be Fully Compliant 7.1. Pre-arrival Processing 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. Section (b) Second provision of the Customs Act provides for filing goods declaration not more than ten days before arrival of goods and to start the processing of the documents before the arrival of the goods. Pakistan is compliant. 7.2 Electronic Payment Each Member shall, to the extent practicable, adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees and charges collected by customs incurred upon importation and exportation. over 60% of imported goods are now cleared through WeBOC with payment of duties and taxes made electronically upon submission of the declaration. Payments via WeBOC are functioning smoothly. Customs also permits importers to maintain accounts in the NBP branches in Custom Houses. The Customs Act should contain the provisions describing the mode of payments of duties/taxes for all imported goods.

Current Status How to be Fully Compliant 7.3 Separation of Release from Final Determination of Customs Duties, Taxes, Fees and Charges Each Member shall adopt or maintain procedures allowing the release of goods prior to the final determination of customs duties, taxes, fees and 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. Section 81 of the Customs Act provides for provisional release of the goods pending final determination of duties, taxes or any other matter required for the finalization of assessment of goods for import, export or transit. The legal provisions including the Customs Act and the procedures governing various modules of WeBOC may be reviewed to ensure that it allows clearance of goods where assessment could not be completed due to any reason specified in the requirements 7.4 Risk Management - C Each Member shall, to the extent possible, adopt or maintain a risk management system for customs control. A Directorate of Risk Management has been established by FBR but it is still in its infancy. It has not begun in depth work, due to lack of adequate technical support staff and trained manpower to review the strategy, process, results, detailed risk profiles based on PCA, Intelligence, and Valuation etc. The Directorate General of Risk Management should be provided the support staff and other technical resources for development of a business process which enables the directorate to assess and manage the risks and convert these into a strategy for monitoring risks on a continuous basis.

Current Status How to be Fully Compliant Electronic payment - C Each Member shall, to the extent practicable, adopt or maintain procedures allowing the option of Electronic payment for duties, taxes, fees and charges collected by customs incurred upon importation and exportation. MOC to pursue State Bank of Pakistan for legislation. This is not possible unless the SBP activates the Electronic Payment Gateway. Once such a gateway is activated Electronic payments from across banks will be possible. Use of credit cards after SBP legislation. State Bank of Pakistan/ NBP to provide timeline. 7.4 Risk Management - C Each Member shall, to the extent possible, adopt or maintain a risk management system for customs control. A Directorate of RMS established but has not begun in depth work, due to lack of adequate technical support staff and trained manpower to review the strategy, process, results, detailed risk profiles based on PCA, Intelligence, and Valuation etc. Business Intelligence tools (software), Data Analysts, RMS design, capacity building and IT support required. Foreign qualified people required. The risks and strategy for monitoring risks on a continuous basis required.

Current Status How to be Fully Compliant 7.5 Guarantee for Fine & Penalty - B In cases where an offence requiring imposition of monetary penalties or fines has been detected, a guarantee may be required for the penalties and fines that may be imposed. New section in the Customs Act is to be introduced, allowing adjudicating authorities to release goods against securities for fine and penalty, pending final decision. FBR to constitute a committee. Who will determine whether clearance Collectorate or Adjudication Collectorate 7.6 Establishment and Publication of Average Release Times - C Members are encouraged to measure and publish their average release time of goods periodically and in a consistent manner, using tools such as, inter alia, the WCO Time Release Study. This is a legal obligation to publish such time release studies. Occasionally such studies have been conducted by the departments with the assistance of donors’. Time release studies need to be conducted on a regular basis and published for the information of all the stakeholders.

Current Status How to be Fully Compliant 7.7 Trade Facilitation Measures for Authorized Operators - C Each Member shall provide additional trade facilitation measures related to import, export or transit formalities and procedures, pursuant to paragraph 7.3, to operators who meet specified criteria, hereinafter called authorized operators. Alternatively, a Member may offer such facilitation measures through customs procedures generally available to all operators and not be required to establish a separate scheme. Pakistan does not have such a system in operation as yet. Initial steps are being taken towards the establishment of such a system however this will take a long time. Pakistan will require anything from 3-5 (or 7) years to be able to achieve the level where authorized operators can be identified and inducted in an AEO system. Assistance of donors required for developing the system and implementation.

Current Status How to be Fully Compliant 7. 8 Expedited Release - C Each Member shall adopt or maintain procedures allowing for expedited release of at least those goods entered through air cargo facilities to persons that apply for such treatment, while maintaining customs control. A procedure is notified under Customs Rules 43 to 48 Chapter 4-Prior Release of Consignments, which specify the goods and the conditions for prior release. This covers the imports of goods whether they enter by air, by post, or otherwise. The rules may be reviewed to ensure that these meet the requirements of the Article and the relevant guidelines to the RKC. 7.9 Perishable Goods - B Each Member shall provide for the release of perishable goods under normal circumstances within the shortest possible time . There are no provisions in the Customs Act on perishable goods which fix time for temporary storage of goods before clearance or warehousing. The current procedure as provided in Chapter IV (Prior Release) of Custom Rules is reviewed in the light of this Article and the requirements specified in this Article of ATF.

Article 8: Border Agency Cooperation
Article - A Current Status How to be Fully Compliant 8.1 A Member shall ensure that its authorities and agencies responsible for border controls and procedures dealing with the importation, exportation and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade. All relevant Government agencies operating at borders (immigration, Customs, Agriculture, Health etc.) work in coordination. However there is no formal arrangement for such coordination. This can be achieved if border coordination committees are set up with Customs as the lead agency. The most important step in this regard would be the setting up of a Single Window operation at border stations. 8.2 Members shall, to the extent possible and practicable, cooperate on mutually agreed terms with other Members with whom they share a common border with a view to coordinating procedures at border crossings to facilitate cross-border trade. Pakistan is partially compliant in aligning office hours under various agreements with neighboring countries. However, this requires reciprocity and political required. Pakistan would require to have bilateral agreements with all the countries with which it has common borders i.e. Iran, Afghanistan, China and India. M/o Commerce to coordinate.

Article 9: Movement of Goods Under Customs Control Intended for Import
Article - A Current Status How to be Fully Compliant 9.1 Each Member shall, to the extent practicable, and provided all regulatory requirements are met, allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared. Section 121 of the Act provides that the Customs officer may grant leave to transship goods without payment of duty with or without any security or bond for the due arrival and entry of the goods at the inland customs station of destination. It is noted that as per standard above, it is mandatory for the Customs to allow transshipment to some inland customs-station. The Pakistan Law and rules relating to “National transit”, what is now called “Transshipment” in Pakistan need to be recast and “National Transit” has to be allowed from all entry points in Pakistan. This will also require changes in the existing “Transshipment Rules”.

ARTICLE 10: FORMALITIES CONNECTED WITH IMPORTATION, EXPORTATION AND TRANSIT
Formalities and Documentation Requirements (reduce complexity and simplification of documents) - B Acceptance of Copies - Use of International Standards -B Single Window - C Pre-shipment Inspection not required – A MOC is to change the IPO Use of Customs Brokers not mandatory - A Common Border Procedures Uniform Documentation Requirements-B Two types of systems are working. One Customs and WEBOC. WEBOC shall take over in two years completely. Rejected Goods (allow return of goods) - MOC It is related to MOC, Changes in Import Policy order are recommended. Temporary Admission of Goods/Inward and Outward Processing- MOC MOC to change IPO and EPO. FBR can make rules subsequently. Import cum export and Export cum import

Article 10: Formalities Connected With Importation and Exportation and Transit
Current Status How to be Fully Compliant 10.1 Formalities and Documentation Requirements - B With a view to minimizing the incidence and complexity of import, export, and transit formalities and of decreasing and simplifying import, export and transit documentation requirements and taking into account the legitimate policy objectives and other factors such as changed circumstances, relevant new information and business practices, availability of techniques and technology, international best practices and inputs from interested parties, each Member shall review such formalities and documentation requirements. The Committee shall develop procedures for sharing relevant information and best practices as appropriate. The aim of this article is rapid release of goods, reducing the time and cost of compliance and least trade restrictive measures. FBR has not taken any action and referred to M/o Commerce to study best international practices.

Current Status How to be Fully Compliant 10. 2 Acceptance of electronic copies - C Each Member shall, where appropriate, endeavor to accept paper or electronic copies of supporting documents required for import, export or transit formalities. Under the WeBOC regime the original documents are not required for filing of goods declarations. Customs is compliant but other departments needs progress on this issue. 10.3 Use of International Standards - B Members are encouraged to use relevant international standards or parts thereof as a basis for their importation, exportation or transit formalities and procedures except as otherwise provided for in this Agreement. Pakistan Customs do not use international standards in all its procedures and formalities. Customs is compliant to a greater extent. However, needs to study in detail. FBR and MOC would require assistance . This require s complete review of the Customs Laws (WeBOC. WCO data model etc).

Current Status How to be Fully Compliant 10. 4 Single Window - C Members shall endeavor to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation or transit of goods through a single entry point to the participating authorities or agencies. Pakistan Customs is in the process of establishing a National Single Window. However, it will take many years to have fully computerized Single Window. Implementation still requires IT and infrastructure related efforts. Legislation and frameworks will have to be created regulating various ministries and departments. The process will involve business process re-engineering of all departments regulating international trade in any manner and a creation of a single electronic platform. 10. 5 Pre-shipment Inspection Members shall not require the use of pre-shipment inspections in relation to tariff classification and customs valuation. There is no mandatory requirement for Pre-Shipment inspection in Pakistan’s Customs law or other laws and regulations relating to imports . Provisions may be inserted in the Customs Law and the related import law e.g. Imports and Exports (Control) Act, 1950 (Import Policy Order).

Current Status How to be Fully Compliant 10. 6 Use of Customs Brokers -A Without prejudice to the important policy concerns of some Members that currently maintain a special role for customs brokers, from the entry into force of this agreement Members shall not introduce the mandatory use of customs brokers. In Pakistan Customs law the use of Customs Brokers is not mandatory. Pakistan is compliant. 10. 7 Common Border Procedures and Uniform Documentation Requirements - B Each Member shall, subject to paragraph 7.2, apply common customs procedures and uniform documentation requirements for release and clearance of goods throughout its territory. Pakistan applies uniform documentation for release and clearance of for imports, exports and baggage. Compliant. The documents will require to be reviewed as suggested above from this angle that the documentation requirements for release and clearance of goods should be uniform throughout Pakistan.

Current Status How to be Fully Compliant Rejected Goods -MOC Where goods presented for import are rejected by the competent authority of a Member on account of their failure to meet prescribed regulations or technical regulations, the Member shall, subject to and consistent with its laws and regulations, allow the importer to re-consign or to return the rejected goods to the exporter or another person designated by the exporter. Pak customs allow re-export of such goods which are not allowed clearance for home use due to SPS standards. Customs may recommend to the MoC and M/o Agriculture etc to provide in their relevant laws that in case goods are not allowed clearance by Customs on the ground of for SPS reasons, the importers may be allowed to re-export the same on their own expenses. 10. 9 Temporary Admission of Goods/Inward and Outward Processing - MOC Each Member shall allow, goods to be brought into a customs territory conditionally relieved, totally or partially, from payment of import duties and taxes if such goods are brought into a customs territory for a specific purpose, are intended for re-exportation within a specific period, and have not undergone any change except normal depreciation and wastage due to the use made of them. Temporary admission is in Ch. 99, Temporary import for Export as per the Istanbul Convention, 1990, to which Pakistan is a signatory. Pakistan is a signatory to the Istanbul Convention however various provisions of the Convention have not been complied with. Pakistan is compliant with this Article.

Article 11 -- Freedom of Transit
Article - MOC Current Status How to be Fully Compliant 11.1. Any regulations or formalities in connection with traffic in transit imposed by a Member shall not: a. be maintained if the circumstances or objectives giving rise to their adoption no longer exist or if the changed circumstances or objectives can be addressed in a reasonably available less trade restrictive manner, b. be applied in a manner that would constitute a disguised restriction on traffic in transit. Pakistan has many disguised and undisguised restrictions on Afghan Transit under APTTA 2010. Compliant Afghan view is that the Transit Rules issued under APTTA are restrictive and seriously hinder transit to Afghanistan. There is a view that restrictions need to be either completely removed or softened substantially. 11.2. Traffic in transit shall not be conditioned upon collection of any fees or charges imposed on transit, except the charges for transportation or those commensurate with administrative expenses entailed by transit or with the cost of services rendered. Compliant so far as Afghan Transit is concerned. However, so far there are no general rules for transit. Compliant for FBR. Pakistan needs to issue general Transit Rules to enable CARs to import and export goods through Pakistan.

Article 11: Freedom of Transit
Article - MOC Current Status How to be Fully Compliant Members shall not seek, take or maintain any voluntary restraints or any other similar measures on traffic in transit. This is without prejudice to existing and future national regulations, bilateral or multilateral arrangements related to regulating transport consistent with WTO rules. Same as in Article 11.2 above Compliant for FBR. Each Member shall accord to products which will be in transit through the territory of any other Member treatment no less favorable than that which would be accorded to such products if they were being transported from their place of origin to their destination without going through the territory of such other Member. Pakistan is not compliant as the Rules issued for Afghan transit are highly restrictive and there is no “National Treatment”. Pakistan should accord “National Treatment” to all International Transit. Members are encouraged to make available, where practicable, physically separate infrastructure (such as lanes, berths and similar) for traffic in transit. Physically separate infrastructure is not provided . Transit sheds no longer in use for Transit. Not compliant . Infrastructure is required at border stations like Torkham and Chaman.

Article 11 -- Freedom of Transit
Article - A Current Status How to be Fully Compliant Formalities, documentation requirements and customs controls, in connection with traffic in transit, shall not be more burdensome than necessary to: a. identify the goods; and b. ensure fulfillment of transit requirements. FBR compliant Pakistan has many disguised and undisguised restrictions on Afghan Transit under APTTA 2010. As against Article 11.1. Once goods have been put under a transit procedure and have been authorized to proceed from the point of origination in a Member's territory, they will not be subject to any customs charges nor unnecessary delays or restrictions until they conclude their transit at the point of destination within the Member's territory. In this case Pakistan is compliant. This however is only part of the journey and the start and end of the journey have created many restrictions for Transit Trade. FBR Compliant. As against Article This will reduce the requirement for documentation substantially Members shall not apply technical regulations and conformity assessment procedures within the meaning of the Agreement on Technical Barriers to Trade on goods in transit. Although APTTA rules do not require application of technical regulations and compliance assessment procedure, this needs to be mentioned in the Transit Rules. Pakistan is not compliant FBR compliant. Same as against Article 11.2

Article- A Current Status How to be Fully Compliant Members shall allow and provide for advance filing and processing of transit documentation and data prior to the arrival of goods. Pakistan has allowed the advance filing and processing prior to the arrival of the goods in the WeBOC transit module wide SRO 121, (I)/ 2014, Dated 24th February, 2014 Same as against 11.2 Once traffic in transit has reached the customs office where it exits the territory of the Member, that office shall promptly terminate the transit operation if transit requirements have been met. Pakistan Customs still require that Afghan Customs should provide T1 issued by Afghan Customs for National Transit of that consignment, A cross border certificate, a copy of Pakistan Customs Goods Declaration . The Insurance guarantee should be released once the goods have crossed into Afghanistan and this is confirmed through tracking devices, de-sealing of containers at exit, EDI message from Afghan Customs and confirmation by Customs at Torkham/ Chaman. Where a Member requires a guarantee in the form of a surety, deposit or other appropriate monetary or non-monetary instrument for traffic in transit, such guarantee shall be limited to ensuring that requirements arising from such traffic in transit are fulfilled. The current Transit Rules go beyond the requirements arising from such traffic in transit. There are excessive requirements even in the calculation of the amount of such guarantees as the withholding income tax is also included in the amount of the guarantee. As recommended against Article 11.1.

Current Status How to be Fully Compliant Members shall endeavor to cooperate and coordinate with one another with a view to enhance freedom of transit. Such cooperation and coordination may include, but is not limited to an understanding on: i. charges; ii. formalities and legal requirements; and iii. the practical operation of transit regimes. Pakistan and Afghanistan have already signed an Agreement on Transit Trade where the requirements of this sub-article have been met. Same as against 11.2 Each Member shall endeavor to appoint a national transit coordinator to which all enquiries and proposals by other Members relating to the good functioning of transit operations can be addressed. Pakistan has appointed a Director General for Transit. He, however, has not been appointed as the National Transit Coordinator. His name and contacts have also not been communicated to the WTO. DG Transit may be appointed as the National Transit coordinator and his name and contacts should be communicated to WTO and its members.

Article 12: Customs Cooperation
Promoting compliance and cooperation amongst traders Exchange of information between Customs administrations Request for information Protection and confidentiality of information Principle of reciprocity to be followed Limitations in seeking information from other countries

ARTICLE 13: INSTITUTIONAL ARRANGEMENTS
1. COMMITTEE ON TRADE FACILITATION WTO has established a Committee on Trade Facilitation for overseeing the implementation of the Agreement. 2. NATIONAL COMMITTEE ON TRADE FACILITATION Each Member shall establish and/or maintain a national committee to facilitate both domestic coordination and implementation of provisions of this Agreement.

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Trade Facilitation Agreement Implementation plan

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Trade Facilitation Agreement Implementation plan

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