RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/234
23 October 2000
(00-4377)
Council for Trade in Goods Original:  English/
French
TRADE FACILITATION
Simplifying customs procedures and cutting red tape for SMEs: -
Switzerland’s experience with “trade facilitation”
The following communication, dated 20 October 2000, has been received from the Permanent
Mission of Switzerland.
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1. Introduction : Facilitating trade by SMEs in a globalized economy
Competitive pressure arising from the ongoing integration of international markets requires
companies to act with ever increasing speed. They should not be kept from dealing with their business
by complicated authorization procedures and time  consuming administrative tasks. This general
observation – although true for all firms – applies above all to SMEs, which are becoming more and
more "international" in scope, but often do not have much resources at their disposal.
Undeniably, globalization creates growth opportunities for many SMEs. It also presents the
authorities with a constant challenge concerning rules and procedures enabling them to reach an
equilibrium between:
- adapting internal procedures (abolishing redundant measures, creating new ones) to
circumstances resulting from the harmonization of international or regional requirements;
- cutting down on administrative measures in order to provide SMEs with the most appropriate
framework for their development.
The unavoidable interactions between simplifyi ng customs procedures and adapting internal
administrative provisions constitute a major element of facilitating trade, in particular for  SMEs.
This presentation proposes to illustrate certain characteristics of such interactions by means of
examples taken from Swiss practice. In response to globalization, the issue of facilitating trade for
SMEs has been widely debated in Switzerland over the past ten years. We shall first briefly examine
the benefits and the internal administrative implications of measures to facilitate trade, and conclude
by discussing a few points in the context of the WTO.
2. Simplifying customs procedures: some recent developments 
For any company the reduction, or even the downrig ht abolition of trade barriers represents a
direct advantage generated by the various possible forms of economic integration. Not being aG/C/W/234
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member of the internal European market, Switzerland as a first step had to simplify its customs
procedures as much as possible, and cooperate in constructive fashion with the customs authorities of
its neighbors.
Any in-depth analysis of customs procedures reveals that many of them exist only to simplify
or suspend standard procedures in specific exceptional cases. Such simplifications or exceptions may
have a bearing on taxes or tariffs (preferential agreements), on administrative provisions  (simplified
procedure for documentary evidence of origin), or combine both. Having become aware of this fact,
Switzerland has moved to significantly simplify customs procedures for registered addressees and
dispatchers,  and for companies that regularly conv ey a certain volume of goods over the border. The
advent of e-commerce and the possibility of processing data  online now offer new possibilities of
simplifying customs procedures,  as shown by the work of the United Nations Economic Commission
for Europe (UN/ECE).
The combination of electronic data processing  with common forwarding  procedures between
Switzerland and the EU has recently given rise to a new computerized transit system  (NCTS), a pilot
project in which Switzerland is taking part alongside  Germany, the Netherlands, Spain and Italy.Launched in May 2000, the NCTS does away with multiple registration and data transmission. Once it
has been entered, information on a consignment is available not only to the dispatcher and the
customs authorities of the exporting country, but also to the customs of the countries through which
the goods transit, and the country of destination. In fact, all transit formalities are dealt with
electronically. The ongoing expansion of the functions of the NCTS and its generalized introductionin all the countries of the common transit zone will follow upon the pilot phase. Overall introduction
in all the contracting countries of the common transit zone is planned for mid 2003. For a land-locked
country like Switzerland, through which approximat ely  500'000 consignments transit each month, the
impact of such a project is very substantial.
3. Adapting internal administrative provisions goes hand in hand with the evolution of
customs   
While simplifying customs procedures has a leading role in trade facilitation, the impact of
such simplification measures for enterprises depends a lot on the evolution of the domestic legislative
and regulatory framework, above all concerning authorizations. A twofold challenge will have to be
met: firstly, easier access of national goods to foreign markets as a result of the international
harmonization of requirements means that regulations will have to be adapted to international
standards; typically, this could take the form of suppressing redundant measures or the creation of
new ones in line with international requirements. Secondly,  overlapping areas of competence between
different administrative bodies may hamper the application of  "accelerated" procedures, a problem to
be solved by streamlining administrative measures.
As part of its recent efforts to simplify customs procedures, Switzerland has systematically
evaluated all types of government authorizations (licenses, concessions, patents, dispensations, etc.)
for various types of economic and trade activity. The results of this evaluation has enabled Swiss
authorities to introduce the following measures directly benefiting companies:
 i. Stepped-up procedures : a decree on deadlines for reply came into force on January 1
st 2000 in
order to pressure the administration to process applications as rapidly as possible. Firms are thus
able to know whether they may expect an answer within several days, several weeks or several
months.G/C/W/234
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 ii. Better co-ordination of procedures :  in order to avoid overlapping areas of competence,
redundant authorizations or overly complex procedures, the Swiss administration has made an
effort to streamline its internal dealings. Certain import or export related activities are often
subject to several national laws as well as to various international provisions. This is for
example the case for phytosanitary products,  which are subject to control by threeadministrative bodies , i.e. the Federal Agricultural Office for sales licensing, the Federal Office
for Public Health for consumer protection, and the Federal Office for the Environment for all
matters relating to toxicity. In this particular case,  a single window  has now been set up by the
Federal Agricultural Office to deal with all cases of conflicting competence and to coordinate
dealings between the three offices. This single window will now process all applications for
authorization and coordinate  dealings within the administration for the importing or exporting
firm. This move has also made it possible to eliminate redundant authorizations without risk tothe level of control or safety.
 iii. More liberal and transparent legislation : the Swiss administration undertook a number of
internal modifications in order to adapt to the harmonization of certain provisions and
formalities relative to trade. For example, partly as a result of the   bilateral agreements that
Switzerland recently signed with the EU which are based on the principle of mutual recognition,
customs formalities for the import and export of risk-free animal products will be considerably
liberalized. One-off authorizations will be supplanted by annual ones; the importer will be
granted a general licence, and have the possibility of being registered as the consignee. For
animal products from the EU, physical controls wi ll be conducted only in exceptional cases, and
a simplified surveillance system will take the place of the current quarantine system. Needless to
say, all these modifications are only possible thanks to the ever more generalized exchange of
electronic data. Besides, for some time now, Switz erland has been pursuing a policy anticipating
the need to adapt technical requirements. They should be set up and worded in a manner not
giving rise to technical obstacles to trade, and compatible with the requirements of its principaltrade partners. As regards evidence of conformity, it must be noted that Switzerland recognizes
unilaterally -but subject to certain conditions- conformity assessment reports or certificates
made out by a foreign body.
 iv. Client orientation : in order to respond more efficiently to the needs and demands of the firms,
the administration has set up central information systems and telephone hotlines. Most of the
administrative parties concerned now have a Website, some of which offer online applicationforms. For example, the Federal Department of Economic Affairs now operates a Website for
SMEs  ( www.pmeinfo.ch ) with a data bank on authorization procedures. This site aims to
become a major portal for small and medium sized firms, a platform for information and direct
communication – in short, an interface between the firms and the administration.
These examples give us an overview of the measures introduced by Switzerland in order to
improve conditions for SMEs and facilitate international trade. They clearly demonstrate that
simplifying customs and administrative procedures is a dynamic process, and that the relevant
provisions should be ever more attentive to the requirements of the private sector.
4. A few general considerations drawing on th e swiss experience with experience with the
view to strengthen trade facilitation in the WTO
 i. The concept of transparency is essential when introducing measures to facilitate trade .  In
practice, transparency means more than just publishing laws, regulations or instructionsapplicable to various areas of trade. It also requires measures liable to improve coordinationG/C/W/234
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between the various administrative bodies. In  this regard, the “single window” concept is
certainly one of the most effective ways to foster transparency, and has been warmly welcomed
by SMEs. Within the terms of current WTO regulations , article X (§1 and §2) GATT 1994,
which deals with the publication and administration of provisions relating to trade, is not very
explicit on this subject. Although certain existing Agreements, such as the  TBT and the SPS,contain  measures that provide for the one-stop shop  principle, its practical application continues
to be vague and discretionary. Article X might be used to set up stricter provisions relating to
transparency, and making current national regulations clearer and more predictable for
economic players.
 ii. In order for measures facilitating trade to be meaningful, it is absolutely necessary to improve
the co-ordination between customs and administrative bodies in general , in particular as
concerns SMEs. Over and above the demand for greater transparency, the alleviation of
administrative burden and the rationalization of existing domestic procedures have a direct
impact on the competitiveness of some firms, especially when speed is the essence in
international trade. In the current WTO framework, such coordination is required under the
terms of article VIII (§1(c) and §4 in particular) of GATT 1994. Since administrative formalitiesmay act as substantial though indirect trade restrictions, it seems advisable to investigate this
issue more thoroughly and determine the possible content of a explore this field in detail in
order to define the possible content of a coherent trade facilitation regime.
 iii. The recourse to international standards developed and harmonised by non governmental bodies
or the equal recognition of current national standards if international ones are lacking, the
harmonisation of technical regulations, and the recognition of conformity assessment
procedures are the cornerstones of facilitating trade . Firms involved in international trade often
have to deal with different national requirements to be able to market their products (obligatory
standards, technical, sanitary or phytosanitary requirements, and testing or evaluating productsfor their conformity with mandatory requirements).  In this regard, the trend towards progressive
harmonization of previously different national standards and  towards the recognition of
equivalence of existing standards when international standards are not available, is clearly
beneficial for traders in terms of transparency and predictability. The TBT and SPS Agreements
offer an outstanding framework in which to deal with these complex and constantly evolving
issues. They should nonetheless be consolidated in response to the growing need for
transparency and co-ordination between relevant administrative bodies, and to current electronic
developments which could greatly facilitate trade.
 iv. Mutual acknowledgement of documents (forms) and data contained therein, in combination with
present-day advances in electronic data processing, contribute significantly to facilitating trade
and transit traffic.  Modernizing customs procedures and technology will constitute an
obligatory step on the way to stimulating trade, by facilitating and speeding up customs
clearance, but also to struggle effectively against fraudulent practices. Although these  measures
will require considerable expenditure for infrastructure and training costs, they must be
considered as part of an investment effort, which quickly produces sizable effects in all areas of
trade-related economic activity, including transport, banking and insurance services. This isparticularly true for countries with a large volume of transit; relevant regulations in this area are
all the more important for traders. In the WTO framework, the terms of Art. VIII (in particular
§1(c) and §4) and of Art. V (in particular §3 and §4) GATT 1994, do constitute a necessary yet
insufficient basis for the enhancement of trad e facilitation: the level of uncertainty and
discretion surrounding some trade-related practices –including customs clearance time- is still agenuine obstacle for many traders.G/C/W/234
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5. Conclusion
The Swiss experience illustrates the complex nature of the necessary interactions between
simplifying customs procedures and adapting the in ternal administrative framework. Such interactions
are what endow measures to "facilitate trade" by companies, and SMEs in particular, with their full
meaning. Indeed the four issues discussed in section 4 show that a lack of coherence betweensimplifying customs procedures and internal provisions may constitute of source of great uncertainty
for all traders. In this regard, the existing WTO rules provide a useful and logical starting point for a
serious investigation of the need to develop a coherent framework of rules relating to trade facilitation
in view of the problems discussed above. Switzerland aims to take an active part in this investigation
and debate.
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