WORLD TRADE  
ORGANIZATION  TN/TF/W/79 
15 February 2006 
 
 (06-0635) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM ARMENIA, CANADA, THE EUROPEAN COMMUNITIES, 
THE KYRGYZ REPUBLIC,  MONGOLIA, NEW ZEALAND,  
PARAGUAY, AND THE REPUBLIC OF MOLDOVA 
  
 The following communication, dated 14 Februa ry 2005, from the Delegations of Armenia, 
Canada, the European Communities, the Kyrgyz Republic, Mongolia, New Zealand, Paraguay, and 
the Republic of Moldova, is being circulated in  advance of the Negotiating Group meeting of 15-
16 February.  
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PROPOSALS ON TRANSIT 
  
I. INTRODUCTION  
1. With a view to clarifying and improving GATT Article V disciplines on freedom of transit, 
and developing a set of multilateral commitments, the following proposals are being submitted to the 
Negotiating Group on Trade Facilitation. The pr oposals have been based on the compilation 
document TN/TF/W/43/Rev.4. The subsequent excha nge of views on proposals has also been drawn 
on, including as reflected in the compilation of questions and answers on Members' proposals in 
document JOB(05)/222. The proposals are without prejudice to the possible format of the final result of the negotiation.  
II. SPECIAL AND DIFFERENTIAL TREATMENT AND TECHNICAL ASSISTANCE 
2. In taking proposals forward, Members must  establish precise, effective and operational 
special and differential treatment which relates the extent and timing of entering into commitments to 
implementation capacities. For potentially r esource demanding commitments, such as those 
concerning bonded transport regime s and authorized trader schemes, special and differential 
treatment, for example in the form of transition periods, or even specific exemptions until capacity 
exists, would probably be required for some de veloping countries, notably the LDCs, and other 
countries in need, notably small low-income economies in transition. This may be in conjunction with 
technical assistance and capacity building as a means to obtain requisite implementation capacity. 
Special and differential treatment and technical assistance in relation to transit are of particular importance to landlocked developing countries given their specific needs and challenges, including in 
terms of lack of territorial access to the sea, remo teness from world markets and high costs associated 
with trading. The further identification of Member s' needs and priorities in relation to the proposals 
can help take all the above issues forward in pa rallel to and as a key element of discussions on the 
proposals set out below.  
 TN/TF/W/79 
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  III. SPECIFIC PROPOSALS 
(a) Legitimate public policy objectives and traffic in transit 
• Members recognize that the legitimate public policy objectives set out in GATT Articles XX 
and XXI, including in relation to national security , health, safety and the environment, shall not 
be compromised in any way. To that end, Members recognize that the general and security 
exceptions provided for in GATT Articles XX a nd XXI shall be fully applicable. Members 
recognize that arbitrary or unjustifiable discrimina tion or disguised restrictions on international 
trade must not be applied to traffic in transit. 
 (b) Non-discrimination 
• National treatment : With respect to all laws, regul ations, requirements, procedures  and fees and 
charges, including transportation charges, affecting the internal passage of traffic in transit across 
the territory of a Member, without prejudice to th e legitimate customs control and supervision of 
goods in transit, Members shall accord to traffic in transit to or from the territory of any 
Member, treatment no less favourable than th at accorded to domestic goods, exports and 
imports, and their movement.  
 
(c) Fees and charges 
• Publication : Members shall publish information on all fees and charges imposed on or in 
connection with transit, or as a condition for tran sit, including transportation charges, ("transit 
fees and charges"), along with their justifi cation and basis. Members shall make this 
information readily available to all interested parties and inform other Members of where this 
information is available. Members shall accord an adequate time period between the publication 
of information on new or amende d transit fees and charges and their entry into force except 
when justified by legitimate public policy objec tives. In no event will new or amended transit 
fees and charges, which are more burdensome than  those previously applied, enter into force 
until information on them is published and made readily available. 
 
• Periodic review : Each Member shall periodically review its transit fees and charges to ensure 
that they are in line with WTO commitments and with a view to consolidating them and 
reducing their number and diversity. 
 
• Reduction / Simplification : Members shall exempt traffic in transit from customs duties, transit 
duties and other fees and charges, except trans it fees and charges that are commensurate with 
the cost of services rendered. An y transit fees and charges shall: 
 
- Be reasonable, having regard to the conditions of transit; 
- Not be charged with respect to consular services;  
- Only be charged for transit services related to the specific transit movement 
in question;  
- Not exceed the approximate cost of the transit service provided;  
- 
Not be calculated on an ad valorem basis.   TN/TF/W/79 
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  (d) Transit formalities and documentation requirements 
• Publication : All laws, regulations, requirements and procedures on or in connection with transit, 
or as a condition for transit ("transit formaliti es and documentation requirements"), along with 
their justification and basis, shall be made pub lic. Members shall make this information readily 
available to all interested parties and inform  other Members of where this information is 
available. Members shall accord an adequate time period between the publication of new or 
amended transit formalities and documentation requ irements and their entry into force except 
where justified by legitimate public policy obj ectives. Members shall periodically publish the 
average time for release of traffic in transit at main points of entry and exit using tools such as 
the WCO Time Release Study.   
 
• Periodic review : Members shall periodically review th eir transit formalities and documentation 
requirements to ensure that they are in lin e with WTO commitments and with a view to 
consolidating and reducing their impact on trade. Such reviews shall allow for the participation 
of all interested parties and, as appropriate, may be held at a bilateral, regional or international 
level.  
 
• Reduction / Simplification : Members shall ensure that traffic in  transit through their territory is 
not subject to any unnecessary delays, restrictions , inspections or controls. Transit formalities 
and documentation requirements shall be reasonable having regard to the conditions of transit, 
applied uniformly and be not more trade restric tive than necessary to achieve the legitimate 
public policy objective pursued. For traffic in  transit, Members shall provide for: 
 
- The processing of transit documents and data prior to the arrival of the 
transiting consignment;  
- The use by traders of commercially av ailable information, documents and 
data wherever possible, including as part of transit declarations;  
- The progressive establishment of a single window for traffic in transit;  
- Separate physical lines, as far as possible, at the border for traffic in transit.  
• Use of international standards : Members shall draw upon international standards and 
instruments1 as a basis for transit formalities and documentation requirements, where such 
standards and instruments exist, except when th ey would be an inappropriate or ineffective 
means for the fulfilment of the legitimate objectives pursued. 
 
• Promotion of regional trans it agreements or arrangements : Members shall promote bilateral 
and regional transit agreements or arrangement s with a view to reducing trade barriers. 
Members agree to cooperate and coordinate in designing and applying bilateral and regional 
transit agreements or arrangements. Members sh all take full account of international standards 
and instruments when designing and applying b ilateral and regional transit agreements or 
arrangements. Members shall not enforce unilatera l rules affecting traffic in transit which are 
not in accordance with the bilateral or regional transit agreements or arrangements in which 
they participate. Members participating in re gional transit agreements or arrangements shall 
                                                      
1 International standards and instruments on transit include the Specific Annex E of the International 
Convention on the Simplification and Harmonisation of Customs Procedures (the Revised Kyoto Convention), the UN TIR Convention, the ATA Convention, the Istanbul Convention, the International Convention on the 
harmonization of frontier controls of goods, the UN Layout Key for documentation and the WCO Data Model.  TN/TF/W/79 
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  give positive consideration to reasoned requests to participate by other Members who fill the 
requisite participation criteria.  
 
• Simplified treatment : Members shall use risk management techniques to enable any inspections 
to be targetted on the basis of the degree of risk  attached to individual consignments. This shall 
include the establishment of authorized trader  schemes which grant simplified treatment to 
traders with a good track record of complianc e with transit formalities and documentation 
requirements. In designing and applying tran sit formalities and documentation requirements, 
Members shall take account of the inherent characteristics of goods.  
 
• Bonded transport regime and guarantees : Members shall operate bonded transport regimes that 
allow the transit of goods through the territory of Members without payment of customs duties 
or other charges subject to the provision of an appropriate guarantee. Members shall ensure that 
guarantees required from transit operators are:  
 
- Reasonable having regard to the conditions  of transit and the nature and value 
of the consignment in question, and lim ited to the amount of customs debt or 
other charges which may be incurred in respect of the goods; 
- Designed and applied on a regional or inte rnational basis to as great an extent 
as possible; 
- Released promptly after the completion of the transit operation;  
- Released in full after the completion of the transit operation. 
No fees and charges shall be imposed in rela tion to the use of bonded transport regimes and 
guarantees except for those directly related to th e approximate cost of any service provided.   
 
(e) Cooperation and coordination 
• Amongst authorities : Members shall ensure cooperation an d coordination between all concerned 
authorities and agencies in their territory to facilita te traffic in transit. Members shall ensure co-
operation with other Members on issues of traffic in transit, including with regard to 
standardizing regulations, formalities, documenta tion and other requirements and procedures in 
connection with transit, including working hours at and operations of border crossings. To this 
end, Members neighbouring each other shall, as far as possible, meet periodically to discuss and come to an understanding on the fees, formalities,  legal requirements and practical operation of 
transit regimes relating to goods moving in transit between them. 
 
• Between authorities and the private sector : Members shall provide opportunities for interested 
parties to comment on the transit regime, includi ng with regard to the introduction of new or 
amended fees and charges, regulations, forma lities, documentation and other requirements and 
procedures in connection with transit, with a view to minimizing unnecessary delays and restrictions on traffic in transit.  
 
(f) Operationalization and clarification of terms 
• Freedom of transit and routes most convenient for international transit : There shall be freedom 
of transit through the territory of each Member via the routes most convenient for international 
transit. Members shall ensure that traders have the right to choose the route most convenient for 
international transit subject to any reasonable restrictions they impose for legitimate public 
policy objectives. No distinction shall be made  which is based on the choice of means of  TN/TF/W/79 
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  transport, the flag of vessels, the place of origin , departure, entry, exit or destination, or any 
circumstances relating to the ownershi p of goods or means of transport. 
 
• Definition of traffic in transit : Goods (including those moved via fixed infrastructure, inter alia  
pipelines, baggage and the personal belongings of  the person operating the means of transport), 
and means of transport, shall be deemed to be in transit across the territory of a Member when the 
passage across such territory, is  only a portion of a complete journey beginning and terminating 
beyond the frontier of the Member whose territory the traf fic passes.  Traffic of this nature is 
termed "traffic in transit" ir respective of (1) trans-shipment, warehousing, breaking bulk, or 
change in the mode of transport and (2) whether the goods or means of transport, after passing 
across a territory of a Member, return to the territory of a Member which they have already left. 
This definition shall not apply to th e operation of aircraft in transit,  but shall apply to air transit of 
goods (including baggage). 
 (g) Final comments 
3. Not all GATT Article V disciplines have been a ddressed in the commitments proposed above, 
for example the existing commitments in GATT Articles V:5 and V:6. We believe that these Articles 
should remain broadly unchanged but are, of course, ready to discuss and explore proposed 
clarifications and improvements to them. Furtherm ore, while some issues re lated to transit, for 
example appeal procedures, are not addressed in this submission, they may of course be addressed in future submissions. 
 
 
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