./.  WORLD TRADE  
ORGANIZATION  TN/TF/W/31 
27 April 2005 
 (05-1721) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM HONG KONG, CHINA 
 
 
 The following communication, dated 26 Apr il 2005, from the Delegation of Hong Kong, 
China, is being circulated in advance of the Negotiating Group meeting of 2-4 May 2005. 
 
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PROPOSAL FOR IMPROVING GATT ARTICLE VIII 
 
I. PROPOSAL 
1. Hong Kong, China proposes the following im provements to Article VIII of GATT 1994: 
(a) Necessity of Trade Regulations 
(i) Members should minimise the incidence and complexity of import and export 
formalities and decrease and simplify import and export documentation requirements to ensure that such fo rmalities and requirements are no more 
administratively burdensome or trade rest rictive than absolutely necessary to 
achieve their legitimate objectives and ar e applied in an efficient manner. 
(ii) Any fees, charges, formalities or requirements referred to in Article VIII of 
GATT 1994 should not be maintained if the circumstances or objectives giving rise to their adoption no longer exist or if the circumstances or objectives can be addressed in a less trade restrictive manner.  Each Member should review its fees, charges, form alities and requirements at reasonable 
and regular intervals.  In such a re view, the concerned Member should take 
into account relevant new information, new business practices, and adoption 
of modern techniques and new technology. 
II. EXPLANATION 
2. Proposal (a)(i) is a step forward from the existi ng paragraph 1(c) of Article VIII, in which 
Members merely "recognise the need for" minimisi ng the incidence and complexity of import and 
export formalities and decrease and simplify impor t and export documentation requirements.  The 
proposal aims to put the statement into action and is  cast in general terms as circumstances vary from 
one Member to another, and fro m one measure to another.  
3. The proposal further establishes two benchmarks, namely 
(a) the formalities and requirements are no more  administratively burdensome or trade 
restrictive than absolutely  necessary to achieve their legitimate objectives; and TN/TF/W/31 
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 (b) they are applied in an efficient manner. 
4. The first benchmark comprises a necessity test (in terms of the administrative burden brought 
by, and trade restrictiveness of, the measures) and a balance against reasonableness (having regard to 
the need for measures to achieve certain legitimat e objectives, e.g., implementation of international 
conventions, other than those falling within exceptions  already provided for under GATT) with regard 
to the objectives of applying the formalities and re quirements.  The second benchmark is to ensure 
that measures are applied efficiently so as to re duce transaction costs and processing time for traders, 
if not for the authorities. 
5. Further to proposal (a)(i), proposal (a)(ii) institutes a necessity test for prevailing fees, 
charges, formalities and requirements referred to in Article VIII of GATT 1994.  Clearly, if the 
circumstances or objectives giving rise to the ad option of a measure no longer exist, the measure 
should not be continued.  Even if such circumstan ces or objectives still exis t, the measure should not 
be continued if the circumstances or objectives can be  addressed in a less trade restrictive manner.  In 
this latter case, the measure may simply be abo lished, or a simplified or more trade facilitating 
measure may be more suitable. 
6. Proposal (a)(ii) further establishes a self-review  mechanism for formalities and requirements.  
It is incumbent upon any authority to review the fees, charges, formalities and requirements under its 
purview at reasonable and regular intervals.  It is not  possible to define a rigid standard period of time 
for the intervals, having regard to different circumstances of different Members and measures.  The proposal also sets out several key factors that should  be taken into account during the reviews.  Lastly, 
it must be emphasised that the proposed review mechanism does not affect  Members’ rights and 
obligations under the existing paragraph 2 of Article VIII. 
III. IMPLEMENTATION CONCERNS 
7. It is believed that the proposal does not entail s ubstantial costs for implem entation or give rise 
to major problems of capacity.  Members having a pplied certain formalities and requirements, or 
considering to apply new ones, are in the best pos ition and with the full capacity of analysing them 
and making sure that they are not overly administratively burdensome or trade restrictive. 
8. It is nevertheless envisaged that some Members may not be able to review all of their 
formalities and requirements instantly if and when proposal (a)(ii) comes into force.  A reasonable 
period of time may be provided to enable  Members to complete the first review. 
 
 
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