WORLD TRADE  
ORGANIZATION  TN/TF/W/12 
4 February 2005 
 (05-0473) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM THE UNITED STATES 
  
 The following communication, dated 4 February 20 05, is being circulated at the request of the 
United States. 
 
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ADVANCE BINDING RULINGS 
 
 
I. PROPOSAL 
X Make available, upon request of a trader in  advance of trade, binding rulings in certain 
specific subject areas (e.g., tariff classific ation, customs valuation, duty deferral). 
 
II. IMPROVEMENT AND CLARIFICATION 
1. This proposal would present an improvement by bringing certainty for traders and customs 
authorities regarding key elements of import transa ctions, in advance of trade commencing.  An 
example of this type of WTO commitment, albeit with a narrow subject matter application, already 
exists in the Rules of Origin Agreement.
1  The latter includes elements related to duration of the 
ruling, modification procedures and othe r specific parameters of operation.  
III. EXPERIENCE 
2. As has been described in great detail duri ng the previous WTO work on Trade Facilitation, 
establishing a regime for traders to obtain binding ru lings in advance of trade is a cornerstone for 
providing certainty at the border (e.g., G/C/W/384 submission by the United States of America ;  
C/C/W/379 submission by Canada ; G/C/W/363 submission by European Communities ;  G/C/W/392 
communication from the World Customs Organization ).  An advance ruling allows a trader to know  
./. 
                                                      
1Article 2 of the Agreement on Rules of Origin states  that: "upon the request of an exporter, importer 
or any person with a justifiable cause, assessments of the origin they would accord to a good are issued as soon 
as possible but no later than 150 days after a request for such an assessment provided that all necessary elements 
have been submitted.  Requests for such assessments  shall be accepted before trade in the good concerned 
begins and may be accepted at any later point in time.  Such assessments shall remain valid for three years 
provided that the facts and conditions, including the rules of origin, under which they have been made remain 
comparable.  Provided that the parties concerned are in formed in advance, such assessments will no longer be 
valid when a decision contrary  to the assessment is made in a review as referred to in subparagraph (j). Such 
assessments shall be made publicly available subject to the provisions of subparagraph (k);"  TN/TF/W/12 
Page 2  
 
 with certainty how merchandise will be treated, allo wing for the amount of duties to be known before 
the goods are even loaded for transport.  Like many other Members, the United States has had a 
longstanding rulings program, and relies on it as an  integral element of its efforts to ensure 
compliance.  Rulings are issued within 90 days fro m receipt of the ruling request, and the subjects of 
the rulings include:  classification, value, admissibility, marking, country of origin, and cabotage.   
IV. COSTS 
3. To a large extent, establishing an advance binding ruling regime is a re-orientation of certain 
customs administrative decision-making away from th e border, and into a function that may not be 
attached to an actual ongoing trade transaction.  As  such, it can involve redirection of administrative 
resources, but involves costs associated with training  personnel, some of which may be transitional.  
A possible method for an advance ruling regime to  be self-supporting would be through a reasonable 
fee structure for obtaining a ruling, which some  Members already use.  Another possibility for 
reducing the costs in establishing a regime would be through resource sharing, such as through a 
regional ruling authority.  In its recent survey, th e OECD reported that countries it reviewed did not 
consider the administration of binding rulings as calling for additional resources.  (OECD publication 
TD/TC/WP (2004)36). 
V. SPECIAL AND DIFFERENTIAL TREATMENT 
4. There currently exists a significant array of s ituations among developing  country Members as 
to whether and how commercial rulings may be provided.  Establishing a fully operating advance 
ruling regime may present significant challenges to some developing country Members, particularly Least-Developed Members.   
5. As with every other proposal, the United Stat es looks forward to working with Members to 
examine the question of whether appropriate tran sition mechanisms would be necessary to address 
particular needs.  Given the unique importance and nature of this proposed commitment, the 
United States is interested in wo rking with Members to consider what other means to implement the 
proposal, such as resource sharing between Memb ers, "mutual recognition"  of rulings between 
Members, or other mechanisms to utilize expe rtise outside the capacity of some Members. 
VI. TECHNICAL ASSISTANCE AND CAPACITY BUILDING 
6. The United States has experience in providing technical assistance in the establishment of 
advance binding rulings regimes, assisting in draf ting of legislation and re gulations, and providing 
training to subject-matter experts. 
VII. NEXT STEPS IN NEGOTIATIONS 
Χ Members refine the subject areas and procedur al elements of a commitment to provide 
advanced binding rulings, and explore avenues for implementation through means such as 
resource sharing or mutual recognition. 
 
Χ Members work together to develop a method and means for undertaking a diagnosis of 
individual Member situations regarding an advance ruling regime, including an assessment 
of time and resources needed for full implementation. 
 
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