WORLD TRADE  
ORGANIZATION  TN/TF/W/68 
24 October 2005 
 (05-4881) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM INDIA 
  
 The following communication, dated 21 October 2005, from the Delegation of India, is being 
circulated in advance of the Negotia ting Group meeting of 24-25 October 2005. 
 
 
_______________ 
 
 
 
COOPERATION MECHANISM FOR CUSTOMS COMPLIANCE 
 
 
I. INTRODUCTION 
1. The joint proposal by India and the United St ates in TN/TF/W/57 sets out the basic approach 
to establish a multilateral mechanism for exchange and handling of information between Members.  
The present paper deals with exchange of trade transaction information consisting of the data 
elements and document(s) that are usually collect ed by customs, at the time of importation or 
exportation.  It proposes a cooperation mechanism for exchange of specific information, in a limited 
number of cases upon request, when there is reason to  doubt the truth or accuracy of the declaration 
filed by the importer or exporter.   
II. PROPOSAL 
2. Establish a mechanism to facilitate c ooperation between customs authorities by: 
(i) Exchanging specific information upon request  on matters such as customs valuation, 
HS classification,  full and accurate description, quant ity, origin of goods in identified 
cases where there is reason to doubt the truth or accuracy of the declaration filed by 
the importer or exporter.  The request for information would be limited to the data 
elements contained in the import or export declaration.   
(ii) In appropriate cases, providing document(s ) filed in support of goods declaration to 
the requesting country for investigative and/or judicial processes.   
III. JUSTIFICATION 
3. The objective of the present negotiations is to si mplify and liberalize border controls to ensure 
expeditious clearance of the legiti mate trade without compromising on the controls that have to be 
exercised.  A multilateral cooperation mechanism for exchange of information among customs 
administrations would be an important step in achieving this aim.  TN/TF/W/68 
Page 2  
 
 4. There are existing arrangements for exchange of information through negotiating bilateral 
agreements.  However bilateral agreements are not always easy to enter into, and at times, they are 
limited in nature.  It is also not possible to have  bilateral agreements with all countries on account of 
logistical limitations or due to unwillingness of either  party to enter into such an agreement.  The 
bilateral approach also has inherent limitations  on account of limited negotiating capacity of some 
Members.  These negotiations present  an opportunity to provide a multilateral underpinning to 
customs cooperation which would complement th e existing bilateral c ooperation mechanisms. 
IV. METHODOLOGY  
5. The form of cooperation envisaged under this pr oposal would be in a li mited number of cases 
where the requesting administration, after carrying ou t necessary internal verification, has reasons to 
doubt the truth or accuracy of any element of the import or export declaration or supporting 
document(s).  There will be an inbuilt mechanism to en sure that the requests are not made in a routine 
manner.  Further, most of the information that ma y be required by the requesting administration could 
be readily obtained from the export or import docum entation.  In a few cases where the supporting 
document(s) is requested, the same is usually in the possession of the requested administration as it is 
submitted by the trader for processing the entry documents.  Thus the exchange of requested 
information may not involve any additional bur den in terms of resources to the requested 
administration.  For making such requests, a time lim it could be considered to avoid any hardship for 
retrieving old documents.   
6. The nature of information to be requested w ould be specific details (e.g., description of 
goods, grade or specification, HS classification, value,  quantity, country of origin, etc.) concerning the 
transaction.  Supporting documents wherev er required would include commercial  invoice, packing 
list, certificate of origin etc.   These documents would be mostly certified or authenticated copies.   The 
information sought could also be for confir ming authenticity of supporting  document(s).   
7. The procedure to be followed for the proposed exchange of information could be through a 
nodal agency to be designated by each Customs administration and notified to the WTO.  The 
designated nodal agency would be required to confir m that all necessary inte rnal checks have been 
carried out within the country of import or export,  as the case may be, and that the information sought 
is necessary to secure compliance with the custom s requirements of the requesting country.  The 
request for assistance should be made in one of  the three official langua ges of the WTO.  Such 
requests could be made in writing or electronically.  Any request for information should include brief 
details of the case, nature of doubt and reasons fo r doubting the truth or accuracy of the declaration, 
results of internal verification carried out, and th e details of information required from the requested 
administration.  It would be desirable to lay dow n a reasonable time limit for furnishing information 
so that the requesting country is assured of a response.   
8. This proposal envisages that the information ex changed should be subject to a confidentiality 
clause, namely, that the information supplied should not be disclosed except to the extent required in 
judicial proceedings.  A similar provision exists in Article 10 of the WTO Agreement on Customs 
Valuation.  The information exchanged through th is cooperation mechanism ca n hardly be effective 
unless it could be used as evidence in judicial proceedings  to secure customs compliance.  Under 
various GATT and WTO provisions (Article X of GATT, Article 11 of the Agreement on Customs 
Valuation), Members are obliged to have strong judicial systems for review of decisions taken by customs authorities.  During the present negotiations, too, there are proposals to improve the system 
of judicial review.  All  this puts a strict burden of proof on the customs  administration to establish a 
violation.  Evidence gathered from other administra tions can at times be crucial to discharge this 
burden of proof.  It is therefore essential that information obtained through the proposed cooperation 
mechanism is allowed to be used as evidence in judicial proceedings without bringing in the cover of 
confidentiality.    TN/TF/W/68 
 Page 3 
 
 
 9. A related issue is the concern of some Memb ers to share information on account of domestic 
confidentiality laws.  There is a need for greater cl arity on this issue.  The declarations presented 
before the two customs administrations (importi ng and exporting) ought to be based on identical 
information relating to the transaction.  All the rele vant particulars in respect of goods are in any case 
to be presented to customs administrations in both the countries.  In case of a true and accurate 
declaration, the same information would in an y case be available with the requesting customs 
administration as well.  Hence,  confidentiality concerns should not be in terms of sharing such 
information with customs administration of another Member, but should only be in terms of making it 
public.   In this regard, a general principle can be adopted that information obtained under this 
mechanism shall be afforded the same degree of confidentiality by the receiving Member that it 
applies to similar information in its custody.  We should be mindful that any blanket denial to 
exchange information on grounds of confidentia lity would only help the cause of non-compliant 
traders.  In many cases the information provided supp lements the results of investigation and acts as 
crucial evidence in establishing the offence in j udicial proceedings.  In view of the above, it is  
proposed that Members should claim no immunity u nder domestic confidentiality laws for providing 
information and the information provided should be al lowed to be disclosed in judicial proceedings.   
10. Implementation of the cooperation mechanism for Customs compliance should be facilitated 
by an  appropriate body in the WTO.  In addition, Me mbers shall have the freedom to raise issues 
concerning non-compliance of request s for information exchange.   
V. TECHNICAL ASSISTANCE 
11. As indicated above, the information exchange is required only in a limited number of cases 
where the truth or accuracy of declaration by importe r or exporter relating to value, HS classification , 
description, quantity or origin of goods is reasona bly suspected after necessary internal verification 
has been carried out.  Retrieval of requested information will be generally from the data and 
documents already available with the customs.  Transaction data and documents may be needed as 
evidence in certain cases to establish violations of customs law  in judicial proceedings.  Technical 
assistance needs in this area are not likely to be  significant as such cooperation can be effected 
through the existing administrative set up of the cust oms administrations. However, this issue can be 
considered if such need is projected by any Member.   
 
__________