. /.  WORLD TRADE  
ORGANIZATION  TN/TF/W/23 
18 March 2005 
 (05-1119) 
Negotiating Group on Trade Facilitation Original:   English 
  
COMMUNICATION FROM THE EUROPEAN COMMUNITIES AND AUSTRALIA 
 
 The following communication, dated 17 March 2005, from the Delegations of the European 
Communities and Australia, is being circulated in  advance of the Negotiating Group meeting of 
22-24 March.    
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CLARIFICATION AND IMPROVEMENTS TO GATT ARTICLE VIII:  
PROVISIONS ON FEES AND CHARGES 
 
1. This submission sets out proposals to clarif y and improve GATT Article VIII provisions on 
fees and charges.  The EC has already made a submission on GATT Article X in which it made proposals to enhance the transparency of fees and charges applicable to import, export and transit 
procedures.  This submission addresses the paramete rs for the fees and charges themselves.  The 
proposals would increase predictability for importers a nd exporters, particularly small- and medium-
sized companies, and help avoid the imposition of unwarranted and disproportionate fees and charges.  
For governments, they would provide greater clarity to administrations in the design and application 
of fees and charges.  The proposals also address a number of non-tariff barriers notified by Members in the NAMA negotiations and are relevant for the clarification and improvement of fees and charges concerning GATT Article V on freedom of transit.   
I. SCOPE OF PROPOSAL 
2. It is essential that the scope of commitments on fees and charges applies beyond customs to 
other agency interventions and tasks  undertaken on their behalf, as otherwise gains in one area could 
be diminished by unnecessary fees and charges applied elsewhere.  The EC proposes that: 
1. The disciplines should apply to all fees and char ges imposed by customs authorities or by any 
other government body (including tasks undertaken on their behalf) on or in connection with 
importation or exportation, or as a condition for importation or exportation, to the extent not 
already covered by other WTO Articles and Agreements.  
 II. GENERAL DISCIPLINES ON FEES AND CHARGES 
3. Article VIII (paragraph 1(a)) establishes certai n obligations regarding fees and charges.  
Notably, it authorizes only those fees and charges that  are limited to the approximate cost of services 
rendered, and prohibits fees and charges aimed indir ectly at protecting domestic products or having an 
effect equivalent to an import or export tax for fi scal purposes.  Past dispute settlement cases have 
partially clarified the provision, notably the definiti on of a fee or charge limited to the approximate 
cost of the service rendered, and the kinds of servi ces permitted.  There is still however considerable 
uncertainty over what may or may not be allowed.  This has led to the introduction of widely varying 
practices around the world and uncertainty and unwa rranted costs to traders.  To address these 
concerns, and drawing on past pane l conclusions, the EC proposes a clarification and improvement of 
Article VIII (paragraph 1(a)) to set out clearer disciplines for fees and charges:   TN/TF/W/23 
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 2. With regard to fees and charges applied in connection with importa tion and exportation, 
Members must ensure: 
- the service provided is related  to the goods in question 
- fees and charges refer to the approximate cost of the service provided   - fees and charges may not therefore be ca lculated on an ad valorem basis  
- administrative or operational costs not constituting a service associated with the 
treatment of imports or exports may not be imposed on such imports or exports 
- non-discrimination  in the design and application of fees and charges. 
 
III. REDUCING THE NUMBER AND DIVERSITY OF FEES AND CHARGES 
4. Article VIII (paragraph 1(b)) recognizes the need  for reducing the number and diversity of 
fees and charges.  However, it does not create any commitment actually to do so.  It should.  To address this significant weakness in the WTO rule book, the EC proposes the following clarifications 
and improvements:  
3.   A requirement for Members to review, and if necessary, consolidate or reduce the number 
and diversity of their fees and charges.  All remaining fees and charges must be notified or 
made publicly and easily availabl e, together with the justification for them.  There should be 
an adequate time period between the publication of new or amended fees or charges and 
their entry into force. 
 4.  A requirement to establish a list of permissible fees and charges.  Practices such as the 
levying of “consular fees” or “consular invo ices” and the like should be discontinued.  
 
5. In taking these proposals forward, the EC notes that in many Members, no fees and charges 
are applied for normal customs services offered at o fficial clearing points.  It is only for services 
beyond the normal tasks, for example customs proc essing outside normal opening hours, that fees are 
sometimes levied.  Such practices can facilitate tr ade and Members could cons ider ways to promote 
them where appropriate, and charging for them, if at  all, to a level commensurate with the services 
provided.   
IV. COSTS, BENEFITS AND ISSUES RA ISED BY DEVELOPING COUNTRIES 
6. The proposed clarifications and improvements set  out above should not imply costs in terms 
of administrative capacity, since administrative savi ngs should arise, for example with any reduction 
in the number and diversity of fees.  However,  to the extent that l east-developed countries and 
possibly other Members would seek advice on the d esign and implementation of new fee structures, 
the EC would be prepared to consider favourably  such requests for assi stance.  Furthermore, 
international organizations a nd Members have relevant expe rience that could be used.  
7. Concerns have been raised about the impact  of reforming fees and charges on government 
revenue, particularly in countries where receipts from customs play a significant role in the 
government’s budget.  However, legitimate fees a nd charges can remain and can also prove an 
important means to support the costs for developing-country members of providing a service to traders.  Moreover, the EC notes that its proposal s to simplify and rationalize fees and charges would 
generate significant benefits, including for trad e between developing countries, where evidence 
indicates that fees and charges may be a partic ularly heavy burden on importers and exporters, 
notably for goods in transit.   
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