WORLD TRADE  
ORGANIZATION  TN/TF/W/34 
28 April 2005 
 
 (05-1739) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM KOREA 
  
 The following communication, dated 27 April 2005, from the Delegation of Korea, is being 
circulated in advance of the Negotiating Group meeting of 2-4 May 2005. 
 
 
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IMPROVEMENT OF GATT ARTICLE V:  
MINIMIZATION OF BURDEN ON CARGO IN TRANSIT AND  
DIFFERENTIATION OF CARGO UNDERGOING TRANSHIPMENT 
 
 
I. INTRODUCTION 
1. Korea believes that improving the implementa tion of Article V of the GATT is a vital 
component of trade facilitation.  Korea reaffirms its  commitment to the principles of the freedom of 
transit, including the principles of non-discriminati on that are dealt with in Article V.  Further, 
Korea upholds the principles of simplification, sta ndardization, and transparency for facilitation of 
goods in transit.  Korea addressed some of the af oresaid issues in communications (TN/TF/W/7, and 
18) concerning Articles VIII and X, which can be a pplied for transit as well.  Below, Korea puts 
forth further suggestions to facilitate transit. 
II. MINIMIZATION OF BURDEN ON CARGO IN TRANSIT AND DIFFERENTIATION 
OF CARGO UNDERGOING TRANSHIPMENT 
2. As the volume of trade is growing and more countries are being tied together in a global 
supply chain, the volume of goods in transit is increasing.
1 Given these trends, minimizing border 
requirements for goods in transit s hould help to facilitate transit.  Furthermore,  differentiating goods 
in transit with transhipment and without transh ipment by implementing a more simplified transit 
process for non-transhipment goods compared to tr anshipment goods will contribute to facilitating 
not only movement of goods in transit but also overall trade.  Article V of GATT does not address 
different treatment for goods in transit without transhipment and for goods in transit with 
transhipment.  Regarding these issu es, Korea proposes that Members: 
• be obliged to review their transit procedures to ensure that border requirements for goods in 
transit are minimized as much as possible;  and 
• accord to goods in transit that do not require  transhipment less burdensome treatment than 
goods in transit that do require transhipment. 
                                                      
  1 The number of containers that the Korean Cust oms treated increased by 195% between 1999 and 
2004. Over the same period, the number of containers in transit increased by 310%.  TN/TF/W/34 
Page 2  
 
 3. With respect to minimizing border require ments, Members may consider reducing 
documentary and data requirements for goods in transit.  In particular, Members may use a 
commercial or transport document (e.g., commercia l invoice, packing list, etc.) as the descriptive 
part of the goods declaration.
  The commercial or transport document may even be accepted as the 
goods declaration for the consignment concerned.  Such usage of commercial or transport document 
is recommended in the Revised Kyoto Convention.2 
4. If goods in transit do not involve transhipment, a simple goods declaration and a simple set of 
service fees are sufficient for transit procedures, for there is only a minimal risk that the goods may be released into the transit country, and the servi ces that the transit country authorities provide 
would be small. 
5. On the other hand, for transit goods that unde rgo transhipment, there may be a need for 
additional inspection and security measures to prev ent the smuggling of goods into the transit 
country or other illegal activities.  In this regard , it would seem reasonable for the transit countries to 
require a minimal amount of additional paperw ork and service fees for transhipment goods in 
transit. 
6. To minimize burdens on the traders engaged in transit traffic, goods in transit without 
transhipment should be given more streamlined treat ment than goods in transit with transhipment.  
Further, Korea finds it beneficial to stipulate th at non-transhipment goods in transit be obliged by 
only the bare minimum requirements with respect to paperwork and fees. For instance, a Member may choose not to require any documents for goods in transit by sea that does not undergo transhipment, while requiring only a limited set of documents for goods in transit by sea that 
undergo transhipment such as inbound manifest, declaration form for unloading, and outbound 
manifest. 
7. Consequently, by reducing the burdens and simp lifying procedures, such as inspection, data 
collecting, etc., for transit goods, especially for go ods in transit that do not undergo transhipment, 
Customs and other related agencies can allocate th eir resources to those areas which involve higher 
risk and require more atte ntion, thus reducing cost and increasing efficiency. 
III. IMPLEMENTATION CONCERNS 
8. To implement the aforementioned measures, Members would need to review their 
documentary requirements and fees for non-transhipme nt goods in transit, as well as those for goods 
in transit with transhipment.   
9. To accommodate such reviewing process,  
• assistance from appropriate international or ganizations, notably the WCO, could be 
helpful and appropriate, and 
 
• such organizations may also present best practices that developing countries can 
easily adopt and introduce. 
                                                     
 
  2 Standard 6 and Recommended Practice 7 of Specific Annex E Chapter 1 of Revised Kyoto 
Convention on Customs Transit, and Standard 5 and Recommended Practice 6 of Specific Annex E Chapter 2 
of Revised Kyoto Convention on Transhipment: " Any commercial or transport document setting out clearly 
the necessary particulars shall be accepted as the de scriptive part of the Good s declaration for Customs 
transit and this acceptance shall be noted on the document ;" and " The Customs should accept as the Goods 
declaration for Customs transit any commercial or tr ansport document for the co nsignment concerned which 
meets all the Customs requirements.  This acceptance should be noted on the document ." 
  TN/TF/W/34 
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10. Once the review is made, Korea believes that  consolidating the documentary requirements 
and simplifying the fee structure need not take much public resource.   
 
 
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