WORLD TRADE  
ORGANIZATION  TN/TF/W/17 
11 March 2005 
 (05-1030) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM JAPAN AND MONGOLIA 
  
 The following communication, dated 10 March 2005, from the Delegations of Japan and 
Mongolia, is being circulated in advance of the Negotiating Group meeting of 22-24 March. 
 
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TRADE FACILITATION:  PROPOSALS TO CLARIFY AND  
IMPROVE GATT ARTICLE VIII 
 
 I. INTRODUCTION 
1. This proposal aims to clarify and improve GATT Article VIII with a view to further 
expediting the movement, release and clearance of goods based on Annex D of the July Package.  In 
short, GATT Article VIII refers to the following: 
(a) Fees and charges imposed on or in connection with importation or exportation; 
(b) Import and export formalities, import a nd export documentation requirements; 
(c) Review of the operation of Member’s laws  and regulations upon request by another 
Member; 
(d) Substantial penalties for minor breaches;  and 
(e) Scope of fees, charges, formalities and requirements imposed by governmental 
authorities in connection with importation and exportation that are subject to the provisions mentioned above. 
2. Among these categories, this paper addresses items of concern to the private sector to 
facilitate the Members’ understanding of the subs tance of Article VIII, by introducing specific 
examples of problems and proposing solutions.  Ensuring the proposed measures based on the 
principle of non-discrimination would reduce the cost s for traders and expand trade, thus contributing 
to the economic development of all Members.  Re garding the cost implication of introducing the 
proposed measures, several national experiences show that most of these measures could be implemented by using the existing facilities and resources of each Member with minimum costs for 
legislation and training of officials.  We believe  benefit of introducing the measures far outweighs the 
cost of introduction. 
3. The following proposals are not exhaustive and are organized to facilitate Members’ 
understanding of GATT Article VIII, and we reserv e the right to make further proposals on this 
subject in the future. TN/TF/W/17 
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II. FEES AND CHARGES IMPOSED ON OR IN CONNECTION WITH IMPORTATION 
AND EXPORTATION 
A. E
XAMPLES  
Fees and charges imposed on or in conn ection with importation and exportation  
In Member X, excessive fees and charges compared to the value of the service provided are imposed, 
generating unnecessary cost for traders.  Furtherm ore, unpublicized fees are required for import and 
export declarations outside office hours.  
 
4. If unpublished fees and charges were required, tr aders, especially small- and medium-sized 
enterprises (SMEs) trying to trade with X for the first time, would face unpredictable costs that would 
restrict their business chances.  Furthermore, if published fees and charges were not limited to the 
approximate cost of services rendered,  they would impede international trade flows .   
B. ELEMENTS OF SOLUTIONS  
5. To cope with such problems and set appropria te fees and charges imposed on or in connection 
with importation or exportation, and to reduce the num ber and diversity of such fees and charges, we 
propose the introduction of the following measures:  
 - Periodic review of fees and charges
 
 
 Periodic review of the appropriateness of the amount and the number of fees and 
 charges imposed on or in connec tion with importation and exportation. 
 
 - Publication of fees and charges  
 
 Publication of fees and charges imposed on or in connection with importation or 
 exportation and prohibiting the collecti on of unpublicized fees and charges. 
 
III. IMPORT AND EXPORT FORMALITIES/IMPORT AND EXPORT 
DOCUMENTATION REQUIREMENTS 
A. EXAMPLES  
Import and export formalities/ documentation requirements  
In Member Y, many complex documents are requi red for customs clearance, incurring tremendous 
time and effort.  Furthermore, customs duty refund procedures in case of re-exportation are complicated and refunds are often delayed.  Govern ment agencies tend to return documents required 
to conduct other procedures to traders with dela y, disrupting the progress of other procedures.  
Conformity assessment and other related pr ocedures are complex and differ greatly from 
internationally recognized procedures.  In additi on, goods are always subject to physical inspection 
even if the company maintains a high level of compliance.  
 
6. The private sector has often complained of prob lems relating to import and export formalities 
and documentation requirements.  Such problem s make import and export formalities unnecessarily 
complex, and impose unnecessary costs on traders, especi ally SMEs trying to trade with Y for the first 
time, thus curbing their opportunities to enter new markets.  For the Government Y too, unnecessarily 
complex import and export formalities hinder the e fficient allocation of lim ited human and financial 
resources, thereby deterring economic development opportunities through the expansion of trade.  TN/TF/W/17 
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B. ELEMENTS OF SOLUTIONS  
7. Solving these problems and simplifying import and export formalities and import and export 
documentation requirements within the scope of  Members’ legitimate policy objectives would 
contribute to Members’ economic development through th e expansion of trade.  To achieve this goal, 
we propose the introduction of the following measures: 
 
1. Import and export formalities 
 - Least trade restrictive import and export formalities and a periodic review  
 
  Limit import and export formalities to the leas t trade restrictiveness level, with a view 
  to minimizing the incidence and complexity of import and export  formalities.   
  Periodically review import and export formalities, based on comments from the    private sectors and other parties.  
 - Use of international standards
 
 
 Use of international standards to the extent possible, where other relevant
 international organizations already have set  up international standards, with a view 
 to minimizing the incidence and comple xity of import and export formalities.   
 
As noted in Paragraph 9 of Annex D of the July Package, it is important to take due 
account of the relevant work of other releva nt international organizations in the area 
of trade facilitation.   
 
 - Documentary examination and physical inspection without delay  
 
 Conduct examination and inspection after receiving application without delay as well  as take other relevant actions including returning necessary documents to traders  without delay, with a view to further expedite the movement of goods.   
 - Pre-arrival documentary examination
 
 
Introduction of procedures for accepti ng and examining documents prior to the 
arrival of goods, with a view to fu rther expedite import and export formalities. 
 
 - Risk management and authorized traders  
 
 Conduct examination and inspection based on risk management.  
One example is to introduce simplified im port and export formalities for authorized 
traders which have high level of compliance with trade related laws and regulations. 
 
Introducing risk management is necessar y for facilitating the trade while ensuring 
regulatory control at boarder simultaneously and for achieving the right balance 
between them.  Risk management would enable governments to allocate human and 
financial resources efficiently and traders,  especially those with high level of 
compliance, to reduce the cost and time spent on trade procedures.    
 - One-time submission of import or export documentation to one agency
 
 
Introduction of procedures for allowing one -time submission of import or export 
documentation to one authority, with a view  to eliminating the inefficiency of 
submitting similar information to multip le authorities (including coordinating the TN/TF/W/17 
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timing and place of physical inspections among the relevant authorities to the extent 
possible). 
 
2. Import and export documentation requirements 
- Least trade restrictive import and export documentation requirements and a periodic 
 review  
 
Limit import and export documentation requirem ents to the least trade restrictive 
level, with a view to decreasing and simp lifying such requirements.  Periodically 
review import and export documentation requi rements, based on comments from the 
private sector and other parties. 
 
 - Use of international standards  
 
Use of international standards to the extent possible, where other relevant 
international organizations already have set up international standards, with a view 
to decreasing and simplifying import and export documentation requirements.  
 
As noted in Paragraph 9 of Annex D of the July Package, it is important to take due 
account of the relevant work of other releva nt international organizations in the area 
of trade facilitation.   
 
 - Acceptance of copies  
 
Acceptance of required documents in copies to the extent possible, with a view to 
reducing the time and costs to meet the requirement for originals for import and 
export documentation, especially in cases wh ere multiple authorities are involved or 
where documents are required to conduct other procedures.  
 - Acceptance of a single documentary submission
 
 
Acceptance of single documentary submi ssion of import or export documentation 
requirements in cases of repeated transacti ons of same products; Exemption of 
documentary submissions for each importa tion or exportation sh ould be permitted. 
 
IV. SUBSTANTIAL PENALTIES FOR MINOR BREACHES 
A. EXAMPLES  
 
8. If a mistake in documentation could be corrected  immediately by the trader at application 
desk without hindering legitimate policy objectives of  the authority, then rejection of documentation 
due to such mistakes would impose unnecessary costs to traders.  Furthermore, if the kinds of 
penalties were not publicized, then it would allo w for the discretion of each official to the 
disadvantage of traders, especially SMEs.  This pr actice is of great concern not only in terms of  
transparency, predictability and impartiality, as noted  in TN/TF/W/8, but also the credibility of the 
Members’ trading system itself. Substantial penalties for minor breaches  
In Member Z, a minor mistake in documentation can result in a rejection by the authority.  
Furthermore, as officials are compensated according to  the amount of penalties, they tend to treat 
minor breaches as a significant issue and force traders to pay penalties.   TN/TF/W/17 
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B. ELEMENTS OF SOLUTIONS  
9. By solving such problems, the legal stability for traders and overall trust in Members’ trading 
system could be improved, providing greater incenti ves for the expansion of trade and leading to the 
economic development of Members.  To achieve  this goal, we propose the introduction of the 
following measures: 
 - Clearly stating and publicizing penalty provisions  
 
 Clearly stating and publicizing penalty provisions against breaches of import and 
 export formalities in relevant laws and regulations.  Prohibiting the imposition of 
 unpublished penalties. 
 
 - Explaining of the reason of rejection of documents  
 
 Explaining why the authority rejects the submitted documents at the application desk. 
 
V. CONSIDERATION OF DEVELOPING MEMBERS’ CONCERNS 
10. Special and differential treatment, technical a ssistance and support for capacity building, and 
cost implications of proposed measures are also important elements for the negotiations as agreed by 
Members in Annex D of the July Package.  Fo r the measures proposed above, granting a transition 
period in accordance with developing Members’ implementation capacity or support/assistance based 
on coordination among relevant international organizations (IMF, OECD, UNCTAD, WCO and 
World Bank) may be taken into consideration.  In  addition, providing opportunities to consult the 
implementation capacities of developing Members toge ther with experts from relevant international 
organizations may be useful measures for Members to consider. 
 
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