WORLD TRADE  
ORGANIZATION  TN/TF/W/9 
31 January 2005 
 
 (05-0374) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM CANADA 
  
 The following communication, dated 28 January  2005, from the Delegations of Canada, is 
being circulated in advance of the Negot iating Group meeting of 7 and 9 February. 
 
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POSSIBLE COMMITMENTS ON ADVANCE RULINGS 
 
A proposal by Canada
 
  
I. BACKGROUND 
1. The term "advance rulings" generally refers to the possibility for a customs administration (or 
any other competent authority) to provide, upon application by a trader in connection to the planned 
importation of goods, a written ruling with resp ect to the following specific requirements or 
entitlements: 
(a) The tariff classification of the goods, applicab le rate of duty, or any tax applicable 
upon importation; 
(b) Whether the goods qualify as originating goo ds and are entitled to the benefit of 
preferential tariff treatment under a free trad e agreement or other system of tariff 
preferences, and whether the goods satisfy requirements for country-of-origin marking. 
2. Procedures for issuance of advance rulings by  customs administrations (or other competent 
authorities) have been in existence for years in  many countries, both deve loped and developing.  
These procedures, whether or not codified in national legislation and regulations, reflect the fact that, 
in most countries, tax authorities have been willing to answer inquiries by traders (be they domestic 
importers, or foreign exporters or producers) regard ing the treatment by Customs of a specific good in 
advance of its importation. 
II. PROPOSAL 
3. By allowing the customs administration to provid e a binding ruling prior to the importation of 
a good based on the facts and circumstances presented by an importer, exporter, a producer or its 
representative, parties are provided with certainty as  to the application of certain provisions within 
existing national legislation.  While the existing GATT provisions do not prevent the establishment of TN/TF/W/9 
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advance rulings procedures, it is only in the contex t of the WTO Agreement on Rules of Origin that a 
requirement to do so exists.
1 
4. Predictability for prospective and ongoing transactions would th erefore be further facilitated 
by developing complementary GATT disciplines on the provision of advance rulings as follows: 
• Advance rulings would be issued on tariff classification  (including any applicable rate of duty or 
tax applicable upon importation).  
• Advance rulings would be issued at the writte n request of domestic importers, or foreign 
exporters or producers.  Advance rulings shoul d be issued within a defined period of time  after a 
request is made (subject to submission of sufficien t information by interested parties).  There will 
be identified situations where the customs admini stration can decline to i ssue the ruling, such as 
when the good is already the subject of a review or appeal. 
• Advance rulings should also be binding  on customs authorities (or any other competent authority), 
for a period of time specified in the ruling, pr ovided that the facts or circumstances on which the 
ruling is based remain unchanged.  However, it is recognized that the customs administration 
would have the option to modify or revoke an advance ruling immediately, should circumstances 
change, or when inaccurate or fal se information has been provided. 
• To the extent possible, and subject to confid entiality requirements, advance rulings should be 
made publicly available ; in such a manner, transparency can  be improved, due process ensured, 
and increased information can be made availabl e, improving compliance and lowering costs even 
for transactions where no advance rulings are sought.  
• Appropriate special and differential treatment  provisions (e.g., deferred implementation, different 
time requirements, etc.) could be incorporated within commitments, to reflect the specific 
circumstances of individual Members. 
III. BENEFITS 
5. The availability of advance rulings is of key importance to traders, especially small- and 
medium-sized ones.  It provides for certainty an d predictability as to how  a given good would be 
treated by Customs once the importation has taken place.  It also provides advance knowledge, in a competitive marketplace, of how a particular good will be treated by the importing country.   
6. The increased certainty in transaction costs pr ovided by advance rulings will also encourage 
greater investment and much needed flows of capita l to developing countries.  Advance rulings can 
also provide a visible model for implementing the pr inciples of transparency and efficiency, providing 
valuable experience and lessons for any other effort s in administrative reform.  It also helps to 
establish trust between customs authorities and traders and, hence, to reduce incentives to circumvent 
regulations.  By informing traders of the appropria te import requirements, advance rulings encourage 
compliance and minimize delays, comp laints and subsequent appeals. 
IV. IMPLEMENTATION COSTS 
7. For those countries with an advance ruling program in place, implementation costs of such a 
proposal would be minimal.  For others, new cost s would include the process for making such rulings 
public (e.g., publication costs), having additional offi cers available to examine requests from traders, 
and the possible need for supplementary training.  That being said, since the Agreement on Rules of 
                                                     
 
 
1 In Articles 2(h) and 3( f) of that Agreement.  TN/TF/W/9 
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Origin already requires Parties to provide advan ce rulings for the purpose of assessment of origin, 
incremental costs could be limited.   
8. Advance rulings could reduce administrative cost s that are normally incurred at the time of 
importation or post-importation.  Initial capital costs for implementing a system of advance rulings are likely to be low relative to more capital intensive initiatives and are likely to be rapidly amortized. 
V. TECHNICAL ASSISTANCE 
9. Further technical assistance in this area will en able customs authorities in recipient countries 
to improve their ability to carry out their duty to enforce legislation, while easing obstacles to legitimate trade and economic growth.  Those having implemented advance rulings have been able to 
utilize them as a means to provide certainty and f acilitate trade; technical  assistance will enable 
developing economies to gain further access to this policy tool.   
 
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