45156 SIMPLIFICATION AND HARMONIZATION OF BORDER MEASURES ENFORCING NON-TARIFF CONTROLS AT THE BORDER June 2005 The establishment, recognition, and application of regulations governing border control issues such as food safety, animal health, and plant protection that are non- customs requirements but are consistent with international standards, guidelines, and recommendations and minimize the length and difficulty of the documentation and verification process at the border. s et Introduction ous effect on the citizens of a nation. Similarly, some processing and production Two of the major goals of border agencies methods and packaging materials are also No are to protect the security, health, and banned by specific country regulations. safety of a nation and enforce product As a result, there should be little room for standards to ensure a fair and competitive discretion by border officials. Products market. To achieve these goals, this pro- must conform to established standards or tective function for goods entering a coun- be prohibited from entry. try is frequently divided into two catego- For example , see the following analysis of UK ries. The first includes those goods that Plant Health Inspection Modernization: are admissible so long as they meet estab- http://www.defra.gov.uk/planth/newsitems/aware/im lished standards, while the second consists ports.pdf of goods that are prohibited from entry In most countries, the control of health, Explanatory such as contraband, illegal narcotics, safety, and other standards issues spreads weapons, and certain types of media. In- across several agencies. Responsibility for spection and control are required at bor- the application of food regulations is often ders to prevent entry of goods belonging to separate from responsibility for plant GFP the latter category. This note, however, health or product safety standards. Fre- describes how goods belonging to the first quently, each corresponding agency main- category--those that are admissible under tains responsibility for controlling imports specified conditions--can be efficiently and exports. Over the years, the multipli- and effectively screened to ensure they cation of agencies active at border cross- meet national standards. ings and in conducting inspections increas- Group: The formalities and procedures regarding the first ingly conflicts with the need to expedite category are subject to the General Agreement on Tariffs and Trade (GATT) Article VIII and Article X. legitimate and low-risk trade. http://www.wto.org/english/docs_e/legal_e/legal_e. htm Despite this strain, poor compliance with international standards can stifle economic Bank The Importance of Simplification progress and even facilitate the spread of and Harmonization disease. Events such as the Bovine Spongi- Border control of imports is both a neces- form Encephalopathy (BSE) outbreak sary function and an established mission of wrought havoc on local, regional, and even all countries. The management of this task national economies, spread fear among World significantly affects the efficiency and suc- domestic and international consumers, and cess in fulfilling the mission. Safety, sani- halted international movement of the tary, and phyto-sanitary standards repre- goods in question for the country in which The sent an example of non-tariff controls. the problems occurred. Sub-standard food, animal, and manufac- For this reason, enforcement of critical tured products can have a serious deleteri- border controls remains a high priority ment and modern systems and technolo- during the commercial transaction. Buy- gies, agencies can effectively and effi- ers and sellers should be prepared to ex- ciently enforce their border require- pect examination, testing, and/or certifi- ments. This can ensure high levels of cation requirements for their goods. compliance without unduly restricting Shortages in government resources, the growth and development of trade. however, preclude inspection and testing Improved procedures facilitate trade by of each and every good to determine minimizing administrative costs, while conformance. Inspecting all goods producing greater market opportunities would also create unreasonable delays in for exporting countries that use interna- shipment and ultimately prove ineffec- tionally recognized and accepted meas- tive due to the similar attention placed ures. Furthermore, properly utilized risk on low-risk and high-risk shipments. On management techniques do not compro- the other hand, allowing the entry of all mise levels of compliance. goods without inspection or testing with For more information on the benefits of adopting a blind reliance upon importer compli- more efficient clearance systems, review proce- ance creates excessive security risks to dures in Japanese ports: http://www.jetro.go.jp/en/stats/survey/access/sing which no government can afford to ex- le_window.html pose itself. The World Customs Organization also offers an array of information on this topic: The adoption of and adherence to ac- http://www.wcoomd.org cepted international standards enable a country to efficiently combine many of The Issues the border-crossing inspection require- While all countries share concern for the ments. As a country works to integrate issues of border management and stan- its economy into the global marketplace dards enforcement, these issues are espe- through adopting internationally ac- cially crucial to the economies of devel- cepted standards, the risk of non- oping countries. These countries are compliance by traders diminishes. This extremely important as they export more approach is often referred to as informed than 50 percent of the world's supply of compliance by the trader. With common fruits and vegetables, sugar, non- standards, manufacturers, producers, and alcoholic beverages, and fish products. traders are expected to comply in all Most costs and delays in border and countries that have adopted these stan- clearance processing are derived from dards. Common compliance testing is the following: then more efficient and often reduces the Multiplicity of agencies involved in risk of non-compliance. compliance and their lack of coordina- Nations must nevertheless remain vigi- tion; lant. The problem of balancing security Financial and staffing limitations and facilitation is best addressed through that restrict hours of operation of non- the implementation of risk management, customs agencies; which requires a gathering of specified Lack of testing and certification labs data by designated border authorities. accessible to border crossing officials; Based upon the information received, Lack of adoption of international customs officials can determine the rela- standards; tive danger or risk of the parties to the Lack of transparency concerning transaction regarding the goods in ques- import and export requirements; tion. Inspections or testing can then be Lack of coordination of controls administered in much higher ratios for with neighboring and trading countries; goods deemed to be of greater threat lev- and els. Minimal political interest to build capacity. By implementing the internationally rec- ognized best practices in risk manage- 2 GFP Explanatory Notes - www.gfptt.org The Solutions To view the WCO Customs Data Model, visit: HTTP://WWW.WCOOMD.ORG In 1982, members of the United Nations worked together to establish an interna- One of the first steps in developing a tional convention that provides guidance model SAD or implementing document to coordinate the inspection and regula- layout alignment is to consult with the tory agencies at border crossings. The relevant government agencies to collect International Convention on the Har- a list of the data needed for those bodies monization of Frontier Controls of to fulfill their mandates. A common Goods recommends in Articles 2 and 3 inventory of required certification, test- that countries reduce the requirements ing, and documentary requirements ex- for completing formalities as well as the pected of all imported goods must be number and duration of controls. taken. When testing and certification are This, as well as the Convention's other recom- needed, agencies can cooperate by dele- mendations, can be viewed at: gating their regulatory authority to one http://www.unece.org/trans/conventn/harmone.pd agreed-upon agency that can incorporate f several required standards into a single These recommendations can facilitate test of the goods in question. greater efficiency in enforcing non- To simplify documentation, countries customs controls at the border. can develop a Single Window that al- Information Coordination through a lows an importer or exporter to provide SAD or Single Window the necessary information and documen- Perhaps the most restrictive issue im- tation to a designated host government porters and exporters face is the multi- agency all at once. This data is then dis- plicity of agencies with differing re- tributed by the host to all relevant agen- quirements and processes. One of the cies. Those agencies can then apply best first efforts to address this concern was practice risk management factors to de- the document alignment work of SIT- termine if the goods should be stopped PRO, Ltd. and the United Nations Eco- for inspection or allowed entry on the nomic Commission for Europe basis of the certification and other docu- (UNECE). The work began with the mentation. alignment of data formatting on the vari- A full description can be found at the UNECE's ous required documents. This work led Recommendation and Guidelines for Establishing a Single Window: to the European Union's creation of a http://www.unece.org/cefact/recommendations/re single administrative document (SAD), c33/rec33_ecetrd352_e.pdf; and and efforts now include development of The Global Facilitation Partnership topic pro- Single Window data collection. files: http://www.gfptt.org/topics/single-window Legislation establishing coordinated sys- tems such as a SAD or Single Window can specify the maximum and minimum Automated Single Window te ng nd list of information that can be required by the government agencies. Data can 3-c: 'Automated Information be harmonized according to the United Transaction' System Nations layout key requirement, and data Trader Authority 1 codes are established to eliminate lin- (incl. Transport) Integrated guistic communication problems. In Single Integrated Documents/ addition, the use of the WCO Customs Data Information Transaction Authority 2 Data Model will establish a standard, Payment System Electronic Confirmation Integrated international, harmonized data set that will meet governments' requirements for Integrated international cross-border trade and is Authority 3 geared exclusively to the requirements of an automated environment. Authority 4 Simplification and Harmonization of Non-Customs Controls at the Border 3 Conformance Assessment Rationalizing Border Agency common standard to be more efficient, Procedures Resources because: Exporters and importers have a Given existing resource constraints, There is less risk of non-compliance similar interest in the reduction of manning numerous border crossings when the standards are internationally costs and trade restrictions created with staff from all involved border agen- known, used for sale in multiple mar- by burdensome conformance as- cies has proven difficult. This frequently kets, and enforced by other countries for sessment procedures at the border. The WTO agreements address this leads to disconnected inspection services similar products; issue by: and long delays for transporters and trad- Training, advice, and best practices Requiring the use of minimum ers, particularly during evenings and techniques for the enforcing officials is effective procedures weekends. more readily available from other coun- Ensuring the transparency of tries that are using the standards; and conformance requirements Solutions to this constraint include the Urging governments to har- designation of border points that accept The capacity to administer inspec- monize standards around interna- tion and testing can be less costly to de- goods requiring specific inspection or tionally agreed-upon standards and velop when the standards being enforced the movement of some controls away to accept 'country-of-origin' stan- are more widely known and are used on dards and conformance certifica- from the border, while maintaining a regular basis, thus making the inspec- tion on the basis of mutual recogni- documentary checks through a leading tion and testing techniques more routine. tion or 'equivalence' agreements. border agency. The latter option entails Businesses in developing countries the cross-designation of officials from International standards exist for many should ask their national govern- one agency to another, strengthened co- industries, and the World Trade Organi- ments to take advantage of the ordination among border agencies, and zation's (WTO) Agreement on the Ap- mutual recognition and regulatory proper training to maintain the quality of plication of Sanitary and Phytosanitary equivalence provisions as an im- portant opportunity to reduce their inspection. Measures (SPS Agreement) represents conformance costs. one such standards-producing body. In the US, customs officials receive For more information, see the US This agreement outlines basic rules for ITC Training Guide. training in certain aspects of narcotics food safety and animal and plant health interdiction, immigration enforcement, standards; additionally, it seeks to and agricultural inspection duties. This broaden multilateral conformity. Spe- overlapping education enables border cific mechanisms and goals for harmoni- enforcement by a smaller number of zation are addressed in Article 5 of the more highly trained officers. SPS Agreement. The agreement pro- Adoption of International Standards vides standards for general oversight, but Adoption of objective international prod- member countries are encouraged to use uct standards is one method of simplifi- international standards, guidelines and cation and harmonization. The lack of recommendations where they exist. To view the full text of the SPS Agreement, includ- uniform standards allows the producer or ing Article 5, visit: trader to pick and choose which stan- http://www.wto.org/english/tratop_e/sps_e/spsagr dards to use. With such a multitude of _e.htm standards, the border inspection and con- While unilateral harmonization of SPS trol officers are faced with a more diffi- and other non-customs controls is a goal, cult task in determining if the trader's regional harmonization can also provide standards meet the requirements of the trade-related benefits. Regional harmoni- importing country. zation includes geographic harmoniza- Common international standards serve to tion and equality of development. Under enhance consistency by allowing traders the former, nations within a given geo- to be more compliant with countries that graphic region work to harmonize their adhere to them. For example, if the con- controls. Through cooperative agree- sumer labeling requirements for the ments and each country seeking compli- same product differ from country to ance with the same standards, one test at country, the opportunity for non- one lab can provide the typical confor- compliance is greater. As described mance certification for multiple coun- above, the officials enforcing compli- tries in one region. This form of har- ance with those standards will also find a monization is touched upon in Article 6 4 GFP Explanatory Notes - www.gfptt.org of the SPS Agreement but can be appli- mation-sharing process, and the WTO Case Study: cable to other sectors as well. can help to ensure that any such changes The Three Sisters comply with international standards and Harmonization of standards with other Common standards promote do not adversely impact international consistency and therefore enable countries possessing similar resource trade. heightened compliance by trad- allocations concentrates efforts on par- Tanzania's Bureau of Standards provides an ers. The Three Sisters, interna- ticular sectors thereby facilitating greater example: tional oversight bodies that es- trade. For instance, Japanese health au- http://www.tbs-tz.org/toc.htm tablish and update standards for thorities accept the testing of US wine in food safety, animal health, and Define Standards Clearly and plant protection, provide an US laboratories approved by the US Concisely excellent example of such an Government to certify that those wines Eliminating uncertainty within the trade improvement. The Three Sisters comply with Japanese standards. include: community by developing clear and con- Food Safety ­ In order to Implementation of Heightened cisely written regulations will foster an closely monitor the safe interna- Transparency environment conducive to trade. tional movement of foodstuffs, the World Health Organization One of the easier methods by which a Make Standards and Certification (WHO) and the United Nations' country can simplify its non-customs Processes Readily Available Food and Agriculture Organiza- measures is through the adoption of Any standards or certification processes tion (FAO) compile the Codex Alimentarius. heightened transparency. Enhanced that must be followed by the trade com- http://www.codexalimentarius.n transparency can be accomplished munity should be readily available to et/web/index_en.jsp through numerous programs, many of this audience. Ideally, a government Animal Health ­ Interna- which follow and elaborate on the stan- should post these items on a website. If tional animal health standards dards in the WTO's Technical Barriers this option is not available, the govern- are established and overseen by the World Organization for Ani- to Trade (TBT) Agreement and in Annex ment should find a logical, physical lo- m a l H e a l t h ( O I E ) . B of the WTO's SPS Agreement. These cation or develop a contact center to as- http://www.oie.int/eng/en_index. standards are applicable as a model for sist with the information dissemination htm improved efficiency in virtually any sec- process. Plant Protection ­ Phyto- tor. New Zealand offers a database to find applicable sanitary standards are written standards on imports: and revised as necessary by the Establish an Enquiry Point http://www.biosecurity.govt.nz/imports/animals/st FAO's Secretariat of the Inter- By creating a central point through andards/index.htm national Plant Protection Con- vention (IPPC). which all requests for information re- Coordination with Other Countries http://www.ippc.int/IPP/En/ garding domestic measures flow, an economy can dramatically improve the Many non-customs problems can be re- consistency of the information made solved by coordination between one available to the public. Greater consis- country and its counterpart in trade. For tency is critical for the long-term devel- neighboring countries, adoption of inte- opment of an economy as it minimizes grated border management techniques production and transport costs. Traders can facilitate and improve efficiency for often do not know which government both countries. For a more detailed dis- agencies are in charge of controls; there- cussion on these techniques, see the fore, establishment of a single, national GFPTT Explanatory Note on Integrated focal point covering all the border proce- Border Management. dures is being proposed in the WTO as In addition, countries can enter into part of the GATT Article X transparency agreements that provide for the enforce- discussion. ment of product standards by the export- Croatia's State Office of Standardization and ing country through mutual acceptance Metrology represents one such example: http://www.dznm.hr/WTO/wtoen.html agreements (MAA). Such mutual recog- nition efforts consist of several formats, Notify the WTO of New Developments including: If a nation plans to promulgate a new requirement or modify an existing regu- Equivalence lation, it should always first contact the In a recommendation made effective on WTO. Doing so will facilitate the infor- 24 October 2001, the WTO outlined Simplification and Harmonization of Non-Customs Controls at the Border 5 This GFP Note has been produced steps that ease the process of granting include those that are outdated or techni- with the financial assistance of a equivalence between countries. Under cally incorrect. grant from TRISP, a partnership this recommendation, one country can between the UK Department for Conclusion International Development and the accept alternative measures that meet the World Bank for learning and shar- conformance standards of an importing Effective safety, sanitary, phyto-sanitary, ing of knowledge in the fields of country without imposing duplicative and other non-customs controls at the transport and rural infrastructure tests. It comprises Article 4 of the SPS border provide an essential element of services. This Note was prepared by JBC International and reviewed Agreement, but again, is applicable to economic development and national se- by the World Bank Trade Logistics other sectors. curity. By implementing a strong set of Group and GFP Steering Commit- internationally recognized standards, tee. The preparation of the GFP Mutual Acceptance countries can protect the integrity of Notes was coordinated by Gérald Even if a country does not deem the Ollivier, World Bank. The views standards of a trading partner equivalent their domestic industries. Furthermore, published are those of the authors to its own, it can still judge those stan- by simplifying these standards and and should not be attributed to the working to harmonize them regionally World Bank or any other GFP af- dards sufficient for the purposes of trade. and multi-laterally, a country can reduce filiated organization. Additionally, Such a scenario creates the need for an its non-tariff barriers to international the conclusions do not represent Mutual Acceptance Agreement (MAA). official policy of the World Bank, For example, see the MAA between Chile, Argen- commerce and enhance its ability to par- its Executive Directors, or the tina, South Africa, New Zealand, Canada, Austra- ticipate in the global marketplace. countries they represent. For more lia and the US regarding wine standards: information, contact Mr. Ollivier at http://www.ita.doc.gov/td/ocg/oenological.htm Finally, improved border processing golliver@worldbank.org. Alignment of Political Priorities through integrated border management, improved risk managed certification test- Competition for resources within coun- ing, modern performance testing, and tries increases as those resources be- facilitated goods clearance processing come increasingly scarce. As important will increase the comfort level of gov- as it is to strengthen enforcement of im- ernment agencies regarding superior port standards, the political will to pro- compliance with their standards. vide more efficient enforcement is gen- erally not a priority. Left to unilateral Additional Resources and Links implementation, experience over the past WTO's Technical Barriers to Trade: decade has shown that many countries http://www.wto.org/english/tratop_e/tbt_e/ will not adopt international systems, pro- tbt_e.htm vide transparency to their rules and regu- UN Economic and Social Council, CE- FACT; Guidelines for Implementing a Single lations, or integrate either within their Window: internal administration or with other http://www.apec-ipt.ku.ac.th/resources/ countries. Furthermore, many develop- UNCEFACT%20PaperPa.pdf ing countries are not engaged in the in- International Portal on Food Safety, Animal ternational standards process and are & Plant Health: http://www.ipfsaph.org/Biosec/En/default.jsp? commonly slow to trust developed coun- language=en tries in this sector. STIC Europe; Trade Capacity Building Re- Countries are more likely to adopt the sults Monitoring/Assessment Framework: Informal Experts' Meeting - 16 June 2004: standards put forth by organizations http://www.epe.be/stic-europe/techassist/ when they proactively participate in the docs/16Jn04%20summary.doc international harmonization of standards. Standards, Productivity and Innovation They can do this by becoming involved Board (SPRING Singapore): with the WTO's SPS Committee, the http://www.standards.org.sg/AboutUs.cfm? id=AU1002 World Customs Organization (WCO) Standards Implementation for Productivity: Committee, and various UN agencies. http://www.standards.org.sg/AboutUs.cfm? These bodies work to address non- id=AU1015 application of international standards, APEC 2002 Collective Action Plan, Path- identify areas in which no standards cur- finder Initiative; Chapter 5 : Standards] and Con- rently exist, and update inappropriate, formance: http://www.apec-iap.org/document/ existing international standards, which CDA_2003_Standards_and_Conformance.htm 6 GFP Explanatory Notes - www.gfptt.org