Earlier this month the ASEAN
finance ministers signed a new ASEAN Customs Agreement, which supersedes the 1997 ASEAN Customs Agreement. I’ve had a chance to review the 2012
Agreement and comment as follows:
1.
Article 3 states
that the Agreement applies to “goods being
imported into, exported from, in transit through, or trans-shipped through the
territories of Member States in accordance with their respective laws and
regulations.” In other words, its provisions
cover all goods, whether or not originating in ASEAN (e.g., qualifying for
preferential treatment under the ASEAN Trade in Goods Agreement).
2.
Article 7 states
that “Member States shall ensure
that customs controls are limited to such extent as to ensure compliance with
their respective customs laws.” Customs
controls refer to “inter alia, control of
the movement of goods; examination of goods; taking of samples; verification of
declaration data and the authenticity of documents; examination of the
accounts; books and records of economic operators; inspection of means of
transport, luggage and other goods carried by or on persons; and carrying out
of official enquiries. “ This has
been a controversial issue in ASEAN, as some ASEAN national customs authorities
have used customs controls as a non-tariff barrier to trade. For example, in
some ASEAN countries it can take many months to get a sample taken and approved
by local customs authorities.
3.
Article 9 sets forth formal and substantive
requirements for goods declaration. There have been frequent disputes among
ASEAN member states regarding the Form D
origin document and other documentation.
4.
Articles 10-12 provide for electronic submission of
declarations, where authorized by national customs authorities.
5.
Articles 16-18
contain general principles regarding release of goods, customs clearance and
free circulation of goods.
6.
Article 20
explicitly adopts the WTO Customs Valuation Agreement as the basis for
determining customs value in ASEAN. Notably,
the 2012 Agreement does not contain the 1997 Agreement’s directive that “Member States shall not use Customs valuation for protective
purposes or as a barrier to trade.”
7.
Article 27 commits ASEAN member states to use a risk
management approach to customs. Customs
agencies in developed countries use risk management techniques such as
sampling, intelligence gathering and data analysis to subject “at risk” imports
for further scrutiny and facilitate trade for the others. Some ASEAN national customs authorities have
had a reputation for the traditional “gatekeeper” approach which subjects all
shipments to the same level of scrutiny.
Article 27 hopefully brings them closer to modern standards.
8.
Article 34 provides for advance rulings by ASEAN national
customs authorities.
9.
Article 35 provides for “Authorized Economic Operators,” a
concept commonly used in the developed world to subject qualified companies to
streamlined regulation.
10.
Articles 37-41 provide for electronic data interchange and
usage by ASEAN national customs authorities.
11.
Articles 42-45 provide for mutual assistance among ASEAN
national customs authorities. The
provisions specify that they shall cooperate to extent possible, but “if the assistance sought would infringe upon
a Member State’s sovereignty, security or other substantial national interests
or prejudice the legitimate commercial interests of any enterprise, public or
private, the customs authorities of the Member State may decline to provide
that assistance or give it subject to certain conditions or requirements.” Hence the 2012 Agreement encourages
cross-border customs cooperation, extending it to areas such as IP and
narcotics control, but preserves the right of ASEAN national customs
authorities to reject cross-border cooperation.
12.
Article 48 requires ASEAN national customs authorities
to designate an official enquiry point and to publish laws and regulations on
the internet.
13.
Article 52 preserves the right of administrative and
judicial appeal of customs decisions.
14.
Article 57 provides that the ASEAN Enhanced Dispute
Settlement Mechanism shall apply to any disputes.
15.
Article 58 provides for confidentiality in the
administration of the 2012 Agreement.
The 2012 Agreement is now being considered by the ASEAN Member States
for ratification.
These are significant steps towards full implementation of the ASEAN
Economic Community. However, as with all ASEAN agreements, its effectiveness
will depend on its implementation, particularly on cross-border cooperation and
dispute resolution. Without effective
cross-border cooperation, an intransigent ASEAN national customs authority can
create problems for supply chains. Without effective dispute resolution (not
necessarily requiring arbitration), that same national customs authority can
continue to create problems indefinitely. Remember that the only WTO dispute settlement
panel between two ASEAN members, the Philippine complaint against Thailand on
cigarettes, involved customs issues.
Hopefully the 2012 Agreement will mean that future disputes can be
avoided, and when they do arise, they will be handled by ASEAN and not through
extra-ASEAN legal norms and forums.
