When commodities are traded internationally, economic operators and Customs alike need exhaustive and up-to-date information with regard to all regulatory measures that apply to cross-border transactions. Apart from calculating the amount of import or export duty to be paid, parties involved in international trade need to be aware of measures such as tariff quotas and tariff suspensions, prohibitions, restrictions and trade defence instruments, to name but a few.

The need to provide information to traders and other stakeholders has long been recognized by the international Customs and trade community. A number of international instruments support this principle, requiring or recommending that information on a wide range of laws and regulations be made available to the public.

The latest global multilateral trade agreement, the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), stipulates in its Article 1 (“Publication and availability of information”) that each WTO Member must promptly publish trade-related and Customs-related information in a non-discriminatory and easily accessible manner in order to enable governments, traders and other interested parties to become acquainted with them. In particular, Members must publish information on the applied rates of duties and taxes of any kind imposed in connection with importation or exportation, as well as rules for the classification of products for Customs purposes.

These same measures are also required or recommended by other, sometimes older, international instruments, including the Revised Kyoto Convention (Chapter 9), the WCO Council Recommendation on the Improvement of Tariff Classification Work and Related Infrastructure (1998) and the African Continental Free Trade Agreement (Article 4 of Annex 4 of the Agreement).

With a view to adopting these standards, many administrations have taken a proactive approach by developing web-based tools in the form of electronic tariff support platforms. These range from comprehensive databases (such as TARIC, the integrated Tariff of the European Union) to websites providing a single access point to all documents (such as the Single Window for Trade operated by the Nigeria Customs Service). Some electronic tariff platforms also include information on advance rulings^[1] and enable traders to apply for a ruling online (Canada Border Services Agency, CBSA).

The advent of comprehensive electronic tariff platforms not only contributes to ensuring transparency and predictability, but also brings about significant positive changes in the way Members implement one of the most important global Customs standards: the WCO Harmonized System (HS). Indeed, such platforms help administrations to migrate to new versions of the HS in a timely manner, which is something that many administrations still see as a major challenge.

It is important to note that, in order to ensure the relevance of the HS, it has been updated regularly updated so as to take into account changes in technology and patterns of international trade. Every five years, each Contracting Party to the HS Convention must implement amendments to its own national nomenclature to align it on new versions of the HS. Not only do Customs tariffs themselves need to be updated, but many other tariff-based instruments likewise have to be brought into line with new versions of the Harmonized System. Stakeholders need to be consulted, various interests taken into account and official updates published. Many administrations find themselves mired in the complexities of the implementation process, ultimately missing the deadline by which amendments must enter into force.

Unlocking the full potential of electronic tariff platforms can be a major game changer here, in more ways than one. In the drafting of amendments, a greater level of inclusiveness of the process can already be achieved by making the proposed changes available for review and inviting input from all relevant stakeholders via an electronic platform. After the adoption of amendments, the new tariff can be implemented via the electronic platform too, without having to print hard copies of official gazettes or tariff books. The whole process can be handled in an entirely digitized and paperless environment, and in an optimized and streamlined manner.

The WCO Secretariat recently assisted the Customs Administration of Eswatini in developing an electronic tariff platform as part of a specific capacity building programme funded by the European Union (EU) named the EU-WCO Programme for the Harmonized System in Africa (HS-Africa Programme). Launched in 2019, the programme aims at delivering assistance to Regional Economic Communities (RECs) and Customs administrations in Africa in the implementation of the HS and modernization of tariff classification work.

As Dumisani E. Masilela, Commissioner General of the Eswatini Revenue Authority, explained, the “lack of information imposed significant costs on businesses in Eswatini, and the e-tariff platform plays a key role in removing the traditional barriers to access to information”.

The project was launched in June 2020, and the platform was inaugurated on 1 September 2020. The work was completed in a short period of time thanks to the strong support from the top management of the Eswatini Revenue Authority, local ownership of the project and sustained commitment of a multidisciplinary project management team.

The electronic tariff platform allows importers to determine which Customs duties, excise duties, anti-dumping duties and countervailing duties may apply to their goods, based on their tariff codes. Users can consult the electronic tariff by browsing it and searching it using specific keywords or generic product description. Once the tariff code and the country of origin of a good are fed into the system, it automatically generates the estimated amount of duties that will be payable. The search result can be downloaded and saved.

Soon after the inauguration, training sessions and awareness-raising activities were organized for various stakeholders, from both the public and the private sectors.

This is only the beginning for the Eswatini Customs Administration, for during the inauguration of the tool, Dumisani E. Masilela announced that “the e-tariff platform is just one example of the many IT-based solutions that the Customs Administration is planning to roll out in the short to medium term. Our goal is to embrace technology and leverage it in order to improve both Customs enforcement capacities and customer experience.”

The East African Community (EAC) has also benefited from the support of the WCO Secretariat and has commenced the process of digitizing its Common External Tariff (CET). The ultimate objective here is similarly to facilitate international trade by means of giving the private sector easy access to trade information.

The platform will be accessible from both computers and mobile devices and will include features that are searchable by tariff code or generic product description. It will allow a seamless migration process of the EAC CET upon transposition of HS 2022. It will furthermore include a mechanism for administration and management of the Duty Remission Scheme^[2] (submission of application, assessment and approval, etc.) and also provide information on other measures affecting the implementation of the CET such as Stays of Application (SoA)^[3] and on preferential tariff treatment for goods originating from Regional Economic Communities to which EAC Partner States are members.

During a series of regional and national meetings organized under the EU-WCO Programme for the Harmonized System in Africa, a number of African countries and RECs have shown a keen interest in developing electronic tariff support tools of various kinds. Some have already started their own projects to establish an electronic tariff platform or trade portal, while others, such as the Customs Administrations of Liberia and Zambia, have confirmed their interest in launching such initiatives as soon as possible.

Since there are myriad ways of designing an electronic tariff tool, proposing a one-size-fits-all approach is not an option. The design and functioning of such a platform must be determined by each country or REC based on the laws, regulations and procedures in place, and, in the case of RECs, on the levels of regional integration.

Moreover, officers managing the project must coordinate with those developing other related IT tools, such as national trade facilitation portals or new websites and applications, in order to identify synergies and avoid any duplication of work. For instance, an electronic tariff tool can be integrated into existing and future trade portals in order to prevent fragmentation of information or duplication of services.

By providing information in a clear, comprehensive and timely manner, electronic tariff platforms can create a virtuous circle where easy access to information means increased trade flows and higher levels of compliance. It could also transform the classification of goods into a more automated, predictable, streamlined and meaningful process, further strengthening the global standard that is the Harmonized System.

More information
capacity.building@wcoomd.org.

^[1] An advance ruling is a written decision issued by a Customs administration that tells the applicant how a good will be treated when it is imported into a country. An advance ruling represents the administration’s official position and remains legally binding on Customs for a certain period of time, until amended or revoked.

^[2] Under duty exemption schemes, exporters are allowed to import inputs duty-free that are to be used in the production of goods for export.

^[3] The practice of stays of application allows EAC countries to deviate from certain tariff lines set under the regional CET for up to a year at a time.