Aleksieiev V.S.

Oles’ Honchar Dnipropetrovsk National University (Ukraine)

WTO Jurisprudence on Some Issues of Administration and Customs Laws

According to the WTO jurisprudence the scope of administration that is subject to a challenge under Article X:3 (a) of GATT 1994 includes the manner in which the legal acts are applied or implemented in particular cases; a legal instrument that regulates such application or implementation; administrative processes leading to administrative decisions. In the latter case, the complainant must demonstrate how and why certain features of the administrative processes necessarily lead to a lack of uniform, impartial, or reasonable administration of legislative acts.

Article X:3 (a) of GATT 1994 sets out three distinct and legally independent obligations — an obligation to administer laws and regulations in a uniform, impartial and reasonable manner. It is worth emphasizing that WTO jurisprudence does not provide for exhaustive definitions of the above requirements. However, it goes without saying that analysis of the particular cases considered within the WTO and interpretations made therein provides an opportunity to understand the scope of the requirements.

According to WTO jurisprudence, a process aimed at assuring the proper classification of products, but which inherently contains the possibility of revealing confidential business information (in this dispute the representatives of the domestic industry, consuming raw materials, were able to participate in the customs clearance procedures applicable to export of such raw materials), is an unreasonable manner for administering the laws, regulations and rules and, therefore, is inconsistent with Article X:3 (a) of GATT 1994.

In another case the Panel found that the fact that the Dominican Republic authorities did not support its decisions regarding the determination of the tax base for imported cigarettes by resorting to the rules in force at the time and that they decided to disregard retail selling prices of imported cigarettes, is not “in accordance with reason”, “having sound judgement”, “sensible”, “within the limits of reason”, or “articulate”.

Whenever a party with a contrary commercial interest, but no relevant legal interest, is allowed to participate in an export transaction, there is an inherent danger that customs laws, regulations and rules will be applied in a partial manner so as to permit persons with adverse commercial interests to obtain confidential information to which they have no right.

Pursuant to the WTO jurisprudence, the requirement of uniform administration of laws and regulations must be understood to mean uniformity of treatment in respect of persons similarly situated; it cannot be understood to require identical results where relevant facts differ. It is considered that the requirement of uniform administration of laws and regulations is not violated merely because, in the administration of those laws and regulations, different conclusions were reached based upon differences in the relevant facts.

However, the lack of any definition, guidelines or standards in how local authorities should apply certain import rules constitutes relevant evidence in establishing non-uniform administration for those rules. Moreover, the lack of any definition, guidelines or standards poses a very real risk that these rules will be administered differently depending on which local authority handles the import matter.

Moreover, the uniform administration shall mean that customs laws and regulations should not vary, that every exporter and importer should be able to expect treatment of the same kind, in the same manner both over time and in different places and with respect to other persons. Uniform administration requires that Members ensure that their laws are applied consistently and predictably and is not limited, for instance, to ensuring equal treatment with respect to WTO Members.

Article O:3 (b) of GATT 1994 stipulates that each contracting party shall maintain, or institute judicial, arbitral or administrative tribunals or procedures for the purpose of prompt review and correction of administrative action relating to customs matters. Such tribunals or procedures shall be independent of the agencies entrusted with administrative enforcement. However, Article O:3 (b) of GATT 1994 shall not require the elimination or substitution of procedures in force in the territory of a contracting party which in fact provide for an objective and impartial review of administrative action even though such procedures are not fully or formally independent of the agencies entrusted with administrative enforcement (Article O:3 (c) of GATT 1994). Any contracting party employing such procedures shall, upon request, furnish the other parties with full information thereon in order that they may determine whether such procedures conform to the requirements ofArticle O:3 (b)-(n) of GATT 1994.

The trade facilitation issues, including improvement of customs formalities and procedures, is one of the key issues discussed in the Doha round that took place not so long ago. According to the information posted on the official WTO web-site, the Members agreed that the negotiations “shall aim to clarify and improve relevant aspects of Articles V, VIII and X of the GATT 1994 with a view to further expediting the movement, release and clearance of goods, including goods in transit”. Negotiations also aim to “enhance technical assistance and support for capacity building in this area,” and develop “provisions for effective cooperation between customs or any other appropriate authorities on trade facilitation and customs compliance issues”.

As Ukraine is moving towards establishing close economic relations with the EU, the main task of our government today is to concentrate on vital reforms and make sure that the new Trade and Customs Laws fully comply with the requirements of the WTO jurisprudence.