Revised Kyoto Convention to

Standardize Customs Procedures and Policies

August 2001

U.S. Customs has sent the Accession Package for the Revised Kyoto Convention to the Treasury Department as the next step in a review procedure that continues to the State Department, the White House and Submission by the President to the Senate. U.S. Customs has reduced the number of reservations to twenty-eight.  Most significantly, these do not apply to the General Annex, which sets standards for basic Customs procedures world-wide. The reservations apply only to the Recommended Practices in Specific Annexes, which are optional to acceding members. The reservations are necessitated by existing laws and regulation.  U.S. Customs will seek adjustments to further reduce the revervations once the U.S. has acceded to the Convention, but did not want to further delay U.S. accession pending these changes. Even so the U.S. will be acceding to 95% of the 514 provisions contained in the Convention's General Annex and Specific Annexes.

The Revised Kyoto Convention is an international instrument adopted by the World Customs Organization (WCO) to standardize and harmonize Customs procedures and policies worldwide. USCIB supports ratifidation and implementation of the Revised Kyoto Convention as a key measure for achieving Customs modernization on a global basis.USCIB member companies are committed to demonstrating the benefits of swift ratification and implementation of the Revised Kyoto Convention.

USCIB Position Paper

Customs Modernization and the Revised Kyoto Convention

March 2001

USCIB Position

In today’s global trade environment, inefficient customs processes and procedures pose significant and costly barriers to trade and investment. Standard, predictable and transparent customs policies and procedures are vital components of a successful economy.  Countries that fail to keep pace with world class standards for customs administration, such as those promulgated by the World Customs Organization (WCO) and the World Trade Organization (WTO), will find it increasingly difficult to attract new business, trade, and foreign investment as business cannot afford the high logistics costs imposed by customs inefficiencies.

To achieve more consistency and efficiency in the customs environment, the US Council for International Business (USCIB) supports customs modernization initiatives, for example, the initiative led by the International Chamber of Commerce (ICC).   The revised Kyoto Convention on The Simplification and Harmonization of Customs Procedures is a key element in this modernization.  USCIB and ICC member companies are demonstrating the benefits of prompt ratification and implementation of the revised Convention around the world.

The revised Kyoto Convention is an international instrument to standardize and harmonize customs procedures and policies worldwide.  The WCO adopted the original Convention in 1974.  Due to the changing nature of global trade through the ‘80s and ‘90s, the WCO adopted a revised version in June 1999. Under the revised Convention, the core principles that govern customs clearance procedures were extracted from the original Convention, reorganized into a General Annex and made obligatory upon ratification.  These principles include:

-          Standard, simplified procedures for clearance of goods (i.e., standardized goods declarations, minimum data requirements, single submission of required documentation, special procedures for compliant traders, examination procedures, penalty guidelines)

-          Use of electronic fund transfers

-          Co-ordinated interventions with other agencies

-          Risk management techniques for Customs control (i.e.,  to focus on high-risk shipments and use customs resources more effectively)

-          Continuous improvement of Customs control techniques

-          Maximum use of information technology and automated systems (i.e., automating systems for improved data collection, exchange and analysis)

-          Use of pre-arrival information to drive programs of selectivity

-          Access to Customs requirements, laws, rules and regulations  (i.e., granting access to customs decisions and rulings)

-          Appeals in customs matters (i.e., establishing the opportunity for appeal)

-          A partnership approach between Customs and Trade, with formal consultative arrangements

The revised Convention also contains Guidelines to assist countries understand how to interpret and apply the above core principles.  More specialized customs procedures and policies, such as temporary storage of goods, are covered in the Specific Annexes. 

In order for it to go into effect, 40 of the 61 Contracting Parties, who are WCO members, must ratify the revised Convention.  Contracting Parties are located in Africa, the Americas, Asia Pacific, Europe, and the Middle East.  The non-Contracting Parties (for example, Latin American countries) must ratify the original Convention first and then the revised Convention, or they can ratify the revised Convention once it enters into force.

-          Inefficient customs procedures and policies are costly, increase cycle time and lead to unpredictability in the clearance process.  USCIB member company products are sourced in multiple countries, undergo complex supply chain operations, and have short life cycles.  To remain competitive, USCIB member companies must get their products to market with speed and certainty.

-          Country-specific data requirements, rather than standard data requirements, are costly. USCIB member companies have purchased automated data systems that cannot be customized for country-specific data requirements.  To tailor these systems for country-specific requirements requires manual changes, is costly, and negates the intended gains from automated systems.

-          Other factors that slow the clearance process and negatively impact customs compliance, include: manual, instead of automated, clearance procedures and processing of documentation; lack of risk management techniques to expedite clearance of lower-risk shipments; and lack of access to customs information.

Go to the USCIB website (www.uscib.org) for general information and to access a video on customs modernization and the revised Convention.  The video is also available on the following website: (http://www.hp.com/hpinfo/newsroom/feature_stories/globaltrade.htm).   Also contact:

(425) 936-2636                                       (650) 236-5698

renst@microsoft.com                                         laura_tomarchio@hp.com