Border Procedures & Trade Facilitation
View GuideAuthorized Economic Operators
What are authorized economic operators (AEOs)? AEOs are businesses and other entities certified by customs authorities to...
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Enquiry/Contact Points
What are enquiry points? Enquiry/contact points are officials in government agencies tasked with answering questions that anyone involved in international businesses may have about trade requirements, such as sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT). (See Trade4MSMEs guides on SPS and TBT) Where can I find enquiry points for TBT and SPS matters? TBT and SPS enquiry points must be notified to the World Trade Organization (WTO). The ePing Alert also provides a list with enquiry points for TBT and SPS measures notified by over 180 countries or territories. To contact the relevant enquiry points for your trade transactions, you can begin by checking the resource materials made available by ePing Alert. Also on that website, you can subscribe to receive notifications on TBT and SPS regulations that may affect your products and identify who to contact for any enquiries you may have. How can I contact enquiry points for other goods trade procedures? The Global Trade Helpdesk (GTH) provides information on enquiry points that you can contact to ask about matters related to exports, imports, and transit procedures. It also describes single window platforms (see the Trade4MSMEs guide on single windows) that you can use to submit all documents required by customs and other agencies to comply with local requirements and border procedures. When using the GTH website, you can check the section on navigating trade procedures by typing in the information required for your desired export or import transactions. Where can I learn more? The Trade Facilitation Agreement Facility (TFAF): The World Trade Organization has an online Trade Facilitation Agreement Facility that lists contact points for trade facilitation matters reported by about ninety countries or territories. If you need assistance with other trade-related matters, you can reach out to the contact points listed, they may be able to answer questions or direct you to the relevant enquiry officials. Links to Supporting Information Trade4MSMEs guide Sanitary and Phytosanitary Measures Trade4MSMEs guide Technical Barriers to Trade The ePing alert Enquiry point – ePing SPS&TBT platform ePing SPS&TBT Platform Home – ePing SPS&TBT platform The Global Trade Helpdesk Global Trade Helpdesk TRADE4MSMEs Guide Single Windows WTO Trade Facilitation Agreement Facility Contact Points | TFAF
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Trade Documents for Exports
What documents do I need to export? The documents required for export vary based on the destination market and mode of transportation. Before trading, it is very important to review what documents are required by the transporter and customs authority to ensure your shipment is released upon delivery. Trade documents, sometimes also referred to as customs documents, generally include the following: Commercial invoice: This is a document issued by the seller to the buyer requesting payment for the goods. It serves both as a formal request for payment and may also be used by customs officials to clear the goods in certain countries. It can be used as a supporting document for insurance claims and may be required for the release of funds from the buyer to the seller or for reimbursement of a letter of credit by banks. UN/CEFACT has developed a cross-industry invoice (CII) to support electronic invoicing and standardize the information shared between buyers and sellers, especially when used with Incoterms. For more information on UN/CEFACT’s initiative and whether it could be helpful to your business, see the Trade4MSMEs guide on Incoterms. Commercial invoices are prepared after purchase orders are submitted by a buyer to a seller detailing the requested item, amount, and purchase price to be paid. A purchase order generally contains more detail than a commercial invoice, listing each item purchased, the unit information, and both buyer and seller information. Bill of exchange: This document details the goods in a transaction, the amount due for payment, when the payment is due, and all necessary banking information. Bills of exchange can be issued directly from a bank (referred to as a bank draft) or from an individual (called a trade draft) and are negotiable, meaning the bearer can sell this document on the market for cash. Packing list: This document, sometimes referred to as a weight list, is used to record the precise contents of a shipment, sometimes including details like the product’s weight. Although the price may be listed in the packing list, it is different from a commercial invoice because it is not a request for payment. Rather, its purpose is for record keeping. Insurance documents: These are included if you have trade insurance. (See Trade4MSMEs guide on Trade Insurance.) Letter of credit: These documents can be used by the importer to finance its purchase from the exporter, essentially certifying payment by the importer’s bank to the exporter’s bank once the goods are received. (See Trade4MSMEs guide on Trade Finance). Transportation documents: These can include bills of lading or waybills. (See Trade4MSMEs guide on Bills of Lading.) Export compliance documents: These documents can involve export declarations, licenses, permits, or certificates. (See Trade4MSMEs guide on Basics of Exporting.) Certificate of origin: These documents certify where the goods come from. This information is required to apply appropriate tariffs, as well as to determine if the goods are allowed to enter the destination country. (See Trade4MSMEs guide on Rules of Origin.) Sustainability certifications: Many new standards and certifications are being created to provide consumers with information about a product’s sustainability, environmental or social impact. Some of these are provided by governments, such as “organic” labels for consumables, while others are through non-profits like the Forest Stewardship Council. (See Trade4MSMEs guides on Standards and Voluntary Sustainability Standards). Links to Supporting Information Trade4MSMEs guide Incoterms UNCFACT e-Invoice | UNECE Trade4MSME Guide Trade Insurance Trade4MSMEs guide for Trade Finance Trade4MSMEs guide on Bills of Lading Bills of Lading Trade4MSMEs guide Basics of Exporting Trade4MSMEs guide Rules of Origin Trade4MSMEs guide Standards Trade4MSMEs guide Voluntary Sustainability Standards
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Trade Facilitation
What is the Trade Facilitation Agreement? From the 2013 Bali Ministerial Conference and after almost ten years of subsequent negotiation, the WTO Trade Facilitation Agreement (TFA) emerged, recognizing the need for improvement in trade processes. Ratified at the beginning of 2017, the TFA is an important step to facilitate border procedures. Recent evidence from an ex-post analysis undertaken by the United Nations Economic and Social Commission for East Asia and the Pacific (UNESCAP) suggests that implementation of the WTO TFA to date (as it is a gradual process in most developing economies) has contributed to reduce trade costs by 1-4% on average. Why does the TFA matter for MSMEs? Although the changes proposed by the TFA benefit all traders, smaller traders, with fewer resources, were identified as benefitting more. Section I of the agreement lists all the various areas and processes that should be aligned and modernized (see the guide on cross-border paperless trade), with changes focused principally on two areas, communication and border procedures. The ITC has highlighted certain articles of the TFA as especially relevant for MSME trade. They include articles on trade procedure information dissemination to SMEs; authorized operators and criteria that will not restrict SME participation (see Getting Down to Business or the guide on authorized economic operators); SME support for single windows (see guide on single windows and national portals); reduced fees and charges for SMEs and expedited shipments; and national committees on trade facilitation and SMEs (see guide on national committees on trade facilitation). For more details, see Making the WTO Trade Facilitation Agreement Work for SMEs. Where can policymakers access more resources? There are many resources for policymakers related to implementation of the TFA. Below are just a few, more can be found in the policymaker resource library. ITC not only provides research and capacity building information on their dedicated webpage to the trade facilitation programme, they also offer a policymaker e-learning course on the WTO trade facilitation agreement and training manual on SMEs and the WTO Trade Facilitation Agreement. OECD trade facilitation page contains useful links to research, video explanations and tools with information on implementation of the agreement and related challenges. World Customs Organization (WCO) resources on trade facilitation include a guide on national committees on trade facilitation and information sheets on specific topics such as advance rulings, appeals in customs matters, single window, risk management/post clearance control and simplified procedure/authorized persons, all of which are accessible here. The WCO also has produced many guides and handbooks related to trade facilitation available through the WCO Tools. World Trade Organization (WTO) resources include the trade facilitation webpage, which contains information on the agreement itself as well as links to videos and publications. Additional resources linked on the page include: The dedicated website of the Trade facilitation Agreement Facility which includes information on the agreement itself, resources and case studies for each TFA provision, numerous general resources such from the WTO’s TFA Facility webpage, as well as links to e-learning courses for policymakers provided by the WTO, IDB, ITC, UNESCAP and others. The trade facilitation agreement database with charts on the state of play of the TFA and the status of the implementation of commitments by WTO Members. Where can policymakers access good practices or national examples? ITC, UNCECE and UNCTAD guide titled Getting Down to Business, Making the Most of the WTO Trade Facilitation Agreement includes information on best practices and other useful information on implementation. OECD trade facilitation indicators simulator and compare your country tool provide governments with a basis to prioritize trade facilitation actions and to identify strengths and weaknesses in trade facilitation. UNCTAD similarly offers a Reform Tracker for monitoring of trade facilitation reforms.
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Services Contact Points
What are services contact points? The World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS) requires WTO Members, set up contact points who can make it easier for services suppliers from developing countries to obtain the information they need. The information provided by these contact points concerns commercial and technical aspects of the supply of services in the domestic market; registration, recognition, and obtaining of professional qualifications; and the availability of services technology. Where can I find other resources on this? Services conditions are often specific to a particular location and industry. Places to start when looking for more information on exporting your service include professional associations for your business, local chambers of commerce, or government trade bodies both domestically and in your target market. Links to Supporting Information WTO contact points WTO directory of contact points for trade in services directdoc.aspx (wto.org)
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Express Consignments and Low-value Shipments
What are express consignments and low-value shipments? With the advent of e-commerce in the digital economy, the Universal Postal Union (UPU) has recognized the increasing “parcelization” of trade. In fact, over 80% of cross-border goods bought online are small packets weighing up to 2 kilograms, and the majority of those packages (roughly 70%) are delivered through the postal system. This has changed the needs of customs processing as more and more shipments are sent by individual or small sellers with different capacities. Why does it matter for MSMEs? MSMEs may not have the expertise to comply with customs requirements, or may be deterred from entering trade altogether given the paperwork and requirements to ship commercial packages abroad. Making tax/duty information readily available and easy to understand in order to calculate expected costs is a first step in the process. What can policymakers do? Some governments have introduced new approaches to deal with low value shipments. For example, Australia applies a goods and services tax – known as GST – which takes the form of a broad-based tax of 10% applied to sales of most goods, services and other items consumed domestically. Canada has developed a generic harmonized system for household imports, which has been proposed as a model for developing a standard application programming interface with standard classification headings for harmonizing identification codes for low value shipments. Other group of countries have decided to apply a flat import rate at a reasonable level that replaces all duties and taxes. On the basis of these approaches, the Global Express Association (GEA) has conceptualized three broad options that policymakers can consider for collecting taxes and duties on low-value shipments. For more information, see the GEA’s Proposal on Tax/Duty Collection on Imported Low Value Shipments. Where can policymakers access more resources? The Universal Postal Union has a number of resources, including a mobile phone application for submitting electronic advance data (EAD) for customs declarations, along with guidelines and guides, recommendations, and standards. Where can policymakers access good practices or national examples? Australia’s GST system applies to goods imported into the economy as well as domestic production. An explanation of how Australia’s GST system works can be found here and an explanation of importing goods with GST is available here, along with a presentation on Australia’s e-commerce experience. Canada’s generic harmonized system for household imports is described in the GEA’s a proposal on tax/duty collection on imported low value shipments. There is also a presentation on Canada’s low-value shipments policy. The Enhanced Integrated Framework (EIF) and UPU, in conjunction with the United Nations Conference on Trade and Development (UNCTAD) have launched a project in Vanuatu to facilitate the efficient post–customs clearance of postal packages through the exchange of pre-arrival/pre-departure information. An additional 23 least developed countries (LDCs) in which the national interfaces between UPU’s Customs Declaration System (CDS) and UNCTAD’s ASYCUDA (a computerized customs management system) can be established quickly have also been identified. For more information, visit the EIF’s Trade for Development News. New Zealand, similar to Australia, also has a GST system in place. More information on GST for overseas business in New Zealand is available here. UPU publishes both case studies and best practices, such as Easy Export to develop a simplified and easy export system for MSMEs. Originally created for Brazil, Easy Export is now being applied in other economies as well, including Tunisia and Morocco.
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How Do I Determine My Product’s HS Code?
What is an HS code? The Harmonized System (HS) is an international classification system of 6-digit codes, used to categorize physical goods for Customs purposes.
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National Committees on Trade Facilitation
What are National Committees on Trade Facilitation (NCTFs)? National Committees on Trade Facilitation (NCTFs), also sometimes...
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Rules of Origin – for Businesses
What are rules of origin? Rules of origin (ROOs) are a set of laws, regulations, and administrative procedures that countries impose to determine where an imported product comes from.
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Customs and Border Procedures
What are customs? Customs refers to the government agency or authority tasked with regulating trade in goods and collecting any duties levied on imports and exports. Offices and staff working for customs are located at places where goods transit across borders, such as ports, airports or other frontiers. Customs manage a set of procedures and operations to control goods and people (travelers) that enter or exit the country. When you export or import, you will have to comply with a series of customs and border procedures that will verify if your products meet market access requirements (see the Trade4MSMEs guide on Trade Documents for Exports). What role do customs play in cross-border trade? Before selling goods abroad or purchasing foreign commodities or products, it is important to map out the relevant procedures your business will have to manage with customs and other competent authorities (such as national plant protection organizations to obtain SPS certificates). Customs play an important role in trade because they protect domestic borders against potential security threats and counterfeit goods. They also examine if your products will be subject to duties and other local regulations and standards (see the Trade4MSMEs guides on Trade Document for Exports and Non-Tariff Measures). How can my business navigate customs procedures? In some economies, it is compulsory when an import value is above a certain threshold to use a licensed customs agent to clear goods through customs. In others, businesses simply choose to hire a customs broker to help avoid potentially costly errors. In all cases, the importer is responsible for knowing the requirements and for ensuring compliance. The Global Trade Helpdesk (GTH) is a free-of-charge website from the United Nations, the International Trade Centre (ITC), and the World Trade Organization (WTO) that provides information on customs authorities and enquiry points for relevant government authorities (see the Trade4MSMEs guide on Enquiry Points) for border procedures involved in exports, imports, and transit of goods. It also describes single window platforms (see the Trade4MSMEs guide on Single Windows) that you can use to submit all documents required by customs and other agencies to comply with local requirements and border procedures. When using the GTH website, you can check the section on navigating trade procedures that appears when you type the product you seek to export from your domestic market and import into your targeted market. These two webpages will provide you or your customs broker with a starting map of resources to navigate through customs. Where can I learn more? Various institutions have online resources and training materials that can help you learn more about technical terms and border procedures managed by customs. Some examples are: Glossary of international customs terms: The World Customs Organization has a glossary with descriptions on key terms used by customs authorities. E-learning courses on customs: The European Commission offers about 600 e-learning courses in 21 languages about customs and border procedures. Most of the materials are free to access. Factsheet on customs procedures and declarations: The European Union Customs Code (UCC) provides a general guide with steps that you can consider for complying with procedures required by customs authorities. Links to Supporting Information Trade4MSMEs guide Trade Documents for Exports World Customs Organization World Customs Organization (WCO Trade4MSMEs guide Non-tariff Measures FEDEX Guide to navigating customs Fedex Global Trade Helpdesk Global Trade Helpdesk Trade4MSMEs guide Enquiry/Contact Points Trade4MSMEs policymakers guide Single Windows and National Portals WCO World Customs Organization Website of the European Union eLearning courses and eBooks The European Union Customs Code (UCC) Union Customs code & Customs Procedures and Customs Declarations Quick Info
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International Commercial Contracts
Should I have a contract with my international partners? Any business dealing has a risk of misunderstandings or unfair dealings. Cross-border business transactions may have added difficulties due to the differences in culture, expectations, languages, and legal systems. Given these potential obstacles or risks, it is important to have a clear agreement on a transaction with overseas partners, preferably in writing, in order to avoid potential future disputes and to foster productive long-term relationships. How do I draft a contract? The contract should contain terms and conditions upon which both parties agree. It is generally recognized that the parties, i.e., you and your business partner(s), are free to choose and agree on the terms and conditions in your contract (freedom of contract). Some of the large international organizations aim to harmonize the substantive rules in international trade and business. These organizations include the United Nations Commission on International Trade Law (UNCITRAL), the Hague Conference on Private International Law (HCCH), and the International Institute for the Unification of Private Law (UNIDROIT), they have developed a wide range of Conventions, model laws, and principles that can be used by the parties for international business contracts. Noteworthy among these are the United Nations Convention on Contracts for the International Sale of Goods (CISG), also known as the Vienna Convention; the HCCH Principles on Choice of Law in International Commercial Contracts; and the UNIDROIT Principles of International Commercial Contracts. These instruments contain sets of rules that can either be incorporated in your contracts for international business transactions and/or can govern your contracts, in addition to national law rules. To assist you in navigating the various international instruments, the three organizations have jointly published a guide to International Commercial Contracts in six languages. Within a contract, it is also important to use specific and well-established terminology in international business transactions. For example, Incoterms (international commercial terms), established by the International Chamber of Commerce (ICC), can help standardize a contract’s terminology and assure that parties have the same understanding (see the Trade4MSMEs guide on Incoterms). Model contracts are also available free of charge from the International Trade Centre or for a fee from the ICC. For information on what to do in the event of a breach of contract, see the Trade4MSMEs guide on Dispute Settlement. Links to Supporting Information UNCITRAL Guide to International Commercial Contracts Legal Guide to Uniform Instruments in the Area of International Commercial Contracts, with a Focus on Sales Trade4MSMES guide Incoterms International Trade Centre Model Contracts for Small Firms International Chamber of Commerce ICC Model Contracts Trade4MSME guide Dispute Settlement
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Non-tariff Measures
What are non-tariff measures? Non-tariff measures are policy measures that can potentially affect traded goods by changing their quantities, prices, or both. The purposes of non-tariff measures include the protection of public health, or the environment, and may imply information, compliance, and procedural costs. These measures can apply to both imports and exports and are divided into 16 categories. The United Nations Conference on Trade and Development (UNCTAD) provides a full list of non-tariff measures and their definitions. What are the different types of non-tariff measures? Below is a table with broad categories of non-tariff measures that you may encounter. The first two, A and B, apply to importers, or buyers, and item P at the bottom of the table applies only to exporters, or sellers. It is important to note that some of these, such as quotas and trade-related investment measures, are prohibited under World Trade Organization (WTO) rules except for specific circumstances. For more details, please see the WTO’s General Agreement on Tariffs and Trade (GATT). Technical measures on imports A Sanitary and phytosanitary (SPS) measures: These include measures to restrict substances, ensure food safety, and prevent the dissemination of diseases or pests. (See guide on SPS measures) B Technical barriers to trade: These relate to product, technical, or quality requirements. They also include measures on labelling and packaging. (See guide on TBT) C Pre-shipment inspection and other Customs formalities: These involve other technical measures. Non-technical measures on imports D Contingent measures: These include antidumping, countervailing, and safeguard measures. E Licensing and quotas: These also cover quantity controls and other related restrictions. F Price control measures: These affect the prices of imported goods. G Finance measures: These restrict payment of imports and terms of payment. H Competition measures: These grant privileges to one or more economic operators. I Trade-related investment measures: These impose local content or export conditions on investment. J Distribution restrictions: These regulate the internal distribution of imported products. K Restrictions on post-sales services: These restrict, for example, the provision of accessory services. L Subsidies and other forms of support: These include financial transfers to enterprises, individuals, or households. M Government procurement restrictions: These restrict bidders from selling products to a foreign government. N Intellectual property: These involve restrictions or rules related to intellectual property rights. O Rules of origin: These are criteria involving the origin of products or their inputs, which can affect whether these are subject to restrictions, duties, or other measures. P Export-related measures: include export quotas and other export prohibitions. How can I start identifying non-tariff measures? Chambers of commerce, industry associations, and trade agencies may provide online portals with lists of non-tariff measures applicable for your products. Businesses can also identify trade restrictions in their targeted markets by using four available online tools, described below: Market Access Map: This database features specific non-tariff regulations that apply to exports or imports of products, as well as a tracker of temporary trade measures put in place in response to COVID-19. Trade Analysis Information System (TRAINS): The TRAINS database provides an exhaustive list of non-tariff measures available for more than 160 countries, covering more than four fifths of world trade. Global Trade Helpdesk: The Global Trade Helpdesk provides an overview non-tariff measures coming from the Market Access Map and TRAINS, as well other information on rules of origin, trade statistics, and related procedures for importers or exporters targeting foreign markets. World Integrated Trade Solution (WITS): The WITS presents country profiles on non-tariff measures by type. Links to Supporting Information The United Nations Conference on Trade and Development (UNCTAD) provides a full list of non-tariff measures and their definitions International Classification of Non-tariff Measures – 2019 edition (unctad.org) World Trade Organization (WTO)’s General Agreement on Tariffs and Trade (GATT) WTO | legal texts – Marrakesh Agreement Trade4MSMEs guide Sanitary and Phytosanitary Measures Trade4MSMEs guide Technical Barriers to Trade International Trade Centre ITC Market Access Map UNCTAD TRAINS International Trade Centre ITC Global Trade Helpdesk World Integrated Trade System WITS
