2. Part 1: International Trade Treaties and Conventions

Overview

Customs administrations operate in a complex legal environment where international law interacts with domestic law. As an instrument of the executive arm of government, Customs enforces a wide range of domestic laws — powers and responsibilities normally set down in a country's main Customs Act.

The doctrine of sovereignty allows a state to write its own domestic law as it sees fit. However, this is progressively modified by international instruments designed to create uniformity, simplicity, harmonisation and predictability in the way Customs operates worldwide. International law increasingly determines the role of Customs, the powers it should have, and the extent of its jurisdiction.

Several international treaties and conventions provide standards specifically for Customs activities. The most important are:

RKC

WCO

1999

Revised Kyoto Convention

International Convention on the Simplification and Harmonization of Customs Procedures

The principal instrument for Customs procedure standards worldwide. Establishes best practice for clearance, control, transparency, and trade facilitation.

WCO

1988

HS Convention

Convention on the Harmonized Commodity Description and Coding System

Provides the universal 6-digit code system for classifying all internationally traded goods, used in over 200 countries representing 98% of world trade.

TFA

WTO

Trade Facilitation Agreement

WTO Agreement on Trade Facilitation

Reinforces the approach taken in the RKC. All its provisions are mandatory and legally binding — WTO Members that fail to implement may face dispute settlement.

CVA

WTO

GATT Art VII

Valuation Agreement

WTO Agreement on Implementation of Article VII of GATT

The international benchmark for customs valuation, ensuring goods are assessed for duty on a consistent, transparent basis across all WTO Members.

The WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE), while not a legally binding Convention, provides best practice guidance to secure international trade and promote partnership with industry. SAFE is examined in Module 3.

Several WTO agreements establish broader trade principles that Customs must also implement. All are founded on the General Agreement on Tariffs and Trade (GATT):

Agreement and Customs relevance

Agreement on Sanitary and Phytosanitary Measures

governs food safety and animal/plant health measures that Customs must enforce at the border.

Agreement on Dumping (Anti-Dumping Agreement)

sets rules for Customs enforcement of anti-dumping duties on goods exported below normal value.

Agreement on Subsidies and Countervailing Measures

provides the framework for applying countervailing duties on subsidised imported goods.

Agreement on Technical Barriers to Trade

ensures technical regulations and standards applied at the border are not unnecessarily trade restrictive.

Further Reading

These instruments demonstrate the importance of unified approaches to managing the clearance of goods and the collection of revenue. Full texts of all instruments are available on the WCO website and the WTO website. In this part of the module, we focus on the HS Convention and the Valuation Agreement, before turning to the Trade Facilitation Agreement.

Learning Objectives

✓	International Customs Agreements and Member State Obligations Identify the primary international agreements governing Customs operations and explain the obligations they impose on member states.

✓	The Harmonized System Convention: Structure, Purpose, and Administration Explain the structure and purpose of the Harmonized System Convention, including how it is administered and updated.

✓	WTO Valuation Agreement: Methods, Application, and Implementation Challenges Describe the WTO Valuation Agreement's primary and alternative methods for determining customs value and identifying the key challenges in its implementation.