Enhancing transparent, predictable trade
Advance Rulings to Generate Greater Business Confidence
Transparent, predictable border processes underpin trade, providing certainty for business. On the other hand, discretionary treatment of goods tends to create a climate of mistrust. This can manifest itself in frequent discussions, disputes, and appeals that delay processing customs declarations and goods clearance, increasing the overall time and cost of trade.
Businesses in Tunisia have expressed frustration at a lack of uniformity in the application of customs legislation and procedures. Variations in tariff classification or determination of origin for the same product across Customs posts and officers create unpredictability, undermining business confidence and discouraging access to the benefits of global commerce, with micro, small and medium enterprises (MSMEs) most affected.
Several factors have contributed to this situation. Limited availability of information and guidance can impact traders’ ability to comply with cross-border legislation, while fuelling suspicion on the part of Customs officers and enabling discretion in the treatment of goods.
To tackle this, the Alliance is supporting Tunisia is introducing an advance rulings mechanism whereby traders can voluntarily request a binding legal opinion on how Customs will treat certain goods. These rulings will be uniformly applied and valid for a set period – at least a year and often longer.
The advance ruling model gives companies the confidence to conduct trade with a clear legal opinion covering their goods before they ship, reducing the chance of disputes during processing by Customs. The system aims to enhance trade predictability and transparency, lower the time and cost of trade for operators that choose to use it, and strengthen relationships between Customs and the private sector.
What We Are Doing
As evidenced by the country’s continuing progress towards full fulfilment of its World Trade Organization Trade Facilitation Agreement commitments, Tunisia is committed to modernising its trade processes .
The Alliance is supporting Tunisian Customs in developing the legal, procedural, and organisational framework to operate advance rulings. The project will focus heavily on change management within Customs to ensure the mechanism functions properly and to encourage business to use it.
A key component of the project involves intensive training of Customs officials by the World Customs Organization on classification and rules of origin creating a critical mass of awareness and expertise. As part of this, the Alliance will develop training manuals for officials and businesses on how the new procedures will operate and communications materials to persuade them of the benefits of adoption.
Aligning with its public private partnership approach, the Alliance is working with the Customs Administration of Tunisia and the trading community, including importers and exporters, customs brokers, and business associations.
To maximise MSME participation, the Alliance will ensure the appointment of MSME representative organisations, and that procedures, documentation and guidelines are made as readily understandable as possible. As with every Alliance project, this initiative will also be 100% gender-sensitised, acknowledging the additional obstacles faced by businesses that are women owned or operated.
The introduction of advance rulings aims to deliver measurable time and cost savings to businesses conducting cross-border trade while also representing a further step in implementing Tunisia’s TFA commitments.
Early adopters are likely to come from automotive, chemical, pharmaceutical, and general manufacturing sectors where more frequent disputes arise on tariff classification and origin.
In general, the project is expected to deliver:
- Faster processing of customs declarations
- Fewer disputes over tariff classification and determination of origins on goods
- Improved targeting of cargo due to advance information on imported goods
- Fewer penalties for operators
- A reduction in demurrage and warehouse storage fees
Establishing an advance ruling mechanism will also demonstrate Tunisia’s intent to further embrace a fairer, more predictable, transparent, effective, and efficient cross-border trading environment. This should make the country more attractive for foreign direct investment.
This targeted, time-limited project will achieve tangible benefits for the private sector as well as providing a platform for further collaboration between Customs and the private sector.
The project is scheduled for completion in 2024
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