the european union’s tacis traceca program

Common Legal Basis for Transit Transportation

The European Union’s Tacis TRACECA program

for Armenia, Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan

A project implemented by

Lamnidis & Associates

EuropeAid

This project is funded by the European Union


Workshop on Corridor Development for Caucasus Countries

May 18-19, 2004

Tbilisi, Georgia

- Trade and Transport Facilitation -

2


Trade Facilitation

Trade Facilitation

TRADETRADE TRANSPORTTRANSPORT

CUSTOMSCUSTOMS

The three dimensions

GENERAL

3


SIMPLIFICATION OF

ADMINISTRATIVEPROCEDURES

INTERNATIONAL TRANSPORT

TRADE

Interrelation of strengthening of institutional grounds for investments and Trade and Transport turnover growth

GENERAL

Institutional grounds for in

vestments

Economic development

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Objective of Trade Facilitation

To provide a world-wide accepted, consistent, transparent and predictable environment for international trade transactions.

Aims of Trade Facilitation

• To improve the quality of international transport and logistics,• To adapt commercial trade and transport practices to

international standards, • To remove obstacles and non-physical barriers to trade.

GENERAL

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Trade Facilitation Goals

• Implementation of WTO, WB, PCA, UN ECE, UN ESCAP, WCO / regional commitments

• Automated Customs clearance with minimal data requirements

• Remote filing and simplified clearance procedures

• Pre-arrival processing, post-clearance controls and audits

• "Fast-track" handling for authorized traders, chosen on the basis of risk assessment

• Single window” solutions and “one stop” clearance by the co-ordination of activities of Government agencies to avoid multiple checks of the same cargo at different times and places

GENERAL

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Trade Facilitation Goals

GENERAL

• A standard time limit for Customs clearance• Co-operation between Customs agencies and trade

entities such as shippers, transportation operators, freight forwarders, chambers of commerce and banks

• Transparency of Customs rules and procedures• Increasing border control capacity (modernization of

infrastructure and computerization)• Harmonization of data elements and requirements• “E-commerce

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Trade Growth

174 163 398 425

11331300

0

500

1000

1500

bio

Eu

ro

1980 1990 2001

Trade of the countries with the World

import export

27 15 8955

240134

0

100

200

300

bio

Eu

ro

1980 1990 2001

Trade of EU with the countries

Import Export

Country with the world European Union with the countryYears 1980 1990 2001 1980 1990 2001Contry/Trade import export import export import export import export import export importASEAN 45 50 122 110 364 421 7 7 19 18 61Japan 100 89 178 214 374 425 16 5 53 24 76China 14 12 41 49 242 292 2 2 10 6 81Shouth Korea 15 12 57 52 153 162 2 1 7 7 22Total 174 163 398 425 1133 1300 27 15 89 55 240

Year 2002ASEAN : Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

STATISTICS

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Trade GrowthMLA Parties

Years 1993 1995 2001 1993 1995 2001Armenia 300 800 1400 55 101 400Azerbaijan 1390 928 4177 69 171 1443Bulgaria 5782 8144 13629 2500 3887 7501Georgia 400 400 1700 131 122 600Kazakhstan 2393 6914 20157 999 806 4562Kyrgyzstan 700 700 1000 16 87 120Moldova 951 1213 2334 92 242 530Romania 9800 14000 30100 4300 7200 21800Tajikistan 800 1200 1500 200 150 130Turkmenistan 1000 2400 3000 300 300 500Ukraine 6900 26700 34800 2600 3700 9700Uzbekistan 1400 4400 4800 600 900 1200Total 31816 67799 118597 11862 17666 48486

EU with the country (mio Euro)

Country with the world (mio Euro)

STATISTICS

9


300800

1400 1390928

4177

400 400

1700

0

1000

2000

3000

4000

5000

Armenia Azerbaijan Georgia

Caucasus with the world (mio Euro)

1993

1995

2001

55 101

400

69171

1443

131 122

600

0

200

400

600

800

1000

1200

1400

1600

Armenia Azerbaijan Georgia

EU with the Caucasus (mio Euro)

1993

1995

2001

STATISTICS

10


2393

6914

20157

7007001000 80012001500 100024003000

1400

44004800

0

5000

10000

15000

20000

25000

Kaz Kyr Taj Tur Uzb

Central Asia with the world (mio Euro)

1993

1995

2001

999806

4562

16 87120 200150130 300300500 600

9001200

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Kaz Kyr Taj Tur Uzb

EU with the Central Asia (mio Euro)

1993

1995

2001

STATISTICS

11


57828144

13629

95112132334

9800

14000

30100

6900

26700

34800

0

5000

10000

15000

20000

25000

30000

35000

Bulgaria Moldova Romania Ukraine

Eastern Europe with the world (mio Euro)

1993

1995

2001

25003887

7501

92 242530

4300

7200

21800

26003700

9700

0

5000

10000

15000

20000

25000

Bulgaria Moldova Romania Ukraine

EU with the Eastern Europe (mio Euro)

1993

1995

2001

STATISTICS

12


Container transport

2604

4899

2822

5426

2880

6329

3035

6764

3194

7205

0

1000

2000

3000

4000

5000

6000

7000

8000

TEU (000s)

2001 2002 2003 2004 2005

Graph 1. Europe and Eastern Asia Trade TEU

West-East

East-West

STATISTICS

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TRANSIB

TRACECA

SOUTH

NOSTRAC

TRANSOCEAN

STATISTICS

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Project Environment

Supplier/Customer

TransportationPurchase PaymentCustomer/Supplier

Intermediary

Project’senvironment

Stateauthorities

PROJECT ACTIVITY

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Overall Project Objectives

Facilitation of development of economic relations, trade communication in the TRACECA region by means of:

- devising of a common legal framework for multimodal carriage of goods and cargo insurance;

- harmonization of national legislation with international principles and requirements relevant to transit traffic;

- facilitation of accession to, ratification and efficient implementation of the priority international conventions;

- harmonization of legal and regulatory framework in the field of transport and customs regulation, incorporating international standards and requirements;

- Improvement of the investment environment for IFI’s and particularly for private investors

PROJECT ACTIVITY

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Project Objectives

• National Legal Working Groups (NLWG) established and efficient operation ensured • Bilateral and multilateral transport transit agreements collected, catalogued and analysed• Ratification of identified recommended conventions and other treaties promoted and

implementation facilitated by means of, inter alia, management development and training

• Guide to International conventions and agreements for transport operators and traders elaborated

• Training program for IGC NLWGs conducted• Draft New Technical Annex(es) to the MLA

– on multimodal transit transport– on TRACECA investments– on freight forwarding operations

• TRACECA road haulage permit and quota system elaborated • Modern technical vehicle standards: needs studied, regulative innovations recommended• Legal assistance to the IGC Permanent Secretariat provided throughout the project

duration • Introduction of the TRACECA Visa• Draft Main strategic directions of Intergovernmental Commission of TRACECA in the

development of transport networks of international transport corridor “Europe-Caucasus-Asia” (TRACECA) for 2005-2010 proposed

PROJECT ACTIVITY

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Project Steps towards Increased TRACECA Transport Corridor Competitiveness (tasks of LWG)

Short-term tasks (1 phase)

– Analysis and monitoring of the existing transport legislation;

– Adoption of the Rules of Procedures IGC and Statutes PS IGC TRACECA;

– Adoption of recommendations on accession to International Conventions (Multimodal, Kyoto Convention etc.);

– Approval of the “TRACECA Permits System” concept for the road transport;

– Identification of violations of MLA

Long-term tasks (2 phase)

– Adoption of amendments/ annexes to the MLA;

– Introduction followed by approval of common technical standards on waits and dimensions for the road transport in TRACECA region;

– Accession to the priority international conventions in the field of transit transportation.

PROJECT ACTIVITY

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Trade and Transport Facilitation Working Groups

NATIONAL NATIONAL COMMISSIONSCOMMISSIONS

NATIONAL NATIONAL SECRETARIESSECRETARIES

TRACECA IGCTRACECA IGC

PERMANENT PERMANENT SECRETARIATSECRETARIAT

UPTFTUPTFT

PROJECTS

LEGALLEGAL

TFWGTFWG

BORDERSBORDERS

TFWGTFWG

TARIFFSTARIFFS

TFWGTFWG

CLBTTCLBTT

HBCPHBCP

TRACECA National Trade and Transport Facilitation Working Groups

PRO-PRO-COMMITTIEESCOMMITTIEES

PROJECT ACTIVITY

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Trade & Transport Facilitation Legal Working Groups

National Legal Working Group (NLWG)

• Monitoring of current legislation in international transit transportation

• Identification of deviations from the international agreements and conventions in force

• Promotion of compliance of the national legislation with provisions of international agreements and conventions

• Facilitation of accession to the existing priority conventions

• Development of recommendations for simplification of the existing regulations applicable to transit transportation

• Simplification of border-crossing procedures keeping sufficient administrative control preventing illicit trafficking of goods

• Active cooperation with Pro-Committees established by the World Bank

Multilateral Legal Working Group (MLWG)

• Analysis of the current national TRACECA member states laws and regulations for international and transit transportation

• Consideration of the recommendations on simplification and harmonization of international transit transport regulations in the TRACECA member states

• Elaboration of the common action plan for increased competitiveness of the TRACECA transit corridor

• Devising recommendations to the PS and IGC on incorporation of amendments and additions to the Basic Multilateral Agreement and it’s annexes

PROJECT ACTIVITY

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Protocol on Amendments to the MLA

Facilitation of Trade and Transport

Documentation Procedures

VAT zero-rate on railway transport services on international and transit railway connection

New Technical Annex on International Customs Transit Procedures for carriage of goods by rail using “SMGS” railway bill to the MLA

Signed

Draft Protocol on Amendments to the TAs on International Road Transport and Customs Documentation Procedures

7 additions and amendments to the Technical Annex on International Road Transport

3 additions and amendments to the Technical Annex on Customs Documentation Procedures

Under consideration

Draft Protocol on Amendments to the TAs on International Road Transport

8 additions and amendments to the Technical Annex on International Road Transport

Under consideration

Draft Protocol on Amendments to the MLADraft New Technical Annex on multimodal transport (10 articles)

Under consideration

Draft Protocol on Amendments to the MLA on TRACECA Investment

Draft New Technical Annex on TRACECA Investment (17 articles)

Under consideration

Draft Protocol on Amendments to the TA on Customs Documentation Procedures

5 additions and amendments to the Technical Annexes on Customs Documentation Procedures

Under consideration

Draft New Technical Annex to MLA on Freight Forwarding Activities

22 ArticlesUnder

consideration

Draft Main strategic directions of IGC TRACECA in the development of transport networks of international transport corridor for 2005-2010

Under consideration

Amendments, Additions and Technical Annexes to the MLA elaborated by the CLBTT project in order to Facilitate Trade and Transport

PROJECT ACTIVITY

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TRACECA VISA

The Protocol of amendments to the Basic Multilateral Agreement on international transport for development of the Europe – the Caucasus – Asia corridor signed on the Third IGC Annual Meeting in Yerevan, October 9-10, 2003 was the first amendment to MLA since its signature in 1998.In order to facilitate Trade and Transport, the above mentioned protocol with 3 amendments and a new Technical Annex have been signed by Parties of the MLA as follows:• Armenia, Azerbaijan, Kyrgyz Republic, Moldova, Romania, Tajikistan – fully endorsed;• Kazakhstan, Turkey Bulgaria, Georgia and Ukraine - endorsed with reservations;• Uzbekistan - did not sign the Protocol because the representative did not have an authority for signature.

Milestones in Project induced harmonization process

Tangible results (OVIs) achieved by the Project at Yerevan Conference

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Milestones in Project induced harmonization process

Tangible results (OVIs) achieved by now by the CLBTT NLWGs

Kazakhstan – waived the reservation to the Technical Annex on international railway transport to the MLA

Turkey – apply for accession to SMGS Agreement

Ukraine – made amendments to the Low of Ukraine “On transit” about using SMGS railway bill as a single transit document

Uzbekistan – signed Protocol on amendments to the MLA

Azerbaijan – ratified the Protocol on amendments to the MLA

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Trade Facilitation National Legal Working Groups - Monitoring and Evaluation Indicators

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Oct

Nov

Road

Review and collection ToR 3.1 ST

Identification of violations ToR 3.2 LT

Proposals/recommendations ToR 3.3, 3.4 LT

Consideration of Protocol TRACECA Permit System STSTDecision-making on necessity of TA to MLA on road vehicle tech.

standards1 PO PR, 5 STConsideration of Protocol Liberalization of road transport and Charging policy

LT

Rail




Consideration2 of Protocol (Tash Conf) SMGS 0-VAT rate ST

Maritime3




Multimodal

Review and Report on implementation of AP, I ST




Consideration of Protocol TA on Multimodal Transport LT

Customs Procedures4


Identification of violations ToR 3.2 LT The Legend:


Consideration of Protocol (Tash Conf) – in part of TRACECA Visa5 ST

Protocol on Transit Facilitation to TA on Customs Doc. Procedures LT

Protocol on International Conventions LT

Transport Investments

Consideration of Protocol on TRACECA Investments LT

1Decision is to be made in view of Minsk Convention on weights and dimensions of transport vehicles for CIS, 1999 2Task shall become applicable only if the Protocol is not signed in Yerevan in October 2003 3Special attention must be paid to the Tri-partite Agreement between Ukraine, Bulgaria and Georgia on railway ferry connection operation, 19994This tasks shall be carried out in cooperation with HBCP Project and Customs Working Groups created under this Project5Task shall become applicable only if the Protocol is not signed in Yerevan in October 2003

Tur Ukr Uzb

NS's Report

Aze Arm Bul Geo Kaz Kyr Mol Rom Tad

L - Letter of General Secretary PS IGC TRACECA Feb-5-03

List of Abbreviations:

Full compliance with recomendations of Project Team and PS

AP - Baky Action Program on Multimodal Transport to Protocol of the Meeting of Heads of Railways, Ports and Shipping Companies (17-18

PR - Progress Report

PO PR/IR - Plan of Operations of Progress/Inception Report

TA - Technical Annex

NS - National Secretary

ToR - Terms of Reference of National Legal Working Groups

ToR (A) - Annex to ToR NLWGs

Description of Tasks

No report received

Report not compliant

Partial compliance

IR - Inception Report

LT - Long Term Task

ST - Short Term Task

Protocol - 6 Protocols on Amendments to the Basic Multilateral Agreement

Rail

Road

Reference Category


Customs Procedures

Multimodal

Maritime

PROJECT ACTIVITY

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Common Legal Basis for Transit Transportation PROJECT ACTIVITY

Trade Facilitation National Legal Working Groups - Monitoring and Evaluation Indicators

Road




Consideration of Protocol on Permit System STST

Decision-making on necessity of TA on road vehicle tech. standards 1 PO PR, 5 ST

Consideration of Protocol on Charging Policies Liberalization LT

Rail




Consideration2 of Protocol (Tash Conf) SMGS 0-VAT rate ST

Maritime 3




Multimodal

Review and Report on implementation of AP, I ST




Consideration of Protocol TA on Multimodal Transport LT

Freight forwarding operations

Consideration of draft TA on FF operations

Customs Procedures 4


Identification of violations ToR 3.2 LT The Legend:


Consideration of Protocol (Tash Conf) – in part of TRACECA Visa5 ST

Protocol on Transit Facilitation to TA on Customs Doc. Procedures LT

Protocol on International Conventions LT


Consideration of Protocol on TRACECA Investments LT

TRACECA Strategy

Consideration of Draft IGC TRACECA Strategy

1Decision is to be made in view of Minsk Convention on weights and dimensions of transport vehicles for CIS, 1999 2Task shall become applicable only if the Protocol is not signed in Yerevan in October 2003 3Special attention must be paid to the Tri-partite Agreement between Ukraine, Bulgaria and Georgia on railway ferry connection operation, 19994This tasks shall be carried out in cooperation with HBCP Project and Customs Working Groups created under this Project5Task shall become applicable only if the Protocol is not signed in Yerevan in October 2003

Description of Tasks NS's Report

Reference CategoryAze Arm Bul Geo Kaz Kyr Mol Rom Tad Tur Ukr Uzb

Road List of Abbreviations:

ToR - Terms of Reference of National Legal Working Groups

ToR (A) - Annex to ToR NLWGs

TA - Technical Annex

NS - National Secretary

L - Letter of General Secretary PS IGC TRACECA Feb-5-03Rail

PR - Progress Report

PO PR/IR - Plan of Operations of Progress/Inception Report

IR - Inception Report

Maritime LT - Long Term Task

ST - Short Term Task

AP - Baky Action Program on Multimodal Transport to Protocol of the Meeting of Heads of Railways, Ports and Shipping Companies (17-18

Multimodal

Protocol - 6 Protocols on Amendments to the Basic Multilateral Agreement

Customs Procedures

No report received

Report not compliant


Partial compliance

Full compliance with recomendations of Project Team and PS

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CLBTT Project Recommendations: Creation of attractive investment environment

• Facilitation of investment in the field of transport along the TRACECA routes Draft New Technical Annex to the Basic Agreement on TRACECA investment, Article 2

• Creation of attractive environment for IFI’s and private investors by implementation and improvement of modern and flexible form of investment:

– Modern forms of concession of the transport infrastructure objects with active participation of private investors (BOT etc.);

– Free economic areas or zones;– Transport logistic centers (hubs);– TRACECA Guarantee Trust Fund;– TRACECA Economic Interest Grouping;– TRACECA Industrial Advisory Forum/Panel;– Settlement of Disputes. Source: Draft Main strategic directions of Intergovernmental Commission of TRACECA in the development of transport networks of

international transport corridor “Europe-Caucasus-Asia” (TRACECA) for 2005-2010

• Promotion of investment flows and insurance of non-commercial risks Convention Establishing the Multilateral Investment Guarantee Agency, 1985, Chapter 1, Article 2

PROJECT ACTIVITY

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CLBTT Project Recommendations:Trade and Transport facilitation

Presently Article 5 “Payment of taxes, duties and other payments” of MLA reads:

Draft amendment to the article 5 of the Basic Multilateral Agreement:

Taxes, duties and other payments, irrespective of their names and origin shall not be imposed for types of transport referred to in Article 1 of the Basic Agreement, except payments for transport and customs services, services related to transport, as well as payments for use of transport infrastructure.

Taxes, duties and other payments, irrespective of their names and origin shall not be imposed for transport in transit, except payments for transport and customs services, services related to transport, as well as payments for use of transport infrastructure.

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CLBTT Project Recommendations:Trade and Transport facilitation

Presently Clause 2 of Article 6 “Preferential Terms and Tariffs” of MLA reads:

2. The Parties have agreed that should preferential terms and tariffs be established between two Parties for types of transport referred to in Article 1 of the Basic Agreement, no less preferential terms and tariffs will be applicable between these Parties and other Parties.

Draft amendment to the Clause 2 of Article 6 of the Basic Multilateral Agreement:

2. The Parties have agreed that should preferential terms and tariffs be established between two Parties or between a Party/Parties with a third country/countries, for types of transport referred to in Article 1 of the Basic Agreement, no less preferential terms and tariffs will be applicable for all Parties to the Basic Agreement.

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• Improvement of services on organization of transportation of goods by any kind of transport

Draft New Technical Annex to MLA on Freight Forwarding Activities (CLBTT Project)

• Commercial or transport document as descriptive part of transit declaration

WCO, Revised Kyoto Convention, Specific Annex E, Chapter 1 Standard 6

Technical Annex on International Customs Transit Procedures for carriage of goods by rail using “SMGS” railway bill to the MLA (CLBTT Project)

• Provision of high quality services and increased economic efficiency of the multimodal transport operations

New Technical Annex on multimodal transport (CLBTT Project)

PROJECT ACTIVITY

Trade and Transport facilitation measures recommended by UN ECE and taken on board by the

Project

the european union’s tacis traceca program

Documents