Saturday, July 13, 2024

Why Should Afghanistan Implement the Trade Facilitation Agreement (TFA)?

Immigration News

Khaama Press
Khaama Press
Khaama Press is the leading news agency of Afghanistan with over 3 million hits a month.

By: Essa KhanEssa Khan, senior Law student at the American University of Afghanistan

It has been almost five years that the Trade Facilitation Agreement (TFA) has entered into force. As a member of the World Trade Organization (WTO) and as a party to the TFA, the previous Afghan government designated only 11.3% of TFA measures as its Category A commitments, which are those commitments that Afghanistan implemented as soon as the Agreement entered into force in 2017. However, Afghanistan failed to implement all of its important commitments under Category B and C, which are commitments that Afghanistan should have implemented with the passage of time and by receiving assistance and support from donors.

While there were significant support and assistance from international and regional organizations for implementation of the TFA, the Ministry Finance and Ministry of Industry and Commerce of the Islamic Republic of Afghanistan were remiss, lacked co-ordination and did not prioritize its implementation. In the official TFA Notifications to WTO, the last measure which Afghanistan could implement was in 2027; however, in the Geneva 2020 Conference, the previous Afghan Government representatives had without any co-ordination and information agreed with the International Community in the Afghanistan Partnership Framework (APF) that the TFA should be fully implemented until 2021. In contrast to such contradictory commitments, until 2021 there had not been any implementation except the 11% of measures. To the contrary, there were some measures which had been moved from Category B to C, which meant that Afghanistan needed even more time than before for their implementation. This paper will argue that Afghanistan should prioritize the full implementation of the TFA because it will expedite the movement, release and clearance of goods at the customs and will strengthen co-operation among customs authorities.

With the full implementation of the TFA, the customs procedures and formalities will be simplified and harmonized, which will precipitate of the movement, release and clearance of goods at the customs. At a time when traders suffer from long delays in clearance of their goods at the customs, the full implementation of the TFA is the best way for Afghanistan to reduce this time. Based on Article 3 of the TFA, a member has to provide an applicant importer an advance ruling, which is a written decision prior to the importation of goods regarding the way goods will be treated when they are at the customs. If Afghanistan implements this provision, it will be beneficial not only for traders but also for the government. Traders will be able to determine and plan the costs of the transactions for the imported goods before their importation while the government can have more time in consulting and deciding the methodology of treating the goods compared to deciding such a question when the goods are at the customs.

Similarly, Article 7.3 of the TFA requires that the release of goods can happen even before the determination of customs duties, taxes, fees and charges. In order to make sure that the importer will pay the customs duties, taxes, charges after the goods are released, the customs authority can require a guarantee for it. Such a measure is helpful for the rapid release of goods when the administrative process takes longer than expected. Whereas Article 7.3 of TFA is a Category A commitment for Afghanistan, which means that it has been implemented since 2017, the implementation of only this measure cannot lead to expedited customs clearance when many other significantly important measures of TFA are not implemented.

In addition to improving the customs clearance of goods, the full implementation of the TFA can also strengthen co-operation among customs authorities. Articles 8 and 12 of the TFA, which are Category C commitments for Afghanistan, require the authorities responsible for importation, exportation, and transit of goods to co-operate and coordinate with each other. With the implementation of this measure in Afghanistan, there will be more co-ordination and co-operation between customs authorities, which can lead to the effectiveness of ports, timely release of goods, reduction of corruption at the customs, and an increase in international trade and private investment in the country. While there is no detailed and specific information in the TFA on how customs authorities should co-operate, there are World Customs Organization (WCO) conventions and guidelines which can help Afghanistan in implementing the provisions of TFA.

In a nutshell, the previous Afghan government could implement some, if not most, of its commitments under the TFA from 2017 until 2021; however, it failed to do so. Now that the Taliban are in power, it is not too late that the Taliban authorities should put genuine efforts for full implementation of the TFA. By doing so, not only will the TFA be implemented earlier than expected, but it will also bring about revenues for Afghanistan way more than can be extracted from tariff reductions. At a time when the domestic revenues and international aid have significantly decreased, Afghanistan can enjoy more revenues from customs by implementing the TFA.

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