Establishing an Advance Ruling Mechanism – Updates on Recent Project Activities
What Are Advance Rulings All About?
Imagine you own a company in Côte d’Ivoire producing spices and dry soup. Every month you import a container of food supplements for your production. You have done your import declaration, the container has arrived in the port of Abidjan, your freight forwarder is on the ground. Today you encounter a Customs officer who argues that you have not correctly classified your product. He/she gives you a different tariff code and suddenly you are expected to pay 30% import duties instead of the anticipated 5%. The dispute continues for several weeks until you negotiate your way back to the original classification which you have used all the months before. But in the meantime, you had to reduce the production due to the missing ingredients.
Similar experiences happen regularly to Ivorian importers of, for example, disassembled machines, fertilizers, medicines, or electronic components. Disputes around classification arise typically for complex products with which Customs is not familiar with. An Advance Ruling can prevent this kind of disputes. It is a written decision by Customs concerning the tariff classification prior to import or export.
The Customs administration of Côte d’Ivoire is currently operationalizing Advance Rulings on tariff classification and rules of origin with support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH through the German Alliance for Trade Facilitation. Once put in place, the mechanism will provide more transparency, consistency, and predictability when it comes to Customs decisions on the classification and origin of goods.
The establishment of the new mechanism has significantly advanced in the recent months.
Finalizing the Legal Framework With Inputs From the Private Sector
In March 2023, the project facilitated the discussion between Customs and the business sector on the new legal provisions related to advance rulings. The highly interactive session allowed Customs to not only present the envisaged legal text to the economic operators but also to embed their observations directly into the text. The finalized text is expected to be signed by the Minister of Budget in the second quarter of 2023.
Beyond the legal work, the project is advising the technical team at Customs on:
- Establishing and describing the procedures to request, treat, issue, store and amend advance rulings;
- Making the necessary organizational changes to manage the new mechanism and issue rulings.
Creating a Pool of Experts on Tariff Classification and Rules of Origin
To be able to issue Advance Rulings, Customs requires a critical mass of technical experts in tariff classification and rules of origin who can be summoned to treat a demand. This is particularly relevant as requests usually concern highly complex and technical goods.
GIZ has joined forces with the World Customs Organization (WCO) under the EU-WCO Africa Programme for Harmonized System in Africa. The objective is to provide a high-quality training series to broaden the Ivorian Customs’ expertise.
Week-long trainings on tariff classification at intermediate and advanced level were held successfully in April and May 2023, respectively. Animated by WCO experts, the Customs officers studied the complexities of the harmonized system. They focused on goods that are of high relevance to Côte d’Ivoire and where disputes frequently arise with the private sector.
Trainings on rules of origin will follow in the coming weeks.
