What does accession to the Revised Kyoto Convention mean for the Philippines?

Accession to the Revised Kyoto Convention is a strong signal to the international trade community and governments around the world that the Philippines stands firmly behind customs procedures that facilitate the secure movement of legitimate trade across national borders. It is a manifestation that the public and private sector can truly work together to facilitate trade towards the promotion of economic growth, national security and customs integrity at both national and international levels.

Accession to the RKC will give the Philippine government:

  • Protection against the passage or issuance of national legislation that are against the principles and provisions of the RKS
  • Solid legislative foundation for reforming and strengthening customs and related institutions
  • Benchmark for assessing the status of Philippine trade efficiency and competitiveness
  • Availability of shepherds and technical teams of experts to guide the reform process
  • RKC management committee providing foreign companies and countries with recourse for expressing grievances when the customs service does not comply with RKC
  • Most effective way of declaring globally that trade and investments are facilitated in the Philippines and that the regulatory environment compares with the best in the world
  • Economic growth stimulus through the modernization of Customs which attracts trade and investments
  • Assurance of modern and efficient Customs service to the economy, allowing it to participate better in the international trade environment

The implementation of the standards and recommended practices of the Convention lead to the following benefits to the economy:

  • Lower cost of imported goods
  • Lower cost of production
  • Increased economic competitiveness of national goods in the world market
  • Attraction for international trade and investment
  • Lower cost to consumers
  • Increased national revenue

For Customs, the benefits are:

  • More efficient use of customs resource
  • Faster, predictable and efficient customs clearance
  • Enhanced customs control
  • Increased trade facilitation

For the trading community:

  • Transparent and predictable procedures mean reduced opportunities for extortion facilitation/grease payments
  • Greater facilities for complaint traders
  • Lower business costs in terms of time and the cost of clearing imports with customs
  • Clear information concerning rights and obligations

(WCO estimates that inefficient global customs procedures add 5% to 7% to the cost of goods traded globally)
What are the main contents of the RKC?

The RKC is composed of three parts the body of the agreement, the General Annex, and the Specific Annexes. The body of the agreement provides the management of the Convention, including its scope, ratification, application, dispute settlement and amendments. The General Annexes has standards and recommended practices.

A contracting party is a required to accept both the Body of Convention and the General Annex in its entirety. They may accept the Specific Annexes as a whole, or in part, subject to its evaluation. A contracting party may enter reservations on standards and recommended practices in the Specific Annexes.
What is the General Annex?

The General Annex contains the general principles of modern customs administration, recommending that a modern Customs administration should implement.

  • Standard simplified procedures
  • Continuous development and improvement of customs control
  • Maximum use of information technology
  • Partnership approach between customs and trade

The ten chapters of the General Annex are as follows:

  1. General Provisions
  2. Definitions
  3. Clearance of Goods
  4. Duties and Taxes
  5. Security
  6. Customs Control and Risk Management
  7. Use of Information Technology
  8. Relationship between Customs and Third Parties
  9. Customs Information, Decision and Rulings
  10. Appeals in Customs matters

Upon accession, a contracting party is given 36 months to implement the standards of the General Annex and 60 month to comply with transitional standards.
What are the Specific Annexes?

The Specific Annexes contain Standards and Recommended Practices which are contracting party may or may not accept following accession to the Body of the Agreement and the General Annex.

Standards are provisions aimed at achieving harmonization and simplification of Customs procedures and practices. There are ten specific annexes as follows