Direct Transport Rules in Regional Trade Agreements and Suggestions

Direct Transport Rules in Regional Trade Agreements and Suggestions

Some regional trade agreements such as the ASEAN-Korea Free Trade Area or the Asia Pacific Trade Agreement require through bills of lading to prove compliance with direct transport requirements (DTRs). Since such clauses do not accord with business practices in transportation, disputes have increased between customs authorities and importers in connection with the direct transport rule in recent years. Thus, it is necessary for participating parties to revise DTR clauses to accommodate business practices and to harmonize with clauses of other free trade agreements. By discussing applicable cases, we propose alternatives that will improve the direct transport rule. We suggest that, for evidentiary documents for DTRs, by contrast with the case now that importers are obliged to submit a through bill of lading, either documents would be most appropriate: a through B/L, a non-manipulation certificate by customs, or any other relevant supporting documents, which accommodate various practices within the industries.