The TIR convention
Traditionally, the customs offices during the international transportations apply the national schemes of controls and procedures when freight crosses the border. They vary from state to state but most often, the custom actions include the freight inspection at every national border and appliance of national guarantee requirements (such as guarantees, customs invoices, and deposits) in order to cover the possible amount of wages and fees during the freights transit period at every territory. Such measures, applied in every country, significantly increase the expenses of time and lags in the route’s coverage. To avoid this, the TIR Convention has been developed aiming to reduce the hardships that the transport company faces and in the same time, to provide the international control system to custom offices capable of replacing the national traditional procedures, providing the income generation by every country involved in the process, which opens the territory to transport the freights.
The basis of TIR convention is an agreement concluded in 1949 by some number of European countries guided by the European Economic Commission. The positive results of an application of this limited system led to the conclusion of TIR Convention in 1959. This Convention was revised in 1975 taking into account the practical experience of the functioning of this system, as well as technological achievements and ever-changing requirements. As a result, TIR Convention of 1975 entered into force on March 20, 1978. After the entry into force, it has replaced the TIR Convention of 1959 to contracting parties, the effect of which has been discontinued. Nevertheless, the former Convention of 1959 is still in force, as one of the 38 contracting parties has not yet joined the new Convention. Presently, the TIR Convention of 1975 has 43 contracting parties, including the European Economic Community.
In order to provide the minimum freights downtime during their transportation, and simultaneously to provide the best guarantees for the customs offices in every transit country, TIR system has four basic requirements:
- the freights are to be transported on secure vehicles or containers,
- fees that are subject to risk to be unpaid, must be internationally guaranteed during the entire route,
- the internationally recognized TIR carnets must follow the freight that are adopted for use in the country of departure and which would be a transit document in the countries of departure, transit, and arrival,
- the measures of customs control performed in the country of departure must be recognized by countries of transit and arrival.
According to TIR Convention, freights transportation must be performed in the vehicles or in containers that prevent the access to the cargo if the customs seals aren’t broken and any attempt to get to the freight will be evident at once. The Convention defines the constructive standards and allowance procedures to transport vehicles and containers, as a result of which the transportation may be executed meeting requirements of TIR only in transport containers and vehicles allowed to the transportation within the frames of regulations of the mentioned Convention of 1972. Special provisions shall apply for transportation of heavy and bulky goods, which cannot be performed by conventional vehicles. Contracting parties are required to accept guaranteeing associations on their territories, which must belong to an international guarantee system and to make commitments to bear any liability under this warranty system with respect to the system of payment customs duties by other entities of the system in respect of claims arising on its territory. Such warranty systems issue TIR carnets for their members – guaranteeing associations, and the presentation of such TIR carnet in connection with a transit operation confirms the existence of the guarantee.
Consequently, such a system can be considered as a set of national transit operations, based nevertheless rather on international than on national measures, i.e. the transportation under international warranty using international transit document certified by the customs authorities of the country of departure, and following the cargo safety conditions supervised by the customs authorities by means of seals, stamped in the country of departure. The only international guarantee system, operating under the TIR system operates under the control of the International Road Transport Union (IRTU) in Geneva, Switzerland.
Originally, the TIR system was destined only for international road transportation. But the road transportation limitation was gradually softened due to requirements of the foreign trade. At the moment, 1975 TIR Convention requires that at least some part of freight was delivered by road. Thus, 1975 TIR Convention allows not only road transportation but also by trailers in the combined rail and road transportation as well as transportation in containers by various types of transport.
Thus, today it is possible to use the advantages of the verified system of international transit when providing the broad spectrum of transportation, which is a matter of value for both trade organizations and for the customs offices.
This system certainly has advantages for customs offices, since it reduces the number of conventional requirements established by national transit procedures (guarantees, documentation, control measures), or makes them less severe. At the same time, it avoids the need for time-consuming and costly in terms of equipment physical inspection in countries of transit, which is now reduced only to check the seals, the check of external condition of the vehicle or container with the freight in transit to the destination country, and of existing national guarantees, as well as the introduction of a national system of documents verification. In addition, there are also the benefits that international transit operations are carried on a single transit document – the TIR carnet – that reduces the risk of presenting of wrongful information to customs offices.
The advantages for the trade and transport companies are not less obvious. Freights may cross the national borders with minimal delays from the side of customs offices. The TIR system contributes to the development of the international trade by means of a shortage of transit obstacles on the route of freights to other countries. This allows shortening of the transport costs significantly thanks to the shortage of the route’s duration. In addition, the revised provisions of TIR Agreement of 1975 allow its broader use for the transportation of the freights in containers. Eventually, by avoiding the obstacles on the international road routes, which are organized due to the performance of the customs control, it gives much more freedom to the exporters when choosing the transportation means that suits the best to satisfy the needs.
We can say about the success of TIR system because it is broadened farther than in Europe solely. Now TIR system covers almost all the European countries. Its scope of implementation has broadened and now embraces countries from the Middle East to Afghanistan. It is applied by the US and Canada and is widespread in Africa and Maghreb countries. Another indicator of its success is the fact that only 3243 TIR carnets were issued in 1952 and in 1985, it was already more than 860.000 of them.
To make TIR system even more available to every country that decides to use it, the TIR Convention of 1975 is opened for new members from the UN and of any of its specific body, as well as similar to them international bodies.
It is also opened for every other country that shall be invited by United Nations General Assembly. The decision of administrative issues within the frames of Convention is fulfilled by the Administrative Committee, which members can be any of the contracting parties. The Committee gathers once a year to consider the issues connected to the implementation of the Convention and, if necessary, provides the implementation of according changes in it requested by the members.
Guarantee system of the TIR Convention
1. International Guarantee
Guarantee system of the TIR Convention has a simple basis of foundation. Every association that represents the transport companies in particular country that is approved by its formal Customs Office as well as the holder of TIR Carnet as common liability jointly guarantee the payment in this country of any duties and taxes that may be payable if any violation occurs during the transport operation carried out on the territory of this country by national and foreign carriers using TIR Carnets issued by this national guaranteeing association or by the association of another country. As a result, every country receives the profit from the guarantee provided on this territory from all transport operations using the TIR Carnet on its territory.
The national guarantee associations contribute to the guarantee system, the managing and forming of which is implemented by the International Route Transport Union (IRU) in Geneva, Switzerland.
If any violation occurs, the customs office must require the payment from the body/person having the direct responsibility before applying the lawsuit against the guaranteeing association. If there will be a necessity in application of guarantee (as an example, due to bankruptcy of the body/person that undertakes the direct responsibility), the customs office applies the lawsuit in any case to the guaranteeing association of the country in which violation occurred to settle this question within the frames of this country. Nevertheless, the guaranteeing association may request the reimbursement of the expenses from the IRU from the budget of International Insurance Fund.
As it is required to limit the guarantee amount, such money limits are defined for each country individually. But the maximum amount, nevertheless, is limited in any case by USD 50.000 for 1 TIR Carnet.
The TIR Convention defines the time frames to make a lawsuit by the customs bodies to the guaranteeing association. It is defined that if the customs office has issued the TIR Carnet with no further restrictions, they can apply a lawsuit to the guaranteeing association only if it will be proven that the certificate of customs clearance was received in the unlawful or fraudful way.
In the case, if TIR Carnet wasn’t issued properly, or such issuing was done with certain limitations, the competent bodies of the country must, during 1 year since the issuing of TIR Carnet, inform the guaranteeing association in the written form.
The requirement for the payment of the required fees may be applied not earlier than three months after the date of such notification. It is possible to make a detailed investigation during this period and to submit the according explanations to the customs office, which can make the payment unnecessary in many cases.
TIR Convention also provides restrictions on the material coverage, that is, the guaranteeing association shall be liable only for the freights that are carried in the sealed part of the road vehicle (or on the cargo platform during the transport of heavy or bulky freights). It follows that the customs authorities may not make a lawsuit against the guaranteeing associations in respect of the freights hidden in other parts of the vehicle or carried by the driver himself.
2. The relationship within the International Guarantee System
The relationship between the International Insurance Association (hereinafter referred to as “insurance association” of “insurer”), IRU, and national guaranteeing associations and carriers using the TIR Carnets, are based on the guaranteeing-insurance agreement between the insurers and IRU, that regulates the use of TIR Carnets, agreement on commitments between the guaranteeing association and IRU, and the Declaration of commitment between the carrier and the guaranteeing association.
3. Guarantee-insurance agreement
This agreement is intended to insure IRU and national guaranteeing associations from the risk that may arise because of fraudulent use of TIR Carnets by carriers. In accordance with the agreement, the insurer must pay to the customs offices the amount to be paid before the prescribed deadline occurs or to reimburse the stated amount to the insurer if they have already been paid directly by them to the customs offices (IRU or the guaranteeing association).
At the request of the customs offices, insurers provide a payment to them either individually or through a local insurance company or bank in order of joint responsibility with the national guaranteeing association.
The amount of the insurance guarantee per 1 TIR Carnet is limited to the amount determined in each country by the official Customs Office and which is adopted by the national guaranteeing association. However, the maximum insured amount shall not exceed USD 50.000 per 1 Carnet.
Relationships arising from guarantee-insurance agreement are governed by the according national legislation.
4. Agreement of guaranteeing association commitment with respect to the IRU
In accordance with the guaranteeing-insurance agreement, the national guaranteeing associations undertake various commitments through IRU regarding the accuracy of compliance with the rules of the international guarantee system. These obligations are set by the agreement on the obligations of the guaranteeing association to IRU. Thus, every association is obliged to:
- inform the insurers through IRU about any notifications received from the customs offices about denial in the formalization or about the cases of obtaining a certificate of customs clearance of the TIR Carnet in an unlawful or fraudulent way,
- collect documents about any customs dispute and forward them to insurers through the IRU (the identification of the carrier, the information about the nature of the fraud, the claimed amount and the information contained in the agreement),
- seek permission from the IRU to pay the amount claimed by the customs offices,
- take any necessary measures to avoid the responsibility if the requirement of customs office is not justified or illegal,
- issue TIR Carnets only to carriers that have signed a declaration of commitment with respect to this organization and to pass such a declaration through the IRU to insurers at their request,
- suspend the issuance of new books to carriers that have been found guilty of any offense or to carriers that did not provide the guarantees required from them at the time of entry,
- pass to insurers all recourse rights against bodies or persons that are responsible for the deeds that led to the provision of the relevant requirements towards the customs offices, as well as customs declaration provided by the carrier,
- bear joint liability in an amount determined by the insurers to pay money to the customs offices if the liabilities stated above weren’t fulfilled.
The relationships between IRU and the national guaranteeing associations that are provided by the Agreement of guaranteeing association commitment are regulated by the Swiss law.
5. The declaration of carrier’s duties with respect to the guaranteeing association
The declaration of carrier’s duties with respect to the guaranteeing association must be signed by every holder of TIR Carnet and that imposes the following duties on him:
- to submit the guarantee or a deposit after the reception of the demand of the association in the amount that must be paid and defined by this association.
- to make it possible to fulfill the provisions of TIR Convention that regulates the TIR Carnets, and the instructions of the guaranteeing association.
- to register the acceptance and returning of TIR Carnet after it was used with according stamps of customs offices. Not used TIR Carnets must be returned immediately after the expiration date.
- not to allow the illegal use of unfilled TIR Carnets issued on one’s name (for example, to resell them).
- to carry the responsibility when using TIR Carnets for own actions and mistakes as well as for the actions and faults of any other counterparts or agents, if any.
- to meet all customs precautions that are required at the customs offices in the countries of departure, arrival, and transit.
- to claim immediately putting the stamps and signatures from the officers of customs, that are required to the proper fulfilling of the transport operation using the TIR Carnet or to ask the proper certificate if putting the stamp or a signature isn’t possible for some reason, or to return of TIR Carnet by the according authority.
- to check if the data put in the TIR Carnet manifesto is according to the character of the freight, factually loaded amount of freight or else to demand the proper certificate of discrepancies from the customs offices.
- to adopt all necessary measures for the proper implementation of a transport operation using TIR systems, together with the customs office or another side and the customs office.
- To resolve any issue with the customs office that arises during the use of TIR Carnets, particularly, to pay any amount requested by them.
- to pay off without further conditions any amount that may be demanded from IRU or from the insurers according to terms of TIR Convention concerning the issued TIR Carnets.
The relationships between the transportation company and the national guaranteeing associations that are provided by the Agreement of guaranteeing association commitment are regulated by the national law.
6. The relationship between the national guaranteeing association and the customs offices
There is no unified form of the documents governing the relationship between the national guaranteeing association and the customs offices. In some cases, there is an exchange of letters between the customs offices and the guaranteeing association, but more often, a special document named “Agreement” is comprised that is signed by the customs offices and the guaranteeing association. Regardless of the accepted form and name, this is an “agreement” about the guarantee concluded between the guaranteeing association according to national law (see the Explanatory note 0.11.2 to the Article 11 of TIR Convention), which is subject to the national civil commercial law applicable to the guaranteeing agreement. The content of an agreement does not have the unified form but it shall include:
- an indication that the guaranteeing association is a branch of IRU and is authorized to issue TIR Carnets indicating the IRU name.
- commitment of association to fulfill all the obligations put down in the guaranteeing association of TIR Convention, particularly, to pay the amounts required by the customs offices in accordance with the conventions and customs legislation and defined as payable by national or foreign carriers for the imported, exported or transit carriages, which are transported using TIR Carnet issued by the national guaranteeing association or by a foreign association, which is a branch of IRU.
- a statement about the maximum amount per every TIR Carnet that may be claimed from the guaranteeing association in the case of illegal or fraudulent use of TIR Carnet.
- An indication that the guarantee by association arising from the contract relating payment of the sums claimed by the customs offices shall be reinsured in the respective insurance company (or national or international association of insurers that has concluded an insurance contract with IRU).
- procedure for the settlement of disputes arising from the improper or fraudulent use of TIR Carnets.
- procedure for disputes resolution arising from the fact of termination of the guarantee agreement.
If a guaranteeing contract says the guarantee of the national guaranteeing association with respect to the payment of the sums claimed by the customs offices shall be reinsured by the insurance company (or national or international association of insurers) than the association shall give the customs offices a guarantee provided by the insurer.
In the warranty certificate signed by the insurer, there must be the obligation to pay in the joint order as common liability amounts to be paid claimed from the guaranteeing association by the customs offices in accordance with the TIR Convention and national customs legislation in the amount established per every TIR Carnet in the guaranteeing contract.
The issue of such certificate is usually preceded to the conclusion of the agreement between the insurer and the national guaranteeing association that defines the responsibility of the insurer. In addition to that, in the case of the national insurer, the International insurers association approves that all amounts paid according to the guarantee certificate will be compensated to the insurer by the association.
The use of TIR Carnet
TIR Carnets are issued by International Road Transport Union (IRU) to the national guarantee associations in accordance with the requirements defined in the contractual obligations signed by them and IRU. Every national guarantee association issues TIR Carnets to the carriers in the own country according to conditions defined by the Declaration of responsibility signed by the carrier and the association.
TIR Carnet consists of two pages of the cover, the voucher and the rootlet N 1 / N 2 called as the Yellow Manifest, detachable vouchers and the rootlets N 1 / N 2 and the protocol and, if necessary, the special list of the farraginous freights (which, however, does not concern the customs offices).
The first page of the cover is printed in English and French, on the second page printed the Rules of Use of TIR Carnet in French and on the third page – the Rules of Use of TIR Carnet in English.
TIR Carnets used for the TIR operation within the limits of the regional guaranteeing system may be issued in any other official language of UN excluding the first page of the cover, parts of which are also printed in English or French. It such case, the Rules of Use are printed on page 2 in the official language of UN and on the 3rd page of the cover – in French or English.
The Yellow Manifest is printed in the language of the country of departure, detachable pages N 1 / N 2, the protocol, and rootlets – in French.
The Yellow Manifest has the purpose of facilitating the filling of TIR Carnet and performance of legitimate checks if any issue arises at the customs. It shall never be detached from the TIR Carnet. The protocol is filled in a case if the customs seals were damaged or in a case of loss or total ruining of the freight with undamaged stamps and if there is a necessity to re-send the freight or to make its emergency unloading.
The especial list for the farraginous freights serves for more precise identification of the transport companies if there is more than one type of the transportation used.
The first cover page, as well as the detached pages N 1 / N 2 and rootlet, are the most important part of the TIR Carnet from the control point of view that is conducted by the customs office. The set consisting of two detachable pages and two rootlets N 1 / N 2 is given in any country in which any TIR operation is carried out. Currently, applicable TIR Carnet contains 14 or 20 detachable pages and rootlets N 1 / N 2, thus, it may be used in 7 or 10 countries.
Presentation of the actual TIR Carnet containing the name, signatures, and stamps of IRU and the body that issued it and which is fulfilled by the carrier in the required way is a sufficient warranty of existence and validity of the guarantee. TIR Carnet is valid until the TIR operation is fulfilled on the customs of the country of departure in terms defined by the body issuing it. Every departure by one vehicle or container must have 1 TIR Carnet. Along with it, TIR Carnet can be issued to the combination of vehicles of several containers loaded at one vehicle or to the combination of vehicles.
If the page that is detached by the customs in the point of departure from the country contains the limitations or if it is not delivered to the customs office of departure, the latter sends the request to the guaranteeing association of own country informing that TIR Carnet wasn’t received or that it was received with limitations. If the given explanations do not satisfy the competent customs office, they may apply the provisions of the TIR Convention and the national legislation to determine the amounts that must be paid to customs. If the customs duties and taxes aren’t recoverable from the person who bears direct responsibility, the competent customs authorities inform the guaranteeing association that it has to pay the definite amount.
In each country, the transit system is similar to the one used in the country of departure. The customs office at the point of entry into the country checks seals and detaches the detachable page N 1 of TIR Carnet. The customs office of the point of departure from the country does the same. Both pages are compared to a final control and at this, the entire control process ends. The customs office in the country of destination, if the point of entry into the country is also the destination point, when processing TIR Carnet, keeps the detachable pages N 1 and N 2 and becomes responsible for the goods that must be subjected to another customs procedure (import clearance, transfer to the warehouse, etc.). If the freight is transported under the TIR system to the other customs office in the same country, the customs office at the point of receipt does the same as the customs office at the point of entry into the country and the last customs office in the list is the one, which is located at the point of destination.
Normally, the system is used as stated above, but each customs office reserves the right to perform the control. If the customs office has suspicions of rules abuse, the seals are broken or they fear that the TIR Carnet has been falsified, it checks the entire transported freight.
In order to ensure more effective control, customs office may require the transportation on the route, on which vehicle is easily detected by necessarily fixed to it TIR plate. Furthermore, transportation must be accomplished within a reasonable time. A carrier who is not able, for whatever reason, to comply with the requirements on the timing of the transportation or predefined routes (because of flood, snowfall, breakdown and so on), must be able to justify himself. In more serious cases (as broken seals, the need to reload the freight onto another vehicle, total or partial destruction of the freight), the carrier must obtain an official statement from any nearest local authority, certifying the report containing in the TIR Carnet. On the basis of this protocol, the customs office may start any investigation to clarify the circumstances of the case.
The customs office of departure, which usually is the office performing the formalities relating to the export, checks the freight based on the information stated in the TIR Carnet by the sender. The customs office imposes seals on the vehicle, makes the appropriate entry in the TIR Carnet, detaches vouchers N 1 and N and assures the appropriate rootlet N 1. The TIR Carnet is returned to the carrier. When crossing the border at the point of departure from the country, the customs office checks the seals, detaches voucher N 2 from the TIR Carnet and checks the appropriate rootlet N 2. The vehicle may leave the country now, and both certified rootlets give a reason to believe that the TIR operation was properly conducted in this country.
The check is carried on according to the following procedure: the customs office of departure from the country sends the detachable page N 2 to the customs office of the sender. The latter compares the received page with initially issued detachable page N 1. If there are no questions or objections from the customs office of departure from the country than the TIR operation in this country ends on this and the TIR Carnet is considered formalized with no exclusions.
On some occasions, TIR Carnets have been used for journeys entirely within a country (for instance from inner customs office of the country to the frontier departure office, without presentation of the Carnet on entry to the following country) for obtaining Customs seals for fraudulent purposes.
IRU undertakes to inform the national Customs authorities of such cases.
In some cases exported special vehicles such as buses, cranes, sweepers, concrete-laying machines etc. are traveling by their own means from a customs office of departure to a customs office of destination.
The transport vehicles of this kind are considered as transit freights and TIR Carnet must be lawfully applicable to them.
Paragraph 7, Article 8
The customs office must inform the national guarantee associations as soon as possible about the cases that are prescribed by the Paragraph 1 of Article 11, namely about the cases of not fulfilling the TIR Carnet or it’s limited fulfilling.
Paragraph 2, Article 10
The customs office may not fulfill TIR Carnets with regular unspecific and ungrounded limitations aimed at avoidance of fulfillment of Paragraph 2 of Article 10 and Paragraph 1 of Article 11.
Addressing the guarantee associations, authorized bodies must limit themselves, if possible, demanding payment of fees and taxes that were not paid before, for those part of the freight towards which the defined regulations were violated.
As for the terms of notification of guaranteeing association about not fulfilling of the TIR Carnets, in this case, the most important meaning has not a day of sending the document but its reception day. Nevertheless, the issue of notification must be decided according to the opinion of the authorized customs office (for example, registered mail is proof of receipt). If the term of notification has passed, the guarantee association is freed from the responsibility.
In order to comply with the picture given in annex N 4, the certificate of allowance must have A4 format folded in half.
As the vehicle does not require any special document or guarantee, special detachable pages are used in order to control it during the entering and exiting to/from the transit countries. The demolition of the vehicle does not make any problem due to Article 41 of the Convention.
If the vehicle has disappeared at all, in this case, it is possible to resort to procedures on the national law in order to receive the compensation from the carrier, the address of which is indicated in the TIR Carnet.
For the proper functioning of the TIR system in the place of customs, the place of departure must perform the strict and full control as the functioning of the TIR system depends on this. Particularly, the following cases must be prevented:
- the false declaration of freights that allows them to be replaced with other freights during the transportation. For example, there were named wallpapers but actually, it was cigarettes that afterward was unloaded and wallpapers were loaded up.
- the transportation of freights not included in the TIR Carnet’s Manifest (as an example, cigarettes, liquors, drugs, guns).
In a case of non-compliance with the obligations that are required by articles 20 and 39 and in a case if there is a need to pay the fines, the demand for such payment shall not be addressed to the guaranteeing association but exclusively to the owner of TIR Carnet or a body/person that is guilty in the breach of the law.
It is necessary to indicate the necessity of immediate return of the TIR Carnets that are fulfilled with limitations or without limitations, as the integral responsibility of the customs office of the place of destination. This not only simplifies the control from IRU but also allows the body to issue the new TIR Carnet to the transportation company after the carrier returned, as the quantity of the simultaneously used TIR Carnets is limited.
All types of control must be minimized and limited to cases when such control is justified by specific circumstances or real hazardous cases. The comments to the annexes to the Convention are stated below.
Annex N 1
The sample of TIR Carnet
The sample of TIR Carnet was reviewed in the document that took power on August 1, 1986. After that, there was a transitional 2-years period in order to spend the stock of the existing TIR Carnets
Description of freights in the freight Manifest
The customs offices and TIR Carnets holders must strictly follow the rules set by TIR Carnet. In the cases, if the freight must be described, it must be performed in the attached documents that must be stamped by the customs offices and indicated in column 8 of the detachable pages. At least, it is required to make a simple commercial description of freights that provides its clear and unambiguous identification at the customs office.
Stating the value of the freight
There are no grounds to holdup the freights by the customs offices as the value of the freight is not indicated in the TIR Carnet.
Issuing the TIR Carnet
When issuing the TIR Carnet, it is required and it is enough to make only one customs stamp and one signature in column 6 of the addition N 2. There are no official bodies expect of customs office that authorized to stamp and sing in page 1.
Annex N 2
Pins installed by means of compressed air to secure the floor of freight partition.
One construction uses the pins with helical thread in many respects the same as the thread of self-tapping screws that give greater strength to the joint when the floor is relatively thin. In this method, during the introduction of the pin, melting of chrome zinc coating of the material of the cross happens.