Several Countries Threatening WTO Moratorium on Data Trasfer Duties, Industry Group Says

The World Trade Organization’s moratorium on customs duties on data transfers (see 1912100047) is being threatened by India, South Africa and Indonesia, which want to impose the duties to “recoup perceived lost revenue,” the Computer and Communications Industry Association said Oct. 26. CCIA said the moratorium has been “key to the development of global digital trade” and urged the Office of the U.S. Trade Representative to push for a permanent extension at the WTO.

Customs requirements on “purely digital transactions” would “impose significant and unnecessary compliance burdens on nearly every enterprise,” CCIA said in comments to the USTR about foreign trade barriers to U.S. exports. “There would need to be several requirements created that would accompany such an approach, many of which would be extremely difficult to comply with.” Traders would need a variety of “data points” to comply with the duties, including the “description of underlying electronic transfer, end-destination of the transmission, value of transmission, and the country of origin of the transmission,” which “do not exist for most electronic transmissions.”

CCIA said India has been particularly “critical” of the moratorium “and believes that ending the moratorium will enable the growth of domestic businesses.” The association said duties on electronic data transfers “would be inconsistent with India’s WTO commitments and would significantly impact an exporter’s ability to operate in India’s increasingly growing digital economy.”

The association also noted that Indonesia recently added electronic transmissions to its Harmonized Tariff Schedule, making it the only country in the world to do so. “This unprecedented step to imposing customs requirements on purely digital transactions will impose significant and unnecessary compliance burdens on nearly every enterprise,” CCIA said, adding that it’s also in conflict with the WTO moratorium. “Left unchecked,” the association said, “Indonesia’s actions will set a dangerous precedent and may encourage other countries to violate the WTO moratorium.”