Additional U.S. Proposals for 2004 Universal Postal Union Congress Supported by Other Member Countries
Released by the Bureau of International Organization Affairs
The United States, with the support of other UPU member countries, submitted the following four proposals on May 11, 2004, for consideration by the UPU members at the upcoming quadrennial Congress. The UPU Congress will be held September 15-October 5 in Bucharest, Romania. The deadline for submission of proposals to the UPU Congress by one member country was March 14, 2004, while the deadline for submission of proposals to Congress supported by at least three UPU member countries was May 14, 2004. The public may comment on these proposals by contacting Dennis Delehanty of the Office of Technical Specialized Agencies at the Department of State at the following email address: [email protected].
[Proposal 20]
Proposal of a general nature
CANADA, JAPAN, SPAIN AND THE UNITED STATES OF AMERICA
Supported by. – Bahamas, Barbados, Grenada, Guyana, Jamaica, Saint Christopher (St. Kitts) and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago
Resolution
Extraterritorial Offices of Exchange (ETOEs)
Congress, Recognizing
that, for the purpose of this resolution, an Extraterritorial Office of Exchange (ETOE) is defined as an office or facility, operated by or in connection with a postal operator, outside its national territory, on the territory of another country, and that these offices are established by postal operators for commercial purposes to draw business in markets outside their own national territory,
Noting
that the issue of ETOEs has been extensively studied within the Universal Postal Union in recent years,
Noting further
that, as a result of the discussion on the issue of ETOEs during the 2001 CA session, a provisional measure was adopted as resolution CA 17/2001, which confirms that the Acts of the Union do not at present contain provisions for settling ETOE-related questions, and which protects the revenues of postal administrations that deliver items dispatched by ETOEs,
Recognizing
that the CA subsequently adopted resolution CA 2/2003 as a provisional measure, until the Congress takes a decision on ETOEs, whereby any UPU member country seeking to establish an ETOE must obtain the agreement of the host country of the ETOE, according to the host country’s legislation,
Recognizing further
that national legislation or policy has thus far been expected to determine whether items dispatched from ETOEs are to be treated as mail under the UPU Acts,
Aware
that the absence of a UPU decision in the matter may cause economic distortions in relations between administrations as regards remuneration of the administration of destination for items sent by ETOEs,
Considering
that the compensation currently received under terminal dues is premised on the mutual exchange of mails in carrying out the universal service obligation, and that this compensation does not necessarily cover the related costs of the delivering administration, particularly in industrialized countries,
Considering further
that this issue will not be equitably resolved over the medium term, to the point where compensation for one-way traffic will be adequate for the delivering administration in all circumstances,
Recognizing
that, according to the DC tariff questionnaire conducted by the Terminal Dues Action Group in 2002, a majority of postal administrations in developing countries report that domestic rates do not cover their costs, thereby providing insufficient remuneration compared with terminal dues,
Decides that
ETOEs are not similarly situated with postal administrations executing universal service obligations under the UPU Acts,
items sent from ETOEs are considered commercial items not subject to the UPU Acts, unless the destination postal administration has announced a policy agreeing to apply those Acts to the items it receives from ETOEs,
the dispatch of items via an ETOE shall not result in a decrease of the remuneration that the destination postal administration would receive for the delivery of those items (including, where applicable, the payment for the Quality of Service Fund provided for in article 26bis of the Convention),
items tendered by ETOEs
shall be treated according to the national policy of the destination country,
may be treated in accordance with the rates, terms and conditions of acceptance for domestic postal products, or
may be charged terminal dues if the destination postal administration has announced a policy to apply the UPU Acts to items tendered by ETOEs,
commercial customs clearance procedures of the destination country shall apply to items sent from ETOEs, unless the destination postal administration has agreed to apply the UPU Acts,
no documentation provided for under the Acts of the UPU may be used for any purposes relating to items sent from ETOEs to the postal administration of the destination country, including for purposes relating to airlines, to customs and to other parties, unless the destination postal administration has agreed to apply the UPU Acts,
Further decides
that the agreement of any UPU member country must be obtained, in accordance with its national legislation, by any other countries or operators seeking to establish ETOEs within that country,
Invites
member countries to advise the International Bureau of national legislation or policy that makes the operation of an ETOE on its territory illegitimate or unauthorized,
Instructs
the Postal Operations Council and the International Bureau to adopt procedures enabling the issuance and withdrawal of International Mail Processing Centres (IMPC) codes in a manner consistent with the provisions of this resolution, including the requirement for ETOE operators to obtain the agreement of the member country in which they are seeking to establish an ETOE.
Declares
that nothing in this resolution may be construed as requiring an administration to accept items from any ETOEs as mail under the UPU Acts.
Reasons. – This proposal is based on the one the four co-author countries put forward to the February 2004 Council of Administration (CA) session in the form of a CA resolution. A majority of CA members felt that Congress itself should decide on the ETOE issue. It is time for Congress to fully consider this resolution and to adopt it.
Since the two resolutions on ETOEs adopted by the CA in 2001 and 2003 were provisional in nature until the Congress takes a decision, the operative parts of these resolutions were incorporated into this Resolution OXX.
This resolution text is in fact an evolution of the text in proposal 07. The latter is a resolution put forward to Congress by the CA that was originally presented by Canada in the context of work on ETOEs conducted by a group, led by Brazil, under the CA Management of the Work of the Union Project Team. The co-author countries – including Canada – support the present resolution (0XX) rather than resolution 07, and encourage other Members countries at Congress to do so as well.
Resolution 0XX would clearly establish that items sent from ETOEs are considered commercial items not subject to the Acts of the UPU. Destination postal administrations would have the possibility of applying their own policies with respect to the acceptance of ETOEs items either under domestic rates or under terminal dues rates. It means that, for example, developing countries which do not cover their costs with domestic rates may adopt policies to charge terminal dues rates (including applicable Quality of Service Fund payments) instead of domestic rates. In addition, this resolution accommodates the concerns of countries that might be under a legal obligation to accept items from ETOEs under terminal dues or other multilateral arrangements.
This resolution also calls for the adoption of enabling procedures consistent with the requirement for ETOEs to obtain the agreement of the government before ETOEs are established within that country’s territory.
This resolution clearly distinguishes between “ETOEs” which are established for commercial purposes and other types of exchange offices set up by one country on the territory of another for operational purposes only and with the agreement of the host country. Operators of such facilities should inform other UPU member countries of these facilities, and UPU members should not treat mail from such facilities as commercial ETOE traffic.
[Proposal 21]
Convention – Proposal
_____________________________________________________________________________________
UNITED STATES OF AMERICA
20. 26.xx
Amendment to proposal 20. 26.1
Article 26
Terminal dues. Provisions applicable to mail flows to, from and between countries in the transitional system
Paragraphs 3.1 and 3.2. Amend as follows:
3 System harmonization mechanism
3.1 When an administration in the target system /…/ establishes that the annual weight of a mail flow exceeds the threshold calculated in accordance with the conditions set out in the Letter Post Regulations, it may apply to the excess mail the payment system provided for in article 25, provided that it has not applied the revision mechanism.
3.2 When an administration in the transitional system /…/ establishes that the annual weight of a mail flow exceeds the threshold calculated in accordance with the conditions set out in the Letter Post Regulations, it may apply to the excess mail the supplement provided for in article 26bis, provided that it has not applied the revision mechanism.
Reasons. – This amendment is proposed to minimize the problems of continuing arbitrage in the UPU terminal dues system between the target and transitional systems. It would eliminate the words “receiving a mail flow of over 50 tonnes a year” in order to prevent further abuses of the system that are detrimental to the interests of developing countries (DCs) and industrialized countries (ICs).
The Pan-African Postal Union (PAPU) terminal dues proposal called for a country-specific threshold to prevent DC-to-IC remailing and reduce arbitrage problems during the transition period. This amendment would introduce such a country-specific threshold, which would preserve the integrity of the terminal dues system and assure universal postal service at affordable rates.
If this 50-ton condition is retained, it would mean that a large number of DCs can be used (and often abused) for DC-IC arbitrage for a "quota" of their small volumes up to 50 tons. The mail flow study showed that over 75% of all mail flows (number of flows) from DCs to ICs* are less than 10 tons and 92% are under 50 tons. Retaining this 50-ton condition would allow at least 40 tons of remail from each small-volume DC to each IC, and would divert target country mail volumes from the more cost-based, country-specific system. This disrupts the balance of the terminal dues system, is detrimental to the cost coverage at both the origin and destination countries, and can have a severe negative financial impact on developing countries if their mail is charged target country rates under bulk mail or 80% of full domestic tariffs under the provisions of Article 23 governing ABC remail.
Supported by. – Bahamas, Canada, Guyana, Jamaica, Saint Christopher (St. Kitts) and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago
[Proposal 22]
Convention – Proposal
____________________________________________________________________________________
UNITED STATES OF AMERICA
20. 31.xx
Amendment to proposal 20. 31.1
Article 31
Parcel post land and sea rates
No change to paragraphs 1. through 1.3. Add new paragraph 1bis below:
1. Parcels exchanged between two postal administrations shall be subject to inward land rates calculated by combining the /…/ base rate per parcel and /…/ base rate per kilogram laid down in the Regulations.
1.1. Bearing in mind the above /…/ base rates, administrations /…/ may in addition, be authorized to claim supplementary rates per parcel and per kilogramme in accordance with provisions laid down in the Regulations.
1.2 (No change)
1.3 (No change)
1bis Postal administrations which are unable to cover their costs by charging inward land rates set under paragraph 1 may set their inward land rates at a level necessary to cover their costs in accordance with the separate procedures laid down in the Regulations.
Reasons. – While the 2004 Postal Operations Council approved a proposal for pricing of parcel post based on service levels, this may not allow some posts to recover the costs of providing the service. Postal administrations should be allowed to cover the costs of delivery for parcel post items.
Supported by. – Bahamas, Barbados, Grenada, Guyana, Jamaica, Saint Christopher (St. Kitts) and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago
[Proposal 23]
Parcel Post Regulations – Proposal
_____________________________________________________________________________________
UNITED STATES OF AMERICA
35. 186.xx
Amendment to proposal 35. 186.1
Article RC 186
Guideline inward land rates
No change to paragraphs 1. through 1ter. Add new paragraphs 1quater and 1 quinter below:
1 The level of the base rate referred to in article 31.1 of the Convention is given below.
1.1 for certain administrations, a country-specific base rate per parcel and a country-specific base rate per kilogramme;
1.2 for certain other administrations, a global base rate per parcel and a global base rate per kilogramme.
1bis The rates referred to in paragraphs 1.1 and 1.2 shall be determined annually by the Postal Operations Council, which will instruct the International Bureau to communicate them to the administrations concerned.
1ter The rates referred to in paragraphs 1.1 and 1.2 may be supplemented by bonus payments, ranging from 5% to 40% of the base rate, which administrations may qualify for if they provide certain service features. The service feature definitions and the bonus payments they attract shall be reviewed annually by the Postal Operations Council, which will ensure that postal administrations are aware of the service features they are required to provide in order to qualify for the bonus payments concerned.
1quater When an administration chooses to set rates based upon costs as provided for in 20. 31. 1bis, it shall provide the International Bureau with documentation relating to its costs and domestic rates for parcels.
1quinter Upon confirmation by the International Bureau of the documentation provided demonstrating costs and domestic rates, an administration shall be authorized to apply cost-based inward land charges not higher than their domestic rates.
Reasons. – While the 2004 Postal Operations Council approved a proposal for pricing of parcel post based on service levels, this may not allow some posts to recover the costs of providing the service. Postal administrations should be allowed to cover the costs of delivery for parcel post items.
Supported by. – Barbados, Grenada, Guyana, Jamaica, Saint Christopher (St. Kitts) and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago
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