Expansion of the OECD Trade Facilitation Indicators in the area of environment

Annex B. Classification issues in the context of the end-of-life segment

Trade in waste and scrap are often subject to complex and inconsistent classifications, with differing interpretations across countries regarding whether a shipment constitutes waste or a recyclable good. Customs authorities interpretation of whether a shipment qualifies as a usable product or regulated waste holds consequences for applicable controls, permits, and clearance procedures (Yamaguchi, 2021[20]).

More specifically, challenges include:

• (i) the classification of non-waste products and materials such as products for reuse and repair, end-of-life products for refurbishment and remanufacturing, and secondary raw materials, and clearly distinguishing their status from waste.

• (ii) distinguishing “controlled waste” under international legal frameworks such as the Basel Convention and the OECD Decision.1

Distinguishing “non-waste” products from waste

The HS includes many waste-related items scattered across various chapters, typically based on material composition (e.g. plastic, metal, paper). While the system distinguishes goods based on their physical characteristics and properties, domestic and international efforts to clarify the status of “non-waste” products or waste have also placed considerations on how they are processed (e.g. what kind of recovery process is applied).

There is no currently internationally agreed definition of waste.2 Therefore, products considered as waste in one jurisdiction can be classified as non-waste in another jurisdiction due to their commodity or raw material characteristics. Main differences lie in the concept of end-of-life, for instance whether these products are considered as waste, or alternatively as non-waste products such as by-products or residuals for input into another production process or as products for reuse. Considerations by countries in distinguishing the product in question, such as used or end-of-life products as non-waste rather than waste include whether it: i) has been intentionally produced, ii) has an intended use, market demand, and positive economic value, iii) can be considered to be part of normal commercial cycle or utility chain, and iv) does not require further processing for the material to be directly used in manufacturing operations or commercial applications (Yamaguchi, 2021[20]).

Another key distinction is the point at which waste ceases to be waste after collection, sorting and processing and becomes a commodity or a secondary raw material. This is particularly important as secondary raw materials may have different quality levels. Waste is generally considered to cease its status as a waste when a recovery process: i) diminishes its negative environmental effects, and ii) yields materials of sufficient beneficial use. Materials resulting from an environmentally sound recovery process and meeting a certain standard or specification may offer clarity that the waste was transformed into a commodity or a secondary raw material. At the same time, this also appears to depend on the extent and type of the recovery process in certain cases. For example, some countries do not consider the simple sorting of an end-of-life product or material to be an adequate means of recovery or recycling and have set forth “end-of waste” criteria.3

Distinguishing “controlled waste” under international legal frameworks

The Basel Convention aims to restrict the transboundary movements of hazardous wastes with respect to its parties, whereas the OECD Decision aims at facilitating trade of waste for recovery in an environmentally sound and economically efficient manner within OECD Member countries. Despite differences in intent and membership, both instruments require, inter alia, prior agreement between import, export and transit countries, known as “prior informed consent (PIC)” procedures, in shipping hazardous waste and other waste that may pose a risk for human health and the environment.

Consignments under PIC procedures operate under international legal frameworks as well as additional national requirements depending on each countries’ regulation, and therefore they constitute shipments intended for environmentally sound management of waste at destination. Under the PIC procedures, exporters need to notify and obtain consent from the competent authorities (normally environmental protection agencies) of import, export and transit countries before a shipment is made (shipments made without consent are illegal). The procedure provides an additional layer of safeguard for transboundary movements of hazardous waste and other waste that may pose significant risks to the environment if improperly managed.

Waste and recyclable materials or scrap subject to transboundary controls are addressed under both frameworks through closely aligned categories, albeit with differences in scope, terminology and procedural requirements. These categories are specified as “hazardous waste and other waste” under the Basel Convention, and “waste subject to amber control procedures” under the OECD Decision.

While these two frameworks are very similar in introducing controls for the transboundary movement of waste, there are several differences.

• First, the memberships of these instruments are different. As of June 2022, 189 countries and the European Union are parties to the Basel Convention. As of June 2022, 38 OECD Member countries are subject to the OECD Decision.

• Second, the Basel Convention introduces additional controls: (i) to prohibit trade of hazardous waste and other waste with non-parties, and (ii) to prohibit the OECD, EU, and Liechtenstein from exporting hazardous wastes to other group of countries (known as the Ban Amendment).

• Third, the PIC procedure is also slightly different between the Basel Convention and the OECD Decision. The Basel Convention sets a consideration period of 60 days requiring written consent from import, export and transit countries. In contrast, the OECD Decision has a shorter consideration period of 30 days requiring only tacit consent between export, import and transit countries (responses are only made if there are objections to the transboundary movement).

• Furthermore, the OECD Decision also offers the use of pre-consented facilities, which are recovery facilities that meet environmentally sound management requirements authorised by competent authorities, to expedite the transboundary movement with a target consent period of seven days.

In June 2022, Parties to the Basel Convention agreed to extend the PIC procedure to cover all cross-border movements of e‑waste, both hazardous and non-hazardous, with effect from 1 January 2025. OECD Members could not agree to automatically incorporate the Basel amendments and as a result, from January 2025 OECD Member countries apply their own national rules to e‑waste shipments: some maintaining green-list status for specific non-hazardous categories, while others require PIC for nearly all e‑waste. Each member must notify the OECD Secretariat of its approach.

Table 3. Comparison of required documents for transboundary movements of waste

Document	Basel Convention	OECD Decision	Key fields required
Notification Document	Required for all covered hazardous and other wastes (Annex V A)	Required for Amber-listed wastes; not required for Green-listed wastes (Decision Appendix 8 A)	Exporter/notifier identity, generator, importer/consignee, recovery/disposal facility, description of waste (Basel code, Y-code, OECD code, UN class, composition), quantity, transport details, insurance, recovery/disposal operation (R/D code).
Movement Document	Required for all covered wastes (Annex V B)	Required for amber-listed wastes (Decision Appendix 8 B); not required for green-listed waste	Notifier/exporter, importer, carrier(s), waste description (codes, quantity, packaging), transport route, ports of entry/exit, signatures at dispatch, transit, and receipt, confirmation of arrival.
Acknowledgement of receipt of notification	Competent authority of import must acknowledge (Art. 6.1)	Same obligation; must acknowledge within three working days (Decision, para. II(12))	Reference number, notifier, authority, date of receipt.
Consent / Refusal	Explicit or tacit consent within 60 days (Art. 6.2‑3)	Written consent/refusal within 30 days (para. II(13))	Consent (with or without conditions), refusal, or request for more information.
Confirmation of disposal / Recovery	Disposal or recovery facility must confirm completion to authorities (Art. 6.9)	Recovery facility must confirm recovery operation completed (para. II(19))	Facility details, method of recovery, confirmation of environmentally sound management, date of completion.
Commercial documents (invoices, transport document)	Basel does not distinguish – all shipments require Notification and Movement	For Green-listed wastes: only invoice and transport document required (para. II(9))	Invoice (waste generator/exporter, consignee, waste description, recovery operation); transport document (carrier, route, packaging, safety info).

Note: This table provides specific information on the documents required under the Basel Convention and the OECD Decision.

Notes

← 1.  These are the main international legal frameworks covering the transboundary movements of waste. There are several other international legal frameworks that prohibit imports of hazardous waste into a particular region, including the Bamako Convention, the Waigani Convention, or the Central American Regional Agreement on the Transboundary Movements of Hazardous Wastes.

← 2.  The Basel Convention does not provide a single, universally binding definition of “waste” (Article 2(1) states that “wastes are substances or objects which are disposed of or are intended to be disposed of or are required to be disposed of by the provisions of national law”), deferring to national definitions.

← 3.  These include: defining waste and scrap (US Institute of Scrap Recycling Industries (ISRI) Scrap Specifications Circular 1989, updated 2021; EU end-of-waste criteria, for iron, steel, aluminium, copper scrap, and glass cullet (Commission Regulations (EU) No 333/2011, No 1179/2012, and No 715/2013); second-hand goods and remanufactured goods (European Committee for Electrotechnical Standardization (CENELEC) developing standards on secondary batteries for industrial applications, under technical committee on secondary cells and batteries (CLC/TC 21X); British Standards Institute (BSI) - Design for manufacture, assembly, disassembly and end-of-life processing (BS 8887-220:2010); US American National Standards Institute (ANSI) “Specifications for the Process of Remanufacturing - RIC001.1-2016” developed by Remanufacturing Industries Council (RIC)). ISO standard on “Cross-border trade of second-hand goods” - Establishes minimum screening criteria for second-hand goods that are traded between countries (ISO 20245:2017) also exists for second-hand goods and remanufactured goods.