SBAM in the international trade regulation system

Abstract

This article is dedicated to the characteristics of the Carbon Border Adjustment Mechanism at the EU border (CBAM) with regard to its place in the system of tariff and non-tariff measures regulating international trade. The relevance of the study is determined by the growing influence of the environ­mental component on international and domestic trade regimes, as well as by the inclusion of "carbon intensity" parameters in the conditions for market access for goods (in particular, the European Union, the United Kingdom, and Switzerland). The hypothesis is put forward according to which CBAM does not have the characteristics of customs or tariff regulation, and its essence and application features correspond to certain characteristics of non-tariff regulation of international trade and, at present, actually form a non-tariff "procedural" regulatory barrier based on mandatory requirements for monitoring, reporting, and verifying of emissions. Accordingly, when studying the place of CBAM in the system of tariff and non-tariff regulation measures of international trade, the national practice of states, and the approaches of the World Trade Organization, certain features of the Mechanism have been systematized for compliance with the characteristics of tariff or non-tariff regula­tion. The content of some international and domestic legal acts has been analysed and compared in terms of their interconnection and correlation (in particular, Regulation (EU) 2023/956, the General Agreement on Tariffs and Trade, the Agreement on Technical Barriers to Trade, and relevant provisions of the legislation of the United Kingdom and Switzerland). The impact of international and national components on both the theoretical and practical aspects of CBAM’s operation has been summarized, as well as the practice of the WTO Dispute Settlement Body and the need for a comprehensive approach in this field has been indicated. The obtained results confirm that CBAM is not a customs duty or internal tax and is not levied at the time of customs clearance, which precludes its qualification as a measure of customs-tariff regulation. The organizational and legal structure of CBAM corresponds to the characte­ristics of a non-tariff "procedural" market access instrument, as it provides for mandatory disclosure of embedded emissions data, their independent verification, and links the possibility of import to the fulfilment of MRV procedures. It has been proven that such a SBAM qualification entails the applic­ability of Articles I and III of the GATT, the provi­sions of the Agreement on Technical Barriers to Trade, and the need of justifying its legitimacy under Article XX of the GATT. The formulated conclusions define the key international legal implications of CBAM’s operation and establish new requirements for third countries concerning the alignment of emissions assessment procedures with the regulatory require­ments of the European Union.