WTO Customs Valuation Agreement

Report
WTO
Customs Valuation
Agreement
Why an Agreement on
customs valuation?
 customs
valuation and ad valorem customs
duties
 Article VII of GATT 1947
 The Tokyo Round Code
 The WTO Agreement on Implementation of
Article VII of GATT 1994 (Customs
Valuation Agreement)
What does the Agreement do?
 Provides
uniformity and certainty
 Transparency and consistency
 Neutral system for valuation of goods
 Basis should be the transaction value
Customs valuation methods
 Primary
basis for customs value is
“transaction value” of the goods sold
 If customs value cannot be determined on
the basis of transaction value of the goods,
alternative methods are provided:
--transaction value of identical goods
--transaction value of similar goods
--deductive value
--computed value
--”fall-back” method
Transaction value
Price actually paid or payable for the
goods when sold for export to the country of
importation adjusted in accordance with the
provisions of Article 8 of the Agreement
Transaction value--details



Price actually paid or payable = total payment made or
to be made by the buyer to or for the benefit of the seller
for the imported goods. Includes all payments made as a
condition of sale of the imported goods by the buyer to the
seller, or by the buyer to a third party to satisfy an
obligation of the seller
Adjustments to the price actually paid or payable (in cases
where specific elements considered to form part of the
value for customs purposes are incurred by the buyer but
are not included in the price actually paid or payable for
the goods)
Inclusion of certain considerations passing from buyer to
seller in the form of goods or services rather than money
Transaction value--conditions
1 - no restriction on the disposition or use
of the goods by the buyer, other than
--imposed or required by law or public authorities in the
country of importation
--limiting the geographical area in which the goods may be
resold do not substantially affect the value of the goods
2 - no part of the proceeds will accrue to
the seller, unless adjustment is made
Transaction value--conditions (2)
3 - sale or price not subject to some
condition or consideration for which a
value cannot be determined for the goods
being valued
4 - buyer and seller not related or if related,
transaction value acceptable for customs
--if relationship did not affect the price, or
--when importer demonstrates that the value closely
approximates a “test value”
Transaction value of identical
or similar goods
 If
transaction value of goods sold cannot be
used for valuation,
1. Transaction value of identical goods
2. Transaction value of similar goods
 Conditions
for use:
--the goods must be sold to the same country of
importation as the goods being valued
--the goods must be exported at or about the same
times as the goods being valued
Deductive and computed
value
 If
transaction value for the goods, or for
identical or similar goods cannot be used,
- Deductive value
- Computed value
the importer has the right to choose the
order of application of the two methods
“Fall-back” method
 If
none of the previous methods can be used, value
can be determined using reasonable means
consistent with the principles and general
provisions of the Agreement and of Article VII
of GATT 1994
 In this method, value must not be based on:
-selling price of goods in country of importation
-higher of two alternative values
-price of goods on domestic market of exporting country
-cost of production other than computed values for
identical or similar goods
-price of goods for export to a third country
-minimum customs value
-arbitrary or fictitious values
Special and Differential
Treatment
 Transition
periods for developing countries:
Five year delayed implementation for
developing countries not parties to the
Tokyo Round Code
Three years for the application of the
computed value method
Special and Differential
Treatment (2)
 Other
provisions for developing countries:
-Possibility of a reservation to retain minimum
values on a limited and transitional basis
-Possibility of a reservation regarding the right of
the importer to choose between deducted and
computed value
-Reservation with respect to certain aspects of
using the deductive valuation method
The Agreement Today
 Committee
–
–
–
–
–
on Customs Valuation
Overview of the agreement
Review notifications
Review implementation
Oversee the provision of technical assistance
Oversee requests for delayed implementation
Implementation Situation
56 Developing Countries originally requested
the 5-year delay period (Art. 20.1)
 23 are still under the delay period, have
been granted an extension, or are in the
process of requesting an extension
 8 have implemented
 25 have not notified nor asked for an
extension, thus the situation is unclear
An additional 24 have not notified the delay,
nor legislation.
Implementation Situation
Central and Eastern Europe
 Of
the 16 countries that are WTO Members,
12 have implemented the agreement
 The
situation with respect to the other 4 is
not clear, as there are very recent acceding
countries (Albania, Croatia, Georgia, and
Lithuania)
Other Delays or Reservations
With respect to Computed values
 47 Members have made such a notification
With respect to Minimum values
 18 Members have made such a notification
With respect to the right of the importer to choose
between deducted and computed value
 53
Members have made such a notification
With respect to certain aspects of using the
deductive valuation method
 51
Members have made such a notification
Other Delays or Reservations
Central and Eastern Europe
 Of
the 16 WTO Members of the region,
only Turkey has made a reservation with
respect to the right of the importer to choose
between deducted and computed value, and
with respect to certain aspects of using the
deductive valuation method
Customs Valuation and
E-commerce
 Potential
Considerations
– on-going work in the CTG and Work
Programme
 Decision
Software
on Carrier Media Bearing
Decision on the Valuation of
Carrier Media
1.
2.
3.
4.
It is reaffirmed that transaction value is the primary basis of valuation under the Agreement on
Implementation of Article VII of the General Agreement on Tariffs and Trade (the Agreement) and
that its application with regard to data or instructions (software) recorded on carrier media for data
processing equipment is fully consistent with the Agreement.
Given the unique situation with regard to data or instructions (software) recorded on carrier media for
data processing equipment, and that some Parties have sought a different approach, it would also be
consistent with the Agreement for those Parties which wish to do so to adopt the following practice:

In determining the customs value of imported carrier media bearing data or
instructions, only the cost or value of the carrier medium itself shall be taken into account.
The customs value shall not, therefore, include the cost or value of the data or
instructions, provided that this is distinguished from the cost or the value of the carrier
medium.

For the purpose of this Decision, the expression "carrier medium" shall not be
taken to include integrated circuits, semiconductors and similar devices or articles
incorporating such circuits or devices; the expression "data or instructions" shall not be
taken to include sound, cinematic or video recordings.
Those Parties adopting the practice referred to in paragraph 2 of this Decision shall notify the
Committee of the date of its application.
Those Parties adopting the practice in paragraph 2 of this Decision will do so on a most-favourednation (m.f.n.) basis, without prejudice to the continued use by any Party of the transaction value
practice.
Application of the Decision
 30
WTO Members have made a notification
concerning their practice of applying the
Decision
 21 WTO Members apply paragraph 2 of the
Decision
 9 WTO Members apply other practices
Application of the Decision
Central and Eastern Europe
 All
those who have notified, apply
paragraph 2 of the Decision
 They
are: Bulgaria, Cyprus, Czech Rep.,
Estonia, Hungary, Latvia, Poland, Romania,
Slovak Rep., and Slovenia
The End
Questions or Comments

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