Copyright 1995 NLCIFT
Title:AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
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AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
GENERAL INTRODUCTORY COMMENTARY
1. The primary basis for customs value under this Agreement is
"transaction value" as defined in Article 1. Article 1 is to be
read together with Article 8 which provides, inter alia, for
adjustments to the price actually paid or payable in cases where
certain specific elements which are considered to form a 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
imported goods. Article 8 also provides for the inclusion in the
transaction value of certain considerations which may pass from
the buyer to the seller in the form of specified goods or
services rather than in the form of money. Articles 2 to 7,
inclusive, provide methods of determining the customs value
whenever it cannot be determined under the provisions of Article
1.
2. Where the customs value cannot be determined under the
provisions of Article 1 there should normally be a process of
consultation between the customs administration and importer with
a view to arriving at a basis of value under the provisions of
Articles 2 or 3. It may occur, for example, that the importer
has information about the customs value of identical or similar
imported goods which is not immediately available to the customs
administration in the port of importation. On the other hand,
the customs administration may have information about the customs
value of identical or similar imported goods which is not readily
available to the importer. A process of consultation between the
two parties will enable information to be exchanged, subject to
the requirements of commercial confidentiality, with a view to
determining a proper basis of value for customs purposes.
3. Articles 5 and 6 provide two bases for determining the
customs value where it cannot be determined on the basis of the
transaction value of the imported goods or of identical or
similar imported goods. Under paragraph 1 of Article 5 the
customs value is determined on the basis of the price at which
the goods are sold in the condition as imported to an unrelated
buyer in the country of importation. The importer also has the
right to have goods which are further processed after importation
valued under the provisions of Article 5 if he so requests.
Under Article 6 the customs value is determined on the basis of
the computed value. Both these methods present certain
difficulties and because of this the importer is given the right,
under the provisions of Article 4, to choose the order of
application of the two methods.
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4. Article 7 sets out how to determine the customs value in
cases where it cannot be determined under the provisions of any
of the preceding Articles.
Members,
Having regard to the Multilateral Trade Negotiations,
Desiring to further the objectives of the GATT 1994 and to
secure additional benefits for the international trade of
developing countries;
Recognizing the importance of the provisions of Article VII
of the GATT 1994 and desiring to elaborate rules for their
application in order to provide greater uniformity and certainty
in their implementation;
Recognizing the need for a fair, uniform and neutral system
for the valuation of goods for customs purposes that precludes
the use of arbitrary or fictitious customs values;
Recognizing that the basis for valuation of goods for
customs purposes should, to the greatest extent possible, be the
transaction value of the goods being valued;
Recognizing that customs value should be based on simple and
equitable criteria consistent with commercial practices and that
valuation procedures should be of general application without
distinction between sources of supply;
Recognizing that valuation procedures should not be used to
combat dumping;
Hereby agree as follows:
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PART I
RULES ON CUSTOMS VALUATION
Article 1
1. The customs value of imported goods shall be the transaction
value, that is the 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, provided:
(a) that there are no restrictions as to the disposition or
use of the goods by the buyer other than restrictions
which:
(i) are imposed or required by law or by the public
authorities in the country of importation;
(ii) limit the geographical area in which the goods may
be resold; or
(iii) do not substantially affect the value of the
goods;
(b) that the sale or price is not subject to some condition
or consideration for which a value cannot be determined
with respect to the goods being valued;
(c) that no part of the proceeds of any subsequent resale,
disposal or use of the goods by the buyer will accrue
directly or indirectly to the seller, unless an
appropriate adjustment can be made in accordance with
the provisions of Article 8; and
(d) that the buyer and seller are not related, or where the
buyer and seller are related, that the transaction
value is acceptable for customs purposes under the
provisions of paragraph 2 of this Article.
2. (a) In determining whether the transaction value is
acceptable for the purposes of paragraph 1 of this
Article, the fact that the buyer and the seller are
related within the meaning of Article 15 shall not in
itself be grounds for regarding the transaction value
as unacceptable. In such case the circumstances
surrounding the sale shall be examined and the
transaction value shall be accepted provided that the
relationship did not influence the price. If, in the
light of information provided by the importer or
otherwise, the customs administration has grounds for
considering that the relationship influenced the price,
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it shall communicate its grounds to the importer and he
shall be given a reasonable opportunity to respond. If
the importer so requests, the communication of the
grounds shall be in writing.
(b) In a sale between related persons, the transaction
value shall be accepted and the goods valued in
accordance with the provisions of paragraph 1 of this
Article whenever the importer demonstrates that such
value closely approximates to one of the following
occurring at or about the same time:
(i) the transaction value in sales to unrelated buyers
of identical or similar goods for export to the
same country of importation;
(ii) the customs value of identical or similar goods as
determined under the provisions of Article 5;
(iii) the customs value of identical or similar
goods as determined under the provisions of
Article 6;
In applying the foregoing tests, due account shall
be taken of demonstrated differences in commercial
levels, quantity levels, the elements enumerated in
Article 8 and costs incurred by the seller in sales in
which he and the buyer are not related that are not
incurred by the seller in sales in which he and the
buyer are related.
(c) The tests set forth in paragraph 2(b) of this Article
are to be used at the initiative of the importer and
only for comparison purposes. Substitute values may
not be established under the provisions of paragraph
2(b) of this Article.
Article 2
1. (a) If the customs value of the imported goods cannot be
determined under the provisions of Article 1, the
customs value shall be the transaction value of
identical goods sold for export to the same country of
importation and exported at or about the same time as
the goods being valued.
(b) In applying this Article, the transaction value of
identical goods in a sale at the same commercial level
and in substantially the same quantity as the goods
being valued shall be used to determine the customs
value. Where no such sale is found, the transaction
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value of identical goods sold at a different commercial
level and/or in different quantities, adjusted to take
account of differences attributable to commercial level
and/or to quantity, shall be used, provided that such
adjustments can be made on the basis of demonstrated
evidence which clearly establishes the reasonableness
and accuracy of the adjustment, whether the adjustment
leads to an increase or a decrease in the value.
2. Where the costs and charges referred to in paragraph 2 of
Article 8 are included in the transaction value, an adjustment
shall be made to take account of significant differences in such
costs and charges between the imported goods and the identical
goods in question arising from differences in distances and modes
of transport.
3. If, in applying this Article, more than one transaction
value of identical goods is found, the lowest such value shall be
used to determine the customs value of the imported goods.
Article 3
1. (a) If the customs value of the imported goods cannot be
determined under the provisions of Articles 1 and 2,
the customs value shall be the transaction value of
similar goods sold for export to the same country of
importation and exported at or about the same time as
the goods being valued.
(b) In applying this Article, the transaction value of
similar goods in a sale at the same commercial level
and in substantially the same quantity as the goods
being valued shall be used to determine the customs
value. Where no such sale is found, the transaction
value of similar goods sold at a different commercial
level and/or in different quantities, adjusted to take
account of differences attributable to commercial level
and/or to quantity, shall be used, provided that such
adjustments can be made on the basis of demonstrated
evidence which clearly establishes the reasonableness
and accuracy of the adjustment, whether the adjustment
leads to an increase or a decrease in the value.
2. Where the costs and charges referred to in paragraph 2 of
Article 8 are included in the transaction value, an adjustment
shall be made to take account of significant differences in such
costs and charges between the imported goods and the similar
goods in question arising from differences in distances and modes
of transport.
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3. If, in applying this Article, more than one transaction
value of similar goods is found, the lowest such value shall be
used to determine the customs value of the imported goods.
Article 4
If the customs value of the imported goods cannot be
determined under the provisions of Articles 1, 2 and 3 the
customs value shall be determined under the provisions of Article
5 or, when the customs value cannot be determined under that
Article, under the provisions of Article 6 except that, at the
request of the importer, the order of application of Articles 5
and 6 shall be reversed.
Article 5
1. (a) If the imported goods or identical or similar imported
goods are sold in the country of importation in the
condition as imported, the customs value of the
imported goods under the provisions of this Article
shall be based on the unit price at which the imported
goods or identical or similar imported goods are so
sold in the greatest aggregate quantity, at or about
the time of the importation of the goods being valued,
to persons who are not related to the persons from whom
they buy such goods, subject to deductions for the
following:
(i) either the commissions usually paid or agreed to
be paid or the additions usually made for profit
and general expenses in connection with sales in
such country of imported goods of the same class
or kind;
(ii) the usual costs of transport and insurance and
associated costs incurred within the country of
importation;
(iii) where appropriate, the costs and charges
referred to in paragraph 2 of Article 8; and
(iv) the customs duties and other national taxes
payable in the country of importation by reason of
the importation or sale of the goods.
(b) If neither the imported goods nor identical nor similar
imported goods are sold at or about the time of
importation of the goods being valued, the customs
value shall, subject otherwise to the provisions of
paragraph 1(a) of this Article, be based on the unit
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price at which the imported goods or identical or
similar imported goods are sold in the country of
importation in the condition as imported at the
earliest date after the importation of the goods being
valued but before the expiration of ninety days after
such importation.
2. If neither the imported goods nor identical nor similar
imported goods are sold in the country of importation in the
condition as imported, then, if the importer so requests, the
customs value shall be based on the unit price at which the
imported goods, after further processing, are sold in the
greatest aggregate quantity to persons in the country of
importation who are not related to the persons from whom they buy
such goods, due allowance being made for the value added by such
processing and the deductions provided for in paragraph 1(a) of
this Article.
Article 6
1. The customs value of imported goods under the provisions of
this Article shall be based on a computed value. Computed value
shall consist of the sum of:
(a) the cost or value of materials and fabrication or other
processing employed in producing the imported goods;
(b) an amount for profit and general expenses equal to that
usually reflected in sales of goods of the same class
or kind as the goods being valued which are made by
producers in the country of exportation for export to
the country of importation;
(c) the cost or value of all other expenses necessary to
reflect the valuation option chosen by the Member under
paragraph 2 of Article 8.
2. No Member may require or compel any person not resident in
its own territory to produce for examination, or to allow access
to, any account or other record for the purposes of determining a
computed value. However, information supplied by the producer of
the goods for the purposes of determining the customs value under
the provisions of this Article may be verified in another country
by the authorities of the country of importation with the
agreement of the producer and provided they give sufficient
advance notice to the government of the country in question and
the latter does not object to the investigation.
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Article 7
1. If the customs value of the imported goods cannot be
determined under the provisions of Articles 1 to 6, inclusive,
the customs value shall be determined using reasonable means
consistent with the principles and general provisions of this
Agreement and of Article VII of the GATT 1994 and on the basis of
data available in the country of importation.
2. No customs value shall be determined under the provisions of
this Article on the basis of:
(a) the selling price in the country of importation of
goods produced in such country;
(b) a system which provides for the acceptance for customs
purposes of the higher of two alternative values;
(c) the price of goods on the domestic market of the
country of exportation;
(d) the cost of production other than computed values which
have been determined for identical or similar goods in
accordance with the provisions of Article 6;
(e) the price of the goods for export to a country other
than the country of importation;
(f) minimum customs values; or
(g) arbitrary or fictitious values.
3. If he so requests, the importer shall be informed in writing
of the customs value determined under the provisions of this
Article and the method used to determine such value.
Article 8
1. In determining the customs value under the provisions of
Article 1, there shall be added to the price actually paid or
payable for the imported goods:
(a) the following, to the extent that they are incurred by
the buyer but are not included in the price actually
paid or payable for the goods:
(i) commissions and brokerage, except buying
commissions;
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(ii) the cost of containers which are treated as being
one for customs purposes with the goods in
question;
(iii) the cost of packing whether for labour or
materials;
(b) the value, apportioned as appropriate, of the following
goods and services where supplied directly or
indirectly by the buyer free of charge or at reduced
cost for use in connection with the production and sale
for export of the imported goods, to the extent that
such value has not been included in the price actually
paid or payable:
(i) materials, components, parts and similar items
incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the
production of the imported goods;
(iii) materials consumed in the production of the
imported goods;
(iv) engineering, development, artwork, design work,
and plans and sketches undertaken elsewhere than
in the country of importation and necessary for
the production of the imported goods;
(c) royalties and licence fees related to the goods being
valued that the buyer must pay, either directly or
indirectly, as a condition of sale of the goods being
valued, to the extent that such royalties and fees are
not included in the price actually paid or payable;
(d) the value of any part of the proceeds of any subsequent
resale, disposal or use of the imported goods that
accrues directly or indirectly to the seller.
2. In framing its legislation, each Member shall provide for
the inclusion in or the exclusion from the customs value, in
whole or in part, of the following:
(a) the cost of transport of the imported goods to the port
or place of importation;
(b) loading, unloading and handling charges associated with
the transport of the imported goods to the port or
place of importation; and
(c) the cost of insurance.
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3. Additions to the price actually paid or payable shall be
made under this Article only on the basis of objective and
quantifiable data.
4. No additions shall be made to the price actually paid or
payable in determining the customs value except as provided in
this Article.
Article 9
1. Where the conversion of currency is necessary for the
determination of the customs value, the rate of exchange to be
used shall be that duly published by the competent authorities of
the country of importation concerned and shall reflect as
effectively as possible, in respect of the period covered by each
such document of publication, the current value of such currency
in commercial transactions in terms of the currency of the
country of importation.
2. The conversion rate to be used shall be that in effect at
the time of exportation or the time of importation, as provided
by each Member.
Article 10
All information which is by nature confidential or which is
provided on a confidential basis for the purposes of customs
valuation shall be treated as strictly confidential by the
authorities concerned who shall not disclose it without the
specific permission of the person or government providing such
information, except to the extent that it may be required to be
disclosed in the context of judicial proceedings.
Article 11
1. The legislation of each Member shall provide in regard to a
determination of customs value for the right of appeal, without
penalty, by the importer or any other person liable for the
payment of the duty.
2. An initial right of appeal without penalty may be to an
authority within the customs administration or to an independent
body, but the legislation of each Member shall provide for the
right of appeal without penalty to a judicial authority.
3. Notice of the decision on appeal shall be given to the
appellant and the reasons for such decision shall be provided in
writing. He shall also be informed of his rights of any further
appeal.
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Article 12
Laws, regulations, judicial decisions and administrative
rulings of general application giving effect to this Agreement
shall be published in conformity with Article X of the GATT 1994
by the country of importation concerned.
Article 13
If, in the course of determining the customs value of
imported goods, it becomes necessary to delay the final
determination of such customs value, the importer shall
nevertheless be able to withdraw his goods from customs if, where
so required, he provides sufficient guarantee in the form of a
surety, a deposit or some other appropriate instrument, covering
the ultimate payment of customs duties for which the goods may be
liable. The legislation of each Member shall make provisions for
such circumstances.
Article 14
The notes at Annex I to this Agreement form an integral part
of this Agreement and the Articles of this Agreement are to be
read and applied in conjunction with their respective notes.
Annexes II and III also form an integral part of this Agreement.
Article 15
1. In this Agreement:
(a) "customs value of imported goods" means the value of
goods for the purposes of levying ad valorem duties of
customs on imported goods;
(b) "country of importation" means country or customs
territory of importation; and
(c) "produced" includes grown, manufactured and mined.
2. (a) In this Agreement "identical goods" means goods which
are the same in all respects, including physical
characteristics, quality and reputation. Minor
differences in appearance would not preclude goods
otherwise conforming to the definition from being
regarded as identical.
(b) In this Agreement "similar goods" means goods which,
although not alike in all respects, have like
characteristics and like component materials which
enable them to perform the same functions and to be
commercially interchangeable. The quality of the
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goods, their reputation and the existence of a
trademark are among the factors to be considered in
determining whether goods are similar.
(c) The terms "identical goods" and "similar goods" do not
include, as the case may be, goods which incorporate or
reflect engineering, development, artwork, design work,
and plans and sketches for which no adjustment has been
made under paragraph 1(b)(iv) of Article 8 because
such elements were undertaken in the country of
importation.
(d) Goods shall not be regarded as "identical goods" or
"similar goods" unless they were produced in the same
country as the goods being valued.
(e) Goods produced by a different person shall be taken
into account only when there are no identical goods or
similar goods, as the case may be, produced by the same
person as the goods being valued.
3. In this Agreement "goods of the same class or kind" means
goods which fall within a group or range of goods produced by a
particular industry or industry sector, and includes identical or
similar goods.
4. For the purposes of this Agreement, persons shall be deemed
to be related only if:
(a) they are officers or directors of one another's
businesses;
(b) they are legally recognized partners in business;
(c) they are employer and employee;
(d) any person directly or indirectly owns, controls or
holds 5 per cent or more of the outstanding voting
stock or shares of both of them;
(e) one of them directly or indirectly controls the other;
(f) both of them are directly or indirectly controlled by a
third person;
(g) together they directly or indirectly control a third
person; or
(h) they are members of the same family.
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5. Persons who are associated in business with one another in
that one is the sole agent, sole distributor or sole
concessionaire, however described, of the other shall be deemed
to be related for the purposes of this Agreement if they fall
within the criteria of paragraph 4 of this Article.
Article 16
Upon written request, the importer shall have the right to
an explanation in writing from the customs administration of the
country of importation as to how the customs value of his
imported goods was determined.
Article 17
Nothing in this Agreement shall be construed as restricting
or calling into question the rights of customs administrations to
satisfy themselves as to the truth or accuracy of any statement,
document or declaration presented for customs valuation purposes.
PART II
ADMINISTRATION, CONSULTATIONS AND DISPUTE SETTLEMENT
Article 18
Institutions
There shall be established under this Agreement:
1. A Committee on Customs Valuation (hereinafter referred to as
"the Committee") composed of representatives from each of the
Members. The Committee shall elect its own Chairman and shall
normally meet once a year, or as is otherwise envisaged by the
relevant provisions of this Agreement, for the purpose of
affording Members the opportunity to consult on matters relating
to the administration of the customs valuation system by any
Member as it might affect the operation of this Agreement or the
furtherance of its objectives and carrying out such other
responsibilities as may be assigned to it by the Members. The
MTO Secretariat shall act as the secretariat to the Committee.
2. A Technical Committee on Customs Valuation (hereinafter
referred to as "the Technical Committee") under the auspices of
the Customs Co-operation Council (hereinafter referred to as "the
CCC"), which shall carry out the responsibilities described in
Annex II to this Agreement and shall operate in accordance with
the rules of procedure contained therein.
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Article 19
Consultations and Dispute Settlement
1. Except as otherwise provided herein, the Understanding on
Rules and Procedures Governing the Settlement of Disputes is
applicable to consultations and the settlement of disputes under
this Agreement.
2. If any Member considers that any benefit accruing to it,
directly or indirectly, under this Agreement is being nullified
or impaired, or that the achievement of any objective of this
Agreement is being impeded, as a result of the actions of another
Member or of other Members, it may, with a view to reaching a
mutually satisfactory solution of this matter, request
consultations with the Member or Members in question. Each
Member shall afford sympathetic consideration to any request from
another Member for consultations.
3. The Technical Committee shall provide, upon request, advice
and assistance to Members engaged in consultations.
4. At the request of a party to the dispute, or on its own
initiative, a panel established to examine a dispute relating to
the provisions of this Agreement may request the Technical
Committee to carry out an examination of any questions requiring
technical consideration. The panel shall determine the terms of
reference of the Technical Committee for the particular dispute
and set a time period for receipt of the report of the Technical
Committee. The panel shall take into consideration the report of
the Technical Committee. In the event that the Technical
Committee is unable to reach consensus on a matter referred to it
pursuant to this paragraph, the panel should afford the parties
to the dispute with an opportunity to present their views on the
matter to the panel.
5. Confidential information provided to the panel shall not be
disclosed without formal authorization from the person, body or
authority providing such information. Where such information is
requested from the panel but release of such information by the
panel is not authorized, a non-confidential summary of this
information, authorized by the person, body or authority
providing the information, shall be provided.
PART III
SPECIAL AND DIFFERENTIAL TREATMENT
Article 20
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1. Developing country Members, not party to the Agreement
(1979) on Implementation of Article VII of the General Agreement
on Tariffs and Trade, may delay application of the provisions of
this Agreement for a period not exceeding five years from the
date of entry into force of the Agreement Establishing the MTO
for such Members. Developing country Members who choose to delay
application of this Agreement shall notify the Director-General
of the MTO accordingly.
2. In addition to paragraph 1 above, developing country
Members, not party to the Agreement (1979) on Implementation of
Article VII of the General Agreement on Tariffs and Trade, may
delay application of paragraph 2(b)(iii) of Article 1 and Article
6 for a period not exceeding three years following their
application of all other provisions of this Agreement.
Developing country Members that choose to delay application of
the provisions specified in this paragraph shall notify the
Director-General of the MTO accordingly.
3. Developed country Members shall furnish, on mutually agreed
terms, technical assistance to developing country Members that so
request. On this basis developed country Members shall draw up
programmes of technical assistance which may include, inter alia,
training of personnel, assistance in preparing implementation
measures, access to sources of information regarding customs
valuation methodology, and advice on the application of the
provisions of this Agreement.
PART IV
FINAL PROVISIONS
Article 21
Reservations
Reservations may not be entered in respect of any of the
provisions of this Agreement without the consent of the other
Members.
Article 22
National Legislation
1. Each Member shall ensure, not later than the date of
application of the provisions of this Agreement for it, the
conformity of its laws, regulations and administrative procedures
with the provisions of this Agreement.
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2. Each Member shall inform the Committee of any changes in its
laws and regulations relevant to this Agreement and in the
administration of such laws and regulations.
Article 23
Review
The Committee shall review annually the implementation and
operation of this Agreement taking into account the objectives
thereof. The Committee shall annually inform the Council for
Trade in Goods of developments during the period covered by such
reviews.
Article 24
Secretariat
This Agreement shall be serviced by the MTO Secretariat
except in regard to those responsibilities specifically assigned
to the Technical Committee, which will be serviced by the
Secretariat of the CCC.
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ANNEX I
INTERPRETATIVE NOTES
General Note
Sequential Application of Valuation Methods
1. Articles 1 to 7, inclusive, define how the customs value of
imported goods is to be determined under the provisions of this
Agreement. The methods of valuation are set out in a sequential
order of application. The primary method for customs valuation
is defined in Article 1 and imported goods are to be valued in
accordance with the provisions of this Article whenever the
conditions prescribed therein are fulfilled.
2. Where the customs value cannot be determined under the
provisions of Article 1, it is to be determined by proceeding
sequentially through the succeeding Articles to the first such
Article under which the customs value can be determined. Except
as provided in Article 4, it is only when the customs value
cannot be determined under the provisions of a particular Article
that the provisions of the next Article in the sequence can be
used.
3. If the importer does not request that the order of Articles
5 and 6 be reversed, the normal order of the sequence is to be
followed. If the importer does so request but it then proves
impossible to determine the customs value under the provisions of
Article 6, the customs value is to be determined under the
provisions of Article 5, if it can be so determined.
4. Where the customs value cannot be determined under the
provisions of Articles 1 to 6, inclusive, it is to be determined
under the provisions of Article 7.
Use of Generally Accepted Accounting Principles
1. "Generally accepted accounting principles" refers to the
recognized consensus or substantial authoritative support within
a country at a particular time as to which economic resources and
obligations should be recorded as assets and liabilities, which
changes in assets and liabilities should be recorded, how the
assets and liabilities and changes in them should be measured,
what information should be disclosed and how it should be
disclosed, and which financial statements should be prepared.
These standards may be broad guidelines of general application as
well as detailed practices and procedures.
2. For the purposes of this Agreement, the customs
administration of each Member shall utilize information prepared
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in a manner consistent with generally accepted accounting
principles in the country which is appropriate for the Article in
question. For example, the determination of usual profit and
general expenses under the provisions of Article 5 would be
carried out utilizing information prepared in a manner consistent
with generally accepted accounting principles of the country of
importation. On the other hand, the determination of usual
profit and general expenses under the provisions of Article
6 would be carried out utilizing information prepared in a manner
consistent with generally accepted accounting principles of the
country of production. As a further example, the determination
of an element provided for in paragraph 1(b)(ii) of Article 8
undertaken in the country of importation would be carried out
utilizing information in a manner consistent with the generally
accepted accounting principles of that country.
Note to Article 1
Price Actually Paid or Payable
The price actually paid or payable is the total payment made
or to be made by the buyer to or for the benefit of the seller
for the imported goods. The payment need not necessarily take
the form of a transfer of money. Payment may be made by way of
letters of credit or negotiable instruments. Payment may be made
directly or indirectly. An example of an indirect payment would
be the settlement by the buyer, whether in whole or in part, of a
debt owed by the seller.
Activities undertaken by the buyer on his own account, other
than those for which an adjustment is provided in Article 8, are
not considered to be an indirect payment to the seller, even
though they might be regarded as of benefit to the seller. The
costs of such activities shall not, therefore, be added to the
price actually paid or payable in determining the customs value.
The customs value shall not include the following charges or
costs, provided that they are distinguished from the price
actually paid or payable for the imported goods:
(a) charges for construction, erection, assembly,
maintenance or technical assistance, undertaken after
importation on imported goods such as industrial plant,
machinery or equipment;
(b) the cost of transport after importation;
(c) duties and taxes of the country of importation.
The price actually paid or payable refers to the price for
the imported goods. Thus the flow of dividends or other payments
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from the buyer to the seller that do not relate to the imported
goods are not part of the customs value.
Paragraph 1(a)(iii)
Among restrictions which would not render a price actually
paid or payable unacceptable are restrictions which do not
substantially affect the value of the goods. An example of such
restrictions would be the case where a seller requires a buyer of
automobiles not to sell or exhibit them prior to a fixed date
which represents the beginning of a model year.
Paragraph 1(b)
If the sale or price is subject to some condition or
consideration for which a value cannot be determined with respect
to the goods being valued, the transaction value shall not be
acceptable for customs purposes. Some examples of this include:
(a) the seller establishes the price of the imported goods
on condition that the buyer will also buy other goods
in specified quantities;
(b) the price of the imported goods is dependent upon the
price or prices at which the buyer of the imported
goods sells other goods to the seller of the imported
goods;
(c) the price is established on the basis of a form of
payment extraneous to the imported goods, such as where
the imported goods are semi-finished goods which have
been provided by the seller on condition that he will
receive a specified quantity of the finished goods.
However, conditions or considerations relating to the
production or marketing of the imported goods shall not result in
rejection of the transaction value. For example, the fact that
the buyer furnishes the seller with engineering and plans
undertaken in the country of importation shall not result in
rejection of the transaction value for the purposes of Article 1.
Likewise, if the buyer undertakes on his own account, even though
by agreement with the seller, activities relating to the
marketing of the imported goods, the value of these activities is
not part of the customs value nor shall such activities result in
rejection of the transaction value.
Paragraph 2
1. Paragraphs 2(a) and 2(b) provide different means of
establishing the acceptability of a transaction value.
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2. Paragraph 2(a) provides that where the buyer and the seller
are related, the circumstances surrounding the sale shall be
examined and the transaction value shall be accepted as the
customs value provided that the relationship did not influence
the price. It is not intended that there should be an
examination of the circumstances in all cases where the buyer and
the seller are related. Such examination will only be required
where there are doubts about the acceptability of the price.
Where the customs administration have no doubts about the
acceptability of the price, it should be accepted without
requesting further information from the importer. For example,
the customs administration may have previously examined the
relationship, or it may already have detailed information
concerning the buyer and the seller, and may already be satisfied
from such examination or information that the relationship did
not influence the price.
3. Where the customs administration is unable to accept the
transaction value without further inquiry, it should give the
importer an opportunity to supply such further detailed
information as may be necessary to enable it to examine the
circumstances surrounding the sale. In this context, the customs
administration should be prepared to examine relevant aspects of
the transaction, including the way in which the buyer and seller
organize their commercial relations and the way in which the
price in question was arrived at, in order to determine whether
the relationship influenced the price. Where it can be shown
that the buyer and seller, although related under the provisions
of Article 15, buy from and sell to each other as if they were
not related, this would demonstrate that the price had not been
influenced by the relationship. As an example of this, if the
price had been settled in a manner consistent with the normal
pricing practices of the industry in question or with the way the
seller settles prices for sales to buyers who are not related to
him, this would demonstrate that the price had not been
influenced by the relationship. As a further example, where it
is shown that the price is adequate to ensure recovery of all
costs plus a profit which is representative of the firm's overall
profit realized over a representative period of time (e.g. on an
annual basis) in sales of goods of the same class or kind, this
would demonstrate that the price had not been influenced.
4. Paragraph 2(b) provides an opportunity for the importer to
demonstrate that the transaction value closely approximates to a
"test" value previously accepted by the customs administration
and is therefore acceptable under the provisions of Article 1.
Where a test under paragraph 2(b) is met, it is not necessary to
examine the question of influence under paragraph 2(a). If the
customs administration has already sufficient information to be
satisfied, without further detailed inquiries, that one of the
tests provided in paragraph 2(b) has been met, there is no reason
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AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
for it to require the importer to demonstrate that the test can
be met. In paragraph 2(b) the term "unrelated buyers" means
buyers who are not related to the seller in any particular case.
Paragraph 2(b)
A number of factors must be taken into consideration in
determining whether one value "closely approximates" to another
value. These factors include the nature of the imported goods,
the nature of the industry itself, the season in which the goods
are imported, and, whether the difference in values is
commercially significant. Since these factors may vary from case
to case, it would be impossible to apply a uniform standard such
as a fixed percentage, in each case. For example, a small
difference in value in a case involving one type of goods could
be unacceptable while a large difference in a case involving
another type of goods might be acceptable in determining whether
the transaction value closely approximates to the "test" values
set forth in paragraph 2(b) of Article 1.
Note to Article 2
1. In applying Article 2, the customs administration shall,
wherever possible, use a sale of identical goods at the same
commercial level and in substantially the same quantities as the
goods being valued. Where no such sale is found, a sale of
identical goods that takes place under any one of the following
three conditions may be used:
(a) a sale at the same commercial level but in different
quantities;
(b) a sale at a different commercial level but in
substantially the same quantities; or
(c) a sale at a different commercial level and in different
quantities.
2. Having found a sale under any one of these three conditions
adjustments will then be made, as the case may be, for:
(a) quantity factors only;
(b) commercial level factors only; or
(c) both commercial level and quantity factors.
3. The expression "and/or" allows the flexibility to use the
sales and make the necessary adjustments in any one of the three
conditions described above.
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4. For the purposes of Article 2, the transaction value of
identical imported goods means a customs value, adjusted as
provided for in paragraphs 1(b) and 2 of this Article, which has
already been accepted under Article 1.
5. A condition for adjustment because of different commercial
levels or different quantities is that such adjustment, whether
it leads to an increase or a decrease in the value, be made only
on the basis of demonstrated evidence that clearly establishes
the reasonableness and accuracy of the adjustments, e.g. valid
price lists containing prices referring to different levels or
different quantities. As an example of this, if the imported
goods being valued consist of a shipment of 10 units and the only
identical imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the
seller grants quantity discounts, the required adjustment may be
accomplished by resorting to the seller's price list and using
that price applicable to a sale of 10 units. This does not
require that a sale had to have been made in quantities of 10 as
long as the price list has been established as being bona fide
through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value
under the provisions of Article 2 is not appropriate.
Note to Article 3
1. In applying Article 3, the customs administration shall,
wherever possible, use a sale of similar goods at the same
commercial level and in substantially the same quantities as the
goods being valued. Where no such sale is found, a sale of
similar goods that takes place under any one of the following
three conditions may be used:
(a) a sale at the same commercial level but in different
quantities;
(b) a sale at a different commercial level but in
substantially the same quantities; or
(c) a sale at a different commercial level and in different
quantities.
2. Having found a sale under any one of these three conditions
adjustments will then be made, as the case may be, for:
(a) quantity factors only;
(b) commercial level factors only; or
(c) both commercial level and quantity factors.
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3. The expression "and/or" allows the flexibility to use the
sales and make the necessary adjustments in any one of the three
conditions described above.
4. For the purpose of Article 3, the transaction value of
similar imported goods means a customs value, adjusted as
provided for in paragraphs 1(b) and 2 of this Article, which has
already been accepted under Article 1.
5. A condition for adjustment because of different commercial
levels or different quantities is that such adjustment, whether
it leads to an increase or a decrease in the value, be made only
on the basis of demonstrated evidence that clearly establishes
the reasonableness and accuracy of the adjustment, e.g. valid
price lists containing prices referring to different levels or
different quantities. As an example of this, if the imported
goods being valued consist of a shipment of 10 units and the only
similar imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the
seller grants quantity discounts, the required adjustment may be
accomplished by resorting to the seller's price list and using
that price applicable to a sale of 10 units. This does not
require that a sale had to have been made in quantities of 10 as
long as the price list has been established as being bona fide
through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value
under the provisions of Article 3 is not appropriate.
Note to Article 5
1. The term "unit price at which ... goods are sold in the
greatest aggregate quantity" means the price at which the
greatest number of units is sold in sales to persons who are not
related to the persons from whom they buy such goods at the first
commercial level after importation at which such sales take
place.
2. As an example of this, goods are sold from a price list
which grants favourable unit prices for purchases made in larger
quantities.
Total
Sale Unit price Number of quantity
quantity sales sold at
each price
1-10 100 10 sales of 65
units 5 units
5 sales of
3 units
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11-25 95 5 sales of 55
units 11 units
over 25 90 1 sale of 80
units 30 units
1 sale of
50 units
The greatest number of units sold at a price is 80;
therefore, the unit price in the greatest aggregate quantity is
90.
3. As another example of this, two sales occur. In the first
sale 500 units are sold at a price of 95 currency units each. In
the second sale 400 units are sold at a price of 90 currency
units each. In this example, the greatest number of units sold
at a particular price is 500; therefore, the unit price in the
greatest aggregate quantity is 95.
4. A third example would be the following situation where
various quantities are sold at various prices.
(a) Sales
Sale quantity Unit price
40 units 100
30 units 90
15 units 100
50 units 95
25 units 105
35 units 90
5 units 100
(b) Totals
Total quantity Unit price
sold
65 90
50 95
60 100
25 105
In this example, the greatest number of units sold at a
particular price is 65; therefore, the unit price in the
greatest aggregate quantity is 90.
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5. Any sale in the importing country, as described in paragraph
1 above, to a person who supplies directly or indirectly free of
charge or at reduced cost for use in connection with the
production and sale for export of the imported goods any of the
elements specified in paragraph 1(b) of Article 8, should not be
taken into account in establishing the unit price for the
purposes of Article 5.
6. It should be noted that "profit and general expenses"
referred to in paragraph 1 of Article 5 should be taken as a
whole. The figure for the purposes of this deduction should be
determined on the basis of information supplied by or on behalf
of the importer unless his figures are inconsistent with those
obtained in sales in the country of importation of imported goods
of the same class or kind. Where the importer's figures are
inconsistent with such figures, the amount for profit and general
expenses may be based upon relevant information other than that
supplied by or on behalf of the importer.
7. The "general expenses" include the direct and indirect costs
of marketing the goods in question.
8. Local taxes payable by reason of the sale of the goods for
which a deduction is not made under the provisions of
paragraph 1(a)(iv) of Article 5 shall be deducted under the
provisions of paragraph 1(a)(i) of Article 5.
9. In determining either the commissions or the usual profits
and general expenses under the provisions of paragraph 1 of
Article 5, the question whether certain goods are "of the same
class or kind" as other goods must be determined on a case-by-
case basis by reference to the circumstances involved. Sales in
the country of importation of the narrowest group or range of
imported goods of the same class or kind, which includes the
goods being valued, for which the necessary information can be
provided, should be examined. For the purposes of Article 5,
"goods of the same class or kind" includes goods imported from
the same country as the goods being valued as well as goods
imported from other countries.
10. For the purposes of paragraph 1(b) of Article 5, the
"earliest date" shall be the date by which sales of the imported
goods or of identical or similar imported goods are made in
sufficient quantity to establish the unit price.
11. Where the method in paragraph 2 of Article 5 is used,
deductions made for the value added by further processing shall
be based on objective and quantifiable data relating to the cost
of such work. Accepted industry formulas, recipes, methods of
construction, and other industry practices would form the basis
of the calculations.
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12. It is recognized that the method of valuation provided for
in paragraph 2 of Article 5 would normally not be applicable
when, as a result of the further processing, the imported goods
lose their identity. However, there can be instances where,
although the identity of the imported goods is lost, the value
added by the processing can be determined accurately without
unreasonable difficulty. On the other hand, there can also be
instances where the imported goods maintain their identity but
form such a minor element in the goods sold in the country of
importation that the use of this valuation method would be
unjustified. In view of the above, each situation of this type
must be considered on a case-by-case basis.
Note to Article 6
1. As a general rule, customs value is determined under this
Agreement on the basis of information readily available in the
country of importation. In order to determine a computed value,
however, it may be necessary to examine the costs of producing
the goods being valued and other information which has to be
obtained from outside the country of importation. Furthermore,
in most cases the producer of the goods will be outside the
jurisdiction of the authorities of the country of importation.
The use of the computed value method will generally be limited to
those cases where the buyer and seller are related, and the
producer is prepared to supply to the authorities of the country
of importation the necessary costings and to provide facilities
for any subsequent verification which may be necessary.
2. The "cost or value" referred to in paragraph 1(a) of
Article 6 is to be determined on the basis of information
relating to the production of the goods being valued supplied by
or on behalf of the producer. It is to be based upon the
commercial accounts of the producer, provided that such accounts
are consistent with the generally accepted accounting principles
applied in the country where the goods are produced.
3. The "cost or value" shall include the cost of elements
specified in paragraphs 1(a)(ii) and (iii) of Article 8. It
shall also include the value, apportioned as appropriate under
the provisions of the relevant note to Article 8, of any element
specified in paragraph 1(b) of Article 8 which has been supplied
directly or indirectly by the buyer for use in connection with
the production of the imported goods. The value of the elements
specified in paragraph 1(b)(iv) of Article 8 which are undertaken
in the country of importation shall be included only to the
extent that such elements are charged to the producer. It is to
be understood that no cost or value of the elements referred to
in this paragraph shall be counted twice in determining the
computed value.
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4. The "amount for profit and general expenses" referred to in
paragraph 1(b) of Article 6 is to be determined on the basis of
information supplied by or on behalf of the producer unless his
figures are inconsistent with those usually reflected in sales of
goods of the same class or kind as the goods being valued which
are made by producers in the country of exportation for export to
the country of importation.
5. It should be noted in this context that the "amount for
profit and general expenses" has to be taken as a whole. It
follows that if, in any particular case, the producer's profit
figure is low and his general expenses are high, his profit and
general expenses taken together may nevertheless be consistent
with that usually reflected in sales of goods of the same class
or kind. Such a situation might occur, for example, if a product
were being launched in the country of importation and the
producer accepted a nil or low profit to offset high general
expenses associated with the launch. Where the producer can
demonstrate that he is taking a low profit on his sales of the
imported goods because of particular commercial circumstances,
his actual profit figures should be taken into account provided
that he has valid commercial reasons to justify them and his
pricing policy reflects usual pricing policies in the branch of
industry concerned. Such a situation might occur, for example,
where producers have been forced to lower prices temporarily
because of an unforeseeable drop in demand, or where they sell
goods to complement a range of goods being produced in the
country of importation and accept a low profit to maintain
competitivity. Where the producer's own figures for profit and
general expenses are not consistent with those usually reflected
in sales of goods of the same class or kind as the goods being
valued which are made by producers in the country of exportation
for export to the country of importation, the amount for profit
and general expenses may be based upon relevant information other
than that supplied by or on behalf of the producer of the goods.
6. Where information other than that supplied by or on behalf
of the producer is used for the purposes of determining a
computed value, the authorities of the importing country shall
inform the importer, if the latter so requests, of the source of
such information, the data used and the calculations based upon
such data, subject to the provisions of Article 10.
7. The "general expenses" referred to in paragraph 1(b) of
Article 6 covers the direct and indirect costs of producing and
selling the goods for export which are not included under
paragraph 1(a) of Article 6.
8. Whether certain goods are "of the same class or kind" as
other goods must be determined on a case-by-case basis with
reference to the circumstances involved. In determining the
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usual profits and general expenses under the provisions of
Article 6, sales for export to the country of importation of the
narrowest group or range of goods, which includes the goods being
valued, for which the necessary information can be provided,
should be examined. For the purposes of Article 6, "goods of the
same class or kind" must be from the same country as the goods
being valued.
Note to Article 7
1. Customs values determined under the provisions of Article 7
should, to the greatest extent possible, be based on previously
determined customs values.
2. The methods of valuation to be employed under Article 7
should be those laid down in Articles 1 to 6, inclusive, but a
reasonable flexibility in the application of such methods would
be in conformity with the aims and provisions of Article 7.
3. Some examples of reasonable flexibility are as follows:
(a) Identical goods - the requirement that the identical
goods should be exported at or about the same time as
the goods being valued could be flexibly interpreted;
identical imported goods produced in a country other
than the country of exportation of the goods being
valued could be the basis for customs valuation;
customs values of identical imported goods already
determined under the provisions of Articles 5 and 6
could be used.
(b) Similar goods - the requirement that the similar goods
should be exported at or about the same time as the
goods being valued could be flexibly interpreted;
similar imported goods produced in a country other than
the country of exportation of the goods being valued
could be the basis for customs valuation; customs
values of similar imported goods already determined
under the provisions of Articles 5 and 6 could be used.
(c) Deductive method - the requirement that the goods shall
have been sold in the "condition as imported" in
paragraph 1(a) of Article 5 could be flexibly
interpreted; the "ninety days" requirement could be
administered flexibly.
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Note to Article 8
Paragraph 1(a)(i)
The term "buying commissions" means fees paid by an importer
to his agent for the service of representing him abroad in the
purchase of the goods being valued.
Paragraph 1(b)(ii)
1. There are two factors involved in the apportionment of the
elements specified in paragraph 1(b)(ii) of Article 8 to the
imported goods - the value of the element itself and the way in
which that value is to be apportioned to the imported goods. The
apportionment of these elements should be made in a reasonable
manner appropriate to the circumstances and in accordance with
generally accepted accounting principles.
2. Concerning the value of the element, if the importer
acquires the element from a seller not related to him at a given
cost, the value of the element is that cost. If the element was
produced by the importer or by a person related to him, its value
would be the cost of producing it. If the element had been
previously used by the importer, regardless of whether it had
been acquired or produced by such importer, the original cost of
acquisition or production would have to be adjusted downward to
reflect its use in order to arrive at the value of the element.
3. Once a value has been determined for the element, it is
necessary to apportion that value to the imported goods. Various
possibilities exist. For example, the value might be apportioned
to the first shipment if the importer wishes to pay duty on the
entire value at one time. As another example, the importer may
request that the value be apportioned over the number of units
produced up to the time of the first shipment. As a further
example, he may request that the value be apportioned over the
entire anticipated production where contracts or firm commitments
exist for that production. The method of apportionment used will
depend upon the documentation provided by the importer.
4. As an illustration of the above, an importer provides the
producer with a mould to be used in the production of the
imported goods and contracts with him to buy 10,000 units. By
the time of arrival of the first shipment of 1,000 units, the
producer has already produced 4,000 units. The importer may
request the customs administration to apportion the value of the
mould over 1,000 units, 4,000 units or 10,000 units.
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Paragraph 1(b)(iv)
1. Additions for the elements specified in paragraph 1(b)(iv)
of Article 8 should be based on objective and quantifiable data.
In order to minimize the burden for both the importer and customs
administration in determining the values to be added, data
readily available in the buyer's commercial record system should
be used in so far as possible.
2. For those elements supplied by the buyer which were
purchased or leased by the buyer, the addition would be the cost
of the purchase or the lease. No addition shall be made for
those elements available in the public domain, other than the
cost of obtaining copies of them.
3. The ease with which it may be possible to calculate the
values to be added will depend on a particular firm's structure
and management practice, as well as its accounting methods.
4. For example, it is possible that a firm which imports a
variety of products from several countries maintains the records
of its design centre outside the country of importation in such a
way as to show accurately the costs attributable to a given
product. In such cases, a direct adjustment may appropriately be
made under the provisions of Article 8.
5. In another case, a firm may carry the cost of the design
centre outside the country of importation as a general overhead
expense without allocation to specific products. In this
instance, an appropriate adjustment could be made under the
provisions of Article 8 with respect to the imported goods by
apportioning total design centre costs over total production
benefiting from the design centre and adding such apportioned
cost on a unit basis to imports.
6. Variations in the above circumstances will, of course,
require different factors to be considered in determining the
proper method of allocation.
7. In cases where the production of the element in question
involves a number of countries and over a period of time, the
adjustment should be limited to the value actually added to that
element outside the country of importation.
Paragraph 1(c)
1. The royalties and licence fees referred to in paragraph 1(c)
of Article 8 may include, among other things, payments in respect
to patents, trade marks and copyrights. However, the charges for
the right to reproduce the imported goods in the country of
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importation shall not be added to the price actually paid or
payable for the imported goods in determining the customs value.
2. Payments made by the buyer for the right to distribute or
resell the imported goods shall not be added to the price
actually paid or payable for the imported goods if such payments
are not a condition of the sale for export to the country of
importation of the imported goods.
Paragraph 3
Where objective and quantifiable data do not exist with
regard to the additions required to be made under the provisions
of Article 8, the transaction value cannot be determined under
the provisions of Article 1. As an illustration of this, a
royalty is paid on the basis of the price in a sale in the
importing country of a litre of a particular product that was
imported by the kilogram and made up into a solution after
importation. If the royalty is based partially on the imported
goods and partially on other factors which have nothing to do
with the imported goods (such as when the imported goods are
mixed with domestic ingredients and are no longer separately
identifiable, or when the royalty cannot be distinguished from
special financial arrangements between the buyer and the seller),
it would be inappropriate to attempt to make an addition for the
royalty. However, if the amount of this royalty is based only on
the imported goods and can be readily quantified, an addition to
the price actually paid or payable can be made.
Note to Article 9
For the purposes of Article 9, "time of importation" may
include the time of entry for customs purposes.
Note to Article 11
1. Article 11 provides the importer with the right to appeal
against a valuation determination made by the customs
administration for the goods being valued. Appeal may first be
to a higher level in the customs administration, but the importer
shall have the right in the final instance to appeal to the
judiciary.
2. "Without penalty" means that the importer shall not be
subject to a fine or threat of fine merely because he chose to
exercise his right of appeal. Payment of normal court costs and
lawyers' fees shall not be considered to be a fine.
3. However, nothing in Article 11 shall prevent a Member from
requiring full payment of assessed customs duties prior to an
appeal.
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Note to Article 15
Paragraph 4
For the purposes of this Article, the term "persons"
includes legal person, where appropriate.
Paragraph 4(e)
For the purposes of this Agreement, one person shall be
deemed to control another when the former is legally or
operationally in a position to exercise restraint or direction
over the latter.
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ANNEX II
TECHNICAL COMMITTEE ON CUSTOMS VALUATION
1. In accordance with Article 18 of this Agreement, the
Technical Committee shall be established under the auspices of
the CCC with a view, at the technical level, towards uniformity
in interpretation and application of this Agreement.
2. The responsibilities of the Technical Committee shall
include the following:
(a) to examine specific technical problems arising in the
day-to-day administration of the customs valuation
system of Members and to give advisory opinions on
appropriate solutions based upon the facts presented;
(b) to study, as requested, valuation laws, procedures and
practices as they relate to this Agreement and to
prepare reports on the results of such studies;
(c) to prepare and circulate annual reports on the
technical aspects of the operation and status of this
Agreement;
(d) to furnish such information and advice on any matters
concerning the valuation of imported goods for customs
purposes as may be requested by any Member or the
Committee. Such information and advice may take the
form of advisory opinions, commentaries or explanatory
notes;
(e) to facilitate, as requested, technical assistance to
Members with a view to furthering the international
acceptance of this Agreement;
(f) to carry out an examination of a matter referred to it
by a panel under Article 19 of this Agreement; and
(g) to exercise such other responsibilities as the
Committee may assign to it.
General
3. The Technical Committee shall attempt to conclude its work
on specific matters, especially those referred to it by Members,
the Committee or a panel, in a reasonably short period of time.
As provided in paragraph 4 of Article 19, a panel shall set a
specific time period for receipt of a report of the Technical
Committee and the Technical Committee shall provide its report
within that period.
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4. The Technical Committee shall be assisted as appropriate in
its activities by the Secretariat of the CCC.
Representation
5. Each Member shall have the right to be represented on the
Technical Committee. Each Member may nominate one delegate and
one or more alternates to be its representatives on the Technical
Committee. Such a Member so represented on the Technical
Committee is hereinafter referred to as a member of the Technical
Committee. Representatives of members of the Technical Committee
may be assisted by advisers. The MTO Secretariat may also attend
such meetings with observer status.
6. Members of the CCC who are not Members of the MTO may be
represented at meetings of the Technical Committee by one
delegate and one or more alternates. Such representatives shall
attend meetings of the Technical Committee as observers.
7. Subject to the approval of the Chairman of the Technical
Committee, the Secretary-General of the CCC (hereinafter referred
to as "the Secretary-General") may invite representatives of
governments which are neither Members of the MTO nor members of
the CCC and representatives of international governmental and
trade organizations to attend meetings of the Technical Committee
as observers.
8. Nominations of delegates, alternates and advisers to
meetings of the Technical Committee shall be made to the
Secretary-General.
Technical Committee Meetings
9. The Technical Committee shall meet as necessary but at least
two times a year. The date of each meeting shall be fixed by the
Technical Committee at its preceding session. The date of the
meeting may be varied either at the request of any member of the
Technical Committee concurred in by a simple majority of the
members of the Technical Committee or, in cases requiring urgent
attention, at the request of the Chairman. Notwithstanding the
provisions in sentence 1 of this paragraph, the Technical
Committee shall meet as necessary to consider matters referred to
it by a panel under the provisions of Article 19 of this
Agreement.
10. The meetings of the Technical Committee shall be held at the
headquarters of the CCC unless otherwise decided.
11. The Secretary-General shall inform all members of the
Technical Committee and those included under paragraphs 6 and 7
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AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
at least thirty days in advance, except in urgent cases, of the
opening date of each session of the Technical Committee.
Agenda
12. A provisional agenda for each session shall be drawn up by
the Secretary-General and circulated to the members of the
Technical Committee and to those included under paragraphs 6 and
7 at least thirty days in advance of the session, except in
urgent cases. This agenda shall comprise all items whose
inclusion has been approved by the Technical Committee during its
preceding session, all items included by the Chairman on his own
initiative, and all items whose inclusion has been requested by
the Secretary-General, by the Committee or by any member of the
Technical Committee.
13. The Technical Committee shall determine its agenda at the
opening of each session. During the session the agenda may be
altered at any time by the Technical Committee.
Officers and Conduct of Business
14. The Technical Committee shall elect from among the delegates
of its members a Chairman and one or more Vice-Chairmen. The
Chairman and Vice-Chairmen shall each hold office for a period of
one year. The retiring Chairman and Vice-Chairmen are eligible
for re-election. A Chairman or Vice-Chairman who ceases to
represent a member of the Technical Committee shall automatically
lose his mandate.
15. If the Chairman is absent from any meeting or part thereof,
a Vice-Chairman shall preside. In that event, the latter shall
have the same powers and duties as the Chairman.
16. The Chairman of the meeting shall participate in the
proceedings of the Technical Committee as such and not as the
representative of a member of the Technical Committee.
17. In addition to exercising the powers conferred upon him
elsewhere by these rules, the Chairman shall declare the opening
and closing of each meeting, direct the discussion, accord the
right to speak, and, pursuant to these rules, have control of the
proceedings. The Chairman may also call a speaker to order if
his remarks are not relevant.
18. During discussion of any matter a delegation may raise a
point of order. In this event, the Chairman shall immediately
state his ruling. If this ruling is challenged, the Chairman
shall submit it to the meeting for decision and it shall stand
unless overruled.
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19. The Secretary-General, or officers of the Secretariat
designated by him, shall perform the secretarial work of meetings
of the Technical Committee.
Quorum and Voting
20. Representatives of a simple majority of the members of the
Technical Committee shall constitute a quorum.
21. Each member of the Technical Committee shall have one vote.
A decision of the Technical Committee shall be taken by a
majority comprising at least two thirds of the members present.
Regardless of the outcome of the vote on a particular matter, the
Technical Committee shall be free to make a full report to the
Committee and to the CCC on that matter indicating the different
views expressed in the relevant discussions. Notwithstanding the
above provisions of this paragraph, on matters referred to it by
a panel, the Technical Committee shall take decisions by
consensus. Where no agreement is reached in the Technical
Committee on the question referred to it by a panel, the
Technical Committee shall provide a report detailing the facts of
the matter and indicating the views of the members.
Languages and Records
22. The official languages of the Technical Committee shall be
English, French and Spanish. Speeches or statements made in any
of these three languages shall be immediately translated into the
other official languages unless all delegations agree to dispense
with translation. Speeches or statements made in any other
language shall be translated into English, French and Spanish,
subject to the same conditions, but in that event the delegation
concerned shall provide the translation into English, French or
Spanish. Only English, French and Spanish shall be used for the
official documents of the Technical Committee. Memoranda and
correspondence for the consideration of the Technical Committee
must be presented in one of the official languages.
23. The Technical Committee shall draw up a report of all its
sessions and, if the Chairman considers it necessary, minutes or
summary records of its meetings. The Chairman or his designee
shall report on the work of the Technical Committee at each
meeting of the Committee and at each meeting of the CCC.
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ANNEX III
1. The five-year delay in the application of the provisions of
the Agreement by developing country Members provided for in
paragraph 1 of Article 20 may, in practice, be insufficient for
certain developing country Members. In such cases a developing
country Member may request before the end of the period referred
to in paragraph 1 of Article 20 an extension of such period, it
being understood that the Members will give sympathetic
consideration to such a request in cases where the developing
country Member in question can show good cause.
2. Developing countries which currently value goods on the
basis of officially established minimum values may wish to make a
reservation to enable them to retain such values on a limited and
transitional basis under such terms and conditions as may be
agreed to by the Members.
3. Developing countries which consider that the reversal of the
sequential order at the request of the importer provided for in
Article 4 of the Agreement may give rise to real difficulties for
them may wish to make a reservation to Article 4 in the following
terms:
"The Government of ............. reserves the right to
provide that the relevant provision of Article 4 of the
Agreement shall apply only when the customs authorities
agree to the request to reverse the order of Articles 5 and
6."
If developing countries make such a reservation, the Members
shall consent to it under Article 21 of the Agreement.
4. Developing countries may wish to make a reservation with
respect to paragraph 2 of Article 5 of the Agreement in the
following terms:
"The Government of ............ reserves the right to
provide that paragraph 2 of Article 5 of the Agreement shall
be applied in accordance with the provisions of the relevant
note thereto whether or not the importer so requests."
If developing countries make such a reservation, the Members
shall consent to it under Article 21 of the Agreement.
5. Certain developing country Members have expressed concern
that there may be problems in the implementation of Article 1 of
the Agreement insofar as it relates to importations into their
countries by sole agents, sole distributors and sole
concessionaires. If such problems arise in practice in
developing country Members applying the Agreement, a study of
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this question shall be made, at the request of such Members, with
a view to finding appropriate solutions.
6. Article 17 recognizes that in applying the Agreement,
customs administrations may need to make enquiries concerning the
truth or accuracy of any statement, document or declaration
presented to them for customs valuation purposes. The Article
thus acknowledges that enquiries may be made which are, for
example, aimed at verifying that the elements of value declared
or presented to customs in connection with a determination of
customs value are complete and correct. Members, subject to
their national laws and procedures, have the right to expect the
full co-operation of importers in these enquiries.
7. The price actually paid or payable includes all payments
actually made or to be 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.