Customs valuation of goods

Category: International Trade Sub-category: Customs
Document type: article

Customs valuation of goods

The WTO Valuation Agreement (the Agreement)

The Agreement provides a Customs valuation system that primarily bases the Customs value on the transaction value of the imported goods, which is the price actually paid or payable for the goods when sold for export to the country of importation, with certain adjustments. In cases where the Customs value cannot be determined using the transaction value, it will be determined using one of the following methods :

The transaction value of identical goods ;
The transaction value of similar goods ;
The deductive value method ;
The computed value method ;
The fall-back method.

The above valuation methods must be used in hierarchical order.

Benefits of implementing the Agreement

The Agreement is intended to provide a single system that is fair ,uniform and neutral for the valuation of imported goods for Customs purposes, conforming to commercial realities and outlawing the use of arbitrary or fictitious Customs values. The Agreement, by its positive concept of value, recognizes that Customs valuation should, as far as possible, be based on the actual price of the goods to be valued. With the majority of world trade valued on the basis of the transaction value method, the Agreement provides more predictability, stability and transparency for trade, thus facilitating international ltrade while at the same time ensuring compliance with national laws and regulations.

The role of the WCO

The WCO Strategic Plan has two goals in its focus area of having the WTO Valuation Agreement implemented by its Members.
These are :
To assist least developed and developing country Members to fully implement the WTO Valuation Agreement.
To encourage Members to interpret and apply the WTO Valuation Agreement in a uniform, predictable and transparent manner.

The Technical Committee on Customs Valuation

The WTO Valuation Agreement mandates the WCO to administer this instrument, through its Technical Committee on Customs Valuation. The responsibility of the Technical Committee, which meets twice a year, is to ensure uniformity in the interpretation and application of the Agreement at the technical level. The Technical Committee maintains a close working relationship with the WTO Committee on Customs Valuation which manages all trade policy aspects of the Agreement. The major responsibilities of the Technical Committee are :

• To examine specific technical problems arising from the day-to-day administration of the Customs valuation systems of Members and to give advisory opinions on appropriate solutions based upon the facts presented. Its decisions are issued in the form of Advisory Opinions, Commentaries, Case Studies, Studies, etc., which are published in the WCO’s Compendium of Customs Valuation ;

• To furnish information and advice on questions concerning the valuation of imported.