World Trade Organisation Valuation Agreement

The Agreement established a Committee on Customs Valuation composed of representatives of the various WTO Member States. This Committee shall meet at least once a year and shall give members the opportunity to consult each other on matters relating to the management of the Customs valuation system. The agreement also established a Technical Committee on Customs Valuation under the auspices of the World Customs Organization, an international organization based in Brussels whose objective is to promote international cooperation in customs matters. The tasks of the Technical Committee, which meets at least twice a year, include: examining specific technical issues arising in the day-to-day management of the Agreement; the preparation of expert opinions and appropriate solutions to these problems; study of the evaluation laws, procedures and practices of member countries; and to provide information and advice on all matters relating to customs valuation that may be requested by Member States. It is also true that some countries continue to face implementation challenges such as those mentioned above. However, the WTO`s most recent agreement, the Trade Facilitation Agreement, offers WTO members an important opportunity to strengthen their implementation of stroke. The two agreements are closely linked. The TFA contains provisions on all elements of customs modernisation necessary for the effective implementation of the CVA: publication of customs laws and regulations, request for consultations with the private sector, implementation of preliminary rulings (encouraged to be assessed), risk management, including the value of goods, appeal or inspection procedures, release of goods under warranty, customs clearance inspection and customs cooperation. To implement the TFA, a country must be able to implement stroke. The Tokyo Round of Customs Valuation Negotiations was to achieve a fair, uniform and neutral value standard that excludes the use of arbitrary or fictitious values, corresponds to trade realities and does not constitute an obstacle to trade.2 After difficult negotiations between developed and developing countries, an agreement has been reached. The WTO Agreement on Evaluation is officially known as the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT) 1994.

It replaced the GATT Valuation Code following the Uruguay Round of multilateral trade negotiations, which established the WTO in 1994. The methods of customs valuation in descending order of priority are as follows: Last but not least, the existence of a large informal sector leads to serious verification problems and imposes a high administrative burden on customs administrations. For them, it is often impossible to apply the transaction value method or even one of the alternative valuation methods. The situation is exacerbated by the fact that in most countries with a large informal sector, there is no mechanism for the exchange of information between importing and exporting countries. The lack of understanding of value for duty and its supporting procedures is one of the engagement achievements of page 156 and exacerbates integrity issues. Customs valuation systems have been the subject of international agreements as they can constitute barriers to trade. The Customs Valuation Agreement (LCA) of the World Trade Organization (WTO) requires the application of the CVA for all WTO Members. The LCA indicates that the customs value of the imported goods is, as far as possible, the transaction value, i.e.

the price actually paid or payable for the goods. Despite extensive technical assistance, many developing countries have not adequately implemented the WTO standard of assessment. In cases where it is not possible to determine the transaction value of the imported goods, the agreement provides for alternative methods of valuation. The first alternative is to set the customs value on the basis of the transaction value of identical goods sold for export to the same country. In the absence of identical goods, customs authorities shall use the transaction value of like goods sold for export to the same country. Where identical or similar goods are not sold for export to the same country, the value of identical or similar goods sold in the importing country may be used. Alternatively, a calculated value can be used; The agreement describes how this value is to be calculated. In the event of failure, the customs authorities shall use “appropriate means consistent with the principles and general provisions of this Agreement” to determine the value of the imported goods. Evaluation rules and related issues must not only be understood, but also applied in a consistent and standardized manner. This will give traders the assurance that they will be treated correctly and fairly, and as a result, they will be more inclined to abide by the rules. The adoption of measures to develop an informed and engaged private sector is also essential, as this will facilitate and promote voluntary compliance with the evaluation rules.

Regular dialogue is particularly important with representatives of dealer associations and the industry, as it puts them in a better position to contribute to improving the level of compliance of their members. This would also be beneficial for Customs, as regular and open communication provides a better understanding of the challenges faced by the private sector with regard to certain aspects of valuation. The Tokyo Round Code was replaced by the WTO Agreement on Implementation of Gatt Article VII in 1994 following the conclusion of the Uruguay Round. This Agreement is essentially the same as the Tokyo Round Valuation Code and applies only to the valuation of imported products for the purpose of imposing ad valorem duties on those products. It does not contain valuation obligations for the purpose of fixing export duties or administering quotas on the basis of the value of the goods, nor does it lay down conditions for the valuation of goods for the purposes of internal tax or exchange control. Most import duties are based on ad valorem duties, i.e. a rate expressed as a percentage of the value of the imported product. The customs value is the determination of the amount on the basis of which the rate of duty is calculated.1 Although these rates are clearly defined by law in a tariff regime, the declared value of imported goods may vary from one transaction to another. This has three important implications for tariff policy. First, an importer may under-invoice and not declare the total value of the shipment in order to reduce their customs obligations. If under-invoicing is not detected, government revenue is lost and the importer gains an unfair advantage over its competitors.

Second, governments can use the valuation system to increase or decrease customs commitments for revenue or protection purposes, thereby offsetting tariff concessions under multilateral or bilateral trade agreements. Third, undervaluation and overvaluation are used for capital flight. Administrations should also have the appropriate infrastructure. The establishment of separate Customs units to deal with valuation issues is beneficial for the development of Customs infrastructure, as is the establishment of national technical committees and Customs valuation policy committees responsible for legislation and regulations. These committees play a role in building capacity and expertise in the field of evaluation and in the consistent application of evaluation laws and regulations at the national level. For importers, the process of estimating the value of a product for customs raises problems that can be as serious as the rate of duty in rem. The WTO Customs Valuation Agreement aims at a fair, uniform and neutral system of valuation of goods for customs purposes, one that corresponds to economic circumstances and prohibits the use of arbitrary or fictitious customs values. .