21979A0412(09)
Multilateral Agreements resulting from the trade negotiations of
1973-1979 (GATT) - Agreement on implementation of Article VII of the
General Agreement on tariffs and trade
Greek special edition ....: Chapter 11 Volume 19 p. 110
Spanish special edition...: Chapter 11 Volume 12 p. 143
Portuguese special edition Chapter 11 Volume 12 p. 143
Finnish special edition....: Chapter 11 Volume 9 p. 109
Swedish special edition...: Chapter 11 Volume 9 p. 109
Dates:
OF DOCUMENT: 10/12/1979
OF EFFECT: 01/01/1981; ENTRY INTO FORCE SEE ART 24
OF SIGNATURE: 17/12/1979; GENEVA
OF END OF VALIDITY: 99/99/9999
Authentic language: FRENCH ; ENGLISH ; SPANISH
Author:
EUROPEAN ECONOMIC COMMUNITY
Subject matter: EXTERNAL RELATIONS ; COMMERCIAL POLICY ; GATT
Directory code: 02700000 ; 11301010
EUROVOC descriptor: EC agreement ; GATT ; customs duties ;
international trade ; customs valuation
Legal basis:
157E113................... ADOPTION
Amended by:
IMPLEMENTED-BY 380D0271.......... IMPLEMENT. FR 10/12/79
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE GENERAL AGREEMENT
ON TARIFFS AND TRADE
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 Article 5 (1) 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.
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.
PREAMBLE
Having regard to the multilateral trade negotiations, THE PARTIES TO
THIS AGREEMENT (hereinafter referred to as "Parties"),
DESIRING to further the objectives of the General Agreement on
tariffs and trade (hereinafter referred to as "General Agreement" or
"GATT") and to secure additional benefits for the international
trade of developing countries;
RECOGNIZING the importance of the provisions of Article VII of the
General Agreement 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
valutation 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:
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, 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, 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 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;
(iv) the transaction value in sales to unrelated buyers for export
to the same country of importation of goods which would be identical
to the imported goods except for having a different country of
production provided that the sellers in any two transactions being
compared are not related.
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 test set forth in paragraph 2 (b) 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).
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 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 Article 8 (2) 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 refereed to in Article 8 (2) 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.
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
Article 8 (2) ; 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
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 90 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 Party under Article 8 (2).
2. No Party 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.
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 General Agreement 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,
(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 Party 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.
3. Additions to the price actually paid or payable shall be made
under this Article only on the basis of objective and quantifyable
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
Party.
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 Party 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 Party 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.
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 General Agreement 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
Party 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 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 Article 8 (1) (b) (iv) 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
business;
(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 % 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.
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, CONSULTATION AND DISPUTE SETTLEMENT
Institutions
Article 18
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 Parties. 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 Parties the opportunity to
consult on matters relating to the administration of the customs
valuation system by any Party 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 Parties.
The GATT 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
Cooperation Council, 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.
Consultation
Article 19
1. If any Party 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 Party or of other
Parties, it may, with a view to reaching a mutually satisfactory
solution of the matter, request consultations with the Party or
Parties in question. Each Party shall afford sympathetic
consideration to any request from another Party for consultations.
3. Parties engaged in consultations on a particular matter affecting
the operation of this Agreement shall attempt to conclude such
consultations within a reasonably short period of time. The
Technical Committee shall provide, upon request, advice and
assistance to Parties engaged in consultations.
Dispute settlement
Article 20
1. If no mutually satisfactory solution has been reached between the
Parties concerned in consultations under Article 19 above, the
Committee shall meet at the request of any party to the dispute,
within 30 days of receipt of such a request, to investigate the
matter, with a view to facilitating a mutually satisfactory
solution.
2. In investigating the matter and in selecting its procedures, the
Committee shall take into account whether the issues in dispute
relate to commercial policy considerations or to questions requiring
detailed technical consideration. The Committee may request on its
own initiative that the Technical Committee carry out an
examination, as provided in paragraph 4 below, of any question
requiring technical consideration. Upon the request of any party to
the dispute that considers the issues to relate to questions of a
technical nature, the Committee shall request the Technical
Committee to carry out such an examination.
3. During any phase of a dispute settlement procedure, competent
bodies and experts in matters under consideration may be consulted ;
appropriate information and assistance may be requested from such
bodies and experts. The Committee shall take into consideration the
results of any work of the Technical Committee that pertain to the
matter in dispute.
Technical issues
4. When the Technical Committee is requested under the provisions of
paragraph 2 above, it shall examine the matter and report to the
Committee no later than three months from the date the technical
issue was referred to it, unless the period is extended by mutual
agreement between the parties to the dispute.
Panel proceedings
5. In cases where the matter is not referred to the Technical
Committee, the Committee shall establish a panel upon the request of
any party to the dispute if no mutually satisfactory solution has
been reached within three months from the date of the request to the
Committee to investigate the matter. Where the matter is referred to
the Technical Committee, the Committee shall establish a panel upon
the request of any party to the dispute if no mutually satisfactory
solution has been reached within one month from the date when the
Technical Committee presents its report to the Committee.
6. (a) When a panel is established, it shall be governed by the
procedures as set forth in Annex III.
(b) If the Technical Committee has made a report on the technical
aspects of the matter in dispute, the panel shall use this report as
the basis for its consideration of the technical aspects of the
matter in dispute.
Enforcement
7. After the investigation is completed or after the report of the
Technical Committee or panel is presented to the Committee, the
Committee shall give the matter prompt consideration. With respect
to panel reports, the Committee shall take appropriate action
normally within 30 days of receipt of the report. Such action shall
include: (i) a statement concerning the facts of the matter ; and
(ii) recommendations to one or more Parties or any other ruling
which it deems appropriate.
8. If a Party to which recommendations are addressed considers
itself unable to implement them, it should promptly furnish reasons
in writing to the Committee. In that event, the Committee shall
consider what further action may be appropriate.
9. If the Committee considers that the circumstances are serious
enough to justify such action, it may authorize one or more Parties
to suspend the application to any other Party or Parties of such
obligations under this Agreement as it determines to be appropriate
in the circumstances.
10. The Committee shall keep under surveillance any matter on which
it has made recommendations or given rulings.
11. If a dispute arises between Parties relating to rights and
obligations under this Agreement, Parties should complete the
dispute settlement procedures under this Agreement before availing
themselves of any rights which they have under the GATT, including
invoking Article XXIII thereof.
PART III SPECIAL AND DIFFERENTIAL TREATMENT
Article 21
1. Developing country Parties may delay application of its
provisions for a period not exceeding five years from the date of
entry into force of this Agreement for such countries. Developing
country Parties who choose to delay application of this Agreement
shall notify the Director-General to the Contracting Parties to the
GATT accordingly.
2. In addition to paragraph 1 above, developing country Parties may
delay application of Article 1 (2) (b) (iii) and Article 6 for a
period not exceeding three years following their application of all
other provisions of this Agreement. Developing country Parties that
choose to delay application of the provisions specified in this
paragraph shall notify the Director-General to the Contracting
Parties to the GATT accordingly.
3. Developed country Parties shall furnish, on mutually agreed
terms, technical assistance to developing country Parties that so
request. On this basis developed country Parties 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
Acceptance and accession
Article 22
1. This Agreement shall be open for acceptance by signature or
otherwise by Government Contracting Parties to the GATT and by the
European Economic Community.
2. This Agreement shall be open for acceptance by signature or
otherwise by governments having provisionally acceded to the GATT,
on terms related to the effective application of rights and
obligations under this Agreement, which take into account rights and
obligations in the instruments providing for their provisional
accession.
3. This Agreement shall be open to accession by any other government
on terms, related to the effective application of rights and
obligations under this Agreement, to be agreed between that
government and the Parties, by the deposit with the Director-General
to the Contracting Parties to the GATT of an instrument of accession
which states the terms so agreed.
4. In regard to acceptance, the provisions of Article XXVI (5) (a)
and (b) of the General Agreement would be applicable.
Reservations
Article 23
Reservations may not be entered in respect of any of the provisions
of this Agreement without the consent of the other Parties.
Entry into force
Article 24
This Agreement shall enter into force on 1 January 1981 for the
governments (1) which have accepted or acceded to it by that date.
For each other government it shall enter into force on the 30th day
following the date of its acceptance or accession to this Agreement.
National legislation
Article 25
1. Each government accepting or acceding to this Agreement shall
ensure, not later than the date of entry into force of this
Agreement for it, the conformity of its laws, regulations and
administrative procedures with the provisions of this Agreement.
(1)The term "governments" is deemed to include the competent
authorities of the European Economic Community.
2. Each Party 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.
Review
Article 26
The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof. The
Committee shall annually inform the Contracting Parties to the GATT
of developments during the period covered by such reviews.
Amendments
Article 27
The Parties may amend this Agreement, having regard inter alia to
the experience gained in its implementation. Such an amendment, once
the Parties have concurred in accordance with procedures established
by the Committee, shall not come into force for any Party until it
has been accepted by such Party.
Withdrawal
Article 28
Any Party may withdraw from this Agreement. The withdrawal shall
take effect upon the expiration of 60 days from the date on which
written notice of withdrawal is received by the Director-General to
the Contracting Parties to the GATT. Any Party may, upon the receipt
of such notice, request an immediate meeting of the Committee.
Secretariat
Article 29
This Agreement shall be serviced by the GATT secretariat except in
regard to those responsibilities specifically assigned to the
Technical Committee, which will be serviced by the secretariat of
the Customs Cooperation Council.
Deposit
Article 30
This Agreement shall be deposited with the Director-General to the
Contracting Parties to the GATT, who shall promptly furnish to each
Party and each contracting party to the GATT a certified copy
thereof and of each amendment thereto pursuant to Article 27, and a
notification of each acceptance thereof or accession thereto
pursuant to Article 22 and of each withdrawal therefrom pursuant to
Article 28.
Registration
Article 31
This Agreement shall be registered in accordance with the provisions
of Article 102 of the Charter of the United Nations.
Done at Geneva this twelfth day of April nineteen hundred and
seventy-nine in a single copy, in the English, French and Spanish
languages, each text being authentic.
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 party shall utilize information prepared 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 Article 8 (1) (b) (ii)
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 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 (b) provide different means of establishing
the acceptability of a transaction value.
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 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 Article 1 (2) (b).
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.
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 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 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.
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 purposes 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.
>PIC FILE= "T0012129">
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. >PIC FILE= "T0012156">
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.
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 Article 8 (1) (b), 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 Article 5.1 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 obtaining 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.
8. Local taxes payable by reason of the sale of the goods for which
a deduction is not made under the provisions of Article 5 (1) (a)
(iv) shall be deducted under the provisions of Article 5 (1) (a)
(i).
9. In determining either the Commissions or the usual profits and
general expenses under the provisions of Article 5 (1), 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 Article 5 (1) (b), 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 Article 5 (2) 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.
12. It is recognized that the method of valuation provided for in
Article 5 (2) 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 Article 6 (1) (a) 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 Article 8 (1) (a) (ii) and (iii). It shall also include the
value, apportioned as appropriate under the provisions of the
relevant note to Article 8, of any element specified in Article 8
(1) (b) 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 Article 8 (1) (b) (iv) 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.
4. The "amount for profit and general expenses" referred to in
Article 6 (1) (b) 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 Article 6 (1) (b) covers
the direct and indirect costs of producing and selling the goods for
export which are not included under Article 6 (1) (a).
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 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 Article 5 (1) (a) could
be flexibly interpreted ; the "90 days" requirement could be
administered flexibly.
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 Article 8 (1) (b) (ii) 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 fist 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.
Paragraph 1 (b) (iv)
1. Additions for the elements specified in Article 8 (1) (b) (iv)
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 case with which it may be possible to calculate the values to
be added will depend on a particular fim'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 Article 8 (1) (c)
may include, among other things, payments in respect to patents,
trademarks and copyrights. However, the charges for the right to
reproduce the imported goods in the country of 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 Party from
requiring full payment of assessed customs duties prior to an
appeal.
Note to Article 15
Paragraph 4
For the purposes of this Article, the term "persons" includes legal
persons, 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.
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 Customs
Cooperation Council 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 systems of
Parties 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 Party 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 Parties
with a view to furthering the international acceptance of this
Agreement ; and
(f) 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 Parties or the
Committee, in a reasonably short period of time.
4. The Technical Committee shall be assisted as appropriate in its
activities by the Secretariat of the Customs Cooperation Council.
Representation
5. Each Party shall have the right to be represented on the
Technical Committee. Each Party may nominate one delegate and one or
more alternates to be its representatives on the Technical
Committee. Such a Party 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 GATT secretariat may also attend such
meetings with observer status.
6. Members of the Customs Cooperation Council who are not Parties
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 Customs Cooperation Council
(hereinafter referred to as "the Secretary-General") may invite
representatives of governments which are neither Parties nor members
of the Customs Cooperation Council 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.
10. The meetings of the Technical Committee shall be held at the
headquarters of the Customs Cooperation Council unless otherwise
decided.
11. The Secretary-General shall inform all members of the Technical
Committee and those included under paragraphs 6 and 7 at least 30
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 30
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 sessions, 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 decisions and it shall stand unless overruled.
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 Customs Cooperation Council on that matter indicating the
different views expressed in the relevant discussions.
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 Customs Cooperation Council.
ANNEX III "Ad hoc" panels
1. Ad hoc panels established by the Committee under this Agreement
shall have the following responsibilities: (a) to examine the matter
referred to it by the Committee;
(b) to consult with the parties to the dispute and give full
opportunity for them to develop a mutually satisfactory solution ;
and
(c) to make a statement concerning the facts of the matter as they
relate to the application of the provisions of this Agreement and,
make such findings as will assist the Committee in making
recommendations or giving rulings on the matter.
2. In order to facilitate the constitution of panels, the chairman
of the Committee shall maintain an informal indicative list of
government officials knowledgeable in the area of customs valuation
and experienced in the field of trade relations and economic
development. This list may also include persons other than
government officials. In this connection, each Party shall be
invited to indicate at the beginning of every year to the chairman
of the Committee the name(s) of the one or two governmental experts
whom the Parties would be willing to make available for such work.
When a panel is established, the chairman, after consultation with
the Parties concerned, shall, within seven days of such
establishment propose the composition of the panel consisting of
three or five members and preferably government officials. The
Parties directly concerned shall react within seven working days to
nominations of panel members by the chairman and shall not oppose
nominations except for compelling reasons.
Citizens of countries whose governments are parties to a dispute
shall not be eligible for membership of the panel concerned with
that dispute. Panel members shall serve in their individual
capacities and not as government representatives, nor as
representatives of any organization. Governments or organizations
shall therefore not give them instructions with regard to matters
before a panel.
3. Each panel shall develop its own working procedures. All Parties
having a substantial interest in the matter and having notified this
to the Committee shall have an opportunity to be heard. Each panel
may consult and seek information and technical advice from any
source it deems appropriate. Before a panel seeks such information
or technical advice from a source within the jurisdiction of a
Party, it shall inform the government of that Party. Any Party shall
respond promptly and fully to any request by a panel for such
information as the panel considers necessary and appropriate.
Confidential information provided to the panel shall not be
disclosed without the specific permission of the person or
government 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 the
information, authorized by the person or government providing the
information, will be provided.
4. Where the parties to the dispute have failed to reach a
satisfactory solution, the panel shall submit its findings in
writing. The report of a panel should normally set out the rationale
behind its findings. Where a settlement of the matter is reached
between the parties, the report of the panel may be confined to a
brief description of the dispute and to a statement that a solution
has been reached.
5. Panels shall use such report of the Technical Committee as may
have been issued under Article 20 (4) of this Agreement as the basis
for their consideration of issues that involve questions of a
technical nature.
6. The time required by panels will vary with the particular case.
They should aim to deliver their findings, and where appropriate,
recommendations, to the Committee without undue delay, normally
within a period of three months from the date that the panel was
established.
7. To encourage development of mutually satisfactory solutions
between the parties to a dispute and with a view to obtaining their
comments, each panel should first submit the descriptive part of its
report to the Parties concerned, and should subsequently submit to
the parties to the dispute its conclusions, or an outline thereof, a
reasonable period of time before they are circulated to the Parties.
PROTOCOL TO THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE
The Parties to the Agreement on implementation of Article VII of the
General Agreement on tariffs and trade (hereinafter referred to as
"the Agreement"),
Having regard to the multilateral trade negotiations and to the
desire expressed by the Trade Negotiations Committee at its meeting
of 11 and 12 April 1979 to arrive at a single text of an Agreement
on implementation of Article VII of the General Agreement of tariffs
and trade;
Recognizing that developing countries may have particular problems
in applying the Agreement;
Considering that the provisions of Article 27 of the Agreement
relating to amendments have not yet entered into force;
Hereby:
I
2. Recognize that the five-year delay in the application of the
provisions of the Agreement by developing countries provided for in
Article 21 (1) may, in practice, be insufficient for certain
developing countries. In such cases a developing country Party to
the Agreement may request before the end of the period referred to
in Article 21 (1) an extension of such period, it being understood
that the Parties to the Agreement will give sympathetic
consideration to such a request in cases where the developing
country in question can show good cause;
3. Recognize that 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 Parties to the Agreement;
4. Recognize that 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 Parties to the
Agreement shall consent to it under Article 23 of the Agreement;
5. Recognize that developing countries may wish to make a
reservation with respect to Article 5 (2) of the Agreement in the
following terms:
"The Government of ... reserves the right to provide that Article 5
(2) 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 Parties to the
Agreement shall consent to it under Article 23 of the Agreement;
6. Recognize that certain developing countries have expressed
concern that there may be problems in the implementation of Article
1 of the Agreement in so far as it relates to importations into
their countries by sole agents, sole distributors and sole
concessionaires. The Parties to the Agreement agree that, if such
problems arise in practice in developing countries applying the
Agreement, a study of this question shall be made, at the request of
such countries, with a view to finding appropriate solutions;
7. Agree that 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. They further agree
that 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. They recognize that
Parties to the Agreement, subject to their national laws and
procedures, have the right to expect the full cooperation of
importers in these enquiries;
II
1. Upon the entry into force of the Agreement the provisions of this
Protocol shall be deemed to be part of the Agreement.
2. This Protocol shall be deposited with the Director-General to the
Contracting Parties to the GATT. It is open for acceptance, by
signature or otherwise, by signatories of the Agreement on
implementation of Article VII of the General Agreement on tariffs
and trade and by other governments accepting or acceding to the
Agreement pursuant to the provisions of Article 22 thereof.
Done at Geneva this first day of November nineteen hundred and
seventy-nine in a single copy in the English, French and Spanish
languages, each text being authentic.
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 party shall utilize information prepared 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 Article 8 (1) (b) (ii)
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 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 (b) provide different means of establishing
the acceptability of a transaction value.
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 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 Article 1 (2) (b).
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.
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 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 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.
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 purposes 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.
>PIC FILE= "T0012129">
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. >PIC FILE= "T0012156">
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.
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 Article 8 (1) (b), 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 Article 5.1 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 obtaining 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.
8. Local taxes payable by reason of the sale of the goods for which
a deduction is not made under the provisions of Article 5 (1) (a)
(iv) shall be deducted under the provisions of Article 5 (1) (a)
(i).
9. In determining either the Commissions or the usual profits and
general expenses under the provisions of Article 5 (1), 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 Article 5 (1) (b), 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 Article 5 (2) 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.
12. It is recognized that the method of valuation provided for in
Article 5 (2) 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 Article 6 (1) (a) 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 Article 8 (1) (a) (ii) and (iii). It shall also include the
value, apportioned as appropriate under the provisions of the
relevant note to Article 8, of any element specified in Article 8
(1) (b) 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 Article 8 (1) (b) (iv) 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.
4. The "amount for profit and general expenses" referred to in
Article 6 (1) (b) 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 Article 6 (1) (b) covers
the direct and indirect costs of producing and selling the goods for
export which are not included under Article 6 (1) (a).
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 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 Article 5 (1) (a) could
be flexibly interpreted ; the "90 days" requirement could be
administered flexibly.
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 Article 8 (1) (b) (ii) 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 fist 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.
Paragraph 1 (b) (iv)
1. Additions for the elements specified in Article 8 (1) (b) (iv)
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 case with which it may be possible to calculate the values to
be added will depend on a particular fim'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 Article 8 (1) (c)
may include, among other things, payments in respect to patents,
trademarks and copyrights. However, the charges for the right to
reproduce the imported goods in the country of 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 Party from
requiring full payment of assessed customs duties prior to an
appeal.
Note to Article 15
Paragraph 4
For the purposes of this Article, the term "persons" includes legal
persons, 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.
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 Customs
Cooperation Council 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 systems of
Parties 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 Party 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 Parties
with a view to furthering the international acceptance of this
Agreement ; and
(f) 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 Parties or the
Committee, in a reasonably short period of time.
4. The Technical Committee shall be assisted as appropriate in its
activities by the Secretariat of the Customs Cooperation Council.
Representation
5. Each Party shall have the right to be represented on the
Technical Committee. Each Party may nominate one delegate and one or
more alternates to be its representatives on the Technical
Committee. Such a Party 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 GATT secretariat may also attend such
meetings with observer status.
6. Members of the Customs Cooperation Council who are not Parties
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 Customs Cooperation Council
(hereinafter referred to as "the Secretary-General") may invite
representatives of governments which are neither Parties nor members
of the Customs Cooperation Council 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.
10. The meetings of the Technical Committee shall be held at the
headquarters of the Customs Cooperation Council unless otherwise
decided.
11. The Secretary-General shall inform all members of the Technical
Committee and those included under paragraphs 6 and 7 at least 30
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 30
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 sessions, 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 decisions and it shall stand unless overruled.
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 Customs Cooperation Council on that matter indicating the
different views expressed in the relevant discussions.
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 Customs Cooperation Council.
ANNEX III "Ad hoc" panels
1. Ad hoc panels established by the Committee under this Agreement
shall have the following responsibilities: (a) to examine the matter
referred to it by the Committee;
(b) to consult with the parties to the dispute and give full
opportunity for them to develop a mutually satisfactory solution ;
and
(c) to make a statement concerning the facts of the matter as they
relate to the application of the provisions of this Agreement and,
make such findings as will assist the Committee in making
recommendations or giving rulings on the matter.
2. In order to facilitate the constitution of panels, the chairman
of the Committee shall maintain an informal indicative list of
government officials knowledgeable in the area of customs valuation
and experienced in the field of trade relations and economic
development. This list may also include persons other than
government officials. In this connection, each Party shall be
invited to indicate at the beginning of every year to the chairman
of the Committee the name(s) of the one or two governmental experts
whom the Parties would be willing to make available for such work.
When a panel is established, the chairman, after consultation with
the Parties concerned, shall, within seven days of such
establishment propose the composition of the panel consisting of
three or five members and preferably government officials. The
Parties directly concerned shall react within seven working days to
nominations of panel members by the chairman and shall not oppose
nominations except for compelling reasons.
Citizens of countries whose governments are parties to a dispute
shall not be eligible for membership of the panel concerned with
that dispute. Panel members shall serve in their individual
capacities and not as government representatives, nor as
representatives of any organization. Governments or organizations
shall therefore not give them instructions with regard to matters
before a panel.
3. Each panel shall develop its own working procedures. All Parties
having a substantial interest in the matter and having notified this
to the Committee shall have an opportunity to be heard. Each panel
may consult and seek information and technical advice from any
source it deems appropriate. Before a panel seeks such information
or technical advice from a source within the jurisdiction of a
Party, it shall inform the government of that Party. Any Party shall
respond promptly and fully to any request by a panel for such
information as the panel considers necessary and appropriate.
Confidential information provided to the panel shall not be
disclosed without the specific permission of the person or
government 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 the
information, authorized by the person or government providing the
information, will be provided.
4. Where the parties to the dispute have failed to reach a
satisfactory solution, the panel shall submit its findings in
writing. The report of a panel should normally set out the rationale
behind its findings. Where a settlement of the matter is reached
between the parties, the report of the panel may be confined to a
brief description of the dispute and to a statement that a solution
has been reached.
5. Panels shall use such report of the Technical Committee as may
have been issued under Article 20 (4) of this Agreement as the basis
for their consideration of issues that involve questions of a
technical nature.
6. The time required by panels will vary with the particular case.
They should aim to deliver their findings, and where appropriate,
recommendations, to the Committee without undue delay, normally
within a period of three months from the date that the panel was
established.
7. To encourage development of mutually satisfactory solutions
between the parties to a dispute and with a view to obtaining their
comments, each panel should first submit the descriptive part of its
report to the Parties concerned, and should subsequently submit to
the parties to the dispute its conclusions, or an outline thereof, a
reasonable period of time before they are circulated to the Parties.
PROTOCOL TO THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE
The Parties to the Agreement on implementation of Article VII of the
General Agreement on tariffs and trade (hereinafter referred to as
"the Agreement"),
Having regard to the multilateral trade negotiations and to the
desire expressed by the Trade Negotiations Committee at its meeting
of 11 and 12 April 1979 to arrive at a single text of an Agreement
on implementation of Article VII of the General Agreement of tariffs
and trade;
Recognizing that developing countries may have particular problems
in applying the Agreement;
Considering that the provisions of Article 27 of the Agreement
relating to amendments have not yet entered into force;
Hereby:
I
2. Recognize that the five-year delay in the application of the
provisions of the Agreement by developing countries provided for in
Article 21 (1) may, in practice, be insufficient for certain
developing countries. In such cases a developing country Party to
the Agreement may request before the end of the period referred to
in Article 21 (1) an extension of such period, it being understood
that the Parties to the Agreement will give sympathetic
consideration to such a request in cases where the developing
country in question can show good cause;
3. Recognize that 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 Parties to the Agreement;
4. Recognize that 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 Parties to the
Agreement shall consent to it under Article 23 of the Agreement;
5. Recognize that developing countries may wish to make a
reservation with respect to Article 5 (2) of the Agreement in the
following terms:
"The Government of ... reserves the right to provide that Article 5
(2) 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 Parties to the
Agreement shall consent to it under Article 23 of the Agreement;
6. Recognize that certain developing countries have expressed
concern that there may be problems in the implementation of Article
1 of the Agreement in so far as it relates to importations into
their countries by sole agents, sole distributors and sole
concessionaires. The Parties to the Agreement agree that, if such
problems arise in practice in developing countries applying the
Agreement, a study of this question shall be made, at the request of
such countries, with a view to finding appropriate solutions;
7. Agree that 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. They further agree
that 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. They recognize that
Parties to the Agreement, subject to their national laws and
procedures, have the right to expect the full cooperation of
importers in these enquiries;
II
1. Upon the entry into force of the Agreement the provisions of this
Protocol shall be deemed to be part of the Agreement.
Contracting Parties to the GATT. It is open for acceptance, by
signature or otherwise, by signatories of the Agreement on
implementation of Article VII of the General Agreement on tariffs
and trade and by other governments accepting or acceding to the
Agreement pursuant to the provisions of Article 22 thereof.
Done at Geneva this first day of November nineteen hundred and
seventy-nine in a single copy in the English, French and Spanish
languages, each text being authentic.