There is some content available for this page in other languages

New Advisory Opinions on Royalties and License Fees, and on "flash sales"

New Advisory Opinion 4.17

This Advisory Opinion was finalized at the 44th Session of the Technical Committee on Customs Valuation (TCCV) which took place in Brussels from 8 to 12 May 2017.

The instrument, based on a case submitted by Mexico, provides an opinion on a scenario where royalties have been paid by a franchisee to a franchisor for the use of the brands and system connected to the operation of stores under a franchise agreement. The Advisory Opinion concludes that as the payment of royalties in this particular case is not related to the imported goods but to the use of the brands and system of the franchisor in the country of importation for the manufacture and sale of the products bearing the intellectual property of the franchisor, the royalties are not to be included in the Customs value of the imported goods.

Under the WTO Valuation Agreement, certain royalties and licence fees are to be included in the Customs value of imported goods. This is an important and complex aspect of Customs valuation and each case must be examined on its own merits to determine whether or not the royalties and licence fees should be included.

New Advisory Opinion 23.1

This Advisory Opinion was finalized at the 48th Session of the Technical Committee on Customs Valuation which took place in Brussels from 13 to 17 May 2019.

The instrument based on a case submitted by Mauritius provides an opinion on the valuation of goods purchased in flash sales. The Technical Committee reaffirmed transaction value as the primary basis of valuation under the Agreement on Implementation of Article VII of the GATT 1994 and concluded that the highly discounted price is acceptable for Customs valuation purposes provided that the provisions of Article 1 are met.

The adoption of this instrument is timely and will be of assistance to Customs Administrations and the Trade, particularly with the development of e-commerce.