Frequently asked questions (FAQ) about Customs valuation

1. What is Customs value?
2. Are there any international rules for the determination of Customs value of goods?
3. What are the different methods of Customs valuation allowed under the ACV?
4. What is transaction value?
5. Is the invoice price the Custom value?
6. Is freight part of the Customs value?
7. Does Customs have the right to reject a value declared by an importer?
8. Can an importer obtain binding advance rulings on Customs valuation?
9. What can an importer do if he does not agree with a valuation decision made by Customs?
10. Could I request an advice on a technical issue on Customs valuation from the WCO Secretariat?
11. What is the TCCV and the CCV?
12. What is the WCO Compendium on Customs valuation and how can I purchase it?
13. Are the TCCV instruments binding on WTO Members?

1. What is Customs value?

In general, Customs Value is the value of goods for the purposes of levying ad valorem duties of Customs.

Ad valorem duties are duties that are calculated based on the value.

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2. Are there any international rules for the determination of Customs value of goods?

Today, all Customs administrations of the WTO Members value imported goods in terms of the provisions of the WTO Agreement on Customs Valuation (ACV), which was adopted in 1994. The ACV establishes a Customs valuation system that primarily bases the Customs value on the transaction value of imported goods, which is the price actually paid or payable for the goods when sold for export to the country of importation, plus certain adjustments of costs and charges.

Non-WTO Members are not obliged to apply the provisions of the ACV. A few rare countries still apply the provisions of the Convention on the Valuation of goods of 1953 also known as the Brussels Definition of Value (BDV) for customs purposes.

The ACV is published in the WCO Compendium on Customs Valuation and is also available via the following link: https://www.wto.org/english/docs_e/legal_e/legal_e.htm#artvii

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3. What are the different methods of Customs valuation allowed under the ACV?

The ACV provides for six methods of valuation to be applied in the following order:

  1. The transaction value method;
  2. The transaction value of identical goods;
  3. The transaction value of similar goods;
  4. Deductive value method;
  5. Computed value method, and;
  6. Fallback method.

Only when the method specified earlier in the sequence cannot be applied, can recourse be taken to the next method in the sequence.

The primary basis for valuing imported goods is the transaction value method which has to be applied to the greatest extent possible.

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4. What is transaction value?

Please refer to Question 2.

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5. Is the invoice price the Custom value?

By definition, the Customs value does not equate to the invoice of the goods. In practice, it may be represented by the invoice price provided that all the provisions of the ACV are met and that it includes all the elements considered to be part of the Customs value.

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6. Is freight part of the Customs value?

It depends on the national law of the importing country. As per the ACV, in framing its legislation, each Member shall provide for the inclusion in or the exclusion from the customs value of the cost of transport of the imported goods to the port or place of importation.

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7. Does Customs have the right to reject a value declared by an importer?

The ACV provides the right to Customs administrations to be satisfied about the accuracy of any statement, document or declaration presented for Customs valuation purposes. In case of persistent doubt, after examining the explanation provided by the importer or otherwise, the declared value may be rejected.

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8. Can an importer obtain binding advance rulings on Customs valuation?

The WTO Agreement on Trade Facilitation encourages WTO Members to provide advance rulings on the appropriate method or criteria, and the application thereof, to be used for determining the customs value under a particular set of facts.

For further information, see please:

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9. What can an importer do if he does not agree with a valuation decision made by Customs?

The ACV provides the right to an importer to file administrative and judicial appeal against the decision of Customs without penalty.

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10. Could I request an advice on a technical issue on Customs valuation from the WCO Secretariat?

As an intergovernmental organization, the WCO provides advice on Customs valuation matters to its Members only.

The WCO cannot provide advice to private stakeholder. The WCO cannot intervene in a dispute between a private stakeholder and a Member.

Private stakeholders who have questions of this nature should approach the Customs administration of the importing country or exporting country for assistance. This administration may in turn seek advice from the WCO Secretariat about the issue should it deem necessary.

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11. What is the TCCV and the CCV?

The ACV establishes a Committee on Customs Valuation (CCV) composed of representatives from each of the Members for the purpose of affording Members the opportunity to consult on matters relating to the administration of the customs valuation system by any Member or the furtherance of the objectives of the Agreement. The CCV administers the ACV from a trade policy perspective.

The ACV also establishes a Technical Committee on Customs Valuation (TCCV) under the auspices of the World Customs Organization with a view to ensuring, at the technical level, uniformity in the practical interpretation and application of the Agreement. The responsibilities of the Technical Committee include advising on specific technical matters as requested by Members or by a panel in a dispute. The TCCV administers the ACV from a technical perspective.

Below you will find the link to the historical documents (working documents and reports) of the TCCV in Zip files arranged by TCCV Session.

http://www.wcoomd.org/en/topics/valuation/resources/tccv.aspx

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12. What is the WCO Compendium on Customs valuation and how can I purchase it?

The Compendium on Customs valuation is published by the WCO to record and make generally available the information and advice issued by the TCCV (known as the instruments) under its terms of reference as laid down in Annex II to the ACV. The Compendium also reproduces, for ease of reference, the text of Article VII and the Note thereto in the General Agreement on Tariffs and Trade 1994, together with the ACV and the Decisions taken by the Committee on Customs Valuation.

The Compendium could be purchased via the following link: http://wcoomdpublications.org

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13. Are the TCCV instruments binding on WTO Members?

In general, only the provisions of the ACV are binding on WTO Members. Instruments of the TCCV do not have the force of law as the provisions of the ACV, to the extent that they are not incorporated in the national laws of the Member.

However, given the fact that the instruments are based on Members’ consensus, they play an important and vital role in ensuring, at the technical level, uniformity in interpretation and application of the ACV.

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