Not to be missed!
WCO / ICC SYMPOSIUM ON CAPACITY BUILDING
AND THE WTO VALUATION AGREEMENT
(Summary Report)
The WCO, in co-operation with the International Chamber of Commerce (ICC), held a Symposium on Capacity Building and the WTO Valuation Agreement on 17 and 18 October 2002 at WCO Headquarters, Brussels. Over 200 participants attended the Symposium from WCO Member Customs administrations, the private sector and relevant international organisations, including the World Trade Organization and the World Bank.
Presentations from a diverse group of speakers and subsequent discussions resulted in the identification of a wide range of issues relating, in particular, to the implementation and maintenance of the WTO Valuation Agreement. A number of concerns were raised by Member administrations from least developed and developing countries regarding impediments to successful implementation of the Agreement. As a result of the constructive presentations and the exchange of views of the participants, a number of measures to assist least developed and developing country Members were identified in regard to their implementation of the WTO Valuation Agreement. The role of the private sector and international organisations also emerged as essential in responding to the capacity building needs of these Members.
Among the concerns raised by least developed and developing country Members was the perceived loss of revenue as a consequence of the implementation of the WTO Valuation Agreement. A number of Members raised this issue. In this connection, the concerned administrations focused on their countries’ heavy reliance on Customs revenues which represent up to 75% of total government revenues. These Members operated in an environment characterised by duty evasion by many importers through the use of false import declarations as well as the presence of a large informal sector. While the significance of the informal sector on the economies of these countries varied, the very nature of these informal importations precluded establishment of risk management, surety/guarantee or post clearance audit control mechanisms. It was suggested that these environments were different from those of developed country administrations and were also in conflict with the bases on which the WTO Valuation Agreement was founded.
It was, nevertheless, agreed that the proper implementation and application of the WTO Valuation Agreement was beneficial for developing developed countries alike, as an instrument for trade facilitation, and that efficient valuation and overall Customs management was conducive to the economic development of all economies.
The participants in the Symposium agreed that a holistic approach to capacity building through reform and modernisation was essential for Customs administrations in least developed and developing countries and that there was an overall link between budgetary security and supply chain security. It was also recognised that effective and efficient valuation controls were critical in achieving the maximum benefit from the implementation of the WTO Valuation Agreement. In this connection, the restructuring and streamlining of developing country Customs organisations, procedures and practices was needed and that the Revised Kyoto Convention provided an immediate set of appropriate provisions and guidelines for the task. Full utilisation of information technology was also considered necessary in addressing the capacity building needs of these administrations. The development of a capacity building programme that was unique to, and addressed the specific needs of, each country, together with the mobilisation of the appropriate financial and human resources, were recognised as major challenges. Partnerships with other Customs administrations and donor organisations, as well as a regional approach, were seen to be workable options in this regard.
Risk management and post clearance audit programmes were identified as the most important control functions toward which any capacity building effort should be targeted. The Symposium participants, however, accepted that in order for a Customs administration to function efficiently within a risk management environment, information was an essential requirement. This was perceived by some least developed and developing country administrations as an impediment to progress. These administrations emphasised that they had experienced great difficulty in obtaining such information. In this connection, the WCO’s work on the development of a guide for the exchange of valuation information and a set of guidelines for the development of a national valuation database for risk management purposes was widely supported. These tools were recognised as legitimate means to fill the obvious gap experienced by administrations in managing their valuation control functions. It was agreed that the exchange of valuation information between Member administrations should not be sought as a matter of routine but rather on an identified needs basis; that business confidentiality should always be protected and should not be compromised or abused; that an "export value", as referred to in Doha Ministerial Decision 8.3, could not be used as the basis for determining a Customs value for imported goods; and that a valuation database should not be used as a de facto minimum/notional/reference price value system.
While it was recognised and accepted that it is the responsibility of Customs administrations to implement and administer the WTO Valuation Agreement, it was also agreed that in order to perform this task efficiently and effectively, it would be more efficient and, in the long term, more financially prudent, to work in partnership with the private sector. It was accepted that traders, after all, are the other users of the Agreement, and that Customs administrations should provide the private sector with sufficient information on valuation rules and procedures necessary for informed compliance. On the other hand, it was understood that the private sector, as a principal user and beneficiary of the Agreement through the implementation of a predictable and transparent national valuation systems, could and should assist Customs to fulfil its responsibilities. Areas of partnership could include the development of best business practices consistent with the Agreement; the provision of information on commercial and accounting practices; information and guidance regarding abnormal business practices and trading arrangements; access to appropriate government officials; and political support to ensure efficient capacity building programmes for Customs administrations.
The Symposium participants endorsed the fact that least developed and developing countries had to take ownership of their own unique reform and modernisation programmes and had to be actively involved and committed to those programmes throughout the entire implementation process. This process began with a needs analysis and extended through the period of the full and effective implementation, including post implementation evaluation. It was recognised, however, that developing administrations’ efforts to build capacity and to reform and modernise their organisations were often frustrated by a lack of resources and the expertise needed to achieve such a goal. It was agreed that in order to fill this obvious gap access to, and assistance from, international donor organisations such as the World Bank was needed. Bi-lateral arrangements with other Customs administrations were also seen as useful, especially from the human resource assistance aspect. It was emphasised that least developed and developing country administrations should not only develop such relationships, but also needed to maximise the current expertise resident in their organisations.
