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CUSTOMS VALUATION

World Customs Organization. CUSTOMS VALUATION. Tariff and Trade Affairs Directorate Knowledge Academy 2 – 3 July 2014. WHY CUSTOMS VALUATION ?. Taxable base for Customs duty revenue Compiling trade statistics Monitoring quantitative restrictions

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CUSTOMS VALUATION

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  1. World Customs Organization CUSTOMS VALUATION Tariff and Trade Affairs Directorate Knowledge Academy 2 – 3 July 2014

  2. WHY CUSTOMS VALUATION? • Taxable base for Customs duty revenue • Compilingtradestatistics • Monitoring quantitative restrictions • Administeringpreferentialsystems • Collectinginternal taxes on imports

  3. WHY CUSTOMS VALUATION ? • AD VALOREM DUTY • Calculated on value of the goods • Customs must appraise the value • Calculation varies with price, quality etc. SPECIFIC DUTY • Calculated on • weight • volume • quantity • Customs must • weigh • measure • count • Calculation is • fixed • rigid

  4. VALUATIONCUSTOMS V/S COMMERCIAL VALUATION • the process of thought which appreciates one thing in terms of the other CUSTOMS VALUATION: • Methodology • need for standard that must be one which can be applied equitably to all transactions.

  5. DEFINITION OF VALUE • Key element of anyCustoms valuationstandard • Notional vs Positive

  6. EVOLUTION OF VALUATION SYSTEMS DIFFERENT AND UNSTABLE VALUATION SYSTEMS 1950/1953 BDV LEAGUE OF NATIONS 1980 GATT VALUATION AGREEMENT GATT 1947 - Article VII 1995 WTO VALUATIONAGREEMENT 1947 EUROPEAN CustomsUNION STUDY GROUP

  7. WTO AGREEMENT ON CUSTOMS VALUATION PRINCIPLES OF VALUATION • Customs valuation should provide greater uniformity, certainty, fairness and neutrality thus preclude use of arbitrary or fictitious Custom values • Customs value should be based on, to the greatest extent possible, the transaction value. • Customs value should be based on simple and equitable criteria consistent with commercial practices • Valuation procedures should be of general application without distinction between sources of supply • Valuation procedures should NOT be used to combat dumping

  8. ECONOMIC RATIONAL OF THE AGREEMENT • The effect of tariff concessions must not be derogated by non-tariff barriers, e.g. an arbitrary Customs valuation regime • An arbitrary valuation system has the same trade restrictive effect as an increase in the tariff

  9. WCO’S ROLE IN THE IMPLEMENTATION OF THE VALUATION AGREEMENT

  10. MEMBERS’ CONCERNS • Members’ concerns with regard to the consequences of implementing the Agreement relate to : • loss of fiscal revenue; • commercial fraud (under-valuation, double invoicing…); • price used between related persons in a commercial transaction, etc.

  11. WCO’s ROLE • Service the Technical Committee on Customs Valuation (TCCV) • Provide technical assistance • Provide capacity building to Members

  12. TECHNICAL COMMITTEE ON CUSTOMS VALUATION (TCCV) • The function of this Committee is to ensure, at the technical level, uniformity in the interpretation and application of the Agreement. • The TCCV meets twice a year and examines, inter alia, technical problems arising in the day-to-day administration of Members’ Customs valuation systems.

  13. TECHNICAL COMMITTEE INSTRUMENTS COMMENTARIES (25) STUDIES (2) ADVISORY OPINIONS (40) EXPLANATORY NOTES (6) CASE STUDIES (17) Total: 90

  14. TECHNICAL ASSISTANCE PROVIDED BY THE WCO • In the framework of the objectives identified in the WCO Strategic Plan, technical assistance comprises of : • organizing training courses, workshops and seminars at the national and regional levels; • formulating technical advices at the request of Members; and • developing practical tools.

  15. WCO’s ROLE The WCO and the TCCV have • Developed the Revenue Package • Developed Guidelines on Post-Clearance Audit • Been reviewing the Customs Valuation Control Handbook • Partnered with other international Organizations ( WTO, OECD, ICC, etc)

  16. ON GOING ISSUES • Transfer pricing • Royalties and licence fees • Global Value Chain • Payment for unlocking a function after importation

  17. CONCLUSION The WCO will continue to : • Provide the required technical assistance for Capacity Building to those Members who need it • Encourage Members to submit to the TCCV and the WCO Secretariat practical valuation issues; • Organize events on valuation issues involving interested Members and relevant international organizations as well as the private sector

  18. Thank you

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