Bee On Trade

Customs Valuation


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1. Purpose of Customs Valuation Process

The customs valuation process is employed by customs to calculate the customs value of imported items. This value is pivotal in determining the duty amount for an imported commodity when the duty rate is ad valorem.

2. Brief Historical Overview

  • The General Agreement on Tariffs and Trade (GATT) played a significant role.
  • Article VII of GATT established fundamental rules for global valuation.
  • It emphasized determining customs value based on actual or comparable goods, not national origin or arbitrary values.

3. Article VII of GATT

  • Article VII sets rules for the global system of valuation.
  • It defines customs value based on actual worth or comparable goods.
  • Permitted a variety of valuation techniques, allowing flexibility.

4. Article VII and Outdated Standards

  • "Grandfather provisions" allowed the retention of outdated standards.
  • These standards didn't align with the new broad standard set by Article VII.

5. Additional Methods for Customs Valuation

  1. Transaction Value
  2. Transaction Value of Identical Goods
  3. Transaction Value of Similar Goods
  4. Deductive Method
  5. Computed Method
  6. Fall-back Method

6. Usage of Additional Valuation Methods

Used when there is no transaction value. Applied when the transaction value cannot be used due to price distortion.

7. Circumstances Warranting Additional Methods

The additional methods come into play when the price is distorted due to certain circumstances, necessitating alternative methods for determining customs value.

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