Q83. Does the ACV restrict the rights of customs authorities?

 

Ans: No. Article 17 of the ACV states that nothing in the Agreement should be construed as restricting OR calling into question the rights of the customs admirations to satisfy themselves as to the truth or accuracy of any statement, document or declaration presented for customs valuation purposes. Paragraph 6 of the Annex –III to the ACV further elaborates on the right of the customs authorities. It recognizes that customs authorities may make enquiries for verifying that the elements of value declared or presented to customs are complete and correct.

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Q84.  What course of action is open to the customs authorities when they have reasons to doubt the declared value?

 

Ans: The Uruguay Round Ministerial Decision, subsequently adopted by the WTO Committee on Customs Valuation (see Appendix III), allows the customs authorities in such cases to make further enquiry with the importer and to reject the declared value if there are still reasonable doubts about its truth and accuracy. However, the procedure outlined in the Decision has to be followed and the customs value has to be determined in such cases using another method in the hierarchy.

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APPENDIX 1

 

ARTICLE VII OF GATT, 1944

 

(Asterisks mark the portions of the text, which should be read in conjunction with notes and supplementary provisions in Annex I of the Agreement.)

 

VALUATION FOR CUSTOMS PURPOSES

 

1. The contracting parties/recognize the validity of the general principles of valuation set forth in the following paragraphs of this Article, and they undertakes to give effect to such principles, in respect of all  products subject to duties or other charges or restrictions on importation and exportation based upon  regulated in any manner by value. Moreover, they shall, upon a request by another contracting party review the operation of any of their laws or regulations relating to value for customs purposes in the light of these principles. The CONTRACTING PARTIES may request from contracting parties report on steps taken by them in pursuance of the provision of this Article.

 

2. (a) The value for customs purposes of imported merchandise should be based on the actual value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be based on the value of  merchandise of national origin  or on arbitrary or fictitious values. *

 

(b) “Actual value" should be the price at which at a time and place determined the legislation of the country of importation, such or like merchandise is sold or offered for sale in the ordinary course of trade under fully competitive conditions. To the extent to which the price of such or like merchandise is governed by the  quantity in a particular transaction, the price to be considered should .uniformly be related to either (i)   comparable quantities, or (ii) quantities not less favorable to importers than those in which the greater volume of the merchandise is sold in the trade between  the countries of exportation and importation. *

 

(c) When the actual value is not ascertainable in accordance with subparagraph (b) of this paragraph, the value for customs purposes should be based on the nearest ascertainable equivalent of such value. *

 

3. The value for customs purposes of any imported product should not include the amount of any internal tax, applicable within the country of origin or export, from which the imported product has been exempted or has been or will be relieved by means of refund.

 

4. (a) Except as otherwise provided for in this paragraph where tt is necessary for the purposes of paragraph 2 of this Article for a contracting party to convert into its own currency a price expressed in the currency of another country, the conversion rate of exchange to be used shall be based, for each currency involved, on the par value as established pursuant to the Articles of Agreement of the International Monetary Fund or on the rate of exchange recognized by the Fund, or on the par value established in accordance with a special exchange agreement entered into pursuant to Article XV of this Agreement.

 

(b) Where no such established Par value and no such recognized rate of exchange exist, the conversion rate shall reflect effectively the current value of such currency in commercial transactions.

 

(c) The CONTRACTING PARTIES, in agreement with the International Monetary. Fund, shall formulate rules governing the conversion by contracting parties of any foreign currency in respect of which multiple rates of exchange are maintained consistently with the Articles of Agreement of the International Monetary Fund. Any contracting party may apply such rules in respect of such foreign currencies for the purposes of para graph 2 of this Article as an alternative to the use of par values. Until such rules are adopted by the Contracting Parties, any contracting party may employ, in respect of any such foreign currency, rules of conversion for the purposes of paragraph 2 of this Article which are designed to reflect effectively the value of such foreign currency ill commercial transactions.

 

(d) Nothing in this paragraph shall be construed to require any contracting party to alter the method of converting currencies for customs purposes which is applicable ill its territory on the date of this Agreement, If such alteration would have the effect of increasing generally the amounts of duty payable.

 

5. The bases and methods for determining the value of products subject to duties or other charges or restrictions based upon or regulated in any manner by value should be stable and should be given sufficient publicity to enable traders to estimate, with a reasonable d certainty, the value for customs purposes.

 

 

 

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ANNEX I

 

NOTES AND SUPPLEMENTARY PROVISIONS

Ad Article VII

Paragraph 1

The expression “or other charges” is not to be regarded as including internal taxes or equivalent charges imposed on or in connection with imported products.

Paragraph 2

1. It would, be in conformity with Article VII to presume that “actual value” may be, represented by the invoice price, plus any non-included charges for legitimate costs which are proper elements of "actual value" and plus any abnormal discount or other reduction from the ordinary competitive price.

 

2. It would be in conformity with Article VII, paragraph 2 (b) for a contracting party to construe the phrase “in the ordinary course of trade...  under fully competitive conditions”, as excluding any transaction wherein the buyer and seller are not independent of each other and price is not the sole consideration.

 

3. The standard of “fully competitive conditions” permits a contracting party to exclude from consideration prices involving special discounts limited to exclusive agents.

 

4. The wording of subparagraph (a) and (b) permits a contracting party to determine the value for customs purposes uniformly either (1) on the basis of a particular exporter’s prices of the imported merchandise, or (2) on the basis of the general price level of like merchandise.

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