The valuation of goods for customs purposes 'Anything to declare?' 'Only my genius.' Oscar Wilde versus US customs.
The valuation of goods for customs purposes by HENK DE PAGTER and RICHARD VAN RAAN 1981 Springer Science+Business Media, LLC
Translated by l.w. Reintjes Cover design: Pieter l. van der Sman ISBN 978-94-017-4512-3 ISBN 978-94-017-4510-9 (ebook) DOI 10.1007/978-94-017-4510-9 1981 Springer Science+Business Media New York Originally published by Kluwer, Deventer, The Netherlands in 1981 Softcover reprint of the hardcover 1st edition 1981 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher.
Preface This book was written in response to the coming into force on the first of January 1981 of the Customs Valuation Code of the GATT, an agreement which has been applied unilaterally by the EEC and the US since the first of July 1980. As a result of the new agreement a uniform system for the valuation of goods for customs purposes will be used for the first time in history of international trade by the most important trading nations. This can be seen as an important step in the removal of trade barriers, as the use of a uniform system enables anyone occupied with international trade to foresee with reasonable accuracy the treatment he will receive in other countries. This book provides a survey of the new system, together with the application and interpretation which to our opinion may be expected on the basis of the international discussions. Some attention is paid, moreover, to the remaining systems of valuation of goods which the exporter may encounter. In writing this book we have not only had the aim of providing a source of information for exporters, but we believe it will be of use to anyone who is, or has to be, interested in the customs valuation. March 1981, the authors. V
Richard van Raan, after studying civil law at the university of Leiden, specialised himself in fiscal law. Henk de Pagter studied fiscal law in Rotterdam. Both are at present employed by the Ministry of Finance and occupied with national and international customs legislation. They participated in the GATT -discussions on the new customs valuation at Geneva and in its development in the BEe. VI
Contents PREFACE v CHAPTER 1. INTRODUCTION CHAPTER 2. DEVELOPMENT OF THE CONCEPT OF VALUE 4 A. Ad valorem duties and specific duties 4 B. Notional concepts and positive concepts 5 C. International developments 5 CHAPTER 3. BACKGROUND OF THE CODE 7 CHAPTER 4. THE DEVELOPING COUNTRIES AND THE PROTO- COL TO THE AGREEMENT 9 CHAPTER 5. THE STATUS OF THE CODE AND THE INCLUSION IN NATIONAL LEGISLATION 11 A. The status of the Code 11 B. Inclusion in nationa11egislation 12 CHAPTER 6. STRUCTURE OF THE CODE 14 A. The articles of the Code 14 1. The new customs valuation system 14 2. The remaining articles 15 B. The annexes 16 VII
CONTENTS CHAPTER 7. ADMINISTRATION OF THE CODE AND DISPUTE SETTLEMENT 17 CHAPTER 8. THE TRANSACTION VALUE OF THE IMPORTED GOODS 19 Survey 19 I Elements of the transaction value 20 A. The price actually paid or payable 20 1. The price 20 2. Method of payment 20 3. Possible discounts 21 B. For the goods 22 1. General 22 2. Damaged goods, shipments with shortages 22 C. Sold for export to the country of importation 22 II Adjustment of the price paid or payable 24 General 24 A. Elements chargeable to the buyer 25 1. Commissions and brokerage 25 2. Cost of containers and cost of packing 26 B. Activities considered to be indirect payment 26 1. Materials, components etc. incorporated in the imported goods and materials consumed in their production 26 2. Tools, dies, moulds and similar items 27 3. Engineering, development, design work, plans etc. 27 C. Royalties and benefits of subsequent resale 28 I. Royalties and licence fees 28 2. Benefits of subsequent resale or use of the imported goods 28 D. Cost associated with the transport 29 E. Elements not forming part of the customs value 29 III Conditions to be met by the transaction value 30 General 30 A. Restrictions as to the use of the goods 31 B. Conditions or considerations for which a value cannot be determined 31 C. Proceeds of any subsequent resale or use of the goods by the buyer that accrue to the seller 32 VIII
CONTENTS D. Relationship between the buyer and the seller 32 1. Acceptability of the transaction value 32 2. Test values 33 CHAPTER 9. THE TRANSACTION VALUE OF IDENTICAL GOODS 35 A. Defmition 35 B. Elements 35 1. The transaction value 35 2. Same commercial level and quantity 36 3. Exported at or about the same time 36 CHAPTER 10. THE TRANSACTION VALUE OF SIMILAR GOODS 37 A. Definition 37 B. Elements 37 CHAPTER 11. THE DEDUCTIVE VALUE 38 A. Reversal of the order of application of methods 4 and 5 38 B. The method 38 C. Sale at or about the time of importation 39 D. No sale at or about the time of importation 40 E. Sale after further processing of the goods 40 CHAPTER 12. THE COMPUTED VALUE 42 A. The method used 42 1. The cost or value of materials and fabrication 42 2. Profit and general expenses 42 3. Cost associated with the transport 43 B. Information 43 CHAPTER 13. THE FLEXIBLE VALUATION METHOD 45 IX
CONTENTS CHAPTER 14. OTHER METHODS FOR CUSTOMS VALUATION 47 CHAPTER 15. THE BRUSSELS DEFINITION OF VALUE 49 A. Definition 49 B. Elements 50 1. Time 50 2. Place 50 3. Quantity and level of transaction 51 4. Open market conditions 51 5. Patents and foreign trade-marks 51 C. Practical application 51 CHAPTER 16. DIFFERENCES IN VALUATION BETWEEN THE CODE AND THE BRUSSELS DEFINITION OF VALUE 52 A. Price 52 B. Quantity 52 C. Level of the transaction 53 D. Secondary undertakings 53 E. The place where the buyer is established 53 F. Discounts and other price-reductions 53 ANNEXES I. Article VII of the GAIT 54 2. The Brussels definition of value 57 3. The Code 59 4. The Protocol 78 X