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Customs Valuation

The Agreement on the Implementation of GATT Article VII (known as the WTO Agreement on Customs Valuation or the “Valuation Agreement”) was negotiated in the Tokyo Round to ensure that determinations of the customs value for the application of duty rates to imported goods are conducted in a neutral and uniform manner, precluding the use of arbitrary or fictitious customs values.

Adherence to the Valuation Agreement is important for U.S. exporters, particularly to ensure that market access opportunities achieved through tariff reductions are not undermined or negated by unwarranted and unreasonable “uplifts” in the customs value of goods to which tariffs are applied. The use of arbitrary and inappropriate “uplifts” in the valuation of goods by importing countries when applying tariffs can result in an unwarranted doubling or tripling of duties.

The Valuation Agreement is administered by the WTO Committee on Customs Valuation, which holds two formal meetings a year. The Valuation Agreement also established a Technical Committee on Customs Valuation, which operates under the auspices of the World Customs Organization (WCO), with a view to ensuring, at the technical level, uniformity in interpretation and application of the WTO Valuation Agreement. The Technical Committee also meets twice a year.

As noted, the Valuation Agreement was initially negotiated in the Tokyo Round, but at that time its acceptance was voluntary. The achievement of universal adherence to the Valuation Agreement as part of membership in the WTO, which occurred in the Uruguay Round) was an important objective of the United States.

Ensuring that Customs Officials use a proper valuation methodology, i.e., one provided for under the Agreement, and avoiding arbitrary determinations or officially-established minimum import prices is essential to maintain the integrity of negotiated market access commitments based on the value of the imported good. Just as important, the implementation of the Agreement often represents the first concrete and meaningful steps taken by some WTO Member governments toward reforming their customs administrations, diminishing corruption, and ultimately moving to a rules-based trade facilitation environment.

An important part of the Customs Valuation Committee’s work in support of the Agreement’s provisions is the examination of Members’ implementing legislation. As of October 2008, 80 Members had notified their national legislation on customs valuation (this figure does not include the 27 individual EU Members); 46 Members, mostly least developed countries (LDCs) or recently acceded countries, have not yet notified their national legislation on customs valuation.