Customs Valuation

Customs valuation is a major feature of modern Customs tariff systems. As well as being important for the assessment of Customs duties, whether for purposes of producing revenue or as a means of encouraging and protecting domestic industry, it is also a significant element in a variety of other aspects of international trade such as statistics, quota and licensing arrangements, taxes and other charges levied at importation and in the application of preference systems.
That certain valuation practices can have restrictive effects on international trade was recognized at the Tokyo Round of multilateral trade negotiations. These negotiations, which took place between 1973 and 1979 within GATT in Geneva, were one of the major trade policy initiatives of our time; they were intended, "to achieve the expansion and ever-greater liberalization of world trade through the progressive dismantling of obstacles to trade". Customs valuation came under study within this framework and one of the results of the negotiations was the adoption of the Agreement on Implementation of Article VII of the GATT, which established a positive system of Customs valuation based on the actual price of the imported goods. The Agreement, which entered into force on 1 January 1981, is intended to provide a fair, uniform and neutral system for the valuation of goods for Customs purposes, a system that conforms to commercial realities, and which outlaws ере use of arbitrary of fictitious Customs values. To this end it provides a revised set of valuations rules, expanding and giving greater precision to the relevant provisions in the GATT, which do not set forth the elements of complete valuation standard. The Agreement notes that Customs value should, to the greatest extent possible, be based on the price actually paid or payable for the goods being values; this price, subject