RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SAU/46
20 June 2000
(00-2483)
Working Party on the Accession
of the Kingdom of Saudi ArabiaOriginal:  English
ACCESSION OF THE KINGDOM OF SAUDI ARABIA
Additional Questions and Replies
The Ministry of Commerce of the Kingdom of Saudi Arabia has submitted replies to
questions raised with specific regard to WT/ACC/SAU/38/Rev.1 (Implementation of the Customs
Valuation Agreement) with the request that they be circulated to members of the Working Party.  The
questions and replies are reproduced hereunder.
_______________WT/ACC/SAU/46
Page 2
Question 1.
Paragraph 2(i) of document WT/ACC/SAU/38/Rev.1 indicates that a Committee has been
established in the Customs Department that is responsible for preparing the ground work for
implementing the Customs Valuation Agreemen t. Who chairs this Committee and which
divisions are members? How regularly does the Committee meet to review and assess progress?Has Saudi Arabia also established an interdepartmental Committee to oversee the overall
implementation of the Agreement; if so, which Departments are represented on this Committee
and which Department chairs this Committee (and at what level)?
Answer:
The committee is chaired by the Director General of the Modernization and Development
Division of the Customs Department. The divisions represented in the committee are: Valuation,
Agreements, Legal, Tariffs, and the Information Center. It meets regularly at least once in threemonths. The above mentioned committee is responsible for overall implementation of the Agreement.
Question 2.
Further to paragraph 3(i) of document WT /ACC/SAU/38/Rev.1 does Saudi Arabia plan to
incorporate verbatim the Custom Valuation Agre ement or the Explanatory Notes into its laws
or regulations, or is the legislation and regulations being drafting to give effect to theseobligations?
Answer:
Saudi Arabia is drafting legislation and regulations amending and enlarging Article 51 to give
effect to the Agreement on Customs Valuation.
Question 3.
Paragraph 3 (iii) of document WT/ACC/SAU/38/Rev.1 indicates that the Committee in the
Customs Department is “studying the practical problems that developing countries are facing in
implementing the provisions of the Agreement.” What are the specific practical problems that
are being studied? What are the plans for addressing these problems?
Answer:
The Committee is studying the problems that other developing countries faced or are facing in
implementing the Customs Valuation Agreement. In particular, it is studying the problem of under-
valuation.
Question 4.
Paragraph 4(i) and 4(ii) of document WT/ACC/SAU/38/Rev.1 state that the “draft regulations
will be ready by the end of 1999”, and the “legislative process will be initiated by the beginning
of 2000.” Is the work on these areas proceeding a ccording to schedule? Has the drafting of the
regulations and legislation been completed?
Answer:
The final drafting of laws and regulations is proceeding and nearing completion.WT/ACC/SAU/46
Page 3
Question 5.
Further to Paragraph 4(iv) of document WT/ACC/SAU/38/Rev.1, could Saudi Arabia explain
why it believes that the “ implementation of the Customs Valuation Agreement requires, as a
necessary pre-condition, the establishment of a computerized database on customs valuation” ?
Why is this a pre-condition (e.g., which provision in the Customs Valuation Agreement requiresthis)? What is this customs valuation database to be used for?
Answer:
Saudi Arabia considers that a computerized database is necessary to implement the agreement
especially the second and the third methods of valuation (Under Articles 2 and 3 of Customs
Valuation Agreement). Under the second and third methods the value has to be based on transaction
value of identical or similar goods exported to the country of importation, at or about the same time as
the goods being valued. Without a data-base, it would  be difficult to apply the second and thirdmethods. The Data-base will not be used to reject declared values.
Question 6.
Further to Paragraph 4(v) of document WT/ACC/SAU/38/Rev.1 on customs modernization,
which international developments and practices is Saudi Arabia studying. Which WTO
Members’ procedures is Saudi Arabia studying?
Answer:
Saudi Arabia is studying the procedures of some countries such as: Australia, Philippines,
Singapore and Turkey. The developments that are under study include:
- which procedures in use before the implementation of the Customs Valuation
Agreement were change, after its adoption, and in what manner the procedures werechange;
- which computer software programs are used  and have been found to be most suitable
for implementing the Agreement;
- how the problem of under-valuation has been handled;
- any organizational or structural changes that are necessary to implement the
Agreement.
Question 7.
Paragraph 4(vi) of document WT/ACC/SAU/38/Re v.1 states that “Saudi Arabia will hopefully
start implementing the Customs Valuation Agre ement on an experimental basis by the year
2001.” Could Saudi Arabia please explain what is  meant by “experimental basis”? Does this
mean Saudi Arabia plans to apply two customs valuation systems at the same time during the
“experimental”  period (e.g. Saudi Arabia’s current system for some importers or products andthe Customs Valuation Agreement for other importers or products)? Further to Paragraph
4(vii) of the same document, is the “experiment al” period intended to last only until the
beginning of 2002?
Answer:
Applying the agreement on experimental basis, means that Saudi Arabia will start applying
the provisions of the agreement before it is formally committed under the WTO to apply it. Only one
system will be applied during that period but only at one port and all imported goods from allWT/ACC/SAU/46
Page 4
countries will be under that system. The idea of applying the system on an experimental basis is to
identify the problems, and to rectify them before the agreement is formally applied as a commitment
under the WTO.
The experimental period may serve to prepare Saudi Arabia for successful implementation of
the Agreement.
Question 8.
Paragraph 4(vii) of document WT/ACC/SAU/38/Rev.1 states that “full and final
implementation of the Agreement will be made from the beginning of 2002.” Is this plan on
schedule? Does this mean that Saudi Arabia will eliminate all minimum values when it
implements the Agreement (and therefore will not be asking for a reservation under paragraph
2 of Annex III)? Does Saudi Arabia intend to seek any other reservations provided under Annex
III of the Agreement?
Answer:
The plan is on schedule. However, Saudi Arabia would make a reservation under paragraph 2
of Annex III of the Agreement to continue the use of minimum values for a handful of products for a
period of two years from the date Saudi Arabia start applying the Agreement. Saudi Arabia would
also make reservations under paragraphs  3 and 4 of Annex III of the Agreement.
Question 9.
How does Saudi Arabia plan to approach customs valuation compliance by importers? Is Saudi
Arabia looking at the risk assessment or impo rter self-assessment, combined with post-entry
verification or audit procedures by Customs? If yes, could Saudi Arabia provide information
and details on who it plans to select importers for verification or audit and what  the type of
verification or audit process it plans to follow? If Saudi Arabia is planning to use another
approach to valuation compliance, could Saudi Arabia provide information and details on this
approach?
Answer:
This issue is still under examination. It has not yet been decided which approach would be
adopted.
Question 10.
As regards Article 11 of the Customs Valuation, how does Saudi Arabia plan to implement the
requirements for review and appeal? Which agency or department/division will provide the
administrative review (e.g., will it be customs va luation division or another division)? What will
be the number of levels of “internal” appeals, the process and procedures an importer must
follow to file an appeal, and the expected normal amount of time for a decision to be rendered?Which department/agency/court will provide appeal? Which court will provide final judicial
appeal?
Answer:
The appeal review procedure is as follows: there are two levels of internal appeal. First, an
appeal can be made to a committee at each port/airport.WT/ACC/SAU/46
Page 5
The appeal against a decision of the port committee goes to a committee at the customs
headquarters, within the Valuation Division. The first appeal normally takes a few days (two or three)
and the second appeal about one week. The final appeal goes to the Board of Grievances, which is an
independent judicial body.
Question 11.
Article 12 of the Customs Valuation Agreement requires Saudi Arabia to make its laws,
regulations, judicial decisions and administrative rulings of a general application publicly
available. When does Saudi Arabia plan to publish its laws and regulations? How does Saudi
Arabia plan to keep its public informed of wh at Customs expects on valuation compliance? How
does Saudi Arabia plan to make available “judicial decisions and administrative rulings of a
general application” publicly available. In general, what is Saudi Arabia’s plans for
encouraging cooperation between Customs and trad ers to promote the exchange of information
in regard to customs valuation?
Answer:
Saudi Arabia publishes all laws and regulations, including laws and regulations on customs
valuation in the official gazette Umal-Qura (please refer to paragraph 43 of the draft report of the
Working Party).
Question 12.
Article 13 of the Customs Valuation requires that the release of goods not be unduly delayed
when the final determination of the custom value can not be made at the time of importation.
How does Saudi Arabia plan to implement this  requirement (e.g., what systems and procedures
does Saudi Arabia plan to put in place to implement Article 13)? How long will customs hold thegood before releasing it when there is a delay in making the determination? How does Saudi
Arabia plan to establish a final customs valu e after the goods have been released without
making the final determination? What type of guarantee (e.g. surety bond) will Customs
require?
Answer:
Saudi Arabia will continue the current practice of releasing goods on surety bond, if the final
determination of customs value cannot be made. The surety bond will be release or adjusted after the
final determination has been made. The period before release, would depend on the uniqueness of
each case, but it would not be unduly l ong. In practice it is a short period.
Question 13.
As regards Article 16 of the Customs Valuation, who in Customs will be responsible for
providing a written explanation when importers request an explanation of how the customsvalue was determined? Will there be time limits on how long the importer must wait to get an
explanation, etc?
Answer:
The head of each port or airport will be responsible for providing a written explanation in a
short period of a few days.
__________