RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/74
13 September 2000
(00-3528)
Committee on Customs Valuation Original:  Spanish
COMMUNICATION FROM  NICARAGUA ,  ANNEX III, PARAGRAPH 1,
OF THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF
THE GENERAL AGREEEMENT ON TARIFFS AND TRADE 1994
The following communication, dated 25 August 2000, has been received from the Permanent
Mission of Nicaragua.
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I wish to request the Members of the Committee on Customs Valuation of the World Trade
Organization (WTO) for a delay of three years commencing 3 September 2000 in the application of
the Agreement on Implementation of Article VII of  the General Agreement on Tariffs and Trade 1994
(GATT 1994).
Our request is based on paragraph 1 of Annex III of the Agreement, which provides that "the
five-year delay in the application of the provisions  of the Agreement by developing country Members
provided for in paragraph 1 of Article 20 may, in  practice, be insufficient for certain developing
country Members.  In such cases a developing country Member may request before the end of the
period referred to in paragraph 1 of Article XX an extension of such period, it being understood that
the Members will give sympathetic consideration to such a request in cases where the developing
country Member in question can show good cause."
In its communication MPNG-053/2000 of 8 February 2000, Nicaragua reported that it had
implemented a programme of modernization of its customs system, with the passing of Law No. 265
"Establishing the System of Self-Clearance for Imports, Exports, and other Customs Regimes" and
that in the context of Central-American integratio n, a protocol had been signed repealing the Brussels
valuation legislation and adopting the GATT Valuation Code, and was in the process of being
approved by a bill which would be ratified by th e National Assembly in order to apply the provisions
of the Agreement on Implementation of Article VII of GATT 1994, as from 3 September 2000.
Nevertheless, despite the efforts of our Directorate-General of Customs, the deadline for the
application of the Agreement on Customs Valuation in Nicaragua is considered to be insufficient
taking into account the Trinational Declaration between El Salvador, Guatemala and Nicaragua"
signed on 2 May 2000, the implementation at national level of Law No. 265 "Establishing the Systemof Self-Clearance for Imports, Exports and other Cu stoms Regimes", the continuation of the process
of restructuring under Law No. 339 "Establishing the Directorate-General of the Customs Services
and reform of the Law Establishing the Directorate-General of Taxes" and the adoption of new
procedures necessary to adapt the computer  system to a new software called SIDUNEA++.
Requirements for a common valuation standard for the "Guatemala, El Salvador and Nicaragua"
customs union
The Trinational Declaration "Integration for the 21st Century", under the Protocol of the
General Treaty on Central American Economic Inte gration (Guatemala Protocol), signed by the
Governments of El Salvador, Guatemala and Nicaragua, recognizes the importance of respecting the
principles of gradualness, specificity and progressiveness of the economic integration process, whichG/VAL/W/74
Page 2
means that all or some States will be able to ad vance with the speed they agree within this process.
Taking into consideration the precedent of the Customs Union between Guatemala and El Salvador,
the three countries agreed a work agenda on the following themes:
• A sectoral economic policy, highlighting two aspects:
- Harmonization of tariff policies;- unification of customs policy.
Against this background, the three countries are to adopt a common tariff policy closely
linked to customs valuation, even though the common external tariff is expressed in ad valorem  terms.
In this respect, Nicaragua could not have a valuation law that differed from the other countries makingup the Customs Union of which it is a Member, since that would imply an absence of a true
harmonization of tariff policy and customs policy.
This means that in the future it will be necessa ry to create a regional legal framework in the
field of customs valuation, consistent with the WTO principles, for the countries making up thisCustoms Union.
Bearing in mind that the Committee on Customs Valuation of the World Trade Organization
(WTO) in its notes G/VAL/30 of 6 July 2000 and G/VAL/33 of 28 July 2000, approved the delay in
the entry into force of the "Agreement on Implementation of Article VII of the General Agreement onTariffs and Trade 1994" for the Governments of El Salvador and Guatemala respectively, similar
treatment is necessary in order to allow the Government of Nicaragua to elaborate common laws in
support of the uniform application of the Agr eement on Customs Valuation, within the Customs
Union, in accordance with the WTO principles.
Reform of the Nicaraguan customs system
Under the Trinational Declaration between El Salvador, Guatemala and Nicaragua, signed on
2 May 2000, a Plan of Action was established, involving the following measures in relation to
customs policy:
• To formulate the legal basis for the establishment of a customs union;
• to promote joint efforts to control smuggling of goods by coordinating administrative
and legal procedures;
• to arrange for the opening of terrestrial customs so as to provide services 24 hours a
day;
• to coordinate day and night opening times for maritime Customs operations;
• to establish adjacent Customs posts, and organize binational Customs posts.
• To implement pilot Customs posts with common services, applying uniform
procedures, administrative systems and guidelines to mobilize trade within and
outside the region.
In the context of the initiatives to implement these measures, Nicaragua launched a process of
modernization of its Customs system by passing Law No. 339 "Establishing the Directorate-GeneralG/VAL/W/74
Page 3
of the Customs Services and Reform of the Law Establishing the Directorate General of Taxes",
which entered into force on 6 July 2000.
One of the objectives of this Law is to develop and improve Customs methods, including the
creation of an administrative career structure, designed to equip the Customs Service with specialistprofessional staff in the functions laid down by the Law.  These include the application of the
Agreement on Customs Valuation, in respect of which it will exercise control functions so as to
ensure the correct application by users of the Customs System.
The implementation of the new Law requires the Customs Service to go through a transitional
period to allow it to adapt its procedures manuals and avoid high staff turnover when the
administrative career structure is established, which requires, among other things, the following:
• To Elaborate the legal and administrative rules necessary to promote transparency
and efficiency of public officials.
• to analyse and update procedures manuals in accordance with the requirements of the
Law and international trade.
• to recruit appropriate professional staff.
• to provide of education and training in the legal and administrative methods required
for the appropriate and correct application of the Agreement on Customs Evaluation.
• to procure the computer and communication equipment necessary to be able to carry
out the new functions assigned to it effectively and efficiently.
The recruitment of the new staff to carry out these tasks will commence early in 2001.  This
means that, if the Agreement on Customs Valuation were introduced as envisaged on 3 September
next, it would create a control vacuum in Customs, since they would not have the time necessary to
introduce the measures designed to strengthen the Customs System as described in the previous
paragraph.
Once the new staff have been recruited, it will be necessary to undertake a process of training
on the Agreement on Customs Valuation, since its application requires a thorough knowledge of its
provisions, in order to avoid arbitrary application and this will involve a demanding learning process
for the new staff.
It is hoped that all the new staff required by the Customs Service will be recruited by the
middle of 2001 and their training will take place throughout the year.
It will also be necessary to elaborate the rules required by the new processes and to ensure
that those who use them, both internal staff and users of the Customs System, are duly informed.
Adoption of SIDUNEA
The Directorate-General of Customs Services of Nicaragua is currently preparing the
technical specifications to migrate from SIDUNEA Version 2.7 to Version SIDUNEA++.
This task also requires the updating of procedures manuals and their harmonization with the
requirements of the Customs Union, which must be  done very carefully since the Customs of the
Republic of El Salvador use the same platform and it is intended to link both Customs Services
through an "electronic data interchange" between both administrations, with a view to subsequentG/VAL/W/74
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integration under the relevant protocol of communi cation with the Customs Information System of the
Republic of Guatemala.  The details which need to be worked out in order to make better use of
SIDUNEA++ are:
• Revision of the operational procedures for Customs Valuation and use of automated
processes for that purpose;
• revision of the technical and legal procedures involved in valuation and monitoring
(control) and legal processes where customs offences are committed (under- and
over-valuation).
These tasks are a matter of priority in achieving a modern Customs Service as required in the
current context of globalized international trade, and th at is the reason for this request, as provided for
in Article 20 of the "Agreement on Implementation of Article VII of the General Agreement onTariffs and Trade 1994", for a delay of three years in the application of the Agreement on Customs
Valuation as from 3 September 2000.
Minimum values
With respect to this subject and in addition to the delay requested above, Nicaragua requires
and undertakes to maintain minimum values, solely for the products approved on 28 April 2000 by the
decision of the Committee on Custom s Valuation in G/VAL/W/59/Add.1.
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