RESTRICTED
WORLD TRADE G/VAL/5
13October 1995
ORGANIZATION(95-3106)
Committee onCustoms Valuation
DECISIONS CONCERNING THE INTERPRETATION AND ADMINISTRATION
OFTHE AGREEMENT ONIMPLEMENTATION OFARTICLE VII
OFTHE GATT 1994 (CUSTOMS VALUATION)
Thefollowing Decisions concerning theinterpretation andadministration oftheAgreement
wereadopted bytheWTO Committee onCustoms Valuation atitsmeeting of12May1995. These
decisions, contained insections AandBofdocument G/VAL/W/1, were originally adopted bythe
Tokyo Round Committee onCustoms Valuation. Thedecisions contained inSection Awereadopted
bytheWTO Committee without anyamendments, while thetextofthedecisions inSection Bwas
adapted totheWTO situation. TheCommittee decided nottotakeanyaction ontheProcedures for
thederestriction ofdocuments setoutinsection B.3ofdocument G/VAL/W/1, untiltheGeneral Council
would takeadecision onthisquestion.
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A. Decisions concerning theinterpretation oftheAgreement
1. Meaning oftheword "undertaken" inArticle 8.1(b) (iv)ofthe 2
English textoftheAgreement.
2. Linguistic consistency oftheterm"development" inArticle 8.1(b)(iv) 2
3. Treatment ofinterest charges inthecustoms value of 2
imported goods (VAL/6/Rev.1).
4. Valuation ofcarrier media bearing software fordata 3
processing equipment (VAL/8).
5. Rectification oftheFrench textofparagraph 1ofthe 4
Note toArticle 2andtheNote toArticle 3
B. Decisions concerning theadministration oftheAgreement
andworking procedures oftheCommittee
1. Reservations under theAgreement. 4
2. Notification andcirculation ofnational legislation in 5
accordance withArticle 22oftheAgreement.
3. Checklist ofissues. 5
4. Information ontechnical assistance. 5
ANNEX: Checklist ofissues 6G/VAL/5
Page2
A. DECISIONS CONCERNING THE INTERPRETATION OFTHE AGREEMENT
A.1 Meaning oftheword "undertaken" inArticle 8.1(b) (iv)ofthe
English textoftheAgreement
Adopted bytheTokyo Round Committee on3March 1983 (VAL/M/6, paragraph 18)
TheCommittee agreed thatinthecontext ofArticle 8.1(b) (iv)oftheAgreement, theEnglish
word"undertaken" wastobeunderstood asmeaning "carried out". Itnoted thattheFrench andSpanish
textsoftheAgreement were notaffected.
A.2 Linguistic consistency oftheitem "development" inArticle 8.1(b)(iv) ofthe
Agreement (VAL/M/13)
TheChairman made thefollowing statement attheTokyo Round Committee meeting of9-
10May1985:
"Consultations havetaken place andinthelightofthese Isuggest thatthematter besettled
byincluding thefollowing statement intheminutes ofthemeeting, ontheunderstanding thatthiswould
bewithout prejudice torights andobligations under theAgreement andthatmembers oftheCommittee
canrevert tothematter should theneedarise.
"The Parties totheAgreement considered thattheterms "development" inEnglish, "travaux
d'étude" inFrench and"creación yperfeccionamiento" inSpanish inArticle 8.1(b) areunderstood
toexclude "research" inEnglish, "recherche" inFrench and"investigación" inSpanish, asstated in
paragraph 6ofVAL/W/24/Rev.1. However, onesignatory, Argentina, considered that,asusedin
Article8.1(b),theSpanishexpression"creaciónyperfeccionamiento"couldnotbeinterpretedasallowing
anypartofthevalue tobeexcluded from the"creación yperfeccionamiento"."
A.3 Decision onthetreatment ofinterest charges inthe
customs value ofimported goods (VAL/6/Rev.1)
Adopted bytheTokyo Round Committee on26April 1984 (VAL/M/9, paragraph 38)and
rectified(FrenchandSpanishtextsonly)bytheCommitteeon24September1984(VAL/M/10,
paragraph 17)
TheParties totheAgreement onImplementation ofArticle VIIoftheGATT agree asfollows:
Charges forinterest under afinancing arrangement entered intobythebuyer andrelating to
thepurchase ofimported goods shallnotberegarded aspartofthecustoms value provided that:
(a) thecharges aredistinguished from theprice actually paidorpayable forthegoods;
(b) thefinancing arrangement wasmade inwriting;
(c) where required, thebuyer candemonstrate that
- suchgoods areactually soldattheprice declared astheprice actually paid
orpayable, andG/VAL/5
Page3
- theclaimed rateofinterest doesnotexceed thelevel forsuchtransactions
prevailing inthecountry where, andatthetimewhen thefinance wasprovided.
ThisDecision shallapply regardless ofwhether thefinance isprovided bytheseller, abank
oranother natural orlegalperson. Itshallalsoapply, ifappropriate, where goods arevalued
under amethod other thanthetransaction value.
Each Party shallnotify theCommittee ofthedatefrom which itwillapply theDecision.
A.4 Decision onthevaluation ofcarrier media bearing
software fordataprocessing equipment (VAL/8)
Adopted bytheTokyo Round Committee on24September 1984 (VAL/M/10, paragraph 7)
TheCommittee onCustoms Valuation DECIDES asfollows:
1. Itisreaffirmed thattransaction value istheprimary basis ofvaluation under theAgreement
onImplementation ofArticle VIIoftheGeneral Agreement onTariffs andTrade (theAgreement)
andthatitsapplication withregard todataorinstructions (software) recorded oncarrier media for
dataprocessing equipment isfullyconsistent withtheAgreement.
2. Given theunique situation1withregard todataorinstructions (software) recorded oncarrier
media fordataprocessing equipment, andthatsome Parties havesought adifferent approach, itwould
alsobeconsistent withtheAgreement forthose Parties which wishtodosotoadopt thefollowing
practice:
Indetermining thecustoms value ofimported carrier media bearing dataorinstructions, only
thecostorvalue ofthecarrier medium itself shallbetaken intoaccount. Thecustoms value
shallnot,therefore, include thecostorvalue ofthedataorinstructions, provided thatthis
isdistinguished from thecostorthevalue ofthecarrier medium.
Forthepurpose ofthisDecision, theexpression "carrier medium" shallnotbetaken toinclude
integrated circuits, semiconductors andsimilar devices orarticles incorporating suchcircuits
ordevices; theexpression "data orinstructions" shallnotbetaken toinclude sound, cinematic
orvideo recordings.
3. Those Parties adopting thepractice referred toinparagraph 2ofthisDecision shallnotify the
Committee ofthedateofitsapplication.
4. ThosePartiesadoptingthepracticeinparagraph2ofthisDecisionwilldosoonamost-favoured-
nation (m.f.n.) basis, without prejudice tothecontinued usebyanyParty ofthetransaction value
practice.
1Seeparagraph 5ofVAL/M/10.G/VAL/5
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A.5 Rectification oftheFrench textofparagraph 1
oftheNote toArticle 2andtheNote toArticle 3
Refer totheTokyo Round Committee meeting of20March 1990(VAL/M/26, paragraph 24)
Noobjections were raised totheproposed rectification oftheFrench textofparagraph 1of
boththeNotetoArticle 2andtheNotetoArticle 3which suggested replacing "lavente" inthefirst
sentence by"celui" andtochange thesecond sentence toread "Enl'absence d'unetelle
vente....differente" (VAL/W/49/Add.4).
B. DECISIONS CONCERNING THE ADMINISTRATION OFTHE AGREEMENT AND
WORKING PROCEDURES OFTHE COMMITTEE
(The Decisions have been adapted totheWTO situation)
B.1 Reservations under theAgreement onCustoms Valuation
Adopted bytheTokyo Round Committee on13January 1981(VAL/M/1, paragraph 36and
Annex 2)
1. Areservation made under Article 21oftheAgreement byaMember accepting theWTO
Agreement before 1January 1995 shallbedeemed tobeaccepted bytheother Members unless the
Committee isnotified (through thesecretariat) byaparticular Member tothecontrary before
1February 1995. Upon request ofaMember orMembers notified totheSecretariat before
1February 1995, thetime-limit shallbeextended foranother thirty days.
2. Members thataccept theWTO Agreement onorafter1January 1995shallbedeemed toaccept
allreservations previously accepted bytheMembers. Reservations made byMembers which accept
theWTO Agreement onorafter1January 1995shallbedeemed tobeaccepted bytheother Members
unless theCommittee isnotified (through theSecretariat) tothecontrary byaparticular Member before
expiry ofthirty daysfollowing thedateonwhich theWTO Agreement enters intoforcefortheMembers
making thereservation. Upon request ofaMember orMembers notified totheSecretariat before the
expiry oftheperiod referred tointhepreceding sentence, thetime-limit shallbeextended forafurther
thirty days.
3. Forreservations made under paragraph 2ofAnnex III,theMember having made thereservation
shallcommunicate totheCommittee (through theSecretariat) induecourse aproposal containing the
terms andconditions under which itwants toretain theminimum customs values (orsimilar schemes).
Thisproposal would bediscussed bytheCommittee withtheaimofreaching anagreement onthe
terms andconditions ofsuchreservation. Agreement should bereached asquickly aspossible and
atanyratenotlaterthanthedateatwhich theMember having availed itself ofthepossibility of
Article 20.1starts implementing theprovisions oftheAgreement.
4. Areservation shallnotcome intoforce if:
- inthecaseofareservation made under Article 21oftheAgreement another Member
objects tothereservation within thetime-limits asspecified inparagraphs 1and2or,
- inthecaseofareservation made under paragraph 2ofAnnex III,noagreement has
beenreached onthecontent (terms andconditions) ofthereservation bythetimethat
theAgreement isimplemented bytheMember inquestion.G/VAL/5
Page5
Cases where aminority viewabout theacceptability ornon-acceptability ofareservation exists would
beexamined intheCommittee, attherequest oftheMember wishing toenter thereservation, with
aviewtoseeking amutually acceptable solution.
5. Reservations made byadeveloping country Member inconformity withparagraphs 3or4
ofAnnex IIItotheAgreement shallbedeemed tobeconsented tobytheother Members.
B.2 Notification andcirculation ofnational legislation
inaccordance withArticle 22oftheAgreement
Adopted bytheTokyo Round Committee on13January 1981 (VAL/M/1, paragraph 37)
(i) Members willsubmit thecomplete textsoftheirnational legislation (laws, regulations, etc.)
oncustoms valuation inoneofthethree official WTO languages assoonaspossible tothe
Secretariat which willcirculate them asCommittee documents totheother Members inthe
language submitted. Ifageneral interest isexpressed intheCommittee thatthetextofa
particular Member beavailable alsoinotherofficial WTO languages, thistextwillbetranslated
andcirculated asaCommittee document. Inthose cases where thenational legislation isnot
inanofficial WTO language, theoriginal textsshallalsobesubmitted totheSecretariat where
theywillbeopenforinspection.
(ii) Itisunderstood thatthetextsofthenational legislation ofdeveloping country Members availing
themselvesoftheprovisionsofArticle20,paragraphs1and2oftheAgreementwillbesupplied
totheCommittee before thedeveloping country Members begin theapplication oftheprovisions
oftheAgreement.
(iii) Atitsmeeting of12May1995 theWTO Committee decided thatincases ofMembers who
were Tokyo Round signatories andwhose legislation hadalready been examined, a
communication from those Members could besenttotheWTO Secretariat indicating that
legislation notified under theTokyo Round Customs Valuation Agreement remained validunder
theWTO Customs Valuation Agreement withaspecific reference tothedocument containing
thelegislation. TheSecretariat would thenproceed tocirculate thisnotification inaWTO
document (G/VAL/M/1, paragraph 29-35).
B.3 Checklist ofissues
Adopted bytheTokyo Round Committee on5May1981 (VAL/M/2, paragraph 52)
(i) "The Committee decided thatMembers should respond inwriting tothepoints contained in
thechecklist1."
(ii) Atitsmeeting of12May1995 theWTO Committee decided thatincases ofMembers who
were Tokyo Round signatories andwhose legislation hadalready been examined, a
communication from those Members could besenttotheSecretariat indicating thattheir
responsestothechecklistofissuesremainedvalidundertheWTOCustomsValuationAgreement
(G/VAL/M/1, paragraph 36-39).
1Thechecklist isreproduced intheAnnex tothisdocument.G/VAL/5
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B.4 Information ontechnical assistance
Agreed bytheTokyo Round Committee on9-10May1985 (VAL/M/13, paragraph 8)
"...In regard tothepoint raised attheCommittee 'slastmeeting about whether therewasneed
toensuregreatertransparencyoftechnicalassistanceactivitiessoastogiveinteresteddevelopingcountry
Members further information andalsotohelpMembers intheirplanning (VAL/M/1, paragraph 18),
theCommittee agreed thattheinformation documents prepared fortheTechnical Committee onsuch
activities were alsomade available asaWTO document..."G/VAL/5
Page7
ANNEX
CHECKLIST OFISSUES
1. Questions concerning Article 1:
(a) Sales between related persons:
(i) Aresalesbetween related persons subject tospecial provisions?
(ii) Isthefactofintercompany prices prima facie considered asgrounds for
regarding therespective prices asbeing influenced?
(iii) What istheprovision forgiving thecommunication oftheafore-mentioned
grounds inwriting iftheimporter sorequests? (Article 1.2(a) )
(iv) How hasArticle 1.2(b) beenimplemented?
(b) Price oflostordamaged goods:
Arethere anyspecial provisions orpractical arrangements concerning thevaluation
oflostordamaged goods?
2. How hastheprovision ofArticle 4toallow theimporter anoption toreverse theorder of
application ofArticles 5and6beenimplemented?
3. How hasArticle 5.2beenimplemented?
4. How hasArticle 6.2beenimplemented?
5. Questions concerning Article 7:
(a) WhatprovisionshavebeenmadeformakingvaluedeterminationspursuanttoArticle7?
(b) What istheprovision forinforming theimporter ofthecustoms value determined under
Article 7?
(c) Aretheprohibitions found inArticle 7.2delineated?
6. How havetheoptions found inArticle 8.2beenhandled? Inthecaseoff.o.b. application,
areex-factory prices alsoaccepted?
7. Where istherateofexchange published, asrequired byArticle 9.1?
8. What steps havebeentaken toensure confidentiality, asrequired byArticle 10?
9. Questions concerning Article 11:
(a) What rights ofappeal areopentotheimporter oranyother person?G/VAL/5
Page8
(b) How ishetobeinformed ofhisrighttofurther appeal?
10. Provide information onthepublication, asrequired byArticle 12,of:
(a) (i) therelevant national laws;
(ii) theregulations concerning theapplication oftheAgreement;
(iii) thejudicial decision andadministrative rulings ofgeneral application relating
totheAgreement;
(iv) general orspecific lawsbeing referred tointherules ofimplementation or
application.
(b) Isthepublication offurther rules anticipated? Which topics would theycover?
11. Questions concerning Article 13:
(a) Howistheobligation ofArticle 13(lastsentence) being dealtwithintherespective
legislation?
(b) Have additional explanations beenlaiddown?
12. Questions concerning Article 16:
(a) Doestherespectivenationallegislationcontainaprovisionrequiringcustomsauthorities
togiveanexplanation inwriting astohowthecustoms value wasdetermined?
(b) Arethere anyfurther regulations concerning anabove-mentioned request?
13. How havetheInterpretative Notes oftheAgreement beenincluded?
14. Howhavetheprovisions oftheDecision ontheTreatment ofInterest Charges intheCustoms
Value ofImported Goods beenimplemented?
15. Forthose countries applying paragraph 2oftheDecision ontheValuation ofCarrier Media
Bearing Software forDataProcessing Equipment, howhavetheprovisions ofthisparagraph been
implemented?
- Forallquestions listed above, anindication ofthereferences isrequested.