RESTRICTED
WORLD TRADE G/VAL/N/1/CAN/1
29January 1996
ORGANIZATION(96-0328)
Original: English/ Committee onCustoms Valuation
French
NOTIFICATION UNDER ARTICLE 22.2OFTHE AGREEMENT
ONIMPLEMENTATION OFARTICLE VIIOFTHE GENERAL
AGREEMENT ONTARIFFS AND TRADE 1994
CANADA
Thefollowing communication, dated 5January 1996, hasbeenreceived fromthePermanent
Mission ofCanada.
_______________
Canada would liketonotify theCommittee onCustoms Valuation thatthelawsandregulations
notified under theTokyo Round Customs Valuation Agreement remain validunder theWTO Customs
ValuationAgreement,withtheexceptionofthenewprovisionsdescribedbelow.DetailsoftheCanadian
legislation arecontained indocument VAL/1/Add.17 +Suppl.1 -3.
Inaccordance toArticle 22.2oftheAgreement onCustoms Valuation, Canada would like
tonotify thatasaresult oftheWorld Trade Organization Agreement Implementation Act,amodification
hasbeenmade totheCustoms Act-subsection 48(7) andrelated regulations 4.1and4.2(Value for
Duty Regulations). Thisnewprovision oftheCustoms Actgives aCustoms officer theauthority to
rejectthetransactionvaluewheretherearedoubtsabouttheaccuracyofinformationsubmittedtosupport
thetransaction value. Italsoprovides forenacting regulations which clearly outline thesteps tobe
followed bytheofficer before suchaction istaken. Theregulation alsoprotects therights oftheimporter
byplacing anobligation onaCustoms officer togivetheimporter anopportunity torespond toCustoms
enquiries andrequires theCustoms officer toinform theimporter, inwriting, oftherationale forany
decision before thatdecision istaken. Thetextoftheseprovisions aswellassupplementary information
follows.
Legislation
48(7) Where anofficer whoisappraising thevalue fordutyofgoods believes onreasonable grounds
thattheinformation submitted insupport ofthetransaction value ofthegoods asdetermined under
subsection (4)isinaccurate, theofficer shalldetermine, inaccordance withtheprescribed procedure,
thatthevalue fordutyofthegoods shallnotbeappraised under thissection.
Regulation 4.1&4.2(Value forDuty Regulations)
4.1 Before making adetermination under subsection 48(7) oftheAct,anofficer shall:
(a) Notify theperson whoaccounted forthegoods under section 32oftheActofthegrounds
fortheofficer 'sbelief thattheinformation submitted insupport ofthetransaction value isinaccurate;
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Page2
(b) Request inwriting thattheperson submit totheofficer, within 30daysafter therequest,
additional information insupport ofthetransaction value ofthegoods;
(c) Reviewanyadditionalinformationreceivedinresponsetotherequestmadeunderparagraph(b);
(d) Where noadditional information isreceived orfollowing thereview oftheadditional
information; iftheofficer continues tobelieve onreasonable grounds thattheinformation submitted
isinaccurate, atleast30daysbefore making thedetermination, givewritten notice totheperson of
thegrounds fortheofficer 'sbelief thattheinformation submitted isinaccurate.
4.2 Where anofficer makes adetermination under subsection 48(7) oftheAct,theofficer shall
givewritten notice ofthedetermination andthereasons formaking ittotheperson referred toin
paragraph 4.1(a)
Supplementary Information
Subsection 48(7) willnormally beaconsideration during thecourse ofavaluation compliance
review oraudit ofanimporter 'sbooks andrecords.
Forexample, anofficer during thecourse ofareview ofanimporter 'sbooks andrecords
discoversamountsforexpenditurestoforeigncompanies,whichcannotbesubstantiatedthroughobjective
andquantifiable documentation, e.g.nopaper oraudit trail. Thiscould leadtheofficer todoubt the
accuracy oftheprice paidorpayable aspresented inthecommercial orcustoms documents.
Inorder toapply subsection 48(7) under suchcircumstances theofficer must carry outthe
following procedures:
- inform theimporter ofthereasons fordoubting theaccuracy oftheinformation made available
insupport ofthetransaction value andrequest inwriting thatadditional information beprovided
within thirty days;
- review anyadditional information submitted byoronbehalf oftheimporter;
- if,either onthebasis offurther information obtained orintheabsence offurther information
requested, theofficer continues tobelieve thattheavailable information isinaccurate, theofficer
willinform theimporter inwriting ofthereasons forhis/her conclusions andadvise theimporter
thatithasanadditional 30daystorespond before adecision ismade toreject transaction
value;
- where sufficient information isnotprovided within 30days, theofficer willinform theimporter
inwriting thatthevalue ofthegoods under review cannot bedetermined under section 48and
thereasons forthatdecision.
TheValue forDutywillthenbeestablished under oneofthesubsequent methods ofvaluation.