COMMITTEE ONCUSTOMS VALUATION
Draft Minutes oftheMeeting of12May 1995
Attached hereto arethedraft minutes ofthemeeting oftheCommittee onCustoms Valuation
of12May 1995. Delegations areinvited tosubmit comments totheSecretariat (Mr. E.Kim,
tel.739.55.84) by7August 1995.
95-2092RESTRICTED
WORLD TRADE G/VAL/SPEC/1
21July 1995
ORGANIZATION(95-2092)
Committee onCustoms Valuation
DRAFT MINUTES OFTHE MEETING OF12MAY 1995
Chairman: Mr. P.Palec ka(Czech Republic)
1. TheCommittee onCustoms Valuation meton12May 1995.
2. Thefollowing agenda wasadopted:
Page
A. Election ofofficers 2
B. Rules ofProcedure 2
C. Participation inmeetings bycertain signatories oftheFinal Acteligible 3
tobecome Original Members oftheWTO
D. Observers: Governments 3
E. Observers: International Organizations 3
F. Adoption of(i)Decision Regarding Cases where Customs 4
Administrations have reasons todoubt theTruth orAccuracy ofthe
Declared Value; and(ii)Decision onTexts Relating toMinimum
Values andImports bySole Agents, Sole Distributors andSole
Concessionaires
G. Decision onContinued Application under theWTO Customs Valuation 5
Agreement ofInvocations ofProvisions forDeveloping Countries for
Delayed Application andReservations under theCustoms Valuation
Agreement 1979
H Coordination between Committees 6
I. Notifications 7
J. Decisions adopted bytheTokyo Round Committee onCustoms Valuation 15
K. Procedures fortheannual review 17
L. Report onthework oftheTechnical Committee atitsTwenty-Ninth session 17
M. Date ofmeetings 22G/VAL/SPEC/1
Page 2
A. Election ofOfficers
3. TheCommittee elected Mr.P.Palec ka(Czech Republic) Chairman.
4. TheChairman noted thattheCustoms Valuation Agreement didnotmake anyreference to
theelection ofaVice-Chairperson, andsuggested todefer discussion ofthismatter tothenextagenda
item on"rules ofprocedure".
5. TheCommittee soagreed .
B. Rules ofProcedures
6. TheChairman noted thattheCustoms Valuation Agreement didnotsetoutanydetailed rules
ofprocedures fortheCommittee, beyond providing that itshould normally meet once ayear.
Paragraph 6ofArticle IVoftheWTO Agreement allowed forsubsidiary bodies oftheSectoral Councils
toestablish their own rules ofprocedures subject totheapproval oftheir respective Councils. The
Council forTrade inGoods, atitsmeeting on3April 1995, hadagreed thattherules ofprocedure
formeetings oftheGeneral Council should apply mutatis mutandis formeetings oftheCouncil for
Trade inGoods with certain modifications assetoutindocument G/C/W/2. Hesuggested thatthe
Committee might adopt thesame rules ofprocedure asadopted bytheCouncil forTrade inGoods
withchanges where necessary totakeaccount ofthespecial requirements ofthisCommittee, andrequest
theSecretariat toprepare draft rules ofprocedure foradoption attheCommittee 'snext meeting. In
themeantime, theCommittee might conduct itsbusiness onthebasis ofcommon-sense andGATT
practice.
7. TheCommittee soagreed .
8. TheChairman recalled thattheTokyo Round Committee onCustoms Valuation hadalways
elected aVice-Chairperson. Hebelieved thatitwould, from apractical point ofview, bepreferable
tohave aVice-Chairperson andsuggested thathemight undertake informal consultations withinterested
delegations andtheChairman oftheCouncil forTrade inGoods with aview toelecting aVice-
Chairperson attheCommittee 'snext meeting.
9. TheCommittee soagreed .G/VAL/SPEC/1
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C. Participation inmeetings bycertain signatories oftheFinal Acteligible tobecome Original
Members oftheWTO (WT/L/27)
10. TheChairmanrecalledthattheGeneralCouncilhaddecidedthatduringaperiodofsevenmonths
following thedateofentry intoforce oftheWTO Agreement, signatories oftheFinal Actthatwere
contracting parties totheGATT 1947 andeligible tobecome original Members oftheWTO, could
bepresent andspeak attheformal andinformal meetings ofthebodies established under theWTO
Agreement other thantheTextiles Monitoring Body, andhave access toalldocuments made available
toWTO Members forsuch meetings, butdidnothave theright toparticipate inthedecision-making
process.
11. TheCommittee took note ofthedecision contained indocument WT/L/27.
D. Observers: Governments
12. TheChairman noted thatcertain governments which were intheprocess ofacceding tothe
WTO, orhadinitiated negotiations todoso,orhaddeclared their intention todosointhenearfuture,
hadbeen invited toattend meetings oftheGeneral Council asobserver. Inaccordance withparagraph 6
oftheGuidelines forObserver Status intheWTO (Annex 2ofWT/L/28), these governments "may
participateasobserversatmeetingsofworkingpartiesandothersubsidiarybodiesoftheGeneralCouncil
asappropriate, with theexception oftheCommittee onBudget,Finance andAdministration". He
proposed thatsuch governments bewelcomed toattend meetings ofthisCommittee iftheysowished,
except ifandwhen itwasconsidered appropriate tohold aclosed session with theparticipation of
Members only.
13. TheCommittee soagreed .
E. Observers: international organizations
14. TheChairman recalled that, pending final agreement onguidelines forobserver status for
international intergovernmental organizations, agreement hadbeen reached intheCouncil forTrade
inGoods toinvite tothefirst meetings ofitssubsidiary bodies, certain international organizations.
With respect totheCustoms Valuation Committee, ithadbeen decided toinvite representatives of
theSecretariats oftheWCO, theIMF andUNCTAD tothisfirstmeeting (G/C/M/1, agenda item 13).
TheChairman alsorecalled thatithadbeen further agreed that, pending theadoption ofcriteria andG/VAL/SPEC/1
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conditions forobserver status forinternational intergovernmental organizations intheWTO, each
subsidiary body oftheCouncil forTrade inGoods should decide, ateach meeting, which international
intergovernmental organizations should beinvited asobservers toitsnext meeting (G/C/M/2, agenda
item 2). These adhocarrangements were without prejudice tothepositions ofdelegations infuture
discussions onthequestion ofobserver status ofinternational intergovernmental organizations. He
proposed that, unless thecriteria andconditions forobserver status were agreed inthemean time,
theWCO, IMF andUNCTAD beinvited toattend theCommittee 'snext meeting asobservers.
15. TheCommittee soagreed .
F. Adoption of(i)Decision regarding cases where customs administrations have reasons to
doubt thetruth oraccuracy ofthedeclared value; and(ii)Decision ontexts relating to
minimum values andimports bysoleagents, soledistributors andsoleconcessionaires.
16. TheChairman recalled thatthese decisions andtexts, contained indocument G/VAL/1, were
referred bytheMinisters atMarrakesh totheCommittee foradoption.
17. TheCommittee adopted thedecisions andtexts contained indocument G/VAL/1.
18. Therepresentative from Egypt stated thathiscountry wasanon-voting participant, butwould
nevertheless liketopoint outthathehadreceived noinstructions about thedecisions under discussion.
19. TheChairman stated thatthese decisions were anintegral partoftheUruguay Round final
package andtherefore would have tobeaccepted byallWTO Members.
20. Theobserver from theWCO stated thattheTechnical Committee hadstarted toexamine the
problems concerning imports bysoleagents, soledistributors andsoleconcessionaires, onthebasis
ofanumber ofpractical cases submitted bymembers.
21. TheCommittee took note ofthestatements made.G/VAL/SPEC/1
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G. Decision onContinued Application under theWTO Customs Valuation Agreement of
InvocationsofProvisionsforDevelopingCountriesforDelayedApplicationandReservations
under theTokyo Round Customs Valuation Agreement (WT/L/38)
22. TheChairman recalled thattheGeneral Council hadadopted thisdecision atitsmeeting of
31January 1995. Henoted thatparagraph 2ofthisdecision provided that"Reservations made under
paragraph 3oftheProtocol totheCustoms Valuation Agreement 1979 shall continue toapply under
theWTO Customs Valuation Agreement forthedeveloping country concerned onalimited and
transitional basis under such terms andconditions ashave been agreed bytheCommittee onCustoms
Valuation until thefirstmeeting oftheCommittee onCustoms Valuation ofthelatter Agreement where
such terms andconditions may bereviewed".
23. Hefurther recalled thattheTokyo Round Committee onCustoms Valuation, atitsfirstmeeting
heldon13January 1981, hadadopted adecision onreservations made under paragraph 3oftheProtocol
relating totheretention ofminimum prices which read asfollows (Annex 2,VAL/M/1):
"3. Forreservations made under paragraph 3oftheProtocol, theParty having made the
reservationshallcommunicatetotheCommittee(throughthesecretariat)induecourseaproposal
containing theterms andconditions under which itwants toretain theminimum customs values
(orsimilar schemes). This proposal would bediscussed bytheCommittee with theaimof
reaching anagreement ontheterm andconditions ofsuch reservation. Agreement should be
reached asquickly aspossible andatanyratenotlater than thedateatwhich theParty having
availed itself ofthepossibility ofArticle 21.1 starts implementing theprovisions ofthe
Agreement.
4. Areservation shall notcome intoforce if:...in thecaseofareservation made under
paragraph3oftheProtocol,noagreementhasbeenreachedonthecontent(termsandconditions)
ofthereservation bythetime thattheAgreement isimplemented bytheParty inquestion.
Cases where aminority view about theacceptability ornon-acceptability ofareservation exists
would beexamined intheCommittee, attherequest ofthecountry wishing toenter the
reservation, with aview toseeking amutually acceptable solution ...".
24. Hepointed outthatinthecaseofdeveloping country signatories totheTokyo Round Customs
Valuation Agreement having made thereservation, theterms andconditions under which thedeveloping
country signatory wanted toretain thesystem ofminimum prices were discussed intheCommitteeG/VAL/SPEC/1
Page 6
onlyashort timeprior toapplication bythedeveloping country signatory oftheAgreement. Therefore,
noterms andconditions hadbeen established bytheTokyo Round Committee foranyrecent developing
country signatory having made thereservation onminimum prices andhaving invoked theprovisions
ondelay periods under Article 21oftheTokyo Round Customs Valuation Agreement. Inlight of
this,heproposed thattheCommittee defer discussion ontheterms andconditions regarding theretention
ofminimum prices ofanydeveloping country Member concerned totheappropriate time.
25. Therepresentative ofNew Zealand stated thathisdelegation hadagrowing concern atthe
useofminimum customs systems particularly aspartofprice band systems incertain countries which
were distorting New Zealand 'strading conditions andcausing some practical trading problems. For
thatreason, hisdelegation hadexpressed some doubts about paragraph 2ofthedraft decision thatwas
adopted bytheGeneral Council earlier thisyear. Nevertheless, New Zealand hadbeen prepared to
joinaconsensus toadopt thatdecision inorder tohelp advance thework oftheWTO. Atthesame
time, hewanted toflagnow hisdelegation 'sexpectation thatsuch countries would usethegeneral
transitional period ofuptofive-years toadjust their current customs régime sothatthey would be
inaposition tofully implement theAgreement following theendofthatperiod. Healsowished to
signal thathisdelegation would notexpect tobevery receptive toaproposal tomaintain minimum
customs value systems beyond theendofthegeneral transition period forthecountries which currently
applied such systems.
26. TheCommittee took note ofthedecision contained indocument WT/L/38, andthestatement
made.
H. Coordination between Committees
27. The Chairman recalled that, inaccordance with therecommendation ofthePreparatory
Committee, theGeneral Council had, atitsmeeting on31January 1995, adopted aDecision onthe
"Avoidance ofProcedural andInstitutional Duplication" (WT/L/29). The decision provided for
cooperationbetweentheTokyoRoundCommitteeonCustomsValuationandthisCommitteewithrespect
tonotifications andtheholding ofjoint orconsecutive meetings intheperiod between thedateofentry
intoforce oftheWTO Agreement andthedateoftermination oftheTokyo Round Agreement. He
added thattheDecision ofthePreparatory Committee andtheCONTRACTING PARTIES toGATT
1947 (PC/11, L/7587) would beproposed foradoption atthemeeting oftheTokyo Round Committee
onCustomsValuation.AdraftdecisiontoterminatetheTokyoRoundAgreementonCustomsValuation
hadalsobeen putforward fortheconsideration oftheCommittee indocument VAL/W/65. HeproposedG/VAL/SPEC/1
Page 7
thattheCommittee take note oftheDecision onthe"Avoidance ofProcedural andInstitutional
Duplication".
28. TheCommittee soagreed .
I. Notifications
29. TheChairman noted thatthere were three items tobeconsidered under thisagenda item:
notification oflegislation, responses tothechecklist ofissues, andnotifications made bydeveloping
country Members.
30. Onthefirstitemofnotification oflegislation, herecalled thatparagraph 1ofArticle 22provided
that"Each Member shall ensure, notlaterthanthedateofapplication oftheprovisions ofthisAgreement
forit,theconformity ofitslaws, regulations andadministrative procedures with theprovisions ofthis
Agreement". Paragraph 2ofthesame Article provided that"Each Member shall inform theCommittee
ofanychanges initslaws andregulations relevant tothisAgreement andintheadministration ofsuch
laws andregulations".
31. TheTokyo Round Committee onCustoms Valuation hadadopted atitsfirstmeeting procedures
regarding "notification andcirculation ofnational legislation" which were asfollows: "(i)Parties will
submit thecomplete texts oftheir national legislation (laws, regulations, etc.)oncustoms valuation
inoneofthethree official GATT languages assoon aspossible tothesecretariat which willcirculate
them asCommittee documents totheother Parties inthelanguage submitted. Ifageneral interest is
expressed intheCommittee thatthetextofaparticular Party beavailable alsoinother official GATT
languages, thistextwillbetranslated andcirculated asaCommittee document. Inthose cases where
thenational legislation isnotinanofficial GATT language, theoriginal texts shall alsobesubmitted
tothesecretariat where they willbeopen forinspection. (ii)Itisunderstood thatthetexts ofthe
national legislation ofdeveloping countries availing themselves oftheprovisions ofArticle 21,
paragraphs 1and2oftheAgreement willbesupplied totheCommittee before thedeveloping countries
begin theapplication oftheprovisions oftheAgreement andtheProtocol."
32. Heproposed thatMembers, whowere notsignatories totheTokyo Round Customs Valuation
Agreement, follow thesame procedures onnotification andcirculation ofnational legislation ashad
been followed bytheTokyo Round Committee onCustoms Valuation.G/VAL/SPEC/1
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33. TheCommittee soagreed .
34. TheChairman stated that, inview ofthefactthattheWTO Customs Valuation Agreement
andtheTokyo Round Customs Valuation Agreement didnotdiffer inasubstantive manner except
where thequestion ofdisputes wasconcerned, itwaspossible thatthelegislation ofsignatories tothe
Tokyo Round Customs Valuation Agreement remained valid under theWTO Customs Valuation
Agreement. Insuch cases forMembers who were Tokyo Round signatories andwhose legislation
hadalready been examined, oneofthefollowing twoapproaches might beused:
(1) Acommunication from those Members could besenttotheWTO Secretariat indicating
thatlegislation notified under theTokyo Round Customs Valuation Agreement remained valid
under theWTO Customs Valuation Agreement with aspecific reference tothedocument
containing thislegislation. TheSecretariat would then proceed tocirculate thisnotification
inaWTO series; or
(2) Members could notify complete legislation totheSecretariat whowould circulate these
notifications inaWTO series. This approach wasbeing suggested aslegislation submitted
bycertain Tokyo Round signatories were contained inanumber ofsupplements anddidnot
make foreasy reference. This would beanopportunity tostart ofthework ofthisCommittee
onaclean andtransparent basis.
35. TheCommittee, agreed tofollow thefirst approach.
36. With respect tothechecklist ofissues which waselaborated bytheTokyo Round Committee
toserve asabasis ofaninitial examination ofnational legislations, theChairman suggested thatfor
Members whowere notsignatories totheTokyo Round Customs Valuation Agreement, theresponses
tothechecklist ofissues should besubmitted atthetime oforassoon aspossible after theMember
concerned hadstarted applying theAgreement.
37. TheCommittee soagreed .
38. InthecaseofMembers whowere Tokyo Round signatories andwhose legislation hadalready
been examined, theChairman proposed thatacommunication from those Members besent tothe
Secretariat indicating thattheir responses tothechecklist ofissues remained valid under theWTO
Customs Valuation Agreement.G/VAL/SPEC/1
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39. TheCommittee soagreed .
40. TheChairman drew theattention oftheCommittee todocument G/VAL/2 which contained
alistofdeveloping country Members having invoked special provisions available tothem under the
Customs Valuation Agreement, andalsoalistofdeveloping country Members affected bytheDecision
taken bytheGeneral Council on"Continued Application under theWTO Customs Valuation Agreement
ofInvocations ofProvisions forDeveloping Countries forDelayed Application andReservations under
theCustoms Valuation Agreement 1979".
41. Therepresentative oftheUnited States stated thatherdelegation feltthattheCommittee ought
toconsider time-frames andregulations concerning notification ofinvocations ofspecial provisions
available todeveloping country Members which were notparties totheTokyo Round Customs Valuation
Agreement. Existing provisions orprocedures didnotestablish anysuch time-frames. Intheview
ofherauthorities there should beatime-limit bywhich developing countries should notify notonly
their intention totakeadvantage ofthedelayed-application oftheAgreement buttheyshould alsoprovide
theCommittee with information ontheir legislation andthespecifics oftheprovisions they intended
touseintheinterim. Shesuggested thatdeveloping country Members wishing tomake such reservations
should dosoby15September 1995, which would leave enough time fortheCommittee toreceive
therelevant documentation andbegin adiscussion atthenext meeting. Furthermore herdelegation
wantedtosuggestthatanyfuturedevelopingcountryMembershouldnotifytheCommitteewithin90-days
ofjoining theWTO ofitsintention toinvoke thespecial provisions available todeveloping country
Members.
42. Therepresentative ofAustralia supported theproposal made bytheUnited States, especially
asconcerned theestablishment ofadeadline forthesubmission ofnotifications andtheproviding of
reasons astowhy such reservations were requested.
43. Therepresentative ofNew Zealand feltthatthere wassome merit inthesuggestion thatcountries
thathadindicated awish tomake useofthereservation forminimum customs value submit details
ofwhat theyproposed touseintheinterim. While there could alsobevalue inconsidering theproposal
thatthenotification obligations with respect tocountries thatjointheWTO inthefuture beclarified,
thatmight betaken upintherelevant accession working parties.G/VAL/SPEC/1
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44. Therepresentative oftheEuropean Communities endorsed thestatement made byNew Zealand,
andsuggested thatconsultations might benecessary toseewhether adeadline could besetandwhether
countries should justify their requests forreservations.
45. Therepresentative ofJapan stated thatnotifications ofinvocations ofanyreservations should
becommunicated assoon aspossible.
46. Theobserver from theWCO stated thattheissue ofminimum values wasvery sensitive and
deserved anin-depth examination.
47. Therepresentative ofCanada stated that, inhisview, twogroups ofdeveloping countries were
concerned bytheissue under discussion. One group consisted ofcountries thatwere signatories to
theTokyo Round Agreement andwhich were subject totheDecision taken bytheGeneral Council
on31January 1995 on"Decision onContinued Application under theWTO Customs Valuation
Agreement ofInvocations ofProvisions forDeveloping Countries forDelayed Application and
Reservations under theTokyo Round Customs Valuation Agreement". Theother group ofcountries
consisted ofthose thatwere notsignatories totheTokyo Round Agreement andhadinvoked thedelayed-
application intheir notification ofacceptance totheWTO Agreement. Thetime-frames applicable to
these twogroups ofcountries would notbethesame. While theCustoms Valuation Agreement did
notexplicitly state thatdeveloping country Members having availed themselves ofthese provisions
should provide justification there wasalsoaquestion ofgeneral transparency. Article 20oftheCustoms
Valuation Agreement referred toaperiod notexceeding five-years which leftopen thepossibility that
thetime-period may beshorter. Hisdelegation would suggest thatwhere acountry feltthatitdid
notneed thefullfiveyears, itcould notify itsintention toapply theAgreement atanearlier date.
48. Therepresentative ofBrazil stated thatBrazil wasasignatory tothe1979 Customs Valuation
Agreement andhadmade useofthefive-year delay period. Theimplementation oftheCustoms
Valuation Agreement wasnotaneasy taskforadeveloping country, andinfactBrazil 'sexperience
showed thatfiveyears were insufficient. Hisdelegation didnothave adirect interest inthisissue
asBrazil hadalready implemented theAgreement. However, itwasimportant totakeaposition here
especially asthesame issue hadarisen intheCommittee onImport Licensing Procedures. TheCustoms
Valuation Agreement aswellastherules contained therein were partoftheUruguay Round final package
which countries hadaccepted. Paragraph 1ofArticle 20stated thatadeveloping country Member,
notpartytotheTokyoRoundCustomsValuationAgreement,maydelaytheapplicationoftheAgreement
"for aperiod notexceeding fiveyears from thedate ofentry intoforce oftheWTO Agreement forG/VAL/SPEC/1
Page 11
such Members". Thedeveloping country Member concerned shall alsonotify theDirector-General
"accordingly". There wasnoobligation toprovide anexplanation astowhy thisperiod oftime was
being invoked norwasthere anyneed tofurnish anyother information onthesystem thatwould be
used intheinterim. There wasadifference between thisprovision andparagraph 1ofAnnex IIIwhich
stated thatifadeveloping country member wanted more thanfive-years thenitwould have toprovide
reasons fortherequest. Inthelatter case, theCommittee hadtheright toaskforinformation and
tojudge whether thiscountry should begranted more time ornot. Ifthedrafters oftheAgreement
hadwanted developing country Members tojustify their invocation ofparagraph 1ofArticle 20then
they would have included thenecessary sentence inthatprovision asthey haddone inthecase of
paragraph 1ofAnnex III.Hisdelegation could notaccept newdisciplines andnotification obligations
being created inrelation towhat wasalready contained intheAgreement andwhich were notpartof
theUruguay Round package. Atthesame time, hisdelegation could understand thatthere wasthe
issue ofgeneral transparency. Here some flexibility could beexercised andcountries applying minimum
price systems could berequested tonotify, forinstance, those minimum values. Butthiswould not
beduetoanyobligation deriving from theAgreement, butrather tothegeneral obligation tonotify
deriving from theDecision onNotification Procedures. That, inhisview, would betheappropriate
waytodealwith thisissue, anditwould notinvolve anyexplanation orjustification astowhyacountry
hadinvoked paragraph 1ofArticle 20.
49. Therepresentative ofCosta Rica stated thattheCustoms Valuation Agreement contained special
provisions available todeveloping country Members which were notsignatories totheTokyo Round
Customs Valuation Agreement, which hisgovernment hadinvoked. Itwas quite clear thatthe
implementation ofthisAgreement would present difficulties forcertain countries anditwasforthis
reason thattheprovision ondelayed-application wasextremely important. Itwashisdelegation 's
understanding, which wassupported bythetextoftheAgreement itself, thatthere wasnoobligation
tojustify theinvocation ofdelayed-application ortheuseofareservation. Itwould bevery dangerous,
atthisstage, tointroduce amendments tothetextorcreate newobligations which were notnegotiated
atthetime. Toinsist onthistype ofnotification might infactmake itvery difficult perhaps even
impossible forhiscountry toimplement theAgreement andhisdelegation could notagree tointroducing
such changes atthistime. Hisdelegation hadalways been infavour ofthegreatest possible transparency,
andagreed thattheCommittee should tryandfindsome other manner toachieve this. Itcould not
bedone bymaking itmandatory topresent ajustification fortheinvocation ofthose special and
differential treatment provisions.G/VAL/SPEC/1
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50. Therepresentative ofVenezuela stated thathisdelegation 'sposition hadbeen well outlined
inthestatements made bytherepresentative ofBrazil, andsubsequently Costa Rica. Theintroduction
ofnewobligations would infactreduce thescope oftheprovisions onspecial anddifferential treatment
which developing country Members hadtheright toresort to.This washappening inother foraas
wellanditwasanalarming trend. Hisdelegation could notsupport anyattempt tointroduce anysuch
changes tothese special anddifferential provisions.
51. Therepresentative ofMalaysia supported theviews expressed byrepresentatives ofdeveloping
countries ontheissue. Most oftheASEAN countries were newMembers oftheCustoms Valuation
Agreement. Hisdelegation wasnotinaposition todebate onthesubstance oftheissue which had
alsobeen raised intheCommittee onImport Licensing Procedures. This issue amounted toquestioning
some ofthebasic principles ofspecial anddifferential treatment provisions available todeveloping
countries. Hisdelegation expected Members toimplement faithfully theprovisions oftheUruguay
Round Final Package especially those onspecial anddifferential treatment. Heshared theview that
those countries having invoked thedelay-period might notneed thefullfiveyears, however, itshould
belefttotheMember concerned toindicate onavoluntary basis ifandwhen itcould implement the
Agreement. Hepointed outthatafurther extension ofthedelay-period wasstillpossible pursuant
toparagraph 1ofAnnex IIIifthere wasavalid reason.
52. Therepresentative ofPakistan stated thatinsofar asdelayed-application pursuant toArticle 20
wasconcerned there wasnodoubt thatitwasaprovision which stood onitsown andthere could not
beanyconditions attached totheinvocation ofthatright byadeveloping country Member. Onthe
issue ofminimum values under paragraph 2ofAnnex IIIthere were anumber ofaspects thatneeded
tobeconsidered such as:what would bethose terms andconditions? would theybegeneral innature,
i.e.applicable toMembers concerned across-the-board?
53. Therepresentative ofArgentina stated thatArgentina wasasignatory totheTokyo Round
Customs Valuation Agreement. Atthetime ofitsacceptance, Argentina hadinvoked theprovision
related todelayed-application buthadnotmade areservation onminimum prices. Hisdelegation 's
position onthese matters reflected hiscountry 'sinterest intheproper application oftheAgreement
andtheapplication ofArticle VIIofGATT 1994. There were nosubstantive differences between
theTokyo Round andtheWTO Agreement onCustoms Valuation with theexception oftheelimination
ofprovisions concerning dispute settlement. Remaining changes related tomodifications ofaneditorial
nature. With regard todelayed-application pursuant toArticle 20,theCommittee should continue
toapply thesame treatment ashadbeen given under theTokyo Round Customs Valuation AgreementG/VAL/SPEC/1
Page 13
andthesame wastrueofthereservation onminimum prices. Inthisconnection, hisdelegation felt
thatitwould beentirely possible tofollow thecriteria setupinAnnex 2ofthedocument VAL/M/1
pertaining tothequestion ofreservations ingeneral under theAgreement. There should benochange
introduced totheprovisions pertaining tospecial anddifferential treatment contained intheAgreement.
54. Therepresentative from ElSalvador stated thathisdelegation 'sposition wassimilar tothat
expressed byother developing countries, particularly Brazil. Hercountry hadbecome aWTO Member
on7May 1995, andhadmade useoftherights asprovided forunder Article 20.Herdelegation 's
reading ofArticle 20wasfairly clear. "Developing country Members may delay application ofthe
provisions ofthisAgreement foraperiod notexceeding five-years from thedateofentry intoforce
oftheWTOAgreementforsuchMembers.DevelopingcountryMemberswhochosetodelayapplication
ofthisAgreement shall notify theDirector-General oftheWTO accordingly." Thenotification had
been made totheDirector-General oftheWTO, andElSalvador 'sobligations under thisprovision
hadbeen met.
55. Therepresentative ofZimbabwe stated thatthere were anumber ofissues under discussion
which needed tobeseparated. Forexample, inhisview, countries could bedivided intotwogroups,
those thatwere signatories totheTokyo Round Customs Valuation Agreement andthose which had
become WTO Members. Also, thereservations under discussion needed tobedivided assome
reservationsweresubstantiveinnatureandothersprocedural.Also,thetransparencyissuewasimportant
since there wasaneed forother trading partners toknow what kind ofcustoms valuation provisions
applied incertain countries. Itwasalsoclear thatoneshould notdemand more thanwhat theAgreement
required with regard tothechoice ofadeveloping country toavail itself oftheprovision ofthe
Agreement.
56. Therepresentative ofUruguay supported thestatements made bytherepresentatives ofBrazil
andother developing countries. Hestressed alsothatparagraph 1ofArticle 20wasanexplicit right
intheAgreement andthatnodeveloping country hadtoshow "good cause" toinvoke thisright.
57. Therepresentative ofParaguay supported thestatement made byBrazil andother developing
countries.
58. Therepresentative oftheUnited States stated thattherights ofdeveloping countries toinvoke
special provisions available tothem under theAgreement wasnotbeing questioned. Asthedelegate
ofPakistan hadmentioned, thediscussion would bemore structured ifthetwoquestions were treatedG/VAL/SPEC/1
Page 14
separately, i.e.thegeneral delayed-application under Article 20.1 andtheprocess ofapplication of
minimum customs value.
59. Therepresentative ofHonduras andPeru supported thestatements made byother developing
country Members.
60. Therepresentative ofAustralia stated thatthetwoissues ondelayed-application andminimum
prices should beseparated. InfactAustralia 'sprevious comments related inparticular tothequestion
ofminimum values.
61. Therepresentative ofPakistan wanted toclarify thatconsultations ifconducted should notbe
undertaken ontheright ofdelayed-application asprovided forunder Article 20oftheAgreement.
Alldeveloping country Members having invoked thisprovision were exercising aright which wasnot
subject todiscussion. Onthequestion ofminimum values under paragraph 2ofAnnex III,discussion
onthisquestion might bepremature asthisright would presumably beused after theexpiration of
delay-periods invoked under Article 20. Hewasnotaware ofanydeveloping country Member being
inthesituation ofhaving made such areservation andhaving toapply theAgreement immediately,
inwhich case such consultations were unnecessary forthemoment.
62. Therepresentatives ofTurkey andVenezuela agreed with thepoint made bytherepresentative
ofPakistan.
63. Therepresentative ofNew Zealand stated thatasconcerned theassumption thatparagraph 2
ofAnnex IIIonly needed tobeconsidered after fiveyears, thiswasapoint ofinterpretation andhis
delegation would want toreserve itsright tocome back toit.
64. TheChairman inresponse toaquestion raised bytherepresentative oftheUnited States, stated
thatthefullnotifications made bydeveloping country Members atthetime ofacceptance oftheWTO
Agreement were reproduced indocument WT/LET/Rev.1. Hethenproposed thattheCommittee take
note oftheinformation contained indocument G/VAL/2 andofthestatements made.
65. TheCommittee soagreed .G/VAL/SPEC/1
Page 15
J. Decisions adopted bytheTokyo Round Committee onCustoms Valuation
66. TheChairman referred todocument G/VAL/W/1 which contained alistofdecisions adopted
bytheTokyo Round Committee onCustoms Valuation. Heproposed thatthedecisions relating to
theinterpretation oftheAgreement which were contained insection Aofdocument G/VAL/W/1 be
adopted bytheCommittee.
67. TheCommittee soagreed .
68. TheChairman suggested thattheCommittee should takeupseparately each ofthedecisions
concerning theadministration oftheagreement andworking procedures oftheCommittee listed in
Section Bofdocument G/VAL/W/1.
69. OntheProcedures fortheParticipation ofObservers (B.1), hepointed outthatthequestion
ofobservers hadalready been dealt with under agenda items DandE.Afinal decision onobserver
status ofinternational intergovernmental organizations bytheGeneral Council would supersede the
adhocarrangementsagreedtounderagendaitemEonobserverstatusofinternationalintergovernmental
organizations. Heproposed thattheCommittee need notadopt theprocedures setoutinsection B.1
ofdocument G/VAL/W/1.
70. TheCommittee soagreed .
71. TheChairman noted thattheProcedures forCirculation ofCommittee Documents (B.2) adopted
bytheTokyo Round Committee took account ofthesituation existing atthetime oflimited membership
oftheAgreement.NotallcontractingpartiestotheGATTweresignatoriestotheTokyoRoundCustoms
Valuation Agreement. However, inlight ofthecurrent situation where allWTO Members were also
MembersofthisCommitteeanddocumentsissuedbytheCommitteewouldbecirculatedtoallMembers,
theCommittee need notadopt thisprocedure assetoutinsection B.2ofdocument G/VAL/W/1.
72. TheCommittee soagreed .
73. TheChairman proposed thatsince consultations onthequestion ofderestriction ofdocuments
were taking place atthelevel oftheGeneral Council, theCommittee should await theoutcome ofthose
discussions before taking anyaction ontheProcedures forthederestriction ofdocuments assetout
insection B.3ofdocument G/VAL/W/1.G/VAL/SPEC/1
Page 16
74. TheCommittee soagreed .
75. TheChairman proposed thattheCommittee adopt decision B.4on"Reservations under the
Agreement onCustoms Valuation" with relevant changes toarticle numbers ordates.
76. TheCommittee soagreed .
77. Responding toaquery from therepresentative oftheNew Zealand, theChairman stated that
thedate indicated inparagraphs 1and2oftheDecision would bechanged from 1January 1981 to
1January 1995. Theonemonth provided forMembers tooppose reservations made under Article 21
oftheWTO Customs Valuation Agreement wasnotanissue asnocountry hadmade such areservation.
78. TheChairmannotedthattheCommitteehadalreadydiscussedunderagendaitemItheprocedures
tobefollowed with respect totheProcedures onNotification andCirculation ofNational Legislation
(B.5) andontheChecklist ofIssues (B.6). Hesuggested thattheCommittee adopt those procedures
asagreed upon under agenda item Iastheprocedures forthenotification andcirculation ofnational
legislation andchecklist ofissues intheWTO Committee onCustoms Valuation.
79. TheCommittee soagreed .
80. TheChairmanstatedthatthepracticeestablishedbytheTokyoRoundCommitteeonInformation
onTechnical Assistance (B.7) would beuseful forthisCommittee toadopt. Itwasapractice which
hadensured andwould continue toensure transparency ontechnical assistance activities. Heproposed
thattheCommittee continue with thispractice setoutinsection B.7ofthedocument G/VAL/W/1.
81. TheCommittee soagreed .
82. The Chairman stated thatthetextofanydecision setoutinSection Bofthedocument
G/VAL/W/1 adopted bytheCommittee would beadapted totheWTO situation; forexample references
to"signatories" would bechanged to"Members" andsoforth. Furthermore, those decisions would
becirculated inafinal version inthedocument series G/VAL/-.G/VAL/SPEC/1
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K. Procedures fortheannual review
83. TheChairman noted thatinaccordance with Article 23oftheAgreement theCommittee was
toreview annually theimplementation andoperation oftheAgreement taking intoaccount theobjectives
thereof, andtoannually inform theCouncil forTrade inGoods ofdevelopments during theperiod
covered bysuch reviews. Under theTokyo Round Committee, anannual review wasusually conducted
atthelastmeeting oftheCommittee onthebasis ofaSecretariat working document which was
subsequently finalized bytheSecretariat inthelight ofcomments orinstructions given bytheCommittee
oranyevent occurring atthatmeeting. Asconcerned thereport totheCouncil forTrade inGoods,
inthepast, theSecretariat hadprepared adraft report, which wascirculated tosignatories tothe
Agreement inadvance ofthemeeting. This report wasreviewed bytheCommittee, andupdated
subsequently bytheSecretariat onthebasis ofinstructions received bytheCommittee andinthelight
oftheCommittee 'sproceedings atthatmeeting. Heproposed thattheCommittee follow thesame
procedure astheTokyo Round Committee regarding theannual review oftheAgreement andthereport
totheCouncil forTrade inGoods.
84. TheCommittee soagreed .
L. Report onthework oftheTechnical Committee atitsTwenty-Ninth Session
85. Theobserver from theWCO presented, onbehalf oftheChairman, Mr.Hadjiyiannis, areport
ontheTwenty-Ninth Session oftheTechnical Committee onCustoms Valuation held from 13to17
March 1995. Thereport ofthesession would becirculated inWCO document 38.999.
86. Under intersessional developments, theTechnical Committee hadbeen informed thatthemajor
intersessional development hadbeen theentry intoforce oftheWTO on1January 1995. TheTechnical
Committee hadalsobeen advised thatasaresult oftheentry intoforce oftheWTO, decisions would
need tobemade about anumber ofprocedural matters, including thephasing outoftheTokyo Round
Technical Committee, theestablishment ofanew Technical Committee under the1994 Agreement
andthetreatment oftheinstruments oftheTokyo Round Technical Committee bythenewTechnical
Committee. Noting thatboth theWTO Customs Valuation Committee andtheTokyo Round Customs
Valuation Committee hadtomake similar decisions, theTechnical Committee haddecided toobserve
thedecisions taken bythese Committees before itmade anydecisions regarding itsown transitional
arrangement. Nevertheless, itwasanticipated thatthefirstmeeting oftheWTO Technical Committee
would beheld inOctober 1995.G/VAL/SPEC/1
Page 18
87. TheTechnical Committee hadbeen informed thatmeetings hadtaken place between theIMF
andWCOSecretariatsinrelationtotheWorldBank/IMF/WCOcooperationprojectconcerningtechnical
assistance oncustoms valuation. Ithadbeen decided thattheWCO andIMF would consult inorder
topresent theproject totheWorld Bank; theproject would contain anaction plan; andinitially the
action plan would betested oncertain chosen countries. The countries selected would work in
conjunction with thethree Organizations. Ifthepilot programmes were satisfactory, thefunding
organizations would probably beinclined toimplement thisproject inalarger number ofcountries.
88. TheTechnical Committee hadbeen informed thattheWCO Secretariat hadreceived replies
from23ContractingPartiesinrelationtothequestionnaireconcerningthechoicestheymadeforapplying
various provisions oftheAgreement. Aconsolidation ofthereplies received would becirculated in
WCO document 39.286. This document should prove extremely valuable tothose countries expected
tointroduce theAgreement inthenext 5years.
89. TheTechnicalCommitteehadalsobeeninformedthatAmendingSupplementNo.12toCustoms
Valuation -GATT Agreement Compendium hadbeen issued inFebruary 1995. TheWCO Secretariat
hadundertaken arevision oftheValuation Training Course inlight oftheentry intoforce oftheWTO
Valuation Agreement. Two new lessons hadnow been added dealing with riskassessment and
selectivity, andpost clearance audit. The brochure onthestudy onlegislation, regulations and
administrative practices would becirculated shortly.
90. With respect totechnical assistance, theTechnical Committee hadtaken note ofinformation
document 39.316 which updated theinformation onseminars andtraining courses organized onthe
GATT Agreement andtheactivities oftheWCO inthisarea. Inconjunction with thecustoms
administration ofGabon, aregional seminar ontheGATT Valuation Agreement hadbeen held in
Libreville, Gabon from 24October to28October, 1994. Theseminar hadbeen intended toinform
WCO Members oftheWest andCentral African region oftheprinciples oftheGATT Valuation
AgreementwithemphasisontheconsequencesresultingfromtheestablishmentoftheWTOandproblems
related toimplementation oftheAgreement bydeveloping countries. There hadbeen fifty-six
participantsfrom,Angola,BurkinaFaso,Cameroon,CentralAfricanRepublic,Côted'Ivoire,Equatorial
Guinea, Gabon andTogo. Theseminar hadbeen conducted inFrench bytwoofficials from theWCO
Valuation Directorate. Asaconclusion totheseminar, delegates hadagreed toadeclaration tobe
presented totheadministrations ofcountries represented attheseminar urging their immediate attention
toinitiating implementation planning activities fortheintroduction oftheWTO Customs Valuation
Agreement. TheWCO Secretariat hadmetwith officials oftheformer PTA, nowcalled theCommonG/VAL/SPEC/1
Page 19
Market ofEastandSouthern Africa (COMESA) inLusaka. Thepurpose ofthemeeting wastodiscuss
what developments hadtaken place intheregional group with respect tocustoms valuation. Most
oftheCOMESA members were WTO Members andthuswould have toapply theAgreement aspart
oftheir newobligations. Ithadbeen suggested thatinformation onthemanner inwhich countries should
proceed wasvery important andithadbeen agreed thatCOMESA would, onapriority basis, explore
with itsmembers various options forconducting aprogramme intheregion. Recently, adelegation
from Macau hadsought advice andinformation onthepreparation ofMacau 'slegislation onvaluation.
Macau used provisions principally forexcise purposes andtheWCO Secretariat hadbeen abletoassist
inrecommending methods forvalue determination.
91. With respect totechnical assistance inrespect ofwhich aninstrument wasadopted, theTechnical
Committee, atthelastsession, hadfinalised itsresponse tothree questions related tothevaluation
ofused automobiles referred toitbytheSlovak Republic. Theresponses provided guidance onthe
useofArticle 1oftheAgreement incircumstances where automobiles were purchased onthedomestic
market ofthecountry ofexport prior toexportation andimportation. Theresponses alsodiscussed
theuseofcatalogue prices inthecontext oftheprohibition onthedetermination ofcustoms value on
thebasis oftheprice ofgoods onthedomestic market ofthecountry ofexport contained inArticle 7.2
oftheAgreement. Theresponses would bepublished asasupplement toStudy 1.1which examined
thevaluation ofused automobiles.
92. With regard totechnical issues currently being considered, theobserver from theWCO stated
thattheTechnical Committee 'sprogramme ofwork included thefollowing topics:
(a) Sole agents, soledistributors andsoleconcessionaires
93. Pursuant tothedecision during theUruguay Round relating totheconcerns expressed by
developingcountrieswithregardtoimportationsbysoleagents,soledistributorsandsoleconcessionaires,
theTechnical Committee hadsought toaddress these concerns onthebasis ofexamples ofproblems
referred toitbydeveloping countries. Inthisregard, theTechnical Committee again considered two
draft casestudies related toimportations bysoleagents andsoleconcessionaires which were generally
based oncases submitted byamember. TheTechnical Committee haddecided tocease itsexamination
ofthefirstcasestudy which related toasoleagent transaction because itdealt with arelatively straight
forward situation. Inrelation tothesecond draft case study, theTechnical Committee hadsuggested
further amendments forconsideration atitsThirtieth Session. TheTechnical Committee hadalso
examined, forthefirst time, twoadditional draft case studies prepared bytheWCO Secretariat onG/VAL/SPEC/1
Page 20
thebasis ofanactual situation encountered byanother member. Both cases dealt with issues associated
with theinterpretation oftherelated person provisions oftheAgreement. After suggesting anumber
ofamendments tothetestofboth case studies, theTechnical Committee haddecided tocontinue its
examination atitsThirtieth Session.
(b) Interpretation ofthephrase "legally recognised partners inbusiness" inArticle 15.4
94. TheTechnicalCommitteehadconsideredadraftinformationdocumentrespondingtotherequest
foranopinion submitted byColombia inrelation totheinterpretation ofthephrase "legally recognized
partners inbusiness" inArticle 15.4 oftheAgreement. Thedraft information document stated that
thephrase related tothespecific legal relationship ofpartnership inrespect ofwhich most, ifnotall,
contracting parties would have separate commercial laws, andthatmembers should notdraft different
definitions ofpartnership specifically forcustoms valuation. TheTechnical Committee hadinstructed
theWCO Secretariat toprepare adraft advisory opinion onthebasis ofdraft information document
forconsideration bytheTechnical Committee atitsThirtieth Session.
(c) Scope oftheterm "maintenance" intheNote toArticle 1
95. TheTechnical Committee hadconsidered adraft information document which discussed the
scope oftheword "maintenance" intheNote toArticle 1andinparticular itsrelationship totheconcept
of"warranty". TheTechnical Committee hadexpressed theview thatthere wasadistinction between
maintenance andwarranty andhadinstructed theSecretariat prepare adraft Explanatory Note for
consideration attheThirtieth Session.
(d) Correlation between paragraphs (c)and(d)ofArticle 8.1
96. The Technical Committee hadre-examined adraft information document concerning the
correlation between paragraphs (c)and(d)ofArticle 8.1. Atthecentre ofthediscussion wasthe
question ofwhether aroyalty orlicence feewhich failed tomeet therequirements forinclusion in
customs value under Article 8.1.(c) could beincluded incustoms value under Article 8.1.(d) when
itwasaproceed ofsubsequent resale, disposal oruseaccruing tothevendor. Members oftheTechnical
Committee were divided intheir position inrelation totheanswer tothatquestion. Inanattempt
toarrive atacommon position, theTechnical Committee hadinstructed theSecretariat toprepare a
revised information document which examined theissues indetail andwhich drew upon therecent
decision oftheTechnical Committee concerning theapplication ofparagraphs (b)and(c)ofArticleG/VAL/SPEC/1
Page 21
8.1. Herecalled thattheTechnical Committee hadrecently examined theissue ofthevalue ofanassist
being determined onthebasis ofaroyalty orlicence feepayment.
97. With regard totheInternational Symposium ontheGATT/WTO Valuation Agreement, the
Technical Committee hadapproved theSecretariat 'sproposal fortheInternational Symposium tobe
held attheWCO inBrussels from 27to29September 1995 thus immediately preceding thenext
Technical Committee meeting. Thepurpose oftheSymposium wastoprovide up-to-date information
onthepractical experience ofcountries already applying theAgreement; topromote thesharing of
bestpractices among theMembers already applying theAgreement andnewMembers; andtoprovide
theopportunity todiscuss practical issues andspecific difficulties asthey concerned new Members.
Theformat fortheSymposium would beaseries ofpanel discussions heldinplenary sessions. Each
panel would dealwithatopic considered tobeofsignificance tocountries whowould shortly berequired
toimplement andapply theWTO Customs Valuation Agreement.
98. With regard toitsprogramme offuture work, theTechnical Committee continued tohave a
fullprogramme ofwork. AtitsThirtieth Session, itwould continue examination ofthecase studies
involving related person transactions, sole agents, sole distributors andsole concessionaires, the
interpretation ofpartners inbusiness inArticle 15.4, thescope oftheterm "maintenance" inthenote
toArticle 1andthecorrelation between paragraphs (c)and(d)ofArticle 8.1. Inaddition, theTechnical
Committee would examine forthefirsttime adraft information document relating totheimplication
ofaseparate loan arrangement between thebuyer andtheseller interms ofArticle 15.4.
99. With regard toelection ofChairman, recognising theuncertain future oftheTokyo Round
Technical Committee inlight oftheneed toestablish thenewWTO Technical Committee, theTechnical
Committee haddecided toelect MrP.R.V.Ramanan (India) astheChairman forThirtieth Session
inOctober. Mr.Hadjiyiannis 'stwoyear term asChairman oftheTechnical Committee would end
on30June 1995. TheTechnical Committee hadexpressed itsappreciation toMr.Hadjiyiannis for
theeffort andskill hedisplayed asChairman oftheTechnical Committee. Itwasanticipated that
theelection oftheChairman ofthenew WTO Technical Committee would take place inOctober.
100. TheTechnical Committee 'sThirtieth Session would takeplace from 2to6October 1995.
101. Therepresentative ofUnited States welcomed thereport presented bytheobserver from the
WCO andwondered whether there wasanything theCommittee ortheWTO Secretariat needed toG/VAL/SPEC/1
Page 22
dotoensure thesmooth transition from theTokyo Round Technical Committee totheWTO Technical
Committee.
102. Therepresentative from theWTO Secretariat stated thattheSecretariat haddiscussed thismatter
with theWCO Secretariat. After thefirst WTO Committee meeting, organizational efforts would
bemade toinstall andmake operational theWTO Technical Committee atitsfirstmeeting which was
scheduled tobeheld intheautumn.
103. TheCommittee took note ofthereport onthework oftheTechnical Committee, andexpressed
appreciation foritscontinued valuable work.
M. Date ofmeetings
104. TheChairmannotedthatArticle18oftheAgreementstatedthat"TheCommitteeshallnormally
meet once ayear, orasisotherwise envisaged bytherelevant provisions ofthisAgreement..".
Recalling thatunder theTokyo Round Agreement theCommittee hadheld tworegular meetings each
year, heproposed thattheCommittee follow thesame practice.
105. TheCommittee soagreed .
106. TheChairman suggested thatthedate andtheagenda ofthenext meeting would besetin
consultation with interested delegations.
107. TheCommittee soagreed .