RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/M/7
17 June 1998
(98-2458)
Committee on Customs Valuation Original:  English
MINUTES OF THE MEETING OF 8 MAY 1998
Chairman:  Mr. T. di Pietro (Italy)
The agenda proposed for the meeting, circulated in WTO/AIR/835, was adopted as follows
with agreement to reverse the order of items 5 and 6:
Page
1. Report on the work of the Technical Committee on Customs Valuation .........................   22. Information on implementation and administration of the Agreement............................. 4
(a) Notification of na tional legisl ation ...................................................................... 4
- India (G/VAL/N/1/IND/2;  G/VAL/W/8;  G/VAL/W/14;
G/VAL/W/19;  G/VAL/W/23)
- Mexico (VAL/1/Add.25/Suppl.1, 2 and 3;  VAL/2/Rev.2/Add.8)
- Singapore (G/VAL/N/1/SGP/1;  G/VAL/N/2/SGP/1)- Iceland (G/VAL/N/1/ISL/1)
- Slovenia (G/VAL/N/2/SVN/1)
- Canada (G/VAL/N/1/CAN/2)
(b) Notification that national legislation under the Tokyo Round
Customs Valuation Agreement remains valid under the WTO CustomsValuation Agreement........................................................................................... 9
- Malawi (G/VAL/N/1/MWI/1)
(c) Notifications made by developing country Members (G/VAL/2/Rev.6)............. 9
3. Information on the application of Decisions of the Committee on
Customs Valuation (G /VAL/W/5/Rev.4) ......................................................................... 10
4. Technical assistance
(a) Information on technical assistance (G/VAL/8/Add.3) ....................................... 10
(b) Article 20.3 technical assistance activities (G/VAL/11;  G/VAL/W/24;
G/VAL/W/25)...................................................................................................... 10
5. Other business ............................................................................................................... .1 2
(a) Date of next meeting............................................................................................ 12
6. Election of  Officers......................................................................................................... .. 12G/VAL/M/7
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1. Report on the work of the Technical Committee on Customs Valuation
1.1 The observer from the WCO presented, on behalf of Chairman Mr. H. Vicente (Argentina), a
report on the work of the Sixth Session of the Technical Committee on Customs Valuation (hereafter,
the Committee), held in Brussels from 27 April to 1 May 1998.
1.2 Regarding intersessional developments, the Co mmittee was informed of the entry into force
on 1 January 1998 of the WCO Secretariat's new struct ure.  The former three-Directorate structure
(Nomenclature, Valuation, and Technique) had been replaced by a two-Directorate structure (Tariff
and Trade Affairs, Compliance and Facilitation).  The Tariff and Trade Affairs Directorate currently
included the Nomenclature and Valuation Sub-Directorates.  Once the work on harmonization and
standardization of rules of origin was completed, the Directorate would have a third Sub-Directorate
with responsibility for origin matters.  The Co mpliance and Facilitation Directorate included the
Enforcement/Compliance Sub-Directorate and the Procedures/Facilitation Sub-Directorate.  TheCommittee was also informed about the continuing development of the WCO Vision Statement
intended to cover the beginning of the 21st century.  At its 38th Session, held in Brussels from 10 to
12 December 1997, the Policy Commission had examined the Secretariat's environmental scan and
agreed to set up a Working Group to produce a more comprehensive draft Vision Statement, and to
reflect the private sector's views in paragraph 19 of the draft report.
1.3 The Committee was also informed that the Secretariat was planning to move to the new WCO
Headquarters by July 1998 and to hold the 7th Session of the Technical Committee in October on the
new premises.  He added that an important Forum on integrity challenges for customs administrations
was held from 1 to 3 April 1998, with speakers from customs administrations and international
organizations and private sector.  Finally, the Committee was informed that the new version of theCustoms Valuation Compendium was available in the three working languages of the Committee.
1.4 Regarding the future direction of the Committee, he noted that the Working Group set up to
discuss this had met on Monday 27 April 1998 from 2:30 p.m. to 8 p.m.  The Working Group
included ten countries participating on a voluntary basis according to the following mandate:
(a) basis for discussion:  the Working Group should consider what had been the
background and environmental issues that had brought the Committee to consider its future
direction;
(b) areas or subjects of the Committee's future work:  the Working Group should
consider what areas or subjects (agenda items) should be added, eliminated or re-emphasised,
with attention being paid specifically to the needs of new Members;
(c) working methods and practices of the Committee:  the Working Group should
consider how to improve the working methods of the Committee to respond to the needs of itsMembers in the future.
The Working Group carried out a comprehensive review  of the factors and issues which would impact
on its work in the future, taking account of the in ternational developments in the customs valuation
field.  The report of the Working Group would be circulated to Members during the intersession.  At
the next session, the Committee would finalize and adopt the recommendations of the Working Partyas well as any further action plans to be implemented immediately.
1.5 On technical assistance, the representative described the various seminars, expert missions
and workshops on customs valuation which the WCO organized and/or in which it participated which
are summarized in WTO document G/VAL/8/Add.3.  He added that, under the framework of the 26th
and 27th WCO Fellowship Programmes, seven officers from seven customs administrations receivedspecialized training on the implementation of the Agreement.G/VAL/M/7
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1.6 Regarding progress on implementation of the Agreement, he noted that the Committee had
examined Document 42.324 which contained information regarding the actions taken by
Burkina Faso, Chile, Mozambique, Nigeria, Slovakia and Zambia to implement the Agreement.  In
June 1997, Burkina Faso had set up a national committee to address the implementation preparations.
The drafting of a national legislation as well as new regulations were almost completed.  Chilereported that the needs analysis carried out by experts from AEC donor countries in December 1997
was quite successful.  Mozambique pointed out that although it did not request the five-year delay
period it was considering the options available.  Nigeria had forwarded its draft legislation and draft
valuation procedures to the WCO for review and advice which had been given.  The Slovak Republic
had held two meetings with the European Union to harmonize the practical implementation of
valuation rules.  Zambia had set up a steering committee which included six senior customs officials.
This committee set up an action plan which included, inter alia , examination of valuation literature,
drafting of legislation, preparing guides and manuals.  Zambia's final target for implementation was
31 January 2000.  He added that document 42.321 also included information concerning technical
assistance that had been provided by developed countries.
1.7 On practical application of the Agreement, the ICC had been invited by the Committee to
give a presentation on "a trader's perspective of a customs audit".  This presentation was very well
received as it illustrated the expectations of the trading community on how it wished to be treated by
customs.  The Secretariat also initiated a study on the use of value declaration forms which would be
concluded at the next session.
1.8 Regarding technical issues already concluded by the Committee, the re-examination of
Explanatory Note 4.1 (consideration of the relationship under Article 15.5, read in conjunction with
Article 15.4) was concluded.  The re-examination ha d been prompted by concerns expressed by one
delegation at the first Committee about the emphasis given to the freedom to enter or terminate a
contract in the actual Explanatory Note 4.1.  An amendment was made to suppress paragraph 15
which heavily focused on the freedom to enter or terminate the contract by either party, an
interpretation which seemed to go far beyond the Interpretative Note to Article 15.4(e).  As a result,the last sentence of paragraph 14 was amended to read "...therefore, the working of the Interpretative
Note to Article 15.4(e) ...shall be taken to apply to situations which go beyond usual buyer/seller or
distribution arrangements and involve a position to exercise restraint or direction on respect of
essential aspects relating to the management of the activities of the other person".  The Committee
also approved the amendments suggested by the Secretariat to Commentary 2.1 regarding goodssubject to subsidies and bounties to reflect the changes agreed during the Uruguay Round.
1.9 Under technical issues currently being considered by the Committee, the relationship between
paragraphs (c) and (d) of Article 8.1 was discussed.  The Committee examined an example submitted
by an administration whereby a licence fee was paid  by an importer for the right to import and sell
goods bearing a seller's trademark on condition to pay 5 c.u. for each article sold by the importer to
buyers in the country of importation.  In response to the two questions agreed by the Committee to be
addressed, i.e. was the licence fee dutiable, and if so, would the application of Article 8.1(c) give adifferent result from the application of Article 8.1(d), most delegates felt that the licence fee was
dutiable but diverged on the proper provision covered in the case.  Some considered Article 8.1(c) or
(d) relevant, others considered Article 1 or 8.1(c) or (d) relevant, one delegation considered only
8.1(c) relevant, and another delegation considered only 8.1(d) relevant.  The Secretariat was asked to
prepare an information document containing this example and the comments made and also theexamples submitted by another delegation during the intersession.  At is next session, the Committee
will retain the example(s) which best illustrate the relationship between these two paragraphs.
1.10 Concerning the meaning of the expression "related to the goods being valued" and "as a
condition of sale of the goods being valued" in connection with Article 8.1(c), the Committee was
asked to prepare an information document which would address the two issues jointly following arequest by a delegation to merge these two issues.  Concerning freight equalization schemes, an issueG/VAL/M/7
Page 4
raised at the 4th Session by an administration which applied the Agreement on an f.o.b. basis, it was
noted that certain exporters included general charge s for freight in the c.i.f. or C&F price for the
goods based on average costs or rates for freight negotiated with transporters.  However, given that
the actual cost for the carriage of the goods was detailed on the bill of lading, the question arose as to
which of the two costs must be deducted by the customs administration to reach f.o.b. levels for
goods.  The Secretariat was requested to prepare an Advisory Opinion for consideration at its next
session taking the view that the actual freight charges should be taken into account in determining
customs value and with a view to reaching an international agreement on this issue.  Concerning the
continuing discussion on warranty charges, the Committee examined the amended version of the
information document prepared and additional suggestions were made to improve its drafting.  The
Committee discussed the future treatment of Annex II to document 41.873 relating to the ICC's
comments and proposals were made which would be considered at the next Session.  Finally, on thescope of the term "control" in Article 15.4, as the Committee had approved the draft document in the
context of the re-examination of Explanatory Note 4.1 which contained similar issues, it was agreed to
keep this item on the programme of future work for the 7th Session.  The Committee would then
consider whether or not an additional instrument was needed.
1.11 For its future work,  the Committee at its 7th Session would continue its examination of the
technical issues under the previous sub-item as well as revert to the issue of related party transactions
and consider questions raised by Hungary during the intersession (interpretation of Article 5 of the
Agreement and price reduction).  An informal exchange of views would also be held on the
implementation and application of the Agreement.  The Committee re-elected Mr. Horacio Vicente
(Argentina) as its Chairman and Mr. M. Kemp (New Zealand) as its Vice-Chairman.  The next
Session of the Committee will be held on 5 to 9 October 1998.
1.12 The representative of Mexico requested further information explaining the work of the two
Directorates which had recently been created in the context of the reorganization of the WCO
Secretariat.
1.13 The representative of the World Customs Or ganization expressed willingness to forward a
document explaining the functions of the new Directorates.  He added that there was no substantial
difference in duties from what existed in the past .  The Valuation Directorate was combined with the
Nomenclature Directorate to form the new Directorate called the Tariff and Trade Directorate and
there had been no difficulties since this new structure had been introduced.
2. Information on implementation and administration of the Agreement
2.1 The Chairman explained that there were three sub-items to examine under this agenda item
and proposed to examine each separately.  He recalled that Article 22 of the Agreement required each
Member to inform the Committee of any changes in its laws and regulations relevant to the
Agreement and any changes in the administration of such laws and regulations.  In addition, the
Decision on Notification and Circulation of National Legislation, adopted by the Tokyo Round
Committee, required each Member to notify its legislation to the Committee.
(a) Notification of national legislation
India
2.2 The Chairman recalled that the notification made by India and circulated in document
G/VAL/N/1/IND/2 concerned recent amendments to the Customs Valuation Rules 1988, bringing
these Rules into conformity with the method of de termination of customs value as laid down in the
Customs Valuation Agreement.  At the April 1996 meeting of the Committee, the United States posedseveral questions during the discussion of India's legislation which had been circulated in document
G/VAL/W/8.  The responses by India were circulated at the October 1996 meeting of the CommitteeG/VAL/M/7
Page 5
and subsequently in document G/VAL/W/14.  At the April 1997 meeting, the United States posed an
additional question which was circulated in G/VAL/W/19, to which the Indian delegation responded
at the October 1997 meeting (circulated in G/VAL/W/23).  It had been agreed to revert to this item at
this meeting.
2.3 The representative of the United States stated that his delegation continued to view the
provision at issue in the Indian legislation, which appeared to set forth an arbitrary uplift, contrary to
Article 7.2 of the WTO Agreement on Customs Valuat ion.  His delegation would undertake to further
discuss this matter informally with India to de velop a better mutual understanding of the issues
involved.  Under these circumstances, he did not consider it necessary to revert to this item at the next
meeting of the Committee.
2.4 The Committee took note of the statements made and agreed  to conclude examination of
India's legislation.
Mexico
2.5 The Chairman recalled that discussion on the modifications that had been introduced to
Mexico's customs legislation had been on-going for several years both in the Tokyo Round
Committee and in the WTO Committee on Customs Valuation.  The amendments and Mexico's
legislation had been circulated in documents VA L/1/Add.25/Suppl.1, 2, and 3.  Mexico's response to
the Checklist of Issues had been circulated in document VAL/2/Rev.2/Add.8.  He noted that it was his
understanding that consultations were still continuing on this matter pursuant to Article XXII:1 of the
GATT 1994 and Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes as well as in the Committee on Regional Trade Agreements.  It had been agreed to revert to
this item.
2.6 The representative of the European Communities confirmed that consultations had been on-
going for quite some time.  His delegation would have liked to see more flexibility from the Mexican
delegation after these consultations.  At the same time, his delegation considered that examination of
this legislation in this Committee could only be regarded as complete in terms of examination of
valuation legislation.  However, areas of concern could always be reopened later in this Committee ifthe need arose, as well as in the Committee on Regional Trade Agreements.
2.7 The representative of Norway stated that her delegation was still not able to fully assess the
Mexican customs valuation regime given that there were answers pending to questions raised by
several Members.  Her delegation was, therefore, not in a position to conclude the examination of the
Mexican customs valuation regime and would ask that the item be maintained on the agenda for the
next meeting.
2.8 The representative of Switzerland supported the statement by the representative of Norway.
Her delegation had not yet received a reply to the questions that it had asked of Mexico.  While
waiting for this information to be communicated, her delegation wished the item to remain on the
agenda.
2.9 The representative of the European Communities clarified that there were not any outstanding
questions, as such.  There was always scope for countries to come back with new ideas or suggestions
on how they might change their practices.  Any initiatives to change were welcome, but his delegation
did not consider that there were any outstanding questions related to the legislation in terms of its
contents, scope, application or interpretation vis-à-vis the Agreement.
2.10 The Committee took note of the statements made and agreed  to revert to this item at its next
meeting.G/VAL/M/7
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Singapore
2.11 The Chairman drew attention to the notification made by Singapore circulated in document
G/VAL/N/1/SGP/1.  This notification included the Customs (Valuation) (Import Duty) Regulations;
the Customs (Amendment) Bill;  and Section 90D of the Customs Act, as inserted by the Customs
(Amendment) Act 1996.  Singapore explained that its implementing legislation consisted of anAmendment Bill to institutionalise the Agreement on Customs Valuation into the Customs Act.  The
operational details of the Agreement on Customs Valuation were in the Regulations made pursuant to
the Amended Act.  He noted that Singapore had submitted its responses to the Checklist of Issues
which had been circulated in document G/VAL/N/ 2/SGP/1.  At the last meeting, questions were
posed to the Singapore delegation by Hong Kong, China, the United States and the European
Communities.  Singapore responded to the questions orally at this meeting.  The European
Communities submitted these questions in writing, which were subsequently circulated in documentG/VAL/W/26.
2.12 The representative of Singapore responded orally to the questions by the European
Communities and asked that they be circulated in written form after the meeting.  To the first
question, he confirmed  that the Interpretive Notes to the Agreement were fully applicable in his
Government's legislation; to the second question, he confirmed that when an importer providedevidence referred to in paragraph 2 of the Agreement, no other proof was required under
Article 3.1(d)(i) of the Singapore regulations;  and finally he confirmed that the deductions allowed
under Article 4.3 of his Government's regulations were the actual costs.
2.13 The representative of the European Communities expressed satisfaction with the responses
provided by the Singapore delegation.
2.14 The Committee took note of the statements made and agreed  to conclude examination of
Singapore's legislation.Iceland
2.15 The Chairman recalled that at the last meeting, he had informed the Committee that Iceland
had notified its legislation in document G/VAL/ N/1/ISL/1 and that it would be taken up at this
meeting.
2.16 The representative of the European Communities considered that Iceland's legislation ignored
the rules in the Agreement on related parties when it came to trade arrangements between exclusive
distributors and so forth.  It appeared to him that the legislation reflected the opposite of what the
Agreement intended regarding sole traders and exclusive distributors.  As he considered it a
complicated issue although easily rectified, he would put the question in writing.
2.17 The Committee took note of the statements made and agreed  to revert to this item at the next
meeting.
Slovenia
2.18 The Chairman drew the Committee's attention to Slovenia's recently notified checklist of
issues contained in document G/VAL/N/2/SVN/1.
2.19 The Committee agreed to conclude the examination of Slovenia's checklist of issues.G/VAL/M/7
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Canada
2.20 The Chairman referred to the notification by Canada of recent technical amendments to the
Canadian legislation and regulations relating to customs valuation which became effective
17 September 1997.  These had been circulated in document G/VAL/N/1/CAN/2.  Specifically, two
provisions of the Canadian Customs Act  had been amended. The first introduced the term "purchaser
in Canada" which was defined by regulation.  The second amended subsection 48(1) of the Customs
Act to explicitly provide that the value for duty of goods was the transaction value if the goods were
sold for export to Canada to a purchaser in Canada.
2.21 The representative of the European Communities noted that his delegation had been
discussing these legal amendments, including the preceding administrative measures, with the
Canadian Revenue Authority for some time.  His delegation had hoped that, in adopting these
amendments, Canada would not take the restrictive approach that was particularly evident inArticle 2.1(c)(ii) of its legislation.  This type of provision had been eliminated in the European
Communities as well as in most of Canada's major trading partners some time ago.  He regretted the
Canadian approach as it reflected a missed opportunity for Canada to adopt an approach more in the
spirit of its trading partners.  His delegation invited Canada to reflect on this and to take an
opportunity when it next presented itself to revisit this restrictive provision.
2.22 The representative of Canada stated that he had taken note of the comments and invitation by
the representative of the European Communities.  As indicated by his delegation's notification, his
Government had made this amendment to confirm practices that had existed in Canada for a long time
which his Government considered fully consistent with the Agreement and its intent.  He indicated
that he would relay the EU concerns to his authorities.
2.23 The Committee took note of the statements made and agreed  to conclude examination of the
Canadian amendments.2.24 The representative of Poland informed the Committee that as of 1 January 1998, the new
Customs Code was in force.  The Polish Customs Code included customs value regulations which
were based on the WTO Agreement on Customs Valuat ion.  Therefore, for practical purposes, Poland
was applying WTO standards in the area of customs valuation regardless of the formal notification
under this agenda item.  Currently, the Polish customs legislation was being translated from Polish to
English and will be notified in the near future to  permit examination of the legislation at the next
meeting in October 1998.
2.25 The representative of Brazil stated that on 15 February 1998, the Brazilian Government
adopted Decree No. 2498 which dealt with the application of the WTO Agreement on Customs
Valuation.  This Decree replaced the customs valuation legislation in force in Brazil which had beennotified in the Tokyo Round Committee on Customs Valuation and confirmed in the Uruguay Round
Committee.  This new Decree, which established the general rules for customs valuation in Brazil,
was complemented by Ministerial Order No. 28/98, dated 16 February 1998, of the Ministry of the
Economy, and by the Federal Revenue Administration's normative instructions numbers 16, 17, and
18 of 16 February 1998.  All this legislation had been notified to the Secretariat in Portuguese.  Thetranslations of the text into one of the official WTO languages was under preparation, and to fulfil its
notification obligations under the Agreement, the Br azilian Government will probably make available
a summary of the main provisions and an update of the Brazilian replies to the checklist of issues.
2.26 The representative of Morocco stated that Morocco had launched a vast programme of reform
and adaptation of its customs valuation legislation to conform to the WTO Agreement.  A draft
national law was finalised and presented to the Parliament for consideration during its present session
which would conclude in June 1998.  Thus, Morocco was willing to apply the Agreement from
1 July 1998, except for a list of products for which it was making a reservation to maintain valuationG/VAL/M/7
Page 8
on the basis of reference prices for a transitional period of at least three years, conforming to
paragraph 2 of Annex III of the WTO Agreement on Customs Valuation.
2.27 She pointed out that the Agreement envisaged the possibility for developing countries to
invoke a waiver for all the provisions of the Agreement in case of difficulties in its implementation of
the Agreement.  However, Morocco, a developing country, had committed itself to apply theprovisions of the Agreement except those concerning reference prices.  This demonstrated the
willingness of Morocco to proceed with implementa tion of its WTO commitments and to make efforts
toward this end.  At the national level, the tariff headings of these products represented less than 8 per
cent of total tariff headings, and their imports only represented a very small part of global imports
(4 per cent) in 1996.  Furthermore, all imports of products on the list of reference prices were not
taxable on the basis of these prices.  It was only those products whose import values were lower than
the reference prices.  Thus, the share of the imports actually effected by these reference prices wasbelow 4 per cent.
2.28 As regarded the structure of this list of products subject to reference prices, it consisted
essentially of textile products and clothing.  The remainder of the list consisted of certain household
appliances,  mechanical, chemical, and electron ic products, and some vehicles.  The request by
Morocco to maintain a limited list of products subject to reference prices for a transitional period wasmotivated by the reasons which were at the origin of the application of these reference prices, which
depended on the sectors in question.
2.29 Regarding textiles and clothing, Morocco respected fully its WTO commitments in this
sector.  Actually, Morocco had already integrated wi thin the timetable required the two first tranches
of textile and clothing in the GATT framework, and the process of liberalization in this sector wascontinuing.  However, maintenance of a list of products for reference prices in this sector was
necessary for a transitional period because of the important role of this sector in the Moroccan
economy.  This sector contributed greatly to industrial employment, 38 per cent of industrial labour,
representing 176,500 people, with over 50 per cent of women, employed by more than
1,458 companies representing more than 23 per cent of national processing industries.  In addition,investment in this sector had reached over DH 1.8 bi llion in 1996, representing an increase of 12.5 per
cent over 1995.  This represented 23 per cent of total investments in processing industries.
Furthermore, the value of production of textiles and clothing reached DH 21.2 billion, 15.7 per cent of
the total value of production of national processing industries.  In 1996, the value added generated by
this industry grew to more than DH 7.6 billion, representing 16.5 per cent of the industrial GDP.
Exports of textiles and clothing represented over 22 per cent of total exports, more than DH 13 billion,
in 1996, compared to 2 per cent in 1995.  In light of this, it was evident that this sector played adeterminant role for the development of the nation al manufacturing industries.  She added that six
months ago, Morocco took a unilateral decision to reduce, on an MFN basis, an average of 50 per cent
the reference prices applied to textiles and clothing which brought these prices to normal prices on the
international market.  Morocco was reflecting on the possibility of reducing further these prices as
well as the customs duties applied.
2.30 Regarding vehicles on the list, reference prices were maintained to limit imports of used
vehicles for the following reasons:  consumer protection;  protection against road accidents due to the
poor quality of these vehicles;  environmental protection;  and avoidance of the aging of Moroccan
vehicles.  Regarding some of the household and electrical appliances on the list, reference prices were
maintained for essentially two reasons.  The firs t was to ensure a minimum of quality for imported
products in the absence of, for the time being, qual ity control and compulsory standards.  She noted
that work was underway to establish a system of quality control and to adapt national standardization
legislation to WTO standards.  The second reason was to minimize painful effects of low-priced
imports on national production during the completion of the process of adaptation of the national anti-
dumping legislation to the WTO Agreements and the establishment of a structure to examine anti-dumping claims.G/VAL/M/7
Page 9
2.31 In conclusion, she underlined that this request was of great importance for the development of
a certain number of industries in key sectors of the national economy, and would also allow Morocco
to implement all the provisions of the Agreement in the near future.  Finally, Morocco had launched  a
major process of liberalization, and was reflecting at the national level about the possibility of
deleting these reference prices even before the end of the period of reservation requested (three years).She reiterated that the draft bill implementing the Agreement had been finalized and presented to the
Parliament for its adoption.  Morocco would notify this as well as the list of products subject to
reference prices in the context of the Committee.
2.32 The representative of the European Communities took note of the information presented.  He
considered that it might have more appropriately been raised under "Other business".2.33 The representative of the United States recognized the great strides taken by Morocco in its
efforts to implement the Agreement on time and the fact that Morocco had availed itself of the
technical assistance that was available to establish a national system and to train its officials.  His
delegation regretted that Morocco considered it  necessary to seek a derogation unde r Annex III.
However his delegation was certainly prepared to engage in informal consultations with Morocco and
other Members on this request in the near future, taking account of the fact that paragraph 2 of Annex
III did allow for such reservations under such terms and conditions that may be agreed by Members.
2.34 The representative of Canada supported the statement by the EU and by the United States.  It
also wondered about the appropriateness of raising this issue under this agenda item as his delegation
understood that the legislation had already been introduced but that it involved a request for a
derogation.  His delegation would also consult with Morocco pursuant to paragraph 2 of Annex III
and look forward to discussion when this was an item on the Committee's agenda.
2.35 The Chairman recognized the right of Members to make declarations during the course of the
meeting.  He informed the Committee that Israel had also recently notified its legislation in document
G/VAL/N/1/ISR/1 and that it would be taken up at the October meeting of the Committee.  The
Committee took note of the statements made and agreed  to revert to these issues when they were
items on the formal agenda of a Committee meeting.
(b) Notification that national legislation under the Tokyo Round Customs Valuation Agreement
remains valid under the WTO Customs Valuation Agreement
2.36 The Chairman recalled that the Committee, at its meeting in May 1995, agreed on procedures
for the notification and circulation of national legislation for Members who were Tokyo Round
signatories and whose legislation had already been examined (paragraph 34(1) and 35 of
G/VAL/M/1).  Since the last meeting, Malawi had notified that its legislation, notified under the
Tokyo Round Customs Valuation Agreement as Go vernment Notice No. 7 of 1990 (VAL/1/Add.27),
had not been changed and therefore remained valid under the WTO Customs Valuation Agreement.
He also noted at this stage that there were still four Members which had notified legislation under the
Tokyo Round Agreement and which had not indicated the status of that notification in this
Committee.  Those Members were Botswana, Lesot ho, Poland, and Cyprus.  He urged those Members
who had not made notifications on legislation as well as replies to the checklist of issues, to submitthe required notification and replies as soon as possible.  He welcomed the statement from Poland that
it would be notifying its legislation soon.
2.37 The Committee took note of the information.
(c) Notifications made by developing country Members
2.38 The Chairman informed the Committee that no new notifications by developing countries
invoking the special provisions available to them under Article 20 and Annex III of the CustomsG/VAL/M/7
Page 10
Valuation Agreement had been received since the last meeting.  Document G/VAL/2/Rev.6, which
had been circulated at the last meeting, contained a list of the developing country Members that had
invoked some or all of these provisions.  The document also listed the developing country Members
affected by the Decision on "Continued Application under the WTO Customs Valuation Agreement
on Invocations of Provisions for Developing Countries for Delayed Application and Reservationsunder the Customs Valuation Agreement 1979" (WT/L/38).
2.39 He added that there were presently 51 developing countries that had invoked the special
provisions under Article 20.1 which allowed them to delay application of the Agreement for  a period
not exceeding five years.  For 27 of these countries, the delay period would expire on 1 January 2000.
That meant that half of the period during which they should be making the transition was over.  For
another 20, the end of the year 2000 would signal the expiration of their delay period.  As Members
were reminded at the last meeting, Members having taken these delay periods should be using thistime to prepare for implementation of the WTO Agreement.  Article 20, in sub-paragraph 3, also
contained provisions for the furnishing of technical assistance on a request basis, which developing
county Members could utilize for this purpose.  This would also be taken up during the agenda item
on technical assistance.
2.40 The Committee took note of the information.
3. Information on the application of Decisions of the Committee on Customs Valuation
3.1 The Chairman drew the Committee's attention to document G/VAL/W/5/Rev.4 which
contained the references of notifications that had been received pursuant to the Decision on the
"Treatment of Interest Charges in the Customs Value of Imported Goods" and the Decision on the
"Valuation of Carrier Media Bearing Software for Data Processing Equipment", both adopted by theCommittee and contained in document G/VAL/5.  This revised document updated the information
contained in G/VAL/W/5/Rev.3 and Corr.3 with the addition of a new document reference for the
Republic of Slovenia.  Specifically, in document G/VAL/N/3/SVN/1, the Government of the Republic
of Slovenia had indicated that it was applying  the above two Decision since 1 January 1996, the date
of enforcement of the new customs legislation in the Republic of Slovenia.
3.2 The Committee took note of the information.
4. Technical assistance
(a) Information on technical assistance
4.1 The Chairman stated that under this agenda item, there were two sub-items.  The first was
information on technical assistance which was contained in document G/VAL/8/Add.3.  This
document provided additional information on technical assistance activities conducted by the WCO.
4.2 The Committee took note of the information contained in this document.
(b) Article 20.3 technical assistance activities
4.3 The Chairman stated that the second sub-item, Article 20.3 technical assistance activities, had
been added to the agenda following agreement by the Committee at the October 1996 and April 1997
meetings.  He added that, in his opinion, the most positive aspect of the work done up to the present
was that the Committee not only collected factual information on technical assistance activities, butalso it gave political hints both to developing countries and to industrialized countries and to the
institutions involved on how technical assistance activities had to be planned for promoting
implementation of the Agreement.  A series of info rmal meetings were held last year following the
United States proposal in G/VAL/W/18, in which the Committee heard from several institutionsG/VAL/M/7
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involved on their activities, and learned of the activities of Members and of the needs and constraints
of other Members in implementing the Agreement.  All of this work had enriched the Committee's
understanding and would contribute to making more effective technical assistance activities in this
area as they proceeded in these institutions, among Members and in the WTO.
4.4 He recalled that following these informal consultations, the Committee had agreed at the
October 1997 meeting that it would engage in discussions of technical assistance activities in a more
systematic and formal manner than in the past, and that these discussions would be held in the formal
meetings of the Committee, under the agenda item technical assistance activities, and in informal
meetings to be held in between the formal meetings as and when appropriate.  The Committee had
agreed to circulate the "request for informatio n concerning the implementation of the Agreement",
contained in G/VAL/11, as a formal Committee document for completion by all developing country
Members, and to hold an informal meeting devoted to technical assistance activities in the first quarter
of 1998 which was to focus on reviewing the responses to this "request for information concerning the
implementation of the Agreement".  The minutes of the last meeting, in G/VAL/M/6, contained this
agreement by the Committee as well as his detailed summary of the informal consultations leading up
to it.
4.5 He reported to the Committee that this first informal meeting on technical assistance activities
in 1998 had been held on 6 March.  The Committee had reviewed the 6 responses to the request for
information that had been received up to that point.  At present, 12 responses had been received and,
following the desire expressed at this informal  meeting, the responses had been circulated in
G/VAL/W/24.  The 12th response, from Mauritius, was not included in this document and had been
circulated at the informal meeting today.  He added that, at this informal meeting, the desire had beenexpressed by responding Members that other Members should consider seriously the technical
assistance needs elaborated in the responses as expectations were high for follow-up activities.  In this
context, the WTO Secretariat briefed the Committee on the progress and plans of its Technical
Assistance Programme on Customs Valuation.  Specifically, this Programme would make use of
expert consultants who would visit, with a WTO official, each Member which had invoked the five-year delay.  Countries would be prioritised according to their dates of implementation.  However,
technical assistance would only be provided on a request basis, and therefore, the responses to the
Chairman's request for information could be considered as requests for assistance under this
Programme.  Also at this meeting the Secretariat circulated a draft of an inventory of the technical
assistance activities related to implementation of the Customs Valuation Agreement by country,
which took into account the results of the Committee's request for information, the information
gathered on least-developed countries through the process of the High-Level Meeting, the activities ofthe WTO and other international organizations, and any other information available.  This had since
been circulated in final form as document G/VAL/W/25.
4.6 He added that the second informal meeting had been held today to present the additional six
of the 12 responses to the questionnaire.  A fruitful discussion was held at this meeting and he invited
Members who wished to continue this discussion in this formal meeting to take the floor.
4.7 The representative of the United States stated that his delegation considered it important that
the Committee begin to discuss the information that was before it and how specific technical
assistance needs could be addressed.  Several developing countries had spoken in the informal
meetings about their desire for the Committee to move on this issue without delay.  There were
expectations as to the help that may be offered wi th respect to their implementation of the Agreement.
His delegation urged the new Chairman of the Committee to conduct informal consultations among
delegations on how to proceed from this point.  His delegation would hope that as a result the
Committee could convene informally well before the next meeting in October to make some concrete
progress in responding to the identified needs of individual countries.  He expressed appreciation for
the Secretariat efforts to establish its Technical Assistance Programme on Customs Valuation whichwould be tailored to the specific needs of Members.G/VAL/M/7
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4.8 The representative of the Philippines considered that there was merit in the new Chairman
pursuing informal consultations on where the Committee should go after collecting the information in
response to the request for information.
4.9 The representative of the European Communitie s stated that the statements made in the
informal meetings should be retained as a basis for future action which the new Chairman should
carry forward.  His delegation expressed appreciation for the Chairman's efforts in bringing this issue
to the forefront of the Committee's work.
4.10 The representative of India agreed that the work on technical assistance should be continued
so that those countries which were having difficulties implementing the Agreement would get
adequate assistance.
4.11 The observer from the World Customs Organization considered that there was a need for the
organizations involved with customs valuation to continue technical assistance activities.  There were
many on-going initiatives, for example the APEC project for APEC Member developing countries,
the European Union activities and those of the WCO.  There was a need for further consultation and
cooperation among these institutions.
4.12 The Chairman presented his ideas for how the work should proceed.  He believed that the
responses to his request for information continued to be an important aspect of the technical assistance
work.  They helped Members to design bilateral and regional activities as well as fed into the WTO
Secretariat Programme which was a request based programme concerned specifically and exclusively
with facilitating implementation of the Customs Valuation Agreement.  He urged those Members who
had not yet responded to this request to take advantage of what it could offer and to respond as soon
as possible.  He also suggested that the new Chairman hold informal consultations and meetings in thecoming months devoted to technical assistance to review additional responses and to hear progress on
the Secretariat Programme.  At these meetings, the floor would be open to any Member which wished
to discuss their particular situation and/or which wished to offer new proposals on how the Committee
could further pursue its mandate under Article 20.3.  All the points which had been made, including
the high expectations from developing countries, the necessity of checking the progress of theSecretariat Programme, and the possibility and the opportunity to discuss other proposals in a
systematic way, would be taken into account.
4.13 The Committee so agreed.
5. Other business
(a) Date of next meeting
5.1 The next meeting of the Committee will be held on 20 October 1998.6. Election of Officers
6.1 The Chairman recalled that the Rules of Procedures for meetings of the Committee on
Customs Valuation provided that the Committee elect a Chairperson at the end of the first meeting of
the year.  The Chairman of the Council for Trade in Goods had carried out informal consultations on a
slate of names for appointment as chairpersons of standing bodies in accordance with the established
Guidelines for appointment of officers.  On the basis of the understanding reached, he proposed thatthe Committee elect M. Mohamed Bentaja (Morocco) as Chairperson.
6.2 The Committee so agreed.G/VAL/M/7
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6.3 The Chairman added that the Rules of Procedure also allowed the possibility of electing a
Vice-Chairperson at this time.  He asked for nominations from Members.
6.4 The representative of Argentina nominated Ms. Julia Nielson (Australia) as Vice-Chairperson
of the Committee.  The representative of the European Communities seconded this nomination.
6.5 The Committee so agreed.
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