RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/98/Add.5
30 April 2002
(02-2457)
Committee on Customs Valuation Original:  English
PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION:
IMPLEMENTATION-RELATED ISSUES
Questions on Tirets 57-61 by the European Communities
Addendum
The following communication, dated 26 April 2002, has been received from the Permanent
Mission of the European Communities.
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Tiret 57
In the context of ensuring that the customs value is correctly determined, a relevant addition
made under Article 8(1)(b)(iv)should be on the basis of quantifiable and objective data, in accordancewith the provisions of Article 8.3.
Questions:
(1) Can some further explanation be provided as to why it would be in the interests of Members,
and in particular developing country Members, to levy customs duties on the listed
goods/services carried out in the country of importation?
(2) In a case where  an importer makes a false claim to the effect that goods/service, dutiable
under Article 8(1)(b)(iv), were undertaken in the country of import, would India not agree
that information concerning the importer, or access to importer's records in the country of
importation, can ensure that the facts in question will be clear to the relevant authorities.
Tiret 58
In accordance with Article 7 of the Valuation Agreement, the customs value shall be
determined  using reasonable means,  when it is not possible to establish a customs value on the basisof the preceding  five methods. The Interpretative Note to Article 7 of the Agreement specifies that:
- "customs values determined under Article 7 should, to the greatest extent possible, be based
on previously determined customs values".
and
- "the methods of valuation to be employed under Article 7  should be those laid down in
Articles 1 through 6 but a reasonable flexibility in the application of such methods would be
in conformity with the aims and provisions of Article 7" .G/VAL/W/98/Add.5
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Questions:
(1) When does  a customs administration  find itself unable  to use the range of valuation methods
provided in the Agreement, and in particular  as provided for  in Article 7, in order to
determine the customs value of imported goods?.
(2) Since the Valuation Agreement provides several possibilities for a customs administration to
determine a customs value on information readily available and used for customs and/or tax
purposes in the country of importation, why would an administration find it necessary - or
possible - to seek other sources of information which have no connection with the import
transactions?.
(3) How could the abandonment of provisions in Article 7 which contribute to a  fair, uniform
and neutral system for the valuation of goods lead to improvements in fighting fraud and
facilitating  trade?.
Tiret 59
The valuation methods at Articles 2 and 3 of the Agreement indicate that the customs value is
to be the transaction value of identical or similar goods sold for export to the same country of import
and exported at or about the same time as the goods being valued.  The 'transaction value' in question
means a customs value already accepted under Article 1 of the Agreement.
In terms of the practical application of the methods of customs valuation indicated by
Articles 2 and 3, in cases where the customs value cannot be determined under the provisions of
Article 1, there should normally be a process of consultation between the customs administration and
the importer with a view to arriving at a basis of value under the provisions of Article 2 or Article 3.
This is provided for in the General Introductory Co mmentary to the Agreement, which also states that
this consultation will enable information to be exchanged with a view to determining a proper basis of
value for customs purposes.
This process of consultation will help the administration and the importer to identify
previously determined transaction values which could serve the purposes required by Articles 2 and 3.
The acceptability of  completed 'pilot' transactions would also be subject to the same
procedure of consultation. Pilot transactions having the objective  of providing a basis for the
valuation of subsequent imports under Articles 2 and 3 would no doubt come in for particular
attention. Against this background, an importer does not have a guaranteed basis for the determination
of the customs value by reference to the so-called 'pilot' transactions.
Question
In view of the role which the administration play s in application of Articles 2 and 3, it would
be interesting to know whether importers have any re al opportunity  to present such pilot transactions.
Tiret 60
A buying agent  helps to connect a buyer and seller, and this function is beneficial for
exporters such as small and medium sized enterprises, particularly in developing countries.
Bearing in mind that a buying commission means "fees paid by an importer to the importer's
agent for the service of representing the importer abro ad in the purchase of the goods being valued", it
would be appreciated if the following questions could be responded to:G/VAL/W/98/Add.5
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Questions:
(1) How can a buying commission be regarded as part of the price paid for the goods,
(2) With respect to the specific example cited by India, in what special circumstances did a
buying commission come to be 'deducted' from the price of the goods.
(3) Does India not find that the instruments of the Technical Committee give valuable
information and guidance with regard to the na ture of buying agents, evidentiary materials
and the nature of commissions and brokerage? Are there other related issues which India
considers should be considered there?
Tiret 61
Article 15(5)  of the Agreement provides that sole agents, sole distributors and sole
concessionaires shall be deemed to be related if  they meet any one of the individual criteria for
determination of a relationship indicated at Article 15 (4).
Amongst the ways in which a sole agent, sole distributor or sole concessionaire can be related
to the seller of the goods, Article 15 (4) (e) and its  Interpretative Note refer to situations where one
person controls the other. This concept includes situations  where one party is in a position to exercise
restraint or direction over the other (see also Explanatory Note 4.1 of the Technical Committee, asamended).
Questions:
(1) In what concrete way does a sole agent, distributor or concessionaire present a risk of fraud or
does not facilitate trade,
(2) When India states that:
"The effect of the provisions in Article 15.5 is thus also that the onus of proving that some
agents, sole distributors and sole agents are related to other persons associated in the business
rests with the Customs administration of the importing Member",
does this view suggest that the responsibilities of the customs authorities in such cases do not
take into account the responsibilities of importers ?
(3) Why should an importer who has little more that a particular form of distribution contract be
subject to the special  rules which govern trade between related parties?
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