WORLD TRADE
ORGANIZATIONG/L/311
25 June 1999
(99-2649)
Council for Trade in Goods
2 July 1999Original:  Spanish
PERU – AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Request for Waiver
The following communication, dated 23 June 1999, has been received from the Permanent
Mission of Peru.
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REQUEST
Peru requests Members to grant it a waiver concerning the implementation of the Agreement
on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTOAgreement on Customs Valuation) from 1 April 1999 until 1 April 2000, in order to enable it to
complete the process of implementing the necessary measures for application of the Agreement.  This
request is submitted in conformity with paragraphs 3 and 4 of Article IX of the Marrakesh Agreement
Establishing the World Trade Organization, the Guiding Principles to be followed in considering
applications for waivers adopted on 1 November 1956, and the Understanding in Respect of Waivers
of Obligations under the General Agreement on Tariffs and Trade 1994, without prejudice to Peru's
rights under Article VII of the GATT, the WTO Ag reement on Customs Valuation and the request for
an extension of the delay in the application of that Agreement submitted by Peru on 25 March 1999
(G/VAL/W/31 and G/VAL/M/10).
The exceptional circumstances justifying the grant of this waiver are set out below.
DESCRIPTION OF THE MEASURES FOR WHICH A WAIVER IS REQUESTED
Peru accepted the Agreement on Implementation of Article VII of the GATT (Tokyo Round
Agreement on Customs Valuation) on 2 March 1994.  When signing and accepting that Agreement,
Peru invoked, inter alia , paragraph 1 of Article 21 concerning delayed application of the provisions of
the agreement for a five-year period.
When the WTO Customs Valuation Agreement came into force, this five-year delay period,
which had begun under the Tokyo Round Agreement, continued to run for Peru, pursuant to the
Decision of 31 January 1995 on "Continued Application under the WTO Customs ValuationAgreement of Invocations of Provisions for Developing Countries for Delayed Application and
Reservations under the Customs Valuation Agreement 1979" (WT/L/38).  This explains why the
five-year delay period ended for Peru on 1 April 1999, and not on 1 January 2000 as in the case of the
other WTO developing country Members which invoked it under the present Agreement on Customs
Valuation.G/L/311
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Peru has made serious and enormous efforts of customs reform, including in particular the
professionalization of customs staff, the facilitation of trade and the automation of customs
procedures.  These efforts have received wide international recognition.  Peru continues to receive
technical assistance from various sources in support of these efforts.
Despite the successes achieved in customs reform, Peru considers that in order to comply
fully with its customs valuation commitments, it is e ssential that specific measures be taken to ensure
proper implementation of the Valuation Agreement, which is why it is necessary to postpone the
application of the Agreement for the period requested.
Granting Peru the requested waiver would allow it not to apply, until the specified date, the
system of valuation of imported goods provided for in the WTO Agreement on Customs Valuation.This waiver would be subject to the following terms and conditions accepted by Peru:
(a) As from 1 January 2000, Peru will apply the provisions of the WTO Agreement on
Customs Valuation to fifty per cent (50%) of the H.S. headings of its Customs Tariff
in force, to be determined by Peru;
(b) Peru will carry out the annexed work programme for the implementation of the
Agreement, establish a Commission to monitor and evaluate implementation of the
above-mentioned programme, and submit two progress reports to the WTO.
In addition to the above, Peru will apply, as  of August 1999, paragraph 2 of Decision 4.1 on
the Valuation of Carrier Media Bearing Software for Data Processing Equipment (G/VAL/5) of the
Committee on Customs Valuation.
Peru also undertakes to establish a mechanism for channelling and finding solutions to the
difficulties encountered by exporters from third countries in relation to the functioning of the
preshipment inspection system.
SPECIFIC POLICY OBJECTIVES PURSUED
To achieve the proper implementation of the WTO Agreement on Customs Valuation so as to
ensure permanent facilitation of trade operations as well as protection of the country's fiscal interests.
REASONS FOR THE REQUEST FOR A WAIVER
Customs valuation is a delicate and complex issue and therefore calls for a customs
administration that has an appropriate infrastructure and staff trained in handling the technical aspectsof the Valuation Agreement.
The waiver is requested in order to comple te the process of implementing the necessary
measures for the adoption of the new valuation system and thus be able to ensure that the Agreement
is properly applied.
In recent years the advances made in the Pe ruvian customs system include the following:
(a) Creation of a climate of transparency in customs practices;
(b) streamlining of customs procedures through random preshipment and post-shipment
inspection methods;G/L/311
Page 3
(c) automation of customs regimes and operations and also of control, inspection and
administrative functions;
(d) removal of corrupt or incompetent staff and recruitment of new professional staff,
combined with the message that this is a new customs administration characterized byintegrity and professionalism;
(e) training of new experts and specialists through the National Customs College;(f) greater emphasis on staff development and training;(g) higher salaries for staff.
Despite these advances, certain specific activities, which are necessary for implementation of
the Agreement have yet to be carried out.  These cover the following elements:
(a) Bringing national legislation into line with the provisions of the Agreement:  this
implies defining technical aspects set out in the WTO Agreement on Customs
Valuation and drafting and adopting the corresponding legal provisions.
(b) Physical infrastructure:  this involves reorganization of the services involved in
implementation of the Agreement and adaptation of the computerized modules formingthe Integrated Customs Management System (SIGAD).
(c) Training and dissemination of the Agreement:  this involves training customs personnel
and operators as well as dissemination of the Agreement among foreign trade operators,
users and the general public.
The waiver will enable Peru to adopt the necessary measures for implementation of the
Agreement.  Immediate implementation of the system could give rise to certain problems in the
valuation of goods as between officials and opera tors, owing to the transition from the valuation
methods currently used (Brussels Value and normal competition price) to that of transaction value,
considering that there is not yet sufficient experience in managing the Agreement nor the necessary
legal framework for implementing it.
CONCLUSION
Taking into account the process of adapting to the rules of the Agreement on Customs
Valuation underway in Peru and the progress made, and that activities necessary for implementing the
Agreement remain to be carried out, Peru requests the WTO Members to accede to its request for a
waiver in order to be able to complete the proce ss of adapting the Peruvian customs system to the
Agreement on Customs Valuation.G/L/311
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ATTACHMENT 1
PROGRAMME OF WORK FOR THE IMPLEMENTATION OF THE WTO CUSTOMS VALUATION AGREEMENT
(PERU)
1999 2000 General Activities
123412Responsible Customs
Coordination
1DEFINITION OF THE OVERALL STRATEGY FOR APPLYING
THE CUSTOMS VALUATION AGREEMENTMEF – MITINCI
MRREE
- Elements
2ALLOCATION OF RESOURCES MEF
- Budgetary resources
- International technical cooperation
- Allocation of human resources
3 REPORTING AND MONITORING STAGES
- Ongoing assessment (Multisectoral Commission) MEF
- Reports to WTO Members x x
SPECIFIC ACTIVITIES
A. UPDATING OF LEGISLATION
1 MEF-MITINCI DEFINITION OF TECHNICAL ASPECTS CONTAINED IN
THE CUSTOMS VALUATION AGREEMENT MRREE
- Instruments of the Technical Valuation Committee
- Ministerial Decision concerning the truthfulness or accuracy
of the declared value
- Decision 3.1 Interests
- Decision 4.1 Software
- Define the FOB or CIF basis
- Others (e.g. family)G/L/311
Page 51999 2000 General Activities
123412Responsible Customs
Coordination
2PREPARATION AND APPROVAL OF THE LEGALRULES FOR THE APPLICATION OF THE CUSTOMS
VALUATION AGREEMENTMEF-MITINCI
MRREE
- Regulating the implementation of the Agreement
- Evaluation of breaches and penalties (General Customs Law
and Regulations) and modifications, if needed
- Preparation and issue of operative procedures handbooks
*   Definitive Import Regime handbook
*   List of Questions G/VAL/5
- Adaptation of the organic structure of the customs areas
involved in the application of the Agreement
- Adaptation of the Declaration of Value format according to
WTO and instructions
3DETERMINATION OF HEADINGS FOR THE
APPLICATION OF THE CUSTOMS VALUATION
AGREEMENT
4 APPLICATION OF THE CUSTOMS VALUATION
AGREEMENT
-S o f t w a r e x
- First group of headings (50%)  x
- Second group of headings (50%)  xG/L/311
Page 6
1999 2000 General Activities
123412Responsible Customs
Coordination
B.TRAINING IN AND PUBLICIZING THE CUSTOMSVALUATION AGREEMENT, ITS DECISIONS AND
THE NATIONAL IMPLEMENTATION RULES
1 TRAINING OF CUSTOMS PERSONNEL AND
OPERATORSMEF
- Training of instructors with APEC support (20)
- Training of instructors with AIDB support (40)
- Training of customs personnel: (by instructors)
*   Officials, basic level
*   Specialists, higher level
*   Auditors, intermediate level
2 PUBLICIZING THE AGREEMENT AMONG THE
FOREIGN TRADE OPERATORS, USERS AND THE
PUBLIC IN GENERAL MEF
- Training of external users: (by instructors)
*   Importers (associations)
*   Customs agents (associations)
*   Others (warehousemen, carriers, etc)
C. MATERIAL INFRASTRUCTURE
1 REORGANIZATION OF THE AREAS INVOLVED IN THE
APPLICATION OF THE CUSTOMS VALUATION
AGREEMENT
- Definition of functions
- Determination of resourcesG/L/311
Page 71999 2000 General Activities
123412Responsible Customs
Coordination
2 ADAPTATION OF THE COMPUTERIZED MODULES
THAT MAKE UP THE INTEGRATED CUSTOMS
MANAGEMENT SYSTEM (SIGAD): MEF
- Electronic transmission of the Declaration of Value
format (B1)
- Authorized import formalities
- Electronic links between the customs offices in the
appraisement area
3 REORGANIZATION OF THE INSPECTION AREA MEF
- Definition of functions
- Determination of resources
- Determination of the ex-post  risk management procedure
- Auditors' training (net 300)
- Basic adaptation of data for use in the ex-post  risk control
procedure in the framework of the Customs Valuation
Agreement.
Explanatory Note
MEF: Ministry of Economy and Finance.
MITINCI: Ministry of Industry, Tourism, Integration and International Trade Negotiations.MRREE: Ministry of Foreign Affairs.
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