RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/M/9
28 January 1999
(99-0321)
Committee on Customs Valuation Original:  English
MINUTES OF THE MEETING OF 13 NOVEMBER 1998
Chairman:  Mr. Mohammed Bentaja (Morocco)
The agenda proposed for the meeting, circulated in WTO/AIR/961, was adopted as follows
with the addition of sub-item 8(a) under other business requested by the Indian delegation:
I. REPORT ON THE WORK OF THE TECHNICAL COMMITTEE ON
CUSTOMS VAL UATION ...................................................................................................2
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF
THE AGREEM ENT.............................................................................................................3
A. N OTIFICATION OF NATIONAL LEGISLATION ............................................................................3
1. Mexico....................................................................................................................... .............4
2. Iceland...................................................................................................................... ..............4
3. Israel....................................................................................................................... ................5
4. Cyprus....................................................................................................................... .............5
5. Morocco ...................................................................................................................... ...........5
6. Panama ....................................................................................................................... ...........6
7. Other matters concerning national legislation ...................................................................6
B. N OTIFICATION THAT NATIONAL LEGISLATION UNDER THE TOKYO ROUND CUSTOMS
VALUATION AGREEMENT REMAINS VALID UNDER THE WTO C USTOMS VALUATION
AGREEMENT ............................................................................................................................6
C. N OTIFICATIONS MADE BY DEVELOPING COUNTRY MEMBERS ................................................7
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE
COMMITTEE ON CUSTO MS VALUATION..................................................................7
IV. TECHNICAL ASSIST ANCE ..............................................................................................8
A. I NFORMATION ON TECHNICAL ASSISTANCE ............................................................................8
B. A RTICLE 20.3 TECHNICAL ASSISTANCE ACTIVITIES ................................................................8
V. REPORT OF THE COMMITTEE ON CUSTOMS VALUATION TO THE
COUNCIL FOR TRADE IN GOODS ..............................................................................17
VI. FOURTH ANNUAL REVIEW OF THE IMPLEMENTATION AND
OPERATION OF THE CUSTOMS  VALUATION AG REEMENT .............................18
VII. TRADE FACI LITATION..................................................................................................20
VIII. OTHER BUSINESS............................................................................................................ 22
A. I NFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN COMMUNITIES VALUATION
POLICY ............................................................................................................................... ....22
B. D ATE OF THE NEXT MEETING ................................................................................................22G/VAL/M/9
Page 2
I. REPORT ON THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS
VALUATION
1.1 The observer from the World Customs Organization (WCO) informed the Committee that
Mr. Horacio Vicente, the Chairman of the Technical Committee on Customs Valuation (Technical
Committee) was unable to attend the meeting and had asked him to present, on his behalf, the Report
of the 7th Session of the Technical Committee.  This Session was held in Brussels from 5 to
8 October 1998 and its report will be circulated in WCO Doc. 42.620.  He noted that the meeting was
well attended by delegates and observers from 56 countries as well as two international organizations.
1.2 Regarding intersessional developments, the Technical Committee was informed that at its
91st/92nd sessions held in Marrakech (Morocco) in June 1998, the WCO Council had examined and
adopted the reports of the fifth and sixth sessions of the Technical Committee on Customs Valuation
as well as the instruments which had been finalized by the Technical Committee at those sessions:  the
amendment to Explanatory Note 4.1 clarifying the meaning of the relationship under Article 15.5 of
the Agreement and the amendments to Commentary 2.1 concerning the treatment of goods subject to
export subsidies or bounties.  The Council had also elected Mr. M. Danet (France) andMr. H. Kappler (USA) as the new Secretary-General and Director of Tariff and Trade Affairs of
WCO respectively.  Both would take up their duties from 1 January 1999. The Technical Committee
was also informed about the inaugural meeting of the WCO’s Working Group on Customs Integrity
from 10 and 11 September 1998.  The Working Group was to prepare an action plan on integrity for
submission to the Policy Commission in December 1998.
1.3 Regarding its future direction, the Technical Committee examined the report of the working
party that had met during the 6
th Session.  The report had recommended a number of proposals to
ensure that the Technical Committee continued to remain relevant to the needs of Members, and
established practices that would facilitate dealing with the needs of and requests from Memberspresently in transition once they began to impl ement the Agreement.  The Technical Committee
adopted the working party’s report and decided to develop an action plan to implement its
recommendations which included the setting of objectives and priorities, the clear allocation of
responsibilities and the monitoring of performance and outcomes.
1.4 On technical assistance, the Technical Committee was informed that the WCO Secretariat had
conducted technical assistance missions in Ghana, Fi ji, Malta, Niger, Tunisia as well as sub-regional
events in Burkina Faso (for the UEMOA Secretariat), and India.  Members continued to stress the
need for continued co-operation and co-ordination of technical assistance activities among Members,
the WCO Secretariat, the WTO Secretariat and other international organizations.  Since the seventhsession, the WCO and WTO Secretariats have been exploring ways to improve co-ordination of their
respective technical assistance efforts.
1.5 Regarding the progress report on implementation, at its last session, the Technical Committee
instructed the Secretariat to send a questionnaire to new Members in order to obtain furtherinformation on the preparatory work that they have undertaken to implement the Agreement.
Pursuant to this instruction, the Secretariat circulated a questionnaire during the intersession to 126
new Signatories and Observers.  Responses were re ceived from 30 countries.  It was apparent from
the responses that some of the new Members in Europe, Asia and South America had made very good
progress towards implementation of the Agreement.  It  was also apparent that a larger number of other
Members had not made significant progress towards implementation, and that some were yet to
commence work on their legislation.
1.6 Under the item practical application of the Agreement, the Technical Committee continued to
examine the use of separate valuation declarations.  Members were keen to ensure the appropriate
balance between facilitation and control and not to burden trade with demands for unnecessaryG/VAL/M/9
Page 3
information.  Noting that a number of Members had successfully implemented the Agreement without
using separate value declarations and seeking to pr ovide guidance to the Members in transition to the
Agreement, the Technical Committee instructed the Secretariat to prepare a study on the trade
facilitation initiatives in the WTO, in the revised Kyoto Convention, and in the G7.
1.7 On technical issues, the Technical Committee adopted a Commentary that provided guidance
on the deduction of freight charges where goods were sold on freight inclusive terms, yet valued
under a FOB system.  The Commentary concluded that the actual cost of freight should be deducted,
as opposed to notional or estimated amounts.  The Technical Committee also adopted an instrument
that provided guidance on the treatment of warran ty charges.  The Technical Committee was still
considering certain other technical issues such as the relationship between paragraphs (c) and (d) of
Article 8.1.  The Technical Committee continued to examine this issue on the basis of specific cases
presented by administrations.  Another issue was the meaning of the expression "related to the goodsbeing valued" and "as a condition of sale of the goods being valued" in connection with Article 8.1 (c)
which the Technical Committee continued to examine on the basis of cases presented by
administrations.  The Technical Committee would also consider the need for a separate instrument on
the scope of the term "control" in Article 15.4 in light of its finalization of the re-examination of
explanatory Note 4.1.  Finally, the Technical Comm ittee returned to its examination of the case study
that had prompted the re-examination of the Explanatory Note 4.1.  The case study involved
consideration of the existence of a relationship between the parties on the basis of contractual
obligations and limitations imposed on one of the parties.
1.8 With a view to fostering greater co-operatio n and information sharing among Members, the
Technical Committee agreed to the WCO Secretar iat’s proposals to issue two new publications
relating to the administration of the WTO Agreement: (a) an Index of Reference Materials on Customs
Valuation and (b) a  list of Contact Points for Exchange  of Information on Customs Valuation.  The
first would contain reference information on Members’ laws and regulations, rulings and
administrative practices, operating manuals, studies, court decisions and training materials, and thesecond would contain the names, titles, addresses, telephone and fax numbers, e-mail addresses, of
personnel responsible for customs valuation functions within Member Administrations.  Both
publications would be updated regularly on the basis of information provided by Members.
1.9 The Technical Committee's 8th Session will take place from Monday 29 March to Thursday
1 April 1999, and it will be preceded by a meeting of the working group from Thursday 25 March to
Friday 26 March 1999 to discuss the future direction of the Technical Committee.
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE
AGREEMENT
2.1 The Chairman stated that there were three items to be considered under this agenda item
which would be dealt with separately.
A. NOTIFICATION OF NATIONAL LEGISLATION
2.2 The Chairman 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 andCirculation of National Legislation, adopted by the Tokyo Round Committee, required each Member
to notify its legislation to the Committee.G/VAL/M/9
Page 4
1. Mexico
2.3 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 responses to
the Checklist of Issues had been circulated in document VAL/2/Rev.2/Add.8.  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.  At the previous meeting of the
Committee, it had been agreed to revert to this item at the next meeting.
2.4 The representative of Switzerland expressed her delegation's regrets that Mexico had not
replied to the questions regarding its customs valuation legislation which had been raised in different
Committees of the WTO.  While her delegation did not wish to further retain this item on the agenda
of this Committee, it nevertheless, reserved its rights to return to this item at a later time if necessary.
2.5 The representative of Norway shared the view expressed by Switzerland and also reserved its
right to revert to this issue later if necessary.2.6 The Committee agreed to conclude the examination of the Mexican legislation.
2. Iceland
2.7 The Chairman noted that Iceland's notification of its legislation was contained in document
G/VAL/N/1/ISL/1.  At the previous meeting, the European Communities had asked the Icelandic
delegation a question regarding related parties and the situation of exclusive distributors.  It had been
agreed to revert to this matter at this meeting.
2.8 The representative of Iceland noted that the EC had submitted their question in writing to the
Icelandic Government and it read as follows:  "Article 15.4 sets out the cases where persons should be
deemed to be related.  Article 15.5 makes specific references to the case of sole agents, sole
distributors, or sole concessionaires.  In Article 8 of the legislation notified by Iceland it is indicated
that persons associated in business as sole agents, sole distributors, or sole concessionaires shall be
deemed to be related.  This would appear to go beyond the scope of Article 15.4 and 15.5 of the
Agreement on Customs Valuation".
2.9 He thanked the European Communities for the question and for bringing this matter to the
attention of the Icelandic authorities.  His author ities had examined carefully the wording of these
Articles and Iceland agreed with the EC that there was a slight difference in the wording of
Article 15.5 of the Agreement on Customs Valuation, on the one hand, and Article 8 of the Icelandic
Customs Law, on the other hand.  It seemed that the wording of the latter went beyond the scope of
Article 15.5 of the Agreement.  This matter was under further consideration by his authorities.  In
order to adjust the text of the Customs Law to the text of the Agreement, amendments would have to
be made to Article 8 of the Customs Law.  Such an amendment required Parliamentary approval in
Iceland.  The Icelandic Ministry of Finance was presently drafting a bill calling for severalamendments of the Iceland Customs Law.  This opportunity would be used to include this particular
amendment.  His authorities expected that these amendments would be approved by the Parliament in
the beginning of next year, and then promptly notified to the WTO.
2.10 The Committee agreed to conclude the examination of the Icelandic legislation.G/VAL/M/9
Page 5
3. Israel
2.11 The Chairman recalled that the Israeli legislation was contained in document
G/VAL/N/1/ISR/1.
2.12 The representative of the European Communities raised two points.  The first referred to
Article 8.1(b)iv of the Agreement which corresponded to Article 33(a)ii.d of the Israeli legislation.
This related to the inclusion in the customs value of  engineering, development, artwork, design work,
etc.  The Agreement on Customs Valuation referred to the inclusion of these items but it allowed for
the exclusion of these items if they were produced in the country of importation.  On the other hand,
the Israeli legislation seemed to refer to the act ual inclusion of these costs even if they were
originating in the country of importation, i.e. Israel.  This might need to be examined and his
delegation would like clarification on this point from the Israeli delegation.  Second, in the samesection of Article 33, he requested clarification on part iv which referred to the inclusion in the
customs value of the projected income from sale or use of the goods.  This was almost in line with the
wording of the Agreement;  the only difference was the inclusion of the word "projected".  He added
that Article 8 of the Agreement included inclusions into the customs value on the basis of objective,
quantifiable criteria.  Perhaps the word "projected" was inappropriate in this context.
2.13 The representative of Israel stated that his delegation would revert to the EC with answers to
the questions as soon as it received the relevant instructions.2.14 The Chairman stated that any additional questions to the Israeli delegation should be
submitted before 17 April 1999 and the Committee agreed to revert to this item at the next meeting
4. Cyprus
2.15 The Chairman noted that the legislation of Cyprus had been circulated in document
G/VAL/N/1/CYP/2.
2.16 The Committee agreed to conclude the examination of the legislation of Cyprus.
5. Morocco
2.17 The Chairman drew Members' attention to the recently submitted legislation of Morocco
which was contained in G/VAL/N/1/MAR/1.  He noted that the legislation was circulated rather late,
so some Members may not have had time to study it.  He recalled that Morocco's invocation of thereservation in paragraph 2 of Annex III in connection with its implementation of the Agreement was
the subject of a meeting of the Committee in July.  A Decision of the Committee was taken at this
meeting (G/VAL/M/8) where it was agreed that Moro cco would report at each formal meeting of the
Committee on the status of its implementation of officially-established minimum values for the
products listed in G/VAL/W/27.
2.18 The representative of Morocco stated that, in accordance with the Decision of the Committee,
his delegation wished to inform the Committee that it reaffirmed its commitm ent to apply completely
the Decision of the Committee of July 1998 for the list of products in G/VAL/W/27.  Up to the
present, no new product had been introduced to th is list.  Article 3 of  the Customs Law 1998/1999
included new rules for customs valuation in conformity with the Agreement on Customs Valuation.
The reference prices were of a temporary nature and would only be applied when the transaction
value was below the minimum values.
2.19 The Chairman stated that any questions to the Moroccan delegation should be submitted
before 17 April 1999 and, given its late circulation, the Committee agreed to revert to this legislation
at the next meeting.G/VAL/M/9
Page 6
6. Panama
2.20 The Chairman drew Members' attention to the notification of the legislation of Panama
contained in G/VAL/N/1/PAN/1.  He thanked Panama for also notifying its responses to the Checklist
of Issues contained in G/VAL/N/2/PAN/1.
2.21 The representative of India requested that the documents be translated into English.  She
added that on the first page of document G/VAL/N/1/PAN/1 under items 4 and 5, there were two
Decisions.  The first one entrusted the Ministry of  Finance and the Treasury with carrying out a
modernization and decentralization programme in order to reorganize and simplify customs
procedures.  The second one was on modernization and administrative decentralization for the
purpose of simplifying customs procedures.  She asked whether there was any difference between
these two Decisions and why two separate Decisions were necessary on this matter.
2.22 The representative of Panama stated that he would transmit the Indian question to his capital
to have a response as soon as possible.
2.23 The Chairman stated that any further questions to the Panamanian delegation should be
submitted before 17 April 1999 and the Committee agreed to revert to this item at the next meeting.
7. Other matters concerning national legislation
2.24 The representative of Poland informed the Committee that it had submitted to the Secretariat
a notification of the Polish national legislation, including Customs Value Regulations which were
based on the Agreement on Customs Valuation.
2.25 The representative of Brazil informed the Committee that at the meeting of 8 May 1998, his
delegation had announced the adoption of Decree No. 2498 setting out the general rules for customs
valuation in Brazil.  His delegation also announced at  this time the adoption of four other pieces of
legislation that, together with the decree, composed a new legal framework regarding customs
valuation.  Those were Ministerial orders No. 28/98 of 16 February 1998, and Federal Tax
Administration's Normative Instructions Nos. 16, 17, and 18 of the same date.  Copies of thislegislation had been submitted to the Market Access Division in Portuguese.  His delegation had also
announced that translation of these texts into one of the official WTO languages would be
forthcoming.  He informed the Committee that his delegation had recently received the translated
versions of the legislation and would be submitting them to the Secretariat early in the next week.
2.26 The representative of Morocco informed the Committee that his delegation notified today its
responses to the Checklist of Issues.2.27 The Committee took note of the statements made .
B. NOTIFICATION THAT NATIONAL LEGISLATION UNDER THE TOKYO ROUND CUSTOMS
VALUATION AGREEMENT REMAINS VALID UNDER THE WTO C USTOMS VALUATION
AGREEMENT
2.28 The Chairman stated that at its meeting in May 1995, the Committee 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, there had been no such notifications.  He also noted that there
were still two Members which had notified legislation under the Tokyo Round Agreement and which
had not indicated the status of those notifications in this Committee.  Those Members were BotswanaG/VAL/M/9
Page 7
and Lesotho.  He urged those Members who had not made notifications on legislation, as well as
replies to the Checklist of Issues, to submit the required notification and replies as soon as possible.
2.29 The Committee took note of the information.
C. NOTIFICATIONS MADE BY DEVELOPING COUNTRY MEMBERS
2.30 The Chairman drew Members' attention to document G/VAL/2/Rev.7 and Corr.1 which
contained the list of all Members which had invoked special and differential treatment provisions
under the Agreement.  It was a revision of the previous version of this document to add  Benin, Chad,
Guyana, and Haiti who had all notified their invocation of the five year delay period contained in
Article 20.1.  In addition, Guyana and Haiti had also invoked the other reservations contained in
Article 20.2 and paragraphs 2, 3 and 4 of Annex III.  For these Members, the five-year delay began
from the date on which they became Members of the WTO, as specified in Article 20.1.  Thedocument also listed those 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 Reservations under the Customs Valuation
Agreement 1979" (WT/L/38).
2.31 He added that there were presently 53 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 29 of these countries, the delay period would expire on 1 January 2000.
That meant that the period during which they should be making this transition was more than half
over.  For another 19, the end of the year 2000 would signal the expiration of their delay period, and
for another 5, the delay period would expire at the end of the year 2001.  Furthermore, there were 28Members which had not notified their legislation nor had invoked the five-year delay period.  As
Members were reminded at the last meeting, Members having taken these delay periods should be
using this time 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 country Members could utilise for this purpose.  This matter would also be taken up laterin the meeting.
2.32 The Committee took note of the information.
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE
ON CUSTOMS VALUATION
3.1 The Chairman drew Members' attention to document G/VAL/W/5/Rev.5 which contained the
document 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 the
Committee and contained in document G/VAL/5.  This revised document updated the information
contained in G/VAL/W/5/Rev.4 with the addition of a new document reference for Panama.
Specifically, in document G/VAL/N/3/PAN/1, the Go vernment of Panama had indicated that it was
applying the above two Decisions since 20 October 1997.
3.2 The Committee took note of the information.G/VAL/M/9
Page 8
IV. TECHNICAL ASSISTANCE
A. INFORMATION ON TECHNICAL ASSISTANCE
4.1 The Chairman noted that there were two sub-items under this agenda item.  The first was
information on technical assistance which was contained in document G/VAL/8/Add.4.  This
document provided additional information on technical assistance activities conducted by the WCO.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.
4.2 The Committee took note of this information.
B. ARTICLE 20.3 TECHNICAL ASSISTANCE ACTIVITIES
4.3 The Chairman recalled that the Committee had had a discussion on this item earlier in an
informal session and agreed to reflect this discus sion in the report of the formal meeting of the
Committee.  It is reproduced below.
4.4 The Chairman stated that the purpose of the informal meeting was to have an exchange of
views on technical assistance and, in particular, where the Committee wanted to go on this subject in
the future.  He recalled that the Committee had agreed to maintain this item on its formal agenda
following agreement to engage in a more active role  in this area.  A request for information had been
circulated to all Members who had invoked the delay period in Article 20.1 and the responses were
compiled in G/VAL/W/24.  Since the issuance of this document, an additional response had been
received from Madagascar which was circulated at the meeting.  He added that the Secretariat hadprepared an inventory of technical assistance activities contained G/VAL/W/25.  This document was
to be revised and shared with the Working Party on Preshipment Inspection for their discussions on
technical assistance.  He requested the Secretariat to brief the Committee on its programme on
technical assistance.
4.5 The Secretariat said that a meeting had been organized at the end of April 1998 with the
selected three consultants to discuss the methodology, the terms of reference of the programme and
the next steps to put into effect the programme.  It was agreed during this meeting that the programme
would use the information that had been provided  to this Committee through the Chairman's request
for information as an indication that these Members were interested in receiving technical assistance.
The Members which had responded to this request represented one group of countries to be targeted
during the first phase of the programme.  Additionally, the group of Members listed in the first phaseof the terms of reference and any ad hoc requests received were also targeted.  A letter from the
Deputy Director-General explaining the programme  was addressed to 30 countries.  The letter
explained that a consultant would be sent to the country for a week to work with officials in assessing
the situation with regard to implementation of the Agreement and what the precise needs of the
country were, in preparing a package of assistance which could include workshops on the Agreement,design of an implementation strategy, preparation of legislation, or whatever would be necessary to
assist the Member in making the transition to the WTO system of valuation.  The letter stressed that
one of the most important elements was that there be sufficient commitment at all levels of
government and that adequate resources would have to be made available to make this transition.
Evidence of this commitment would be, for example, the creation of a task force within thegovernment comprising all relevant officials and Ministries involved in the transition work as well as
providing to the WTO Secretariat the name of a national focal point whom it could contact to organize
the mission.
4.6 An additional questionnaire was sent to those Members which had responded to the request
for information for the sole use of the consultants to better understand the particular situation in each
country.  For the other countries, only the letter was sent.  Of the 30 letters that were sent, 19G/VAL/M/9
Page 9
responses were received indicating interest in the programme. For those who sent contact names,
letters were sent proposing dates for missions.  9 missions had been carried out since the beginning of
August.  By December 1998, 10 such missions will have been carried out and 3 are planned for early
1999.
4.7 The missions were organized so that on the first day a series of meeting would be held with
the highest level of government officials availabl e in all the Ministries involved in making the
transition.  The purpose of this was to assess the level of political commitment and to explain exactly
what would need to be accomplished.  Some Members requested a two or three day seminar on the
Agreement which was combined with the mission.  Meetings were held throughout the week with the
task force or the customs administrations to work on practical aspects of implementation.  The idea
was to design the missions to be as pragmatic and practical as possible with a view to implementation.
4.8 The Secretariat would send out another group of letters in early 1999 aimed at Members
targeted in the second phase of the programme.
4.9 The representative of the United States was pleased that the Secretariat programme was
running and already having results.  He raised some questions for clarification on the responses
compiled in G/VAL/W/24.  These might help clarify the needs expressed so that his delegation might
respond more fully to the requests.  His delegation noted that Bolivia, Colombia, Egypt, Kenya,
Philippines and Tunisia had identified needs associated with computerization, both in terms of
software and hardware.  It would be helpful to hear from these countries if they had worked eitherwith the UNCTAD ASYCUDA programme and/or with the World Bank, providing assistance on
hardware associated with application of the ASYCUDA software. He noted that Bolivia was in the
process of modifying its goods clearance system and asked if this was to establish a pre-clearance
release system in accordance Article 13 of the Agreement.  He also asked if legislation was currently
in place. With respect to Colombia, there was a reference to a decision by the ANDEAN communityto apply the Agreement.  He asked whether Colomb ia was currently applying the Agreement.  Also,
Colombia had informed the Committee that it had not benefitted from WCO assistance, but in
document G/VAL/W/25 there was a reference to a WCO expert mission in April 1996.  He asked for
clarification on this.  Regarding Egypt, he asked if there was legislation in place and, if not, if the
WTO or the WCO could assist with the documentation and legal needs identified in the response.
Kenya had refered to the need to train the trainers and his delegation wondered whether the WCO was
assisting Kenya in this regard or could do so.  Finally the Philippines seemed to focus on post-clearance control and he asked whether APEC assistance had been useful in this area and, if not, in
what ways it had not.
4.10 The representative of Colombia noted that Colombia was one of the countries that had
benefited from the Secretariat technical assistance programme which had been useful.  Work focused
on the legislation concerning customs valuation and specific cases of valuation. With respect to the
questions by the delegation of US, he confirmed that his Government was applying the WTO
valuation system, except for certain products for which minimum prices were used.  Once the
transition period expired, his Government would make the relevant changes. In general terms, he
outlined three types of technical assistance requirements.  The first was connected with the knowledgecountries must have on the Agreement and WTO rules.  The WTO had the capability to bring this
knowledge to the various customs authorities.  Second, work related to the actual physical
infrastructure might not be covered by WTO technical assistance.  This included computerization
needs such as specific software programmes on customs, but also modernizing customs
administrations and equipping it to carry out all aspects of its work.  Computers were only one aspectof this physical infrastructure;  other aspects included investment programmes in modernization of the
customs administrations.  International organizations  such as the Inter-American Development Bank,
the World Bank or others could substantially contribute to modernizing this physical infrastructure.  A
third requirement was management systems for customs administrations.  Customs administrations
had a few specific features stemming from the services they had to provide.  It was not clear to whatG/VAL/M/9
Page 10
extent financial assistance could be given for this third area or whether, in fact, it was necessary as
there was some technology which developed countries only had.  He put great importance on this area
because the physical infrastructure really depended on the money available which could be solved
through credit or in the budget.  But  customs administration management involved know-how which
was very specific.  Perhaps the countries which had already acquired some experience could transmitit.  In conclusion, these three elements/categories, knowledge of the WTO valuation system, physical
infrastructure and management systems for customs administrations should be considered for
technical assistance.  His delegation would like to see to what degree the WTO was capable of dealing
with each of these three areas, where the WTO could help developing countries and, if not, if it could
provide other alternatives so that access to this type of technical assistance could be available.
4.11 The representative of the Philippines confirmed that her Government did receive assistance
from APEC which, however, might not be adequate.  Her authorities had requested the WTO
Secretariat to provide an in-house consultant to examine the management systems that were in place.
She added that the Philippines had been a pilot country for the ASYCUDA system which had been
extremely helpful in clearing goods at the border.  She also noted that in the context of a World Bank
assistance project, some hardware was being provided, but she was not sure whether it was forcustoms purposes.  She would seek more clarity from her authorities.  Another technical assistance
request voiced by her authorities was on-the-job training meaning seconding some customs officer to
certain developed countries which had efficient customs administration so they could learn by actually
working in such a context.  However, she had advi sed her authorities that they should seek bilateral
assistance on this matter.
4.12 The representative of Bolivia noted that his country was in the process of establishing a date
with the WTO Secretariat for a technical assistance mission.  His delegation attached much
importance to such a mission since it would aim to st rengthen the institutions responsible for customs
valuation in Bolivia.  He would consult with his authorities on the questions posed by the UnitedStates to give some responses as early as possible.
4.13 The representative of India made two general observations on the matter of technical
assistance activities.  First, Article 20.3 did not preclude any type of technical assistance.  Therefore
in her delegation's view, it was important that the form that the technical assistance took should be on
the basis of programmes related to the needs of a particular country.  Second, her delegation believed
that Article 20.3 was part of the balance of rights and obligations of the Uruguay Round Agreements.While cooperation and coordination with other international organizations was necessary, her
delegation believed this particular issue was an implementation matter which needed to be dealt with
fully in this Committee and within the WTO.  Therefore, it was for the WTO to address these issues in
their entirety as well as every form of technical cooperation needed by a developing country Member.
4.14 The representative of the United States thanked delegations for their preliminary responses.
Regarding the points made by Colombia and the Philippines on management systems, he expected
that these related to issues like pre-clearance release of goods before the valuation had been
completed, post-clearance controls, perhaps risks assessment in terms of selectivity, etc.  Several
countries in APEC had been involved in developi ng modules to specifically address some of the
issues associated with management.  He would follow up with his authorities on what APEC was
doing in this area and asked other Members involved  in APEC to provide clarifications as well.
While the APEC programme was clearly targeted at APEC members, he understood that these
modules had been provided to the WCO and, through the WCO, were available to non-APEC
members.   Perhaps this could be useful for assistance in the area of management systems.  He agreedwith India that this was an issue of implementation and needed to be addressed by the WTO and
specifically by this Committee.  That was why his delegation had suggested examining what countries
were doing to provide technical assistance and how they could better address the needs of developing
countries.  In addition to APEC, the US as well as other developed countries had bilateral
programmes.  APEC was an example of bilateral efforts coordinated among a group of developedG/VAL/M/9
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countries to ensure the avoidance of redundancy and to specifically address needs.  He acknowledged
that this was a difficult process and individual countries had individual needs.  So the extent to which
resources that were already out there were being efficiently allocated was very important.
4.15 The representative of Canada considered that the kind of technical assistance that the WTO
was providing was useful.  It was important to have on-site visits, to direct efforts to identifying and
targeting the actual needs of the individual members, and to involve all departments.  He noted that
while the WTO Secretariat had a comparative advantage on the knowledge side of the Agreement and
in possibly helping each Member coordinate its efforts, it was also clear from the survey that a
number of the needs went outside this area of competence, for example the infrastructure and
management issues mentioned by Colombia.  It was well known that other organizations also
provided technical assistance.  His delegation considered it useful if the WTO Secretariat, at a seniorlevel, write to organizations such as the World Bank, the WCO, UNCTAD, etc. to provide them with
the responses to the questionnaire contained in G/VAL/W/24.  It might be useful to share this
information with other organizations along with a quick summary of the kind of technical assistance
the WTO was providing.  He suggested that it should be sent at a senior level to call attention to the
needs that had been identified and to contribute to a better coordination of all efforts, allowing eachorganization to provide technical assistance according to its comparative advantage and avoiding
duplication.  This might also allow a better interchange between the various organizations regarding
their activities in this area.
4.16 The observer from the World Customs Organization welcomed this discussion as the WCO
was a major provider of technical assistance not only in valuation but in all areas of customs and
believed that greater coordination was necessary.  Customs valuation was a fundamental function of
any customs administration.  When WTO Members would have to introduce the WTO Agreement, in
some senses the only real change needed would be a change of the laws applied for valuing goods.
However, it was clear that this was not all because customs valuation was a fundamental function thatwent to the heart of how customs worked.  The changes that would be needed within the customs
administration were quite vast as Colombia had said.  There was a need for knowledge about the
Agreement and this was fairly easily provided.  The WCO as well as other organizations and
Members had training courses on the Agreement, and there were books on the subject.  However this
was theoretical knowledge;  practical knowledge was also needed and the WCO tried to provide both.
The second area that Colombia mentioned was the provision of infrastructure. This was an area which
was difficult for the WCO because it was not a pr ovider of funds but was a technical organization.
Within the WCO it was recognized that automatio n of customs functions provided facilitation that
improved the control on goods.  The WCO had Committees that examined automation and worked
closely with UNCTAD, the World Bank and others to try to provide the necessary infrastructure.  In
fact, when WCO changed its computer system, the old machines were sent to administrations to help
them automate their functions.  Some of these went from being  word processing machines toASYCUDA machines for processing entries.  Governments could also do this.  The third area
Colombia mentioned was technology or know-how which was probably WCO's biggest strength and
where most time was spent. The issues of risk assessment and risk processing, pre-entry clearance,
etc.  were dealt with comprehensively within the WC O,  including the furnishing of training materials
and awareness materials.  WCO technical assistance on valuation dealt with all three of the areas thatColombia raised.  The WCO provided information on the rules, it looked at how countries may
implement the Agreement, it set out a time-table and action plan for the administration to follow to
address various issues like legislation, customs procedures, declaration processors, etc.  Most of the
countries for which assistance was provided had invoked the 5-year transition period.  However, when
assistance was sent, there might be only 2 years left, in which case the WCO would develop aprogramme over the 2 years and hope that the administration would go forward with it.  He added that
what was needed was a better understanding of what  everybody else was doing.  All were working in
the same direction, but part of the problem came from customs administrations and other ministries
approaching different people or organizations to get assistance.  There was a need for coordinationG/VAL/M/9
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within the organizations and within Member administ rations, and also a need to make the request for
assistance to a single point.
4.17 The representative of Australia stated that her delegation agreed that technical assistance
needs should be based on needs identified by members.  The WTO did have a role in this area,
however her delegation agreed with Colombia that there were areas better dealt with by other
organizations.  The reason for this Committee's initiative had been to address the question of further
action and how the obligations under this Agreemen t would be met.  In that light, her delegation
supported Canada's idea to send, at a senior level a letter explaining the Committee's actions.  Her
delegation would encourage more integration and as much dialogue as possible.  After reflecting on
the issues, and given the Secretariat programme, the consistent messages coming about the need to
tailor technical assistance to country-specific needs, and the fact that countries were at uniquesituations in terms of implementation, strategy and planning, her delegation thought it might be useful
for the Secretariat to prepare a kind of check-list that , in main areas, identified what the key priorities
were for further action from Members.  The Secretariat could work with individual Members to pull
together existing information as well as to identi fy the main priorities always with a concrete,
practical focus.  In line with the approach taken so far, this would be voluntary for Members. This
kind of document could then be a useful tool useful for developing countries to  identify the main
priorities and to help the discussions within the WTO, with the Secretariat, with bilateral donors, and
with other organizations to ensure that the assist ance being received was needs driven and geared to
Members' priorities.  In order to avoid a glut of information, her delegation envisaged a "yes-no", one-
line list approach that would be as user friendly as possible.
4.18 The representative of India thanked the WCO for clarification of its activities, especially in
light of Canada's proposal that the Committee needed to understand what other bodies were trying to
do.  On Canada's proposal that the Committee should write to international organizations to send them
a document which was currently restricted, her delegation would need to reflect in the light of thecoordination with other organizations built into the WTO Agreement.  It was useful to reflect also on
how this information on the technical assistance activities of other international organization could be
used.  Her delegation agreed with the Australian proposal for the Secretariat to draw up a checklist of
the type of requests/needs of developing country Members in the various programmes that had been
undertaken for technical assistance.  As a first step to eliciting fresh information from other
international organizations, it would be useful for the Committee to assess what it would need from
other organizations.  While the key priorities for the next actions of Members would be useful, it wasfirst necessary to understand what type of technical assistance was being requested and what were the
limitations on providing that assistance in the WTO.
4.19 The representative of the United States considered the Canadian and Australian proposals
useful and complementary.  Regarding Canada's idea, G/VAL/W/24 was a restricted document but
these organizations already had access to it as observers to the WTO.   He understood the idea as
notifying these organizations at a political level of the existence of this information so that perhaps
there would be a little more attention paid then currently to the efforts undertaken by the WTO.
Looking at Colombia's categorization of technical  assistance needs, the second one was related to
physical infrastructure and the WCO quite rightly pointed out that it is not a donor organization andgenerally was not in a position to be able to respond to those types of needs.  However, the World
Bank, and the IADB were donor organizations that coul d play a role.  So it could be extremely useful
that these organizations were aware at a political level of Members' needs.  He agreed with India that
the Australian proposal could be useful in terms of identifying what types of technical assistance were
needed.  This document could generally be structured along the lines of Colombia's categories so thattechnical assistance needs could be thought of in terms of knowledge, physical infrastructure and of
management systems.
4.20 The representative of the European Union believed the WTO programme was useful and
should continue.  He considered the Canadian suggestion useful in that the WTO should make overtG/VAL/M/9
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contact with other assistance providers in this field to establish what it had been doing and how it saw
the development of activities in this field.  One of  the original motivations for the exercise in the
Committee was to better coordinate and eliminate redundancy.  An appropriate communication to the
relevant bodies would be an excellent idea which his delegation would support.  He added that his
delegation admired the APEC programme and found it a useful gesture to make available the moduleswhich had been developed to the WCO for the use of all Members.  He encouraged all Members to
use this resource.  He noted that Colombia had clearly outlined its needs.  These could be a basis for
what might be needed in the future.  His delegation supported computerization of customs
administrations and supported the UNCTAD ASYCUDA programme.  However, it was worth
recalling that the countries which had originally implemented the Customs Valuation Agreement had
done so with little information technology, and th at the implementation of the Agreement could and
must be done even in the absence of currently available technology.  Regarding the last suggestion, hesuggested reflecting back to what had been envisaged for this initiative on technical assistance.  It
seemed essential that the responses contained in document G/VAL/W/24 be supplemented by
responses from other countries.  An evaluation of the technical assistance given was necessary before
going on to further initiatives like developing further priorities.  If the WTO Secretariat established a
draft checklist of priorities, his delegation might have some ideas to add.  Given the time-frame forimplementation, it was important to establish what needed to be done in the time which remained.
4.21 The representative of Canada clarified his delegation's proposal.  The idea to attach document
G/VAL/W/24 to a letter to other organizations was simply to draw the attention to the other
organizations of the kinds of technical assistance be ing sought, as identified by the actual Members.
They may want to take this information into account in their own planning of the types of technical
assistance they provide.  The objective was to get the best and most efficient technical assistance that
the Members themselves actually needed and to use the comparative advantage of every organization.
His delegation did not have a problem with the Indian suggestion for an on-going assessment of
technical assistance and would want to be part of this.  His delegation supported the Australianproposal and agreed with the US that this would be a useful tool.  He added that the Committee had
received a number of responses from Members and he encouraged other Members to also provide the
responses which provided a clearer picture of what was still required.
4.22 The representative of Colombia supported the Canadian proposal.  It was an  interesting idea
not only to let development banks have the results of the survey on technical assistance, but this
should also be accompanied by a document from this Committee that would sensitise them todeveloping countries' need to modernize their customs systems and put into force the Customs
Valuation Agreement.  An objective to be sought from these development banks could be a credit
facility to provide technical assistance in an integral manner and not on a patchwork basis.  This
would not only be cost-effective but would give much more efficiency to developing countries'
transition towards the WTO system of valuation.
4.23 The representative of Switzerland considered that the replies provided by the developing
countries for information should make it possible for technical assistance to be better targeted and
more efficient.  Like other delegations, her delegation noted a considerable number of technical
assistance activities in the area of customs provided by organizations such as the WCO, UNCTAD,the World Bank, etc.  Her delegation was in favour of the Canadian proposal. It would be useful for
the replies provided to this Committee to be made more accessible to other international organizations
and more widely disseminated.  This would only increase the effectiveness and efficiency of technical
assistance activities and better respond to the need for coordination.  She added that a few months
ago, Switzerland made an important contribution to the WTO for the financing of technical assistancefor developing and transition countries.  One of the specific fields identified was customs valuation.
As a contributor, her delegation was particularly interested in the Secretariat's after-mission evaluation
of the situation of the beneficiary country to determine the status of implementation of the Agreement,
the specific needs of the country, the specific problems it had to face, etc.  Her delegation also
attached great importance to an assessment of the different technical assistance activities and theG/VAL/M/9
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results obtained.  She supported the Australian idea and a checklist of issues would be a useful follow-
up to the exercise started in this Committee.  Such  a list should make it possible to better identify
needs, to improve the effectiveness of technical assistance, and enable a better assessment of what had
had been done and what still remained to be done.
4.24 The representative of Venezuela supported the proposals from Colombia, Philippines, the US
and Canada.  His Government had until the year 2000 for implementation but had not yet responded
to the Secretariat's programme.  This was due to an on-going restructuring affecting the entire customs
system in Venezuela which had taken longer than originally expected.  Furthermore, his delegation
had received from its customs authorities a first idea of what the concrete needs in terms of technical
assistance were going to be for Venezuela.  It hoped to give this formal shape in the near future.
However, the main points were as follows:  support regarding the updating and handling ofinformation systems;  technical assistance on the mechanisms for subsequent monitoring of values
and possible fraud;  and handling of transfer procedures and the way in which the enterprises involved
in this practice should be handled.
4.25 The representative of Japan supported the Canadian proposal.  His delegation also supported
the Australian proposal for a checklist which should be user friendly.4.26 The representative of Hong Kong, China considered technical assistance very important,
especially in view of the impending application of the Agreement to the 53 developing country
Members which had invoked Article 20.1 of the Agreement.  His delegation was aware of thechallenges ahead, in particular the lack of experience amongst some developing country Members and
the short time-frame involved.  His delegation appreciated the efforts already made by many parties,
including the WTO Secretariat, in addressing these needs.  In this light, his delegation agreed with the
Canadian and Australian proposals and that further technical assistance activities had to be
strengthened and better focused and coordinated.  Finally, he thanked India for recalling thatdeveloped country Members had agreed to provide a wide-range of technical assistance to developing
country Members on mutually agreed terms.  In this connection, his delegation would encourage
developed countries to brief the Committee on what they had done and what they would be doing in
the area of technical assistance on customs valuation.
4.27 The representative of the World Customs Organization supported Colombia's idea of creating
a credit facility.  He noted that the WCO had a customs reform and modernization programme which
was broader than just valuation.  It looked at reforming customs, providing customs integrity, and
modernizing customs to do its job more efficiently.  It was comprehensive and targeted toward
developing countries. The programme was looking for ways to improve coordination and
understanding between it and other organizations like the World Bank and the IMF because these
organizations may be able to provide funding.  He supported the idea of the WTO Committee writingto the WCO Secretariat;  this would create an opportunity for the latter to give a full accounting of the
reform and modernization programme.  He added that customs reform and modernization was a
comprehensive concept and it would take time for countries to be able to introduce certain aspects of
it.  However, there was a deadline for implementa tion of the Agreement and for many it was the end
of 1999.  Customs reform and modernization may be a background item for now because the mainobjective was providing Members with the assistance they needed to fulfill their obligations, and the
WCO was keen to do that.  He agreed with the observations of the EU that a lot of elements that were
now standard practice in developed countries for applying the Agreement were not so when these
countries introduced the Agreement in the early 1980's.  Countries could implement the Agreement
and quite successfully control it without post-clearance audits and automated systems;  it might bemore labor-intensive and slower but it would still work effectively.  The Agreement was a working
document and adaptable to different circumstances.  Although automation and facilitation were long-
term objectives, the main objective presently was implementation of the Agreement.G/VAL/M/9
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4.28 The Secretariat explaining the WTO programme's follow-up activities, said that the
implementation methodology of the programme foresaw that at the conclusion of each mission, the
consultant would prepare a report based on the activities that were conducted during the mission as
well as those that should be conducted by the national administrations and ministries after the
conclusion of the mission.  Copies of the report would be sent to national authorities and to the WTOSecretariat.  The idea was that this report would be a working document whereby the administrations
could continue to carry out the activities that were contained in the report having agreed upon those
activities with the consultant before-hand.  The programme foresaw the possibility of a follow-up
mission if requested to take stock of what had been accomplished since the first mission and to assess
what else had to be done for implementation by the deadline.  She added that most of the missions
that had been carried out so far had been financed by special funding provided by certain Members, in
particular Switzerland, but there was a lot of tech nical assistance going on within the WTO and this
programme was only a part of that.  All resources had to be shared, so any missions in the future
would depend on available funding.
4.29 The Chairman summarized the discussion on the two proposals by Canada and Australia.  He
asked the Secretariat to prepare a letter based on the Canadian proposal and requested further input
and clarification from delegations on the Australian proposal.
4.30 The representative of India considered that it would be more prudent to examine what type of
coordination with other organizations would be n ecessary before interacting with international
organizations at a high political level.  In this light, given that document G/VAL/W/24 may alreadyhave been circulated to these bodies, as the United States suggested, she requested clarification on the
utility of providing this document again at a high political level purely for information.  Regarding the
Australian proposal, she believed that it would be useful to prepare this document according to the
categorization that Colombia had suggested.  But what was needed before writing to other
organizations was to analyze first what the specific needs were, to be taken from G/VAL/W/24, andsecond to assess what the WTO was capable of providing on its own.  Only then could the Committee
reflect on how to address other bodies to work out a coordinated programme.  Given the time left for
actual implementation, she considered that such action should be taken rather fast.
4.31 The representative of Canada expressed disappointment in delaying the letter that would
simply transmit, at a senior level, the information identified by Members who were actually looking
for technical assistance.  The idea was to send it at a senior level so that it would catch the attention ofother organizations whose Members were in the process of implementing the Agreement and who
needed the assistance identified through the WTO proc ess.  His delegation agreed with continuing the
on-going assessment of the kinds of technical assistance needed.  It would not seem useful to hold up
sharing this information that Members had already id entified when this would enable them to perhaps
get this assistance immediately rather than waiting.  This particular proposal was simply trying torespond to what everyone agreed was most effective, i.e. assistance targeted to the actual needs of
each individual Member.
4.32 The representative of the United States noted that the WTO worked closely with the WCO
and UNCTAD, and in that context, document G/VAL/W/24 had probably complimented their
activities.  Because the World Bank worked in regional groups and there was not necessarily a focal
point on customs reform, it could be that the document did not get much attention.  Therefore, it
would be extremely useful for this document to be highlighted at a senior level so that those who
made decisions in these organizations were aware of the information this Committee had developed.
He agreed that that there was not much time left until the end of the transition period for manyMembers and that the Committee could not afford to wait.  He saw no reason to wait to send a
document which was already available to them but perhaps was not getting the attention that it needed
to help coordination among organizations.  He added that Australia's proposal would be an effort to
fully assess what was being done in technical assistance, and what were more precisely the specificG/VAL/M/9
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needs of individual countries.  The more immediate effort should be to attempt to get the attention of
these organizations with a document that should not be controversial.
4.33 The representative of the European Union considered the Canadian proposal a straight
forward matter given the relatively limited time av ailable.  It would be a communication and the
entire purpose of this exercise was to ensure transparency, to avoid duplication, and to give a clear
message that technical assistance was important.  To ensure application of the Agreement, everybody
would need to know what the others were  doing;   information coming into one organizations should
be immediately available at all other levels.  This should be done as soon as possible because the
relevant other organizations (such as the WCO, the World Bank, UNCTAD, etc.) may be able to
incorporate the needs into their own programmes and initiatives.  He added that reflection on the
structure of the Australian proposal was needed.  He noted that this Committee was discussingimplementation of the Customs Valuation Agreement and should not go beyond that scope into
customs modernization, customs infrastructure etc.  These were relevant issues but the Committee's
immediate focus was good and timely implementation.
4.34 The representative of India considered that sending this communication for transparency
purposes was a rather limited objective.  She emphasized that what had been done until presently was
not enough for all Members to meet their obligations under this Agreement.  This included developed
countries providing technical assistance to help developing countries meet this obligation.  Therefore,
if coordinated action was necessary among organiza tions, a coordinated plan of action needed to be
clarified.  Colombia's suggestion to develop a credit programme in some of the development bankswas a useful suggestion.  The idea of a checklist of the needs expressed by various countries was
aimed at designing such a coordinated programme which could then be taken up at a high political
level.  Her delegation believed this would be a more effective way of tackling the issue.  Reference
could also be made that the WCO was the main addressee in this area.  Although the WCO looked
after customs valuation and the more comprehensive or broader aspects of modernization of customsadministration, her delegation believed that the obligations set out in the Agreement were those of the
Members.  Therefore it was for this Committee to take care of the valuation aspect.  A coordinated
programme would have to emerge from this Committee.
4.35 The representative of the United States agreed with the EU on the Committee's objectives.
However, his delegation put more priority on infrastructural issues. Good and timely implementation
of the Agreement required capacity building in customs administrations and the Colombian ideasabout physical infrastructure and management syst ems were all about capacity building.  Knowledge
was simply not enough.  He regretted that the Committee could not agree to the Secretariat submitting
a letter because he thought it would be ideal to bring the Committee's efforts to the attention of these
other organizations sooner rather than later.  This did not mean only the WCO, which already knew
what the WTO was doing in this area, but organizations like the World Bank.  The Committee couldalways follow-up in more comprehensive manner along the lines of the Australian proposal.  He
added that there was a lot of technical assistance going on already - bilateral assistance regional
assistance, and that by international organizations.  The problem had always been coordination.  The
Committee had been engaged in this exercise for the last 18 months to see to what degree it could
bring about some coordination.  The Committee could not be sure that these other organizations knewspecifically how their efforts could relate to implementation of the Customs Valuation Agreement.
4.36 The representative of Colombia considered that the Committee needed to be more ambitious
and optimistic and reflect on how the development banks could participate in the resolution of the
implementation issue.  Therefore he was not only in  agreement with the possibility of involving these
development banks but also believed that the Committee could be more ambitious in the content of
this communication by trying to involve these banks and not merely sending them information for
transparency purposes.G/VAL/M/9
Page 17
4.37 The representative of Norway noted that his delegation fully supported all efforts in this area
and shared the views expressed that Article 20.3 was an issue of implementation and that there was an
element of urgency at this point in time.  He supported the Chairman's suggestion because he could
not see any inconsistency between drawing the attention of other organizations to document
G/VAL/W/24 and at the same time meeting the concerns of India regarding the need to address thespecific needs of developing countries. The latter would be addressed through the Australian proposal.
4.38 The representative of Australia considered that all the discussion on this item was about
fulfilling Article 20.3 which was the Committee's mandate and for which there was an element of
urgency.  Against that background, her delegation considered that sharing information and mobilizing
the maximum resources was always helpful especially when it came from action by the Committee.
4.39 The Committee agreed that the Secretariat would prepare a checklist of the priority activities
for technical assistance to assist Members in identifying gaps in activities aimed at implementation of
the Agreement, and that it would revert to the Ca nadian proposal to send G/VAL/W/24 to other
organizations at a later informal meeting.
4.40 The representative of India asked if the checklist would be divided along the categories
suggested by Colombia which she would support.
4.41 The representative of Australia agreed that Colombia's categories were useful and had no
problem with them being used in this document.  The key was that this document be practical and be
about Members priorities on the path to implementation.
4.42 The representative of India said that she was uncertain as to what was meant by key activities.
She saw this as identifying the forms of technical assistance available and any lacuna in this
availability.
4.43 The representative Australia agreed with India's understanding and added that another aspect
was Members identifying those areas where they wanted work to be done next.
V. REPORT OF THE COMMITTEE ON CUSTOMS VALUATION TO THE COUNCIL
FOR TRADE IN GOODS
5.1 The Chairman drew Members' attention to document G/VAL/W/28 which contained the draft
Report of the Committee on Customs Valuation to the C ouncil for Trade in Goods.  He noted that the
document would be revised to take into account the proceedings of the present meeting.  He asked for
any comments on the document, section-by-section.
5.2 The representative of Mexico asked that paragraph 5 be updated.  The representative of the
United States asked that paragraph 10 be updated to  reflect the informal mee ting held in the morning.
The representative of Colombia considered it would be useful to include in paragraph 10 the
information presented by the Secretariat on its technical assistance programme.  The representatives
of Brazil and Poland  asked that their recent notifications of legislation be reflected in the report.
5.3 The Committee took note of the statements made.  It was agreed  to submit the Report to the
Council for Trade in Goods as revised according to  the statements made, incorporating notifications
of responses to the Checklist of Issues, and re flecting the proceedings of the present meeting.G/VAL/M/9
Page 18
VI. FOURTH ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION OF
THE CUSTOMS VALUATION AGREEMENT
6.1 The Chairman drew Members' attention to document G/VAL/W/29 which contained the
Fourth Annual Review of the Implementation and Operation of the Customs Valuation Agreement.
He asked for any comments on the document, section-by-section.
6.2 The representative of India noted that India was not reflected in section I(b)(iii) of the
document, although by reference to footnote 1 of the Section, India was appropriately and correctly
reflected in sections I(b)(iv) and I(b)(v).  Her delegation requested an amendment to reflect India in
the list as well.
6.3 The representative of India further noted that there were four other documents of this
Committee which did not correctly reflect India's situation although there were others that did.  She
listed the documents:  G/VAL/W/3, G/VAL/6, G/VAL/W/13, G/VAL/W/22.  These documents also
did not show India with the footnot e mentioned earlier, and her delegation would be grateful if these
documents could be modified as well.
6.4 The representative of the United States requested a clarification either from the Secretariat or
from India concerning India's first remark on section (b)(iii);  he asked if India had, in fact, invoked
Annex 3 paragraph 2 regarding minimum values.
6.5 The respresentative of India replied that while her delegation had not used this reservation, in
India's view it was still there.6.6 The Secretariat said according to the Decision that was adopted by the Committee in
May 1995 regarding Annex 3, paragraph 2, it would seem that a  reservation under Annex 3,
paragraph 2 would have to be invoked before the date of implementation of the Agreement.  SinceIndia had been applying the Agreement since 1988 and had never invoked that reservation it had not
been included in section (b)(iii).
6.7 The representative of India referred to document G/VAL/2/Rev.7, dated 2 November 1998,
which, in Part II, noted at the end that "invocation for delayed application and reservations under the
relevant provisions of the Customs Valuation Agreement 1979 continued to apply for the following
developed country members in accordance with paragraphs 1, 2 and 3 of the aforementionedDecision," and India was listed thereunder.  This was her delegation's understanding of the situation.
6.8 The Secretariat explained the meaning of Part II of G/VAL/2/Rev.7.  This section grouped all
the reservations together, not only reservations relating to minimum prices.  This did not necessarily
mean that a country listed under this section had taken all the reservations that were listed under thefirst paragraph in Part II.  It was not specified under this part which country had taken which
reservations.  It appeared that as far as the records showed, India had never invoked paragraph 2 of
Annex 3.
6.9 The representative of India disagreed with the recollection of the Secretariat.  She recalled
that India had had a reservation each under paragraphs 3, 4 and 5 of Article 1 of the 1979 Protocol to
the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade.
She quoted part of Paragraph 3 which said "that developing countries which currently value goods on
the basis of officially established minimum values may wish to make a reservation to enable them to
retain such values on a limited and transitional basis under such terms and conditions as may beagreed to by the parties to the Agreement".  She added that, subsequently, a draft Decision was placed
for the consideration of the General Council at its meeting held on 31 January 1995 on "Continued
Application under the WTO Customs Valuation Agreement of Invocations of Provisions for
Developing Countries" .  This Decision was adopted by the General Council at this meeting and wasG/VAL/M/9
Page 19
contained in WT/L/38.  She noted that this Decision was also referred to in the documents that the
Committee was presently discussing.  She added that it was her delegation's belief that India's
reservation therefore under paragraph 3 of the Protocol continued.  India's customs legislation, which
was notified to the WTO and enacted in 1988, also provided for the application of minimum prices
and had been considered in the Committee.
6.10 The representative of the United States said his recollection, based on some background
searching his delegation had conducted in the context of Morocco's invocation of this reservation, was
that India did invoke, under the Tokyo Round Agreement, an identical reservation and there was an
agreement among the Parties to that Agreement that the reservation was time-limited and had then
expired, i.e. it was effectively disinvoked.
6.11 The representative of India stated that there was no time-limit to India's reservation and India
had never disinvoked it.
6.12 The representative of the European Communities thought this appeared to be a factual matter
in need of verification.  His delegation did not have the necessary records at hand.  He thought it
could be solved by reference to the records of the WTO.  If it was something beyond a factual matter,
it would have to be considered further.  He added that this section of document G/VAL/W/29 was a
snap shot of current reservations on minimum values.  Any country which had implemented the
Agreement beyond a certain delay period would not appear on this list because it would be
implementing the Agreement without minimum values and any reservations on minimum values of ahistoric nature would no longer be reflected.  He concluded that perhaps this issue could be verified
between India and the Secretariat.  It did seem to be a purely factual one.
6.13 The representative of Japan noted, for the record, his agreement with the representative of the
EU that this was a factual matter.  He added that his delegation's understanding was somewhat
different from the Indian delegate's understanding.
6.14 The Chairman, in the light of the discussion, proposed adopting the text of the Fourth Annual
Review ad referendum  while waiting for clarification of the matter between the Secretariat and the
delegations concerned .  The Committee took note of the statements made and agreed  to the document,
add referendum, until a mutually satisfactory solution could be found.  The document would also be
revised to take into account the proceedings of the present meeting.
6.15 The representative of India stated that whil e she was always willing to consult with the
Secretariat to address factual issues, she wanted the Committee to note that India clearly believed that
its reservation had not been disinvoked.  She reminded the Secretariat that in 1989 when India's
notification was reviewed, the Indian delegate had clearly stated that, though India then had not used
the minimum valuation system for the last four years, and it had not been used since either, the
reservation continued to hold  and that India wanted to see how its system worked before it disinvoked
the reservation.
6.16 The representative of Brazil proposed deleting section IX of the Annual Review as he
considered that the issue of Consultation and Dispute Settlement lay with the Dispute Settlement
Body.
6.17 The representative of the European Communities recalled that it had been decided to include
such a section in the new format for the annual reviews.  He asked why the Committee should change
it again.  However, if desired, the substance of what was written under this section could be altered.
6.18 The representative of Mexico asked that the substance under this section be revised to note
that the examination of Mexico's legislation had been terminated.G/VAL/M/9
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6.19 The Committee agreed to modify the text under this section in the Annual Review to reflect
that the consultations on Mexico's legislation had been suspended but the countries involved had
reserved their rights.
VII. TRADE FACILITATION
7.1 The Chairman noted that at its meeting of 5 June and 8 July, the Council for Trade in Goods
decided that "its Chairman would invite the Chairpersons of the Committees on Customs Valuation,
Import Licensing, Rules of Origin, Sanitary and Phytosanitary Measures, Technical Barriers to Trade,
the Chairperson of the Working Party on Preshipment Inspection and, as appropriate, the
Chairpersons of other subsidiary bodies of the CTG to propose an item "trade facilitation" for
inclusion in the agenda of their meetings".  Unde r this agenda item these bodies would address those
aspects of trade facilitation which they regarded as being related to the respective agreements with aview to introducing the results of these discussions in the informal CTG discussions on trade
facilitation in March 1999.
7.2 He added that the CTG had also agreed that the core agenda for trade facilitation would
constitute the following areas of activity:
1) import and export procedures and requirements, including customs and border-
crossing problems:  overview of the Kyoto Convention and its current revision
process - September 1998;
2) physical movement of consignments (transport and transit);  payments, insurance and
other financial requirements which affect the cross-border movement of goods in
international trade - December 1998;
3) electronic facilities and their importance for facilitating international trade;  technical
co-operation and development issues relating to simplification of trade procedures;
consideration of WTO Agreements relating to, or including provision on , trade
facilitation - March 1999;  and
4) evaluation of the exploratory and analytical work to assess the scope for WTO rules
in the area of trade facilitation - June 1999.
He believed that the Committee's task was to reflect on whether any of these core issues
related to the issues discussed in the Committee and that some input should be provided to the CTG
by March 1999.  He asked Members for comments.
7.3 The representative of the United States stated that one of the most fundamentally important
elements of the trade facilitation environment was customs valuation.  The US private sector
considered that no single customs-related element had greater importance in the trade transaction
process than the valuation of imported goods.  One reason for this was the importance of the
uniformity and certainty of implementation of tariff commitments when valuation was conducted in
accordance with the rules set out in the Agreement.  He added that there were several other aspects in
the Agreement that related to trade facilitation and what commonly were considered to be "best
customs practices".  For example, there were the transparency provisions in Article 12, and the
provision providing the right to appeal a valuation determination to a judicial authority in Article 11.
7.4 Also, Article 13 addressed one of the most impor tant elements of trade facilitation, especially
in terms of enhancing economic growth in a world that now manufactured and distributed in a just-in-
time manner.  This was true whether it entailed inputs destined for a manufacturing operation or
commodities important to consumers.  Article 13 prov ided for the release of goods prior to clearance
and had been recognized as a best customs practice under International of Chamber of CommerceG/VAL/M/9
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guidelines.  Therefore, his delegation considered it logical that when the Committee would report to
the CTG on its discussions on trade facilitation, in addition on reporting on implementation of the
Agreement itself, it might also provide a status report on the elements in the Agreement related to
transparency (Article 12), to appeal provisions (Article 11) and to the timely release of imported
goods (Article 13).
7.5 The representative of the European Communities confirmed that there was a link between
customs valuation and trade facilitation.  The Agreement itself was a major facilitation tool and its
global implementation would be the single greatest contribution to trade facilitation.  That aside, there
were significant linkages and direct relevance between the implementation of the Agreement and the
recognition of the need for further facilitation of tr ade.  Although in practice valuation produced close
contact with trade and trade procedures going beyond merely the customs aspects of the movement ofgoods, other issues on which work could progress were information requirements, declaration forms,
linkages with the general customs rules, import data, etc.  These areas could be examined more
carefully with a view to contribu ting to discussions on the potential for further trade facilitation.  He
presumed that this meeting would be followed up in March 1999.  However it would be useful to have
an opportunity to share views on this agenda item in an informal meeting before then.
7.6 The representative of India reserved her delegation's position on all issues raised by the US
and the EU.  Her delegation was small and it wished to see that the constraints faced by small
delegations were taken account of in any informal meeting that this Committee might envisage on this
issue.  She noted that the Committee would formally meet only in April and perhaps the mostappropriate way for the Committee to report to the CTG at its March meeting would be to reflect that
a preliminary discussion took place in November where some aspects were raised.  She noted that the
mandate to the CTG was only to report on the progress on the work in the Committee on this issue.
7.7 The representative of Canada agreed that while matters should be managed in such a way as
to enable small delegations to be able to participate fully, his delegation considered that it would be
worthwhile to follow-up on the EU proposal to have an informal meeting sometime in the new year,
perhaps February, to reflect on some of the issues raised by the US and the EU.  His delegation
considered that these elements were important and may have a link to trade facilitation.  It would be
unfortunate if this Committee could not, at least, provide some preliminary views in a detailed fashion
to the CTG meeting in March 1999 when the CTG would be dealing directly with trade facilitation
issues in existing Agreements.
7.8 The representative of Mexico considered the relationship between trade facilitation and the
work of this Committee very important as it was about improved rationalization of instruments and
improved operation and organization of issues on customs valuation.  It was an appropriate time for
the Committee to contribute to the work on trade facilitation.  It would be regrettable if thisCommittee did not support this work.  He agreed that some issues had been identified which could be
further taken up in an informal meeting.
7.9 The representative of Hong Kong, China support ed the idea of having an informal meeting on
this important subject.  His delegation found the US proposal attractive because it would be useful to
give to the CTG, not only a report on implementation of the Agreement, but also a status report on the
implementation of those provisions which were relevant to trade facilitation. Whether the Committee
would need a meeting or could endorse a draft report that might be circulated by the Secretariat was a
question his delegation would be considering at a later stage.
7.10 The representative of India asked which report was being referred to by the representative
from Hong Kong, China and whether the Committee would have the opportunity to review a possible
report prepared by the Secretariat.G/VAL/M/9
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7.11 The Chairman noted that the mandate for the Committee's work in this area was in document
G/C/M/34 which also requested the provision of a report to be presented to the CTG.  It was on this
basis that the item was included on the agenda for this meeting.
7.12 The representative of Mexico proposed that the Committee agree to have an informal meeting
in January and another one in March on trade facilitation so as to reply to the request from the CTG.
The meeting in March would build on the discussions in January so as to prepare a report to the CTG.
7.13 The representative of India stated that Members were engaged in a very heavy agenda from
this time onwards.  However, she could agree to an informal meeting in January provided that the
Secretariat would prepare a report before this date which explained which were the Articles or
provisions of the Agreement which were relevant to this discussion.  A decision on a further meetingwould be based on such a document and the discussions at a January meeting.
7.14 The Secretariat noted that it had prepared two documents for the CTG discussions on trade
facilitation (G/C/W/80 and G/C/W/115) which also covered customs valuation issues.  However, if
the Committee wanted a document for its own purposes, the Secretariat would prepare another one.
7.15 The representative of India stated that while duplication of work by the Secretariat should be
avoided, she would like to reserve her delegation's position on the relevance of the proposals by the
US, the EC, and Hong Kong, China in the context of these documents which would be examined by
India.
7.16 The Committee took note of the statements made.  It agreed  that the Chairman would carry
out consultations on this matter in order to determine whether the Committee would hold an informal
meeting on this matter.
VIII.  OTHER BUSINESS
A. INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN COMMUNITIES VALUATION POLICY
8.1 The representative of India referred to th e European Commission's Regulation 2322/97 of 24
November 1997 which established the standard import values for determining the entry price of
certain fruit and vegetables.  Article 1 of this Regulation stated that "the standard import values
referred to in Article 4 of Regulation EC 3223/94 shall be fixed as indicated in the Annex hereto".
Her delegation requested the EC to clarify whether this was factually correct, whether the EC wasapplying fixed values on certain products, whether the products listed in the Annex attached to
Regulation 2322/97 and referred to in Article 1 were the only products that attracted standard or
minimum prices, and if not, what additional products might be affected, and what was the WTO
justification for these fixed prices.
8.2 The representative of the European Communities stated that he did not believe that this
Regulation involved minimum prices, as such.  He would come back to the Committee with a
complete response as soon as possible.
B. DATE OF THE NEXT MEETING
8.3 The next meeting of the Committee is scheduled for 27 April 1999.
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