RESTRICTED  WORLD TRADE  
ORGANIZATION  G/VAL/M/37 
30 April 2004  
 
(04-1927) 
Committee on Customs Valuation  
   
MINUTES OF THE MEETING OF 8 MARCH 2004 
 
Chairman:  Mr. Ivan Lee (Hong Kong, China)
 
   The agenda proposed for the meeting, circulated in WTO/AIR/2255 and Add.1 was adopted 
as follows: 
 
I.
 REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON 
CUSTOMS VALUATION .......................................................................................................2  
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF 
THE AGREEMENT.................................................................................................................2  
(i) Notification of national legislation ........................................................................................... ..2 
(ii) Notifications made by devel oping country members ..................................................................8  
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE 
COMMITTEE ON CUSTOMS  VALUATION......................................................................9  
IV. TECHNICAL ASSISTANCE ..................................................................................................9  
V. INDIA - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN 
COMMUNITIES VALUATION POLICY...........................................................................10  
VI. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, AND NINTH ANNUAL REVIEWS OF THE IMPLEMENTATI ON AND OPERATION OF THE 
CUSTOMS VALUATION AGREEMENT ..........................................................................11
 
VII. PRESHIPMENT INSPECTION ...........................................................................................11  
VIII.  PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION (WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES................................12
 
(i) Paragraph 8.3 of document WT/MIN/(01)/17...........................................................................12  
IX. OTHER BUSINESS................................................................................................................1 3 
(i) United States – Questions to delegations on certain customs valuation practices...................13  
(ii) Date of the n ext meeting ....................................................................................................... ....14  
 
   
 
 G/VAL/M/37 
Page 2  
 
I. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS 
VALUATION 
1.1 The observer of the World Customs Organization
 reported on the activities of the Technical 
Committee and on the WCO technical assistance progra mme on customs valuation.  This report is 
contained in Annex I to this report.   
 
1.2 The Committee took note  of the report. 
 
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT 
(i) Notification of national legislation 
2.1 The Chairman  recalled that Article 22 of the Agre ement on customs valuation (Agreement) 
required each Member to inform the Committee on Customs Valuation (Committee) of any changes 
in its laws and regulations releva nt to the Agreement and any chang es in the administration of such 
laws and regulations.  In addition, the Decisi on on Notification and Circulation of National 
Legislation, adopted by the Tokyo Round Committee, required each Member to notify its legislation 
to the Committee.  He suggested that, under this sub-item, the Committee take up the legislations in 
sequence as listed in the agenda.  He further reca lled that the notification of legislation by the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu had been presented to the 
Committee.  However, the examination of this no tification remained suspended since the Committee's 
meeting on 4-5 November 2002 pending resolution of  the difference in views between the parties 
involved on notifications across the WTO.  He noted his appreciation for the flexibility of the parties 
involved in allowing the Committee to proceed with  the examination of other notifications.   
 
 - Armenia 
 2.2 The Chairman
 recalled that at the previous meeting, it was agreed to revert to Armenia's 
notification in document G/VAL/N/1/ARM/1 and G/VAL /N/2/ARM/1 at this meeting.  At the last 
meeting, the United States submitted some questi ons to Armenia which were circulated in 
G/VAL/W/128.    2.3 The representative of the United States
 stated that her delegation was still awaiting responses 
from the delegation of Armenia and wanted to kno w from the Armenian delegation what the status 
was.  2.4 The Chairman
 stated that the Armenian delegation w as not present.  He suggested that the 
Secretariat communicate with the delegation of Armenia after the meeting.   
 
2.5 The Committee agreed  that the Secretariat should communicate with the delegation of 
Armenia, and to revert to this notification at its  next meeting.  Any follow-up questions should be 
submitted to the Secretariat be fore 15 September 2004.    
 
 - Burkina Faso 
 2.6 The Chairman
 recalled that at the last meeting of  the Committee, the Committee agreed to 
request the English translation of Burkina Faso's notification, contained in document G/VAL/N/1/BFA/1.  The English translation was circ ulated in G/VAL/N/BFA/1/Rev.1.  At the last 
meeting, the US posed an oral question to Burkina Faso.   
 
2.7 The representative of Burkina Faso
, on behalf of the Ambassador  of Burkina Faso based in 
Brussels, responded to the questions posed.  He  highlighted the recent WTO technical assistance  G/VAL/M/37 
 Page 3 
 
 
mission to his country which was highly effective in assisting implementation of the Agreement.  On the question posed by the US at the last meeting,  his delegation wished to pursue a reservation to 
continue to use a system of officially establis hed minimum values.  He reminded Members that 
Burkina Faso was applying the Agreement since June  2000 and was convinced of its merits, including 
a positive approach to value, neutrality, transparen cy, simplicity and predictability for traders.  
Nevertheless, he noted that globalisation, including increasing volumes of trade, the sophistication of 
products, transportation systems and electronic commerce pose increasing challenges to customs administrations.  Protecting the interests of the population in fighting drug and weapons trafficking 
and the economy in terms of fighting customs fraud and maintaining revenue require innovate 
solutions.  Application of the Agreement implie d in-depth customs reforms aimed at simplifying 
customs and transit procedures, training and working with the private sector.  Much had been done.  
However, his Government still had difficulties with  application of the Agreement, such as dealing 
with an active informal sector,  streamlining proc edures and fraud.  In order to deal with these 
complications his delegation made use of mini mum values for certain sensitive products.  His 
Government needed more time in order to protect weak industries and this was a principle enshrined 
in the spirit and flexibility encouraged by the D oha Agreement.  He concluded that training and 
procedural streamlining was on-going in order to brin g Burkina Faso to the point of fully applying the 
Agreement in the near future.    2.8 The representative of the United States
 appreciated the response and asked whether Burkina 
Faso planned to submit a request for a waiver in or der to continue to use minimum values since their 
application was not permitted in the Agreement. 
 2.9 The representative of the European Communities
 also noted that if Bu rkina Faso wished to 
continue to use minimum values, the correct pro cedure for requesting a waiver would have to be 
followed.  He also noted that the provisions of the domestic legislation would also have to be 
examined as appropriate. 
 2.10 The representative of Burkina Faso
 stressed that his Government was eager to move as 
quickly as possible towards full implementation of the Agreement.  However, it needed a little more 
time to reorganise procedures and strengthen its i ndustries.  This would provide a better groundwork 
for respecting its commitments. 
 
2.11 The representative of Canada  requested, in light of the di scussion, that Burkina Faso's 
notification remain on the agenda for the next meeting of the Committee.  2.12 The representative of the United States
 supported the Canadian request and indicated that her 
delegation would consult informally with the de legate from Burkina Faso on the minimum value 
question in the interim.    2.13 The Committee took note
 of the statements made and agreed  to revert to this notification at its 
next meeting.  Any follow-up questions shou ld be submitted to the Secretariat before 
15 September 2004.   The Chairman  encouraged interested delegations  to consult informally with the 
delegation of Burkina Faso on its possible waiver re quest.  He could make himself available for such 
consultations, if necessary.    
 - Chile 
 2.14 The Chairman
 drew Members' attention to Chile's notification contained in 
G/VAL/N/1/CHL/1.  This document contained Articles 19 and 24.2 of Law No. 19.912 which were intended to ensure compliance with the terms of the Agreement.  These Articles introduced 
amendments to Law No. 18.525 on the importation of goods to the country and Law No. 18.483, 
known as the "Automotive Statute", and gave formal effect, in Chilean legislation, to the 
implementation of the Agreement.   G/VAL/M/37 
Page 4  
 
2.15 The representative of  the European Communities
 stated that his delegation was encouraged 
by the provisions related to used cars in the legisl ation which indicated that they would be valued 
under the Agreement.  This was often a problematic area for application of the Agreement.  While the 
legislation gave discretion to the national custom s authorities to establish regulations governing the 
value of such goods, the legislation specified that an y such regulations would be in conformity with 
the Agreement.  The EC would also urge that Ch ile refer to the WCO documentation on the matter to 
"clarify obscure contradictory passages of the Agre ement" as noted in the legislation.  The WCO 
could also be encouraged to continue to  work efficiently in this area.    
 2.16 The Committee agreed
 to conclude the examination of Chile's notification. 
 
 - China 
 
2.17. The Chairman  informed the Committee that at the previ ous meeting, it was agreed to revert to 
two outstanding Chinese notifications contai ned in documents G/VAL/N/1/CHN/2 and 
G/VAL/N/1/CHN/3.  As was agreed at previous m eetings, Members could cr oss-reference questions 
raised and responses provided during the Transitio nal Review Mechanism (hereafter, TRM) during 
the examination of the national legislation so as not to duplicate work.  2.18 The representative of the United States
 recalled her delegation's understanding, stated during 
the past two TRMs, that written responses to questi ons raised under the TRM would follow under this 
national notification agenda item.  Her delegation had some questions  concerning the notification in 
G/VAL/N/1/CHN/1.  She understood that China took issue with her delegation's understanding about 
addressing that item so she would address these ques tions later.  Concerning the documents listed 
under this sub-item for this meeting,  her delegation had a series of ques tions which it would circulate.  
China could respond orally at this meeting or in writt en form later.  With re gard to China's "Customs 
Regulations Regarding Determina tion on Customs Valuation of Royalties and Licence Fees Related 
to the Imported Goods," Article 3 provided that  royalties and licence fees shall be added to the 
customs value of imported goods provided the paymen ts met both of the conditions which followed.  
She asked if provision was made elsewhere for situations where royalties or licence fees were already included in the price.  Her delegation also had questions concerning Articles 4 through 7 and 11 of 
these Regulations and would read them out de pending on how China wanted to address them. 
 
2.19 The representative of China
 wished to make clear his delegation's position on the matter 
raised by the US.  First, on whether the questi ons raised under the TRM we re also applicable under 
this agenda item, China considered that the TRM a nd this item were subject to different procedures. 
No delegation should take for gran ted that questions raised under th e TRM were also applicable under 
this agenda item and, thereby, expect China to provide written answers.  Second, his delegation did 
not consider that all questions raised under the TRM concerned national legislation.  Some had 
nothing to do with legislation notif ied under this agenda item and it w as therefore irrelevant to expect 
written answers to these questions under this agenda ite m.  Finally, his delegation would like to see all 
Members strictly follow the Rules of Procedures for meetings of this Committee.  Therefore, for the 
questions raised today or in previous meetings to  the Chinese delegation, he requested that Members 
follow the Rules of Procedure.  His delegation woul d not consider questions raised not in accordance 
with the Rules of Procedure of this Committee.   2.20 Referring to the legislation notified under G/VAL/N/1/CHN/3, the Chairman
 asked the 
delegation of China if it would prefer that the US  forward the questions raised today in writing for 
responses in writing, or would the Chinese delegation prefer to hear the questions and respond orally 
at this meeting.  2.21 The representative of China 
regretted that the US failed to submit and circulate the questions 
in writing before this session as required by the Rules of Procedure.  If the US delegation wanted to  G/VAL/M/37 
 Page 5 
 
 
provide his delegation with a copy of those questions  in writing, his delegation was prepared to study 
them and give an appropriate response in due course.    2.22 The representative of the United States
 requested the delegation of China to examine the 
minutes of previous meetings in G/VAL/M/32 and G/VAL/M/35, particularly on how her delegation 
and the rest of the Committee considered handli ng questions raised under the TRM by delegations 
which also wanted the same questions dealt with u nder the notification of national legislation item.  
She would defer discussing these questions today, even though her delegati on had submitted them in 
writing pursuant to the practice it understood would be a pplied.  She agreed to deal with this question 
after the meeting as the Chairman had suggested.  With regard to the questions her delegation was 
submitting today, she simply inquired as to whether China could answer some of them orally.  Her 
delegation was happy to submit them in writing to China as well.  With respect to the Rules of 
Procedure, her delegation understood that the practi ce in this Committee, as with any other body of 
the WTO, was such that Members could ask questions orally and expect those questions to be reflected in the minutes of the meeting.  These Members could also receive responses orally from 
other Members. Further, if a Member submitted ques tions in writing, it could also expect to receive 
responses in writing from other Members.  In additi on, her delegation would submit its questions in 
writing.  She further reiterated her delegation's understanding that an oral request that certain 
questions submitted in writing be reflected on th e agenda again would enable the Committee to 
maintain those questions for future discussion.  It was not necessary to continue to submit papers to 
the Secretariat with the same request.   Therefore,  her delegation's questions on the piece of legislation 
raised at the beginning of the discussion of this sub-item should be taken up  at the next Committee 
meeting, and her delegation was unable to conclude its examination of that  legislation at this meeting.   
 
2.23 The representative of China
 indicated that his delegation welcomed the questions that the US 
delegation would submit today and wo uld study them.  He expressed his delegation's position that the  
minutes of the meetings and oral requests of Memb ers should not and could not serve as a substitute 
for the rules of procedure for the meetings of this  Committee.  He expected Members to follow these 
Rules in submitting any questions to his delegation on its notifications.  Finally, he requested that his 
initial statement be recorded as the position of his delegation on the matter of the questions posed by 
the US on G/VAL/N/1/CHN/1.    2.24 The representative of the United States
 noted the recent circulation of an additional Chinese 
notification in document G/VAL/N/3/CHN/1 and ques tioned whether this notification would be on 
the agenda for the next meeting of the Committee b ecause it was not officially on the agenda for this 
meeting.  2.25 The representative of the Secretariat
 explained that the notification symbol G/VAL/N/3, 
referred to by the US, was for Members' notificati ons of application of the two Committee Decisions 
(on Carrier-Media Bearing Software and on Inter est Charges).  The notification requirement was 
simply that Members notify the date of applicati on of these Decision.  The practice in this Committee 
had been for those notifications to be addressed  under agenda item C for which the Secretariat 
regularly issued a document listing all the new notifica tions of application of these decisions received.  
The Chinese notification circulated in G/VAL/N/3 /CHN/1 was received after the agenda and this 
regular document was circulated so it was not include d on the agenda for this meeting.  The Chairman  
remarked that the Chinese notification contained in G/VAL/N/3/CHN/1 would be taken up at the next 
meeting of the Committee in October.  2.26 On this sub-item of the agenda, the Chairman
 noted that different views had been expressed 
on how to proceed with the notifications submitted under this sub-item of the agenda.  He, therefore, 
proposed that the Committee take note of the oral statements made, that he carry out informal 
consultations with the two delega tions concerned with a view to finding a way to proceed on this 
matter, and that the Committee revert to the matter at its next formal meeting. G/VAL/M/37 
Page 6  
 
2.27 The Committee so agreed
. 
 
 - India 
 
2.28 The Chairman  recalled that, at the last meeting, it was agreed to revert to India's notification 
in G/VAL/N/1/IND/3, which contained certain amen dments to the Customs Valuation (Determination 
of Price of Imported Goods) Rules 1988.  In additio n, India's responses to the Checklist of Issues was 
contained in document G/VAL/N/2/IND/1 and Corr. 1.  At the last meeting, the European 
Communities posed oral questions to India.  Cana da also reserved the right to submit subsequent 
questions.  Since the last meeting, written questi ons had been received from the US, circulated in 
document G/VAL/W/128.  
 2.29 The representative of India
 responded to the EC questions first.   With regard to the first two 
questions pertaining to the objectives of the amendi ng provisions to the customs valuation rules, she 
explained that the amendment was made with a vi ew to preventing customs valuation fraud based on 
India’s long experience in the application of the Agreement.  The Uruguay Round Ministerial 
Decision Regarding Cases Where Customs Administra tions Have Reasons to Doubt the Truth or 
Accuracy of the Declared Value, (hereafter, Decisi on 6.1) enabled customs administrations to reject 
the declared value in cases of reasonable doubt regardi ng the truth or accuracy of the declaration.  The 
amendment made in Rule 4(2) of the Indian Cust oms Valuation Rules sought to specify in clearer 
terms the situations in which a customs officer may reject the declared value.  The EC had requested 
specification of the provisions of the Agreement to  which the amending provisions indicated in the 
notification corresponded.  The Agreement was an ag reement on implementation of Article VII of the 
GATT. The exact wordings used in Sub-Rules 4(2) (a) to (c) could be found in Article VII 2 (b) and 
the Note to Article VII, paragraphs 2.1 and 2.3 r espectively.  India believed that these were certain 
basic principles in international trade transac tions and should continue to hold ground on a 
harmonious interpretation of Article  VII and the Agreement.  Sub-Rule 4(2) (d) in the notified 
amendment was based on Article 8.3 of the Agreement.   She added that the EC had also asked in what 
way the inclusion of provisions of Sub-Rule 4 (2)(a ) to (c) would lead to implementation of Article 1 
of the Agreement.  As explained above, these prov isions aimed to particularize the situations of 
potential valuation fraud for carrying out necessary check s for truth or accuracy of the declared value 
in accordance with the Committee’s Decision 6.1. 
 
2.30 She then responded to the questions from the United States.  The first US question also related to the objectives of the amendments which sh e responded to above.  The US then asked if the 
amendments changed India’s application of the tran saction value.  She confirmed that they did not 
change the application of the transaction value.  The third question related to how the amendment to 
India's law promoted the principle that the basis of valuation of goods for customs purposes should be 
the transaction value.  She confirmed that the Indi an valuation legislation continued to respect the 
primacy of transaction value as was stated clearly under Rules 3 and 4.  The amendment was intended 
to specify the potential situations of valuation fraud  so as to facilitate identification of genuine cases 
of transaction value.  This also responded to the next US question pertaining to whether the amendments to India's legislation contained the Artic le 1 criteria for acceptance of transaction value. 
The amended provisions may become the grounds for rejection of the d eclared value by application of 
Decision 6.1.  She also confirmed that prior to th e 2001 amendment, Rule 3 stated "for the purpose of 
these rules, the value of imported goods shall be th e transaction value," and that subsequent to the 
amendment, Rule 3 now stated "subject to Rules 9 and 10A, the value of imported good shall be the transaction value.  
 
2.31 Regarding the operational effect of the change to Rule 3, this change was to clarify and to 
emphasize that transaction value was subject to adju stment under Rule 9 (Artic le 8 of the Agreement), 
and that its acceptance was subject to the truth or accuracy of the declaration which may be determined under the provisions of Rule 10A (Deci sion 6.1).   With regard to the seventh US 
question, she reiterated that the Agreement was an agreement on implementation of Article VII of the  G/VAL/M/37 
 Page 7 
 
 
GATT.  The exact wordings used in Sub-Rules 4(2) (a) to (c) could be found in Article VII.2 (b) and 
the Note to Article VII, paragraphs 2.1 and 2.3 r espectively.  India believed that these were certain 
basic principles in international trade transac tions and should continue to hold ground on a 
harmonious interpretation of Article VII and the Agreement.  Sub-Rule 4 (2)(d) was based on 
Article 8.3 of the Agreement.  The above situations might become criteria for rejection of the declared 
value in cases where customs had reasonable doubt rega rding the truth or accuracy of the declaration 
submitted.  The objective of the amendment was to sp ecify in clear terms the situations in which a 
customs officer may reject the declared value.    2.32 She added that the US also asked what  “fully competitive conditions” were, how these 
conditions were accomplished, and what the criteri a were.  The US also asked who determined 
“abnormal discount or reduction” from the ordinary  competitive price and what the criteria were;  
what types of prices were used for comparison as an “ordinary competitive price;" and whether there 
was a difference from “normal discount or reducti on”.  She responded that these were expressions 
which were used in Article VII of the GATT an d were well understood in trade parlance. The 
assessing officers took decisions regarding the accepta bility of declared prices taking into account, 
inter alia , the relevant international price informati on and contemporaneous import prices.  Decision 
in cases where the truth or accuracy of the declarati on were reasonably suspected were taken after due 
enquiry and in consultation with the importer, in accordance with Rule 10A (Decision 6.1).  The US 
also enquired about the difference in the overall operation of India’s customs valuation regime before 
the amendment versus after the 2001 amendment.  India had been seriously concerned about the 
valuation fraud occurring through under-valuati on by certain unscrupulous importers, which was 
resulting in a heavy leakage of revenue.  The amendm ents introduced in Rule 4(2) were intended to 
check these tendencies.  However, care was always ta ken to ensure that cases of genuine transactions 
were unaffected by the change.  Cases of genuine transactions were, in fact, facilitated by intelligent 
application of valuation cont rol tools and risk assessment.  
 
2.33 The representative of the United States
 looked forward to receiving the responses in writing 
before reacting to them.  She noted that her de legation would have some  particular follow-up 
questions concerning the use of Article VII of the GATT, but would come back to them after studying 
the responses.  Finally, she added that her delegation would also ra ise questions concerning India's 
customs valuation practices for soybean oil which it believed was relevant to the work of this 
Committee.   
 2.34 The representative of the European Communities
 would also study the responses but noted 
that the responses, at this stage, did not allay his delegation's concerns.   
 
2.35 The Committee agreed  to revert to the examination of this legislation at its next meeting.  Any 
follow-up questions should be submitted to the Secretariat before 15 September 2004.    
 
 - Peru 
 
2.36 The Chairman  drew Members' attention to the Per uvian notification contained in document 
G/VAL/N/1/PER/2.  This document contained th e customs legislation in Supreme Decrees 
Nos. 203-2001-EF, 131-2000-EF, 186-99-EF, and 187-99-EF.    2.37 The representative of the United States
 requested that this sub-item be retained for the 
Committee's next meeting since her delegati on was still reviewing the notification.  
 
2.38 The Committee agreed  to revert to the examination of this  notification at its next meeting.  
Any follow-up questions should be submitted to the Secretariat before 15 September 2004.  G/VAL/M/37 
Page 8  
 
 - Thailand 
 
2.39 The Chairman
 recalled that at the last meeting, it was agreed to revert to Thailand's 
notification in G/VAL/N/1/THA/1 and the responses to  the Checklist of Issues in G/VAL/N/2/THA/1.  
The United States circulated questions to Thailand in G/VAL/W/128 and the EC posed oral questions 
at the last meeting.  Subsequently, Thaila nd responded to the US questions in document 
G/VAL/W/130.    2.40 The representative of the United States
 requested that this sub-item be retained for the 
Committee's next meeting as her delegation w ould have some follow-up questions.    
  
2.41 The Committee agreed  to revert to the examination of this  notification at its next meeting.  
Any follow-up questions should be submitted to the Secretariat before 15 September 2004.  2.42 In concluding this agenda item, the Chairman
 urged those Members which had not yet 
notified their implementing legislation to do so as soon as possible. 
 
(ii) Notifications made by developing country members 
2.43 The Chairman  drew Members' attention to document  G/VAL/2/Rev.18 which contained the 
updated lists of all Members who had invoked special and differentia l treatment provisions under the 
Agreement.  In addition, document G/VAL/W/76/Ad d.7 contained an updated i nventory of notification 
requirements pursuant to extension decisions and minimum value reserv ations.  He suggested that the 
Committee take note of the informati on contained in these two documents. 
 
 - Extension of delay period 
2.44 The Chairman  noted that under this sub-item, there was one request pending in the Committee, 
namely from Rwanda.    2.45 The representative of Rwanda
 informed the Committee that Rwanda was applying the 
Agreement since 1 January 2004.  Therefore, the re quest for the extension of the delay period that 
Rwanda needed sometime ago was now unnecessary.  He thanked the Secretariat for its assistance to 
his delegation as well as to the observer from the WCO Secretariat for the information presentation.  
He expressed his delegation's hope that Rwanda w ould soon become a benefici ary of such technical 
assistance.  
 - Notifications made under Committee Deci sions on extensions or minimum values 
 2.46 The Chairman
 noted that, lastly, under this sub-item , the Committee was to consider the 
notifications made under the Decisi ons concerning delay extensions and minimum value reservations.  
One such notification had recently been received fro m Sri Lanka, circulated in G/VAL/N/4/LKA/2.   
 2.47 The representative of Sri Lanka
 informed the Committee th at, in accordance with the 
requirement in the Decision contained in G/VAL //53 of 7 March 2003, his delegation circulated 
through the Secretariat the basic criteria and info rmation on the application of minimum values on 
used motor vehicles. With regard to the work pl an for phasing out minimum values, the Minister of 
Finance of Sri Lanka was currently considering th is matter under a special committee. This committee 
was considering the implications of the phase-out  on under-valuation of used motor vehicles, and on 
the environment from the importation of used motor vehicles.  He assured the Committee that his 
delegation would keep it informed with regard to the progress made by this special committee. 
  G/VAL/M/37 
 Page 9 
 
 
2.48 The representative of the United States  appreciated the information presented by Sri Lanka 
and noted that her delegation lo oked forward to receiving the work plan for phasing-out minimum 
values that was currently in preparation in Sri Lanka.   2.49 The representative of Canada
 commented on the information contained in document 
G/VAL/W/76/Add.7.  His delegation appreciated receiving the information contained therein on a 
regular basis.  This information and that contained in G/VAL/2/Rev. 18 were extremely useful in order 
to allow Members of the Committee to keep abreast of the developments in countries that had invoked 
various flexibility provisions provi ded by the Agreement.  His delegation was pleased that the list in 
G/VAL/W/76/Add.7 was actually getting shorter as each addendum was issued, indicating better 
implementation of the Agreement.  This said, his delegation noted that, with respect to certain 
countries listed, some progress reports or reports on the basis and criteria for determining minimum 
values had not been met.  There could be a legitim ate reason for this, but hi s delegation believed it 
would be useful if the Chairman or the Secretariat would send a reminder to those countries of their requirements as contained in the Decisions adopted  by the Committee or the General Council (in the 
cases of Article IX waivers).  These requirements were included in the Decisions for valid reasons and 
his delegation attached the utmost importance to  having regular reports on the progress in bringing 
measures and national legislation into conformity  with the obligations of the Agreement.   
 2.50 The representative of the European Communities
 also welcomed the report from Sri Lanka 
and looked forward to receiving the work programme on the phase-out of minimum values.  Like 
Canada, his delegation attached importance to th e progress reports and recommended all Members to 
follow-through on their obligations in this regard.  2.51 The Committee engaged in an informal exch ange of views on the Canadian proposal.  The 
Committee agreed
 that the Secretariat continue to update the document G/VAL/W/76 on a regular 
basis so that all Members, if they had an inter est in the matter, would have access to the relevant 
information. Those delegations which had a co ncern over the matter could initiate informal 
discussions with other delegations concerned e ither after this meeting or as appropriate. 
 
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE 
ON CUSTOMS VALUATION 
3.1 The Chairman  recalled that under this agenda item, the Committee noted any new notifications 
of application of the De cisions of the Committee on Customs Valu ation on the "Treatment of Interest 
Charges in the Customs Value of Imported Goods and on the Valuation of Carrier Media Bearing 
Software for Data Processing Equipment", both adopt ed by the Committee and contained in document 
G/VAL/5.  Since the last meeti ng, Tanzania and China had notified their application of these two 
Decisions.  Document G/VAL/W/ 5/Rev.14 had been updated to incl ude Tanzania's notification in 
G/VAL/N/3/TZA/1.  China's notific ation, in document G/VAL/N/3/CH N/1, was received after the 
document was issued and would be included in  the next revision of this document.   
 3.2 The Committee took note
 of the information. 
 IV. TECHNICAL ASSISTANCE 
 - Information on Technical Assistance 
 
4.1 The Chairman
 recalled that under this item, the Secr etariat usually informed Members of the 
technical assistance activities carried out under th e auspices of the WCO.  Document G/VAL/8/Add.12 
contained recent information, reported at the 17th Session of the Technica l Committee, on technical 
assistance activities carried out by th e WCO Secretariat or WCO Members.   
 G/VAL/M/37 
Page 10  
 
 - Article 20.3 Technical Assistance and Trade-Related Technical Assistance 
 
4.2 The Chairman
 added that under this sub-item, the Committee had adopted a Work Programme 
on Technical Assistance for Capacity Building as Re gards the Implementation and Administration of 
the WTO Agreement on Customs Valuation, containe d in document G/VAL/W/82/Rev.1.  At the last 
meeting, it was noted that there were new WTO-wide procedures designed to streamline technical 
assistance requests into the annual technical assistance pl ans.  It was also noted that the Committee on 
Trade and Development would soon be discussing a draf t Technical Assistance Plan for 2004.  In this 
regard, Members noted the need to avoi d two parallel and repetitive exercises.  
 
4.3 He informed the Committee that since its last meeting, the Committee on Trade and 
Development had adopted the 2004 Technical Assi stance Plan (as in WT/COMTD/W/119/Rev.3).  
Under the plan,  four regional seminars on customs valuation were foreseen, one in Africa, one in 
Asia Pacific, one in Caribbean, and one in Central Asia and Caucasus.  In addition, the Plan stated 
that developing country Members may request two priority areas for national activities at any time 
during the year.  Least-developed countries may request   three such national priorities.  Depending on 
individual members’ own priorities, customs valuati on could, of course, be identified as a priority 
activity for a national activity through this process.  4.4 Furthermore, he recalled that in the past, a few members had shared with the Committee their 
technical assistance activities on the bilateral and other fronts.  Similar notification practice was also 
followed in a number of other WTO fora, such as th e TRIPS Council and the TBT Committee.  In this 
connection, he encouraged Members providing t echnical assistance to continue to inform the 
Committee, either orally under this agenda item or  in written form, of the various technical assistance 
and capacity building activities they had been carrying out  
 
4.5 The Committee took note
 of the information. 
 
V. INDIA - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN 
COMMUNITIES VALUATION POLICY 
5.1. The Chairman  recalled that at the last meeting of the Committee, it was agreed to revert to this 
item pending responses from the EC to questions that  had been posed by Brazil in G/VAL/W/122.  The 
EC had recently circulated  responses in document G/VAL/W/131.  These were received after the agenda 
for the meeting was circulated and, therefore,  were not on the agenda for this meeting.   
 
5.2 The representative of Brazil  informed the Committee that authorities in his capital were 
unable to react to the EC reply yet.  He anticipat ed that they would have expected more detailed 
answers on the criteria and methodology regarding th e definition of third countries.  This could, 
therefore, lead to some follow-up questions and he  requested that this item remain on the agenda of 
the next meeting.  5.3 The representative of India
 stated that her capital was also  examining the EC responses and 
wished to retain this item on the agenda for the next meeting in order to ask follow-up questions or 
clarifications.   
 5.4 The representative of the European Communities
 noted that in his delegation's responses, the 
actual questions were summarized.  He hoped that th is would not create difficulties for Members to 
follow the logic of the document.  With respect to Brazil's plea for more information, he considered 
that there was really no more information that coul d be provided on this question.  That was because, 
as he had stated before, the regulation was more in th e field of agriculture and not customs valuation.  
The regulation related to the im plementation of a long-agreed WTO commitment in the field of 
agriculture.  The mention of valuation in the re gulation could possibly have been avoided.  His 
delegation considered that it had responded as fully  as possible to the questions posed by certain  G/VAL/M/37 
 Page 11 
 
 
Members, particularly the delegation of India.  Many responses had been provided to questions and 
follow-up questions from India and he did not understa nd why, at this stage, the delegate of India 
stated that her delegation was examining the respon ses.  He was not clear as to which responses she 
was referring.  He once again stressed that his delegation was open to accepting further questions but 
was not sure what more could be said about the re gulations at issue.  He further encouraged the 
delegations to see the entirety of the responses a nd was open to consult informally on the matter as 
necessary.     5.5 The Committee took note
 of the statements made and agreed to revert to this item at its next 
meeting. 
 
VI. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, AND NINTH ANNUAL REVIEWS 
OF THE IMPLEMENTATION AND OPERATION OF THE CUSTOMS 
VALUATION AGREEMENT 
6.1 The Chairman  recalled that, at the last meeting, th e Committee took note of the six documents 
containing the Fourth through Ninth Annual Revi ews in documents G/VAL /W/29, G/VAL/W/43, 
G/VAL/W/77, G/VAL/W/89, and G/VAL/W /109.   and G/VAL/W/124.  It was agreed that  this matter 
would be referred to this meeting of the Committee.    6.2 The representative of India
 stated that her delegation was re visiting the matter  and consulting 
with the Secretariat.  She felt more time was needed, so she requested that the Committee revert to this 
item at its next meeting. 
 6.3 The Committee so agreed
. 
 
VII. PRESHIPMENT INSPECTION 
7.1 The Chairman  explained that, following adoption of th e final report of the Working Party on 
Preshipment Inspection (PSI) in document G/L/ 300, the General Council agreed that future 
monitoring of the Agreement on PSI should be undertaken initially by the Customs Valuation Committee, where PSI would be a standing agenda item.  At the last meeting, Members were reminded that, according to Article 6 of the Agreement on PSI, the Ministerial Conference was obliged to review the provisions, implementation a nd operation of this Agreement "at the end of the 
second year from the date of entry into force of  the WTO Agreement on PSI and every three years 
thereafter…"  He further recalled that the firs t review was carried out from 1996 through 1999, and 
asked the Committee to consider, for discussion, two questions:  whether it was desirable to carry out 
a second review of the Agreement on PSI, given the ob ligation under this Agreement and the fact that 
a second review called for every three years thereaf ter was overdue;  and secondly if a review was 
desirable, in which body of the WTO should this  review be conducted.  One Member indicated 
agreement to move forward with the Review.  He su ggested that Members reflect on what this Review 
should address and the appropriate forum, and submit their ideas and Review parameters for 
discussion at the next meeting of the Committee.    7.2 The representative of Pakistan
 asked for additional information, including the document 
references of the various reports , concerning the first Review. 
 7.3 The representative of the Secretariat
 explained that the first Review was carried out by the 
Working Party on PSI that was established by the General Council in December 1996 for this 
purpose.  The working party provided a first re port to the General Council in document G/VAL/214 
which included some recommendations.  An inte rim report was included in document G/VAL/273, 
and the final report was circulated in document G/ VAL/300, dated 18 March 1999 and adopted by the 
General Council at its meeting of  15 June 1999 (WT/GC/M/40/Add.3).  The Working Party ceased to 
exist with the adoption of this final re port which concluded the first Review. G/VAL/M/37 
Page 12  
 
7.4 The representative of the United States
 sought further clarification.  She presumed that this 
Committee assumed responsibilities of the Agreement on PSI, including that of the Article 6 Review.  
If this was the case, the question to be considered  was whether or not the Committee should conduct a 
Review, given that it was an obligation under the Agreement on PSI.  This would be the case unless, 
when the Working Party was disbanded and when th e last Review was completed, there was some 
specific adjustment to indicate that no further Revi ew was necessary.  Once this was clarified, the 
Committee could have a better idea of its respons ibilities on the matter as well as on the questions 
posed by the Chairman - whether a Review should be conducted, and in which forum.  She also wondered whether a Review by this Committee woul d not amount to an amendment of Article 6 of 
the Agreement.   
 
7.5 The Chairman
 stated that his understanding was that the requirement for the review arose 
from the mandate in Article 6 of the Agreement on PSI  and it had not in any way been affected by the 
first Review nor the reports of the Working Party th at carried out this Review.  As regards the US 
question concerning whether this Committee had a manda te to carry out this Review and the form of 
this Review, one of the recommendations of the Wo rking Party was that "future monitoring of the 
Agreement [on PSI] should be undert aken initially by the Customs Valuation Committee, and that PSI 
should be a standing agenda item.".  This recomme ndation was subsequently endorsed by the General 
Council.  He stood to be guided by Members on how to  interpret the word "initially" in this context. 
 7.6 The representative of the United States
 considered that interpretation of the word "initially"  
would probably have to be clarified before the Committee's next meeting.  She suggested that the 
Chairman carry out informal consultations on the ma tter because it concerned a legal interpretation of 
a recommendation provided at the level of the Worki ng Party and agreed to by the General Council.    
 7.7 The representative of Pakistan
 supported the suggestion by the US delegation to have 
informal consultations before the Commi ttee proceeded further on the matter.   
 7.8 The Committee agreed
 that the Chairman should carry out informal consultations on the 
interpretation of the word "initially" used in th e context of the recommendation of the Working Party 
on Preshipment Inspection contained in its report to  the General Council in document G/L/300.  The 
Chairman  encouraged delegations to read the relevant  background documentation so as to prepare for 
these consultations.   
 
VIII. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION 
(WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES 
(i) Paragraph 8.3 of document WT/MIN/(01)/17  
8.1 The Chairman  recalled that the Committee engaged in considerable discussion  in the last two 
years pursuant to its mandate in paragraph 8.3 of the Implementation Decision of the Doha Ministerial 
Declaration "to identify and assess practical means to address such concerns, including the exchange 
of information on export values and to report to the Ge neral Council by the end of 2002 at the latest.".  
At the last meeting, he gave a detailed account of  the work undertaken by the Committee with a view 
to fulfilling its mandate.  This was recorded in paragraph 10 of the minutes of the last meeting 
(G/VAL/M/36).  It was then agreed that he woul d continue to carry out informal consultation under 
his own responsibility, and to revert to this matter at this meeting.   
 8.2 He added that, in advance of this meeting, he  had talked with a number of delegations to see 
if there were new developments in Members’ positions and if Members had any fresh ideas on the 
matter.  His indications were that no new develo pments had been made on this matter since the 
Committee's last report to the General Council.  In this  light, he suggested reverting to this item at the 
next formal meeting of the Committee.  He would c ontinue to carry out informal consultations among  G/VAL/M/37 
 Page 13 
 
 
Members in the meantime.  If he sensed any devel opments in Members' positi ons, he might convene a 
meeting of the Committee at the appropriate time.   
 
8.3 The Committee took note  of the statement and agreed  to revert to this item at its next meeting. 
 IX. OTHER BUSINESS 
(i) United States – Questions to delegatio ns on certain customs valuation practices 
 - Mexico 
 
9.1 The representative of the United States
 noted that her delegation had submitted questions to 
Mexico on estimated prices and the use of preshipme nt inspection.  It had just received Mexico's 
responses to these questions which it understood Mexico  would circulate.  She requested that this 
issue be inscribed on the agenda of the next meeting of the Committee under a sub-item concerning Mexico's notification of national legislation item.    - China 
 
9.2 The representative of the United States
 also stated her delegation's understanding concerning 
questions that it had submitted on China's TRM.  Her delegation had stated repeatedly on the record 
that the questions submitted under the TRM would also  be submitted under the notification of national 
legislation item.  She reiterated that the minutes of the past meetings reflected her delegation's 
understanding of the practice of submitting questio ns under the TRM for cross-referencing under the 
national notification agenda item (item B.1).  The mi nutes also reflected that there were no objections 
from China when this matter was di scussed at these meetings.  If th ere was a misunderstanding on this 
question, her delegation would be pleased to consult on the matter.  However, her delegation clearly 
stated that any questions submitted under the TRM would also apply under the agenda item 
concerning the notification of national legislation.  She took note of China's point regarding whether 
certain questions asked during th e TRM concerned national legisla tion.  However, her delegation 
would not accept the idea that if China considered th at a question did not fit under national legislation 
then it should not be asked.   9.3 The representative of China
 stated that her delegation's position had already been made very 
clear and she requested that it be put on the record of this meeting.  Every Member should act in line 
with the Rules of Procedure of this Committee.  If the United States insisted on applying the same questions raised under the TRM to the agenda item concerning notification of national legislation, it 
should have to follow the Rules and submit those ques tions again under the relevant agenda item.  Her 
delegation would accept those questions raised in  compliance with the Rules of Procedures. 
 
9.4 The Chairman
 stated that these questions would be dea lt with in the informal consultations he 
would conduct on the matter.    
 - India 
 9.5 The representative of the United States
 understood that India had received responses to 
questions that her delegation had raised on reference prices on soybean  oil.  She asked that India 
provide these responses and, since her delegation woul d need time to study them, that this item be 
inscribed on the agenda of the Committee's next meeting.  
9.6 The representative of India
 indicated that her delegation had responded to US questions 
regarding India's reference price on soybean oil in which concerns were expressed regarding Indian 
practices leading to a higher applied tariff then Indi a's bound rate for soybean oil in the Committee on 
Agriculture.  These questions were raised again at the last meeting of this Committee so her G/VAL/M/37 
Page 14  
 
delegation would provide responses to this Committee.   The reference price, or tariff value system 
used by India was kept as close as possible to th e international market price of soybean oil. The 
situation was closely monitored and the referenc e prices were periodically reviewed. India had 
consistently ensured that the applied rates of du ty did not exceed the bound rates of duty on soybean 
oil.  On the question of how this tariff value wa s calculated, she explained that the tariff value was 
calculated on the basis of the lowest prevailing inte rnational price suitably adjusted for freight and 
insurance for levy of duty on CIF basis. This policy was necessary on account of under-invoicing in 
edible oil imports which was a matter of serious con cern in India.  It was a highly sensitive issue, not 
only from the point of revenue, but also from the point of view of keeping price stability in the internal market.   She added that the situation was closely monitored and the policy reviewed from 
time to time.  She would provide this response in writing to the US delegation. 
 9.7 The representative of Pakistan
, with regard to India's refere nce to "the lowest prevailing 
international price," asked whether this price wa s based on some international publications of 
commodities prices, or on the lowest declared value taken as the basis for calculating the tariff value. 
 
9.8 The representative of India  explained that, according to he r understanding, the international 
prices which were taken into account  were based on internationally recognised publications such as 
the Oil World Weekly  which took into account the FOB prices of Brazil and Argentina since the bulk 
of imports of soybean oil were from these countries.   
9.9 The Committee took note
 of the statements made and agreed  to include items on Mexican 
estimated prices and India soybean oil on the agenda of its next meeting.  
(ii) Date of the next meeting 
9.10 The Chairman informed Members that the ne xt meeting of this Committee was scheduled for 
27 October 2004. 
 9.11 The meeting was adjourned.   G/VAL/M/37 
 Page 15 
 
 
Annex I 
 
Report to the WTO Committee on Customs Valuation on the Activities of  
the WCO Technical Committee on Customs Valuation and on 
Related Technical Assistance Activities 
 
 Mr. Chairman and Members of the Committee,   Given that the 18
th Session of the Technical Committee on Customs Valuation of the World 
Customs Organization (WCO) is scheduled to commence on Monday 29 March 2004 and that the 
report on its 17th Session was published together with the minutes of the last meeting of the World 
Trade Organization (WTO) Committee on  Customs Valuation, my report to you today will focus 
primarily on the current work of the WCO Technical Committee and the Valuation Technical Assistance Programme of the WCO Secretariat.  
Theme Meeting
 
  The first two days of the 18
th Session of the WCO Technical Committee will take the form of 
a theme meeting, the subject of which this year is an "In-depth Discussion on Articles 1, 8 and 15 of the WTO Valuation Agreement".  This meeting will  cover four issues and these will be discussed at 
four round tables, each comprising a moderator, two speakers and two panellists.  The four issues are: 
"Article 1: treatment of related-party transactions";  "Article 15: sole agents, sole distributors and sole 
concessionaires";  "Article 8.1(c):  ("royalties" an d "licence fees") and the implementing provisions 
therefore" and "Article 8.1(b):  ("inputs")  and the implementing provisions therefore". 
  As was the case with the prev ious theme meetings, this meeti ng will also present yet another 
opportunity for Members to share their Customs valuation experience and knowledge;  indeed, it 
constitutes an alternative approach to providing further technical assistance to developing and 
least-developed countries.   The balance of the 18
th Session will continue from Wednesday 31 March to Friday 
2 April 2004 and its agenda includes other issues to be dealt with by the Technical Committee on 
Customs Valuation. 
 Draft Guidelines on Databases
 
  One of the items on the agenda is the review  of the "Draft Guidelines on the Development 
and Use of a National Valuation Database as a Risk Assessment Tool".  It should be recalled here 
that, under the mandate to address concerns rega rding the accuracy of declared values which it 
conferred upon the WCO Technical Committee, the WTO Committee on Customs Valuation had asked the Committee to step up its efforts in order to finalize these guidelines.  To this end, the WCO 
Technical Committee reviewed the draft guidelines at its 17
th Session and made amendments to the 
proposed text as well as introducing new text.  On the basis of both this review and additional written 
comments from Members, a new text will be submitte d to the Technical Committee for finalization. 
 Technical and administrative issues
 
  The Technical Committee will have to examine technical items submitted by Members.  
These include, in particular, a "Study of imports by sole agents, sole distributors and sole 
concessionaires" tabled by Uganda, a "Study concerning the expression 'sale for export'" from the European Community and an item on the "Valuation treatment of price-influenced imports between 
related parties" submitted by Colombia.  G/VAL/M/37 
Page 16  
 
 Members of the Technical Committee will also have to consider two administrative matters 
relating to the adoption and implementation of the Agreement, namely the revision of the "Customs 
Valuation Compendium" and its dissemination on the WCO Web site, and the revision of the 
"Customs Valuation Control Handbook".  
Technical assistance and capacity-building
 
 
As far as technical assistance and capacity bu ilding are concerned, workshops, seminars 
and/or training courses have been organized in sev eral Member countries since our last report to the 
WTO Committee on Customs Valuation.  At nationa l level, the WCO Secretariat has organized 
missions in Angola, Kenya, Lesotho, Nigeria, Senegal and Tanzania and similar such training 
activities have also been scheduled at national and regional level for the first half of 2004. 
 
After more than two years dedicated to capacity building, the WCO/USAID valuation 
programme for five Sub-Saharan A frican countries - Kenya, Lesotho, Nigeria, Senegal and Tanzania - 
is drawing to a close.  At the sugg estion of the WCO, the US aid agency  has extended the programme 
until 31 March 2004.  This has allowed the second phase of the programme to be completed in 
accordance with the action plan an d enabled a second post-import audit study visit to the South 
African Customs administration to be organized fo r Customs officials from Lesotho and Tanzania, as 
well as a similar study visit to the French Customs administration for Customs officials from Senegal. 
 
The WCO/USAID programme has continued to  fund the provision of documentation and 
audiovisual and computer equipment to the Customs training colleges of these five countries.   
The WCO Secretariat has organized assessmen t missions to these countries in order to 
ascertain their progress in implementing the WTO Va luation Agreement and to assess the impact of 
activities carried out within the framework of th e WCO/USAID programme.  Initial findings indicate 
satisfactory results overall.  
 It should be stressed that the above-mentione d technical assistance activities were conducted 
with the support of specialists from Member Cust oms administrations, namely Germany, Denmark, 
the United Kingdom and France. 
 
 In the context of its partnership with the WTO, the WCO Secretariat helped to organize a 
WTO-sponsored sub-regional workshop on Customs valuation in Saint Lucia.   I should like to take this opportunity to hi ghlight once again the excellent working relations 
between the Secretariats of our two Organizations  and emphasize that continued cooperation in the 
field of Customs valuation technical assistance can  but strengthen Members' capacity to implement 
the WTO Valuation Agreement.  
__________