RESTRICTED  
  
WT/ACC/TLS/8  
 
26 June 2020  
(20-4485)  Page: 1/8 
Working Party on the Accession of Timor -Leste  Original: English  
 
 
ACCESSION OF TIMOR -LESTE  
CHECKLIST  ON IMPLEMENTATION A ND ADMINISTRATION   
OF THE CUSTOMS VALUA TION AGREEMENT  
The following submission, dated 23 June 20 20, is being circulated at the request of the 
Delegation of Timor -Leste . 
 
 
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  WT/ACC/TLS/8  
 
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  Title VII, Chapter IV and Schedule I  of the Customs Code of Timor -Leste (Decree -Law No.  14/2017 , 
hereinafter – the Code ) set out the customs valuation principles in line with the Agreement on 
Implementation  of Article VII of the GATT 1994  (Customs Valuation Agreement) . 
1. Questions  concerning  Article 1: 
(a)  Sales between related persons: 
 (i) Are sales between related persons subject to special provisions? 
Article 97(1) of the Code sets forth that t he customs value of the goods is the transaction value, 
that is, the price actually paid or payable for the goods when they are sold for exportation to the 
country of importation.  Clause 2(1) (d) of Schedule I  further defines that  the customs value of the 
imported goods shall be their transaction value, i.e. the price paid or payable for the goods when 
sold for export to Timor -Leste, adjusted in accordance with Clause 3, if, inter alia,  the buyer and 
seller of the goods are not rel ated at the time the goods are sold for export or, if the buyer and seller 
are related at that time:  
• their relationship does not influence the price paid or payable for the goods;  
• the importer shows that the value of the transaction of the goods complies w ith the  
requirements set forth in Clause 2(2), below . 
Clause 1(2)  define s that persons are deemed to be related if: 
a. They are employees and business managers of each other ; 
b. They are legally recognized partners in a business;  
c. They are an employer and employee;  
d. He/she is a person who own s, controls or holds 5 % or more of the voting rights or shares 
of both;  
e. One of them directly or indirectly controls the other;  
f. Both are directly or indirectly controlled by a third person;  
g. Toget her they directly or indirectly control a third person;  
h. They are members of the same family (up to the fourth degree) . 
Persons are considered  from the same family when:  
a. They have kinship relationship up to the fourth degree;  
b. They are married or maintain a civil union or de facto  union with one another or if one  is 
married, maintains a civil union or de facto  union with a person having a kinship  
relationship up to the fourth degree with the other;  
c. A person has been adopted as the child of another person or o f a person with whom that 
person maintains a relationship of kinship up to the third degree.  
 (ii) Is the fact of intercompany prices prima facie  considered as grounds for  
  regarding the respective prices as being influenced?  
Article s 97(2) and 97(3) of t he Code state that  in cases where the value of an imported good 
indicated in the invoice is less than the fair market value of that good, the customs authorit ies may 
calculate the fair market value of the transaction by reference to th e value of similar transactions 
between parties operating on a commercial basis.  The c ustoms authorit ies will determine customs 
value of the imported goods , by consider ing the FOB value, the freight, the insurance and other 
expenses.  
The Code does not contain specific provisions for considering the fact of intercompany prices as the 
prima facie  as grounds for regarding the respective prices  as being influenced . 
 (iii) What is the provi sion for giving the commun ication of the afore-mentioned 
  grounds in writing if the importer so requests? (Article 1.2(a)) 
When Customs is of the opinion that the relationship between the buyer and seller of any goods 
influences the price paid or payable for the goods, Customs will notify  the importer in writing if so WT/ACC/TLS/8  
 
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  requested, of the reasons that made Customs form such an opinion, giving the importer a 
reasonable chance to convince Custom s that the relationship did not influence the price  
(Schedule  I, Clause 2(3)).  
 (iv) How has Article 1.2(b) been implemented?  
Clause 2(2) of Schedule I requires that in a sale between related persons, the importer must provide 
evidence that the transaction value of the goods subject to valuation, taking into account any 
relevant factors including those factors and the differences that may be stipulated, significantly 
approximate s the customs value of other goods exported at the same time, or in c lose proximity, to 
the value of the goods under valuation, being:  
• The transaction value of the identical or similar goods with respect to the sale of such 
goods for export to Timor -Leste between a seller and a buyer which are not related at the 
time of sal e; 
• The deductible value of the identical or similar goods;  or 
• The computed value of identical or similar goods . 
(b) Price of lost or damaged goods: 
1. Are there any special provisions or practical arrangements concerning the valuation 
 of lost or damaged goods? 
Schedule I does not define any special provisions or practical arrangement s on the valuation of lost 
or damaged goods.  
However, t here are general principle s defined in Article 201(2) of the Code that t he authori zed 
warehouse keeper shall be responsible for the payment of the duties  and other charges relating to 
missing goods, namely by theft or robbery, without prejudice  to the possible procedure for tax 
violation, under the law.  
2. How has the provision of Article 4, to allow the importer an option to reverse the 
 order of application of Articles 5 a nd 6, been implemented? 
Clause 2(5) , Schedule I  requires the customs a uthorit ies to determine the customs value of the 
goods through the sequential use of the following methods of valuation:  
a. transaction value of identical goods  (Clause 4) ; 
b. transaction value of similar goods  (Clause 5) ; 
c. deductive value (Clause 6) ; 
d. computed  value  (Clause 7 ); 
e. residual research basis  (fallback, Clause 8) . 
Pursuant to  Clause 2(6)  of Schedule I , at the written request of the importer addressed to the 
customs  authorit ies, the order of application of Clause 6 (deductive value) and  Clause  7 (computed  
value ) may be reversed.  
3. How has Article 5.2 been implemented? 
According to Clause 6(3) of Schedule I, when goods subject to valuation or identical or similar goods 
are sold under the condition that they have been imported within 90 days but are not sold at the 
same time, the deductible value of the goods shall be the unit price for the sales provided that the 
importer is not related to the seller, goods were sold in greater number to enable determination of 
unit price, and the price has been adjusted (to take in to consideration certain commissions, profits, 
expenses, costs, charges, duties and other taxes ).  
4. How has Article 6.2 been implemented? 
The Schedule I does not define provision for requir ing or compel ling any person not resident in its 
own territory to produce for examination, or to allow access to, any account or other record for the 
purposes of determining a computed value.  WT/ACC/TLS/8  
 
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  Clause 7(4) of Schedule I provides t he amount of profit and general expenses required to determine 
the computed value of goods shall be calculated on a percentage basis and determined on the basis 
of the information prepared in a manner consistent with the generally accepted accounting principles 
of the country of production of the goo ds, which is provided  by or on behalf of the importer of the 
goods subject to assessment . 
When the information provided is not sufficient , the c ustoms authorit ies may obtain sufficient 
information by verifying the sales for export to  Timor -Leste of the mor e specific group or variety of 
goods of the same class or type of goods to obtain more information . 
5. Questions  concerning  Article 7: 
(a)  What provisions have been made  for making value determinations pursuant to 
 Article 7? 
According to Clause 8(1) of Schedule I, w hen, in opinion  of the customs authorit ies, the customs 
value of the imported goods cannot be determined under Clauses 2 to 7, it shall be determined based 
on information derived from the valuation methods established in Clauses 2 to 7,  with f lexible 
interpretation and reasonabl e means allowed under the Customs Valuation Agreement, to the extent 
necessary to arrive at a valuation of the goods.  
(b)  What is the provision for informing the importer of the customs value determined 
 under Article 7?  
Article 14 of the Code define s that any interested parties have the right to be informed by the 
customs authorit ies, upon request , about the pro gress  of the procedure in which they have a direct 
interest and the final decision that have been made, as well as the general or specific application of 
customs law, regulation s, instructions, final resolutions and decisions of the World Customs 
Organization.  
(c)  Are the prohibitions fo und in Article 7.2 delineated? 
Clause 8( 2) of Schedule I determine s that a customs value should not be determined based on the 
following information : 
a. the selling price in Timor -Leste of goods produced in Timor -Leste;  
b. a method that establishes the acceptance of the highest value among 2 alternatives;  
c. the price of the goods on the domestic market of the exporting country;  
d. the cost of production, in addition to the calculated values that have been determined  for 
identical or similar goods according to clause 7;  
e. the price of goods for export to a country other than Timor -Leste, unless the goods have 
been imported into Timor -Leste;  
f. minimum customs values;  
g. arbitrary or fictitious values.  
6. How have the options found  in Article 8.2 been handled? In the case of f.o.b. 
 application, are  ex-factory prices also accepted? 
Clause 3(1) of Schedule I define s that to  determin e the transaction value of the goods, the price 
paid or payable for the goods must be adjusted : 
a. when adding the amounts, insofar as they are no longer included in the price paid or 
payable and are determined on the basis of sufficient information, equivalent to:  
i. Commissions and agency in respect of goods, incurred by the buyer, in addition         to 
purchase commissions;  
ii. Costs and packaging fees incurred by the buyer in respect of goods, including the         
cost of packaging, boxes and other containers and covers which are treated for         
customs purposes as part of the imported goods and all pack aging expenses  incurred 
in the delivery of goods in the condition in which they were dispatched  to Timor -Leste;  WT/ACC/TLS/8  
 
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  iii. Value of any of the following services and goods:  
• materials, components and other goods incorporated in the imported goods;  
• tools, matrices, mo ulds and other goods used in the production of imported            
goods;  
• materials consumed in the production of imported goods;  
• engineering, development, artistic, design, planning or outline work carried out             
outside Timor -Leste and required for  the production of imported goods, -            
determined in accordance with Subclause 2, which has been supplied, directly or             
indirectly, by the buyer of such goods imported free of charge or at a reduced  cost 
for use in connection with the production and sale for export of such  imported 
goods, broken down by the imported goods in a reasonable manner  and in 
accordance with gener ally accepted accounting principles;  
iv. Royalties and licensing fees, including payments for patents, trademarks and 
copyrights with respect to imported goods that the buyer has to pay, directly or  
indirectly, as a condition of the sale of goods for export to  Timor -Leste, excluding the 
inherent charges to the right of reproduction of goods imported into Timor -Leste or 
payments made by the buyer for the right to distribute or resell the imported goods, 
if such payments are not a condition of the sale for export ; 
v. Value of any part of the proceeds of a subsequent sale, disposal or use of the goods 
by the buyer that directly or indirectly bears on the seller;  
vi. Value of any materials, components and other goods incorporated in the imported 
goods for the purpose of re pairing or remodelling  those goods prior to their export to 
Timor -Leste, and the price paid for the repair or refurbishment service, as the case 
may be;  
vii. Transport and insurance costs, and boarding, landing and handling fees, as well as 
other fees and expen ses associated with the carriage of imported goods until such  
goods have left the exporting country, if such costs, fees and expenses are paid 
payable by the purchaser, directly or indirectly, to or for the benefit of the seller as a 
condition of the trans action.  
b. in deducting the amounts, to the extent that they are already included in the price paid or  
payable for the goods, equivalent to:  
i. Transport and insurance costs, and boarding, landing and handling fees, as well as 
other fees and expenses associated with the carriage of goods imported from the  goods 
left the exporting country, in addition to any cost, charge or expense referred to in  
Sub-clause  (ii)(B) of Clause  3; 
ii. Any of the following costs, fees and expenses:  
• any reasonable costs, fees and expenses incurred in constructing, building 
assembling and maintaining, including the provision of technical assistance, of 
goods after importation;  
• any costs, fees and expenses incurred in transporting and insuring the goods in 
Timor -Leste, including costs, fees and reasonable associated expenses;  
• any customs duties and other taxes payable in Timor -Leste due to the importation 
or sale of the goods, if the cost, rate or expense is separately identified from the 
balance of the price paid or pay able for the goods.  
7. Where is the rate of exchange published, as required by Article 9.1? 
According to the Code , it is necessary to calculate the exchange rate to determine the customs value 
when the value in the invoice is denominated in foreign currency . The applicable exchange rate shall 
be the last one disclosed by the competent authorities ( Article 100(1)), and t he exchange rate to be 
used shall be the one in force at the time of acceptance of the customs declaration (Article 100(2)).  WT/ACC/TLS/8  
 
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  The competent authorit y to publish the exchange rate is the Central Bank of Timor -Leste  
(www.bancocentral.tl ).  
8. What steps have been taken to ensure confidentiality, as required by Article 10? 
According to Article 17 of the Code, customs officers are bound to professional confidentiality 
regarding confidential facts, information and documents that became  known to them  while 
performing their duties . The confidentiality obligation ceases when the disclosure of facts, 
information or confidential documents has been expressly  authori zed by the person or entity that 
provided them or when  ordered by court in judicial proceedings  or required by other authority duly 
mandated by law .  
9. Questions  concerning  Article 11: 
(a)  What rights of appeal are open to t he importer or any  other person?  
Article 67  of the Code define s that h olders of subjective rights or legally protected interests who 
consider themselves  wronged by  the administrative act have the right to claim or file a hierarchical 
appeal against  acts and decisions taken by the customs authorit ies in the exercise of their powers.  
Any person who has requested a decision from the customs authorit ies and has not got a reply  within 
30 days can lodge an appeal.  
(b)  How is he to be informed of his right to further appea l?  
Article 64 (2) of the Code state s that without prejudice to time limits for specific decisions provided 
for in customs legislation , the customs authorit ies shall make a decision and notify the applicant  
within 30 days following the date of receipt of all required information.  
This time limit may , however, be extended when the customs  authorit ies is unable to comply with 
it. In this case, the customs authorit ies shall inform the applicant before the expiration of the time 
limit, stating the reasons for the extension as well as the further time limit  that they deem necessary 
to decide about the application . 
If there is no decision within a maximum period of 30 days, the request is considered tacitl y rejected.  
Before a decision is made by the c ustoms  authori ties, the interested person shall be notified in 
writing of a prior hearing. If the application is denied, the applicant shall be informed in writing , 
including the reasons for the denial and the right to appeal.  
10. Provide  inform ation on the publication, as required by Article 12, of: 
Article 15 of the Code define s that the list of current forms for  customs declaration s, collection of 
customs revenue, application of the procedure for determining  the customs value of the goods or 
the fulfilment  of the duties under  the Code and other customs legislation in force,  as well as the 
forms for customs control of persons, goods a nd means of transport  shall be published , whenever 
possible,  in the official website of the Ministry of Finance and the Customs  Authority  at 
www.mof.gov.tl . 
(a) (i) The relevant national laws; 
It is mandatory that all national laws of Timor -Leste are published in the Jornal da República,  the 
Official Gazette of the State.  These include : Presidential Decrees; Laws and Resolutions of the 
National Parliament;  Decree -Laws, Government Decrees, and Government Resolutions ; and 
Ministerial Diplomas and Ministerial Orders (Dispatches).   
 (ii) The regulations concerning the application of the Agreement; 
All regulations concerning the application of the Customs Valuation Agreement are published in the 
Jornal da República,  the Official Gazette of the State, and in the official website of the Ministry of 
Finance and the Customs Authority  at www.mof.gov.tl .  WT/ACC/TLS/8  
 
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   (iii) The judicial decision and administrative rulings of general application relating 
  to the Agreement; 
All relevant j udicial decisions are published in the official websites of the Courts  at www.tribunais.tl  
and in the Jornal da República,  the Official Gazette of the State.  
 (iv) General or specific laws being referred to in the rules  of implementation 
  or application. 
It is mandatory that all national laws of Timor -Leste are published in the Jornal da República,  the 
Official Gazette of the State.  
(b)  Is the publication of further rules anticipated? Which topics would they cover? 
No. 
11. Questions concerning Article 13: 
(a)  How is the obligation of Article 13 (last sentence) being dealt with in the 
 respective legislation? 
According to Article 172  of the Code on provisional release of goods, the customs  authorit ies may 
authorize the release of goods prior to settlement of customs duties and other charges on the basis  
of a simplified declaration  under the following condition s: 
a. submission of a declaration with the necessary information for the  identification of the 
goods;  
b. provision of a bank guarantee in accordance with the form  and in the amount as the 
customs authorit ies may determine sufficient to ensure payment of customs  duties and 
other  charges payable on the goods; and,  
c. the determination by the customs  authorit ies that the goods are not goods whose  import 
or export, as the case may be, is prohibited by law and that any  licence, permit or other 
authori zation required by law for the importation or  exportation has been obtained.  
(b)  Have additional explanations been  laid down?  
No. 
12. Questions concerning Article 16: 
(a)  Does the respective national legislation contain a provision requiring customs 
 authorities to give an explanation in writing as to how the customs  value was 
 determined?  
As already mentioned, Article 14 of the Code define s that any interested parties have the right to be 
informed by the customs authorit ies, upon request , about the progress of the procedures in which 
they have a direct interest and the final decision that have been made, and the general or specific 
application of customs law, regulation s, instructions, final resolutions and decisions  of the World 
Customs Organization.  
The customs authorit ies shall decide and notify the applicant, within  30 days following the date of 
receipt of  all required information (Article 64(2) of the Code).  
(b)  Are there any  further regulations concerning an above-mentioned request? 
No. WT/ACC/TLS/8  
 
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  13.  How have the Interpretative Notes of  the Agreement been included? 
The Interpretative Notes of the Customs Valuation  Agreement  are reflected in Schedule I of the 
Code, to ensure their common understanding and proper implementation.  
14. How have the provisions of the Decision of 26 April 1984 on the Treatment of 
 Interest Cha rges in the Customs Value of Imported Goods been implemented?  
According to Clause 1(5) of Schedule I, interest on a financial agreement concluded by the buyer 
relating to the purchase of imported goods shall not be considered as part of the customs value in 
any case where:  
a. the interest rat es are different from the price actually paid or payable for the goods;  
b. such goods are actually sold at the price stated as the price actually paid or payable;  
c. the buyer, if required, can demonstrate that:  
i. The financial agreement was concluded in writing;  
ii. The declared interest rate does not exceed the value practiced at that time for such 
transactions in the country where the financing was granted.  
15. For those countries applying paragraph 2 of the Decision of 24 September 1984 
 on the Valuation of Carrier Media Bearing  Softw are for Data Processing Equipment,  
 how have the provisions of this paragraph  been implemented?  
According to Clause 3(1 )(c) of Schedule I, i n respect to computer media with data or instructions, in 
determining the value of the transaction value of the goods according to Clause 2, the price paid or 
payable for the goods must be adjusted by deducting the value of the data  or instructions from the 
price paid  or payable for the goods if:  
i. the value of the data or information is distinguishable  from the cost or value of the  
computer medium;  
ii. the data or instructions are not incorporated in the data processing equipment.  
 
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