WORLD TRADE
ORGANIZATIONG/VAL/54
16 May 2003
(03-2619)
Committee on Customs Valuation Original:  English/
                  French/
                  Spanish
TECHNICAL COMMITTEE ON CUSTOMS VALUATION RESPONSE TO THE
TERMS OF REFERENCE FOR THE WORK OF THE TECHNICAL COMMITTEE
ON CUSTOMS VALUATION IN CONNECTION WITH CONCERNS ON
THE ACCURACY OF THE DECLARED VALUE (G/VAL/51)
The attached document contains the response of the Technical Committee on Customs
Valuation to the terms of reference sent by the Committee on Customs Valuation in connection with
its work on paragraph 8.3 of the Ministerial Declaration (WT/MIN(01)/17).
_______________G/VAL/54
Page 2
WORLD CUSTOMS ORGANIZATION
ORGANISATION MONDIALE DES DOUANES
ORGANIZACIÓN MUNDIAL DE ADUANAS
TECHNICAL COMMITTEE
ON CUSTOMS VALUATIONVT0330E1
-
16th Session
-
Brussels, 2 May 2003.
TECHNICAL COMMITTEE ON CUSTOMS VALUATION RESPONSE TO THE
TERMS OF REFERENCE FOR THE WORK OF THE TECHNICAL COMMITTEE
ON CUSTOMS VALUATION IN CONNECTION WITH CONCERNS ON
THE ACCURACY OF THE DECLARED VALUE
1. The Technical Committee has examined all of the points in the Terms of Reference set out in
WTO Doc. G/VAL/51 arising out of the mandate of Doha Decision, paragraph 8.3, which underlines
the importance of strengthening co-operation between the Customs administrations of Members in the
prevention of Customs fraud.
2. The Technical Committee recognised that Member administrations should have the necessary
legal and administrative framework for the effective implementation of the WTO Valuation
Agreement. This framework consists of (1) a supporting legislative framework that facilitates truthful
and accurate value declarations, (2) a comprehensive sanctions regime to address non-compliance and
support voluntary compliance, (3) a legal framework that provides for the right of appeal to the
importer, (4) policies and procedures governing valuation and compliance, (5) administrative and
technical capacity, (6) strategies for dealing with pa rticular sectors (e.g., the informal sector) of trade
and (7) partnership with trade. These items are discussed in more detail in paragraphs 20 to 27, below.
3. With this important foundation in mind, the Technical Committee provides the following
response to the Committee on Customs Valuation as requested by the Terms of Reference.
1) Examine the technical aspects of the prac tical means considered in the Committee or
others related to them to address concerns about the accuracy of declared value,
including the exchange of information on export values, to cover, inter alia, the
following points :
• The elements contained in the format provided  in the Annex of G/VAL/W/102, possibly taking note
of the current work in the TCCV (such as the Draft Guide to the Exchange of Customs Valuation
Information, under consideration by the TCCV)
4. The Technical Committee reviewed the elements in the format contained in the Annex to
Doc. G/VAL/W/102.  With regard to Part A : Details to be furnished by the Requesting
Administration (Items 1-18), the Technical Committee was of the view that no rigid rule was neededregarding the details to be provided.  The key point was for the requesting administration to provide
the minimum data elements needed to identify the export transaction.G/VAL/54
Page 3
5. Specific clarification was sought from India regarding Point 4 of Part B (Information Sought
by the Requesting Administration, other, please specify).  The Technical Committee noted the
explanation provided by India that this point was designed to cover residual information or assistance
that the Customs administration in the country of importation might seek depending on thecircumstances, e.g., information necessary for the verification of the authenticity of an invoice which
was suspected of not being genuine.
6. Clarification was also sought from India regarding Point 2 of Part C, which states that the
information provided by the requested administration may be disclosed in judicial proceedings.  India,
supported by several delegations, was of the opinion that this point served as a reminder of Article 10
of the Valuation Agreement, which authorises disclo sure of confidential information to the extent that
it may be required to be disclosed in the context of judicial proceedings, even without the specific
permission of the person or government providing such information.  Those delegations also pointed
out that Doha Decision (paragraph 8.3) specifically referred to Article 10, and that the information
exchanged would be of no use if it could not be used in judicial proceedings.  Several other
delegations were of the opinion that Article 10 did not cover information provided to the authorities inthe country of exportation by the exporter.  In addition, those delegations considered that the
authorities in the country of exportation should consent before their confidential information is used
in judicial proceedings in the country of importation.  Nevertheless, the Technical Committee agreed
that confidentiality of information must be  considered in accordance with the applicable
confidentiality provisions.
7. Subject to the observations set out in paragraphs 4 to 6 above, the Technical Committee has
completed its consideration of the elements contained in the Annex to Doc. G/VAL/W/102.
8. The Technical Committee has finished its examination of the Guide to the Exchange of
Customs Valuation Information.  The Guide was developed to facilitate the exchange of valuation
information among Customs administrations.  It consists of (1) a checklist regarding valuation
verification actions to be taken by the Customs administration in the importing country before
requesting information from the Customs administration in the exporting country and (2) a set of
recommended procedures, applicable to the Customs administrations of both the importing and
exporting countries, for the exchange of valuation information.  Certain elements contained in the
Guide, namely, the details to identify the goods to  be provided by the importing country in the request
for information, are similar to the elements contained in Part A of the Annex to Doc. G/VAL/W/102.
A copy of the Guide, as developed by the Techni cal Committee, is attached and forms part of the
response.
• The bilateral approach through exchange of information arrangements
9. The bilateral approach was identified as the desirable means for the exchange of information
in many cases.  The bilateral approach is useful for both valuation and other Customs issues.  It
provides the flexibility to address the particular ne eds of the parties concerned, such as with regard to
specific expectations, confidentiality, safeguards, etc.  Many Members have entered into various
Customs Mutual Assistance Agreements on a bilateral basis with positive results.  In many cases,these agreements are used to provide assistance to develop or verify suspicions of fraud.  The WCO
has developed a Model Bilateral Agreement, which can be used as the basis for the negotiation of a
bilateral agreement between two parties relative to mutual administrative assistance and information
exchange on all Customs issues.  In particular, paragraph 2 of Article 3 of the Model Bilateral
Agreement covers the provision of information to ensure the correct determination of Customs value.
10. There may be practical obstacles to the bilateral approach to information exchange, namely,
(1) it can be a difficult and complex process to conclude bilateral agreements, particularly with allG/VAL/54
Page 4
trading partners, (2) different levels of administrative capacity and trade between parties might
impede the negotiation and the administration of a bilateral agreement on an equal footing, and (3)
confidentiality of information must be highly respected but it may limit the ability of Customs
administrations to exchange information as they wish.
11. In view of the above, several Members supported the position that the bilateral approach
should not be the only or the ideal solution and preferred the multilateral approach to the exchange of
information in many cases.
• Techniques or processes used by Customs admin istrations in the final determination and/or
verification in respect of the value of goods
12. The Technical Committee has identified a number of techniques and processes for the
determination and verification of the value of the goods.  The techniques and processes begin prior to
the importation of the goods and continue until all post importation checks have been completed.
These techniques and processes include, but are not limited to, the following :
• Use of a special value declaration form.
• Verification at the border, which involves an examination of the value declaration, supporting
documents or records, or, where necessary, of the goods themselves, in order to ensure the truth
and accuracy of the Customs value.
• Valuation risk management : the goal of valuation risk management is to concentrate valuation
fraud controls on targeting areas of highest risk, so that resources can be allocated in an efficient
way.  It involves the process of identifying risk areas in terms of valuation fraud and valuation
fraud trends and methodologies so as to exercise appropriate general and specific controls to
ensure compliance.  Customs administrations need to develop special information strategies toenhance their capacity to compile, analyse and use a range of relevant information sources. One
of the valuation risk-assessment tools can be the use of a national valuation database (see
response to Point 2 of the Terms of Reference).
• Dialogue with the importer : Maintaining an activ e dialogue with the importer regarding questions
and concerns about issues relating to the declared value can often eliminate doubts about the
accuracy of the declared value and dispel suspicions of fraud.
• Application of approach set forth in Decision 6.1 and Technical Committee Case Study 13.1 in
cases where Customs administrations have reasons to doubt the truth or accuracy of the declaredvalue.
• Post-clearance audit techniques for valuation control purposes : this process enables Customs
officers to verify, after the clearance of the goods, the truth and accuracy of the declarationsthrough the examination of the books, records, and other relevant commercial data held by the
importer.
• Investigation and intelligence techniques for fraud investigation, which require close co-
ordination between the valuation/clearance functions and the investigation and intelligencefunctions.
13. The Customs Valuation Control Handbook developed by the Technical Committee provides
guidance to Member Customs administrations on how to maintain appropriate control mechanisms
and procedures to ensure correct valuation management.
14. The Control Handbook sets out means for the control of the declaration of value and the
verification of the Customs value of goods for each of the valuation methods provided for in the
Valuation Agreement to ensure that : (1) the conditions for the use of the transaction value method arefulfilled; (2) the declared value includes the tota l payment made (to be made) by the buyer for the
imported goods; (3) the declared value includes all additions necessary under Article 8 of theG/VAL/54
Page 5
Agreement; (4) an alternative method of valuation, where indicated, is being used correctly.  These
means include the use of valuation rulings, procedures for checking the value declaration and
supporting documents, techniques for making further enquiries concerning the truth or accuracy of a
declaration, such as how to carry out an audit at an importer’s premises.
15. The Control Handbook also discusses means of verification of more complex elements such
as related party transactions, buying commissions, assists, royalties and licence fees.  The Handbook
contains a list of revenue risk areas and a model of computerisation for valuation control.  It also
highlights the different alternatives regarding the organisation of valuation control.
• The method of communication and ideal time  frame for the exchange of information
16. The Technical Committee agreed that requests for information should be made in writing or
electronically.  The requested Customs administration may require written confirmation of electronic
requests.  Where circumstances so require, requests may be made verbally.  Such requests should be
confirmed as soon as possible either in writing or by electronic means.
17. An ideal time frame for the exchange of information can not be fixed because the response
time varies depending largely on the nature of the information requested, resource availability, as well
as the degree of technological development for the collection and transmission of the information.
Therefore, while it is important to respond to a request expeditiously, flexibility is needed depending
on the situation.
18. It is important that the replies to requests for information be communicated as quickly as
possible and preferably within a mutually agreed time frame.
• The usefulness of contact points for the exchange of information on export values
19. Contact points are essential for the fast, simple and effective exchange of information.  To
assist requesting administration officials in transmitting a request for information, the appropriate
office, preferably at the headquarters level, which is responsible for the exchange of valuation
information, should be identified in each Customs administration.  The WCO will centralise the
information on the contact points of Member administrations.
Further relevant considerations
20. As stated in the introduction in paragraph 2 of this response, the Technical Committee
recognised that there are several necessary components of a Customs legal and administrative
framework, namely :
• A supporting legislative framework that facilita tes truthful and accurate value declarations
21. Such a legislative compliance framework should (1) require importers to provide accurate and
truthful Customs value declarations; (2) shift the onus for such declarations onto the importer,
including importer self assessment obligations; and, (3) require the importer to maintain books,
records and supporting documents and allow Customs to access them.
• A comprehensive sanctions regime to address non-compliance and support voluntary compliance
22. This should include (1) legislative penalty and enforcement provisions that deal with
non-compliance based on the severity of non-compliance; (2) provisions to waive or reduce penalties
where the importer brings mistakes or violations to the attention of Customs and voluntarily correctsG/VAL/54
Page 6
them; and (3) provisions that discourage undervaluation, such as giving the government the right to
purchase goods at the declared value or providing benefits to compliant importers (e.g., reduced
inspections).
• A legal framework that provides the right of appeal to the importer
23. In line with Article 11 of the Valuation Agreement, an appeals mechanism which provides the
right of appeal to the importer, including the final right of appeal to a judicial authority, will help to
ensure transparency and fairness regarding the determination of the Customs value and fosters
uniform and consistent valuation practices within the Customs administration.
• Policies and procedures for value and compliance
24. In line with Article 12 of the Valuation Agreement, this should include the development and
publication of valuation policies and procedures and the engagement of the trade for greatertransparency and fairness.  This will promote greater understanding of the valuation provisions,
contribute to improve compliance and encourage truthful and accurate declarations.  These policies
and procedures should also extend to compliance provisions.
• Administrative and technical capacity
25. All Member Customs administrations must make their best efforts to establish appropriate
work programmes to develop their administrative and technical capacity with a view to using the
effective and efficient procedures and tools that address concerns about the truth and accuracy of the
declared value (see response to point 4 of the Terms of Reference).
• Strategies dealing with particular sectors of trade
26. Appropriate strategies need to be developed to manage cases which might present difficulties
to Customs administrations, such as “informal sector” trade, sole agency transactions and transfer
pricing within multinational companies.
• Partnership with Trade
27. Mutual confidence between the Trade and Customs should be fostered.  Training programmes
should be established to ensure that both the Trade and Customs develop a comprehensive
understanding of the Valuation Agreement and its applicability to the diversity of trade flows.
2) Intensify its efforts towards finalising the guidelines on the development and use of a
valuation database as a risk assessment tool.  The Committee also urges the TCCV to
explore co-operation and co-ordination with  similar work being carried out by other
international organisations.
28. The Technical Committee continues to pursue completion of the guidelines on the
development and use of a valuation database as a risk assessment tool and is currently reviewing a
draft document.  In preparing the draft, the WCO Secretariat contacted UNCTAD in order to benefit
from UNCTAD’s experience with regard to  ASYCUDA.  In addition, numerous Member
administrations have submitted information on their experience with valuation databases.  A
symposium was also held on 24 and 25 April, 2003 at the WCO in which Members provided
information on the use of databases as a risk assessment tool.G/VAL/54
Page 7
29. The Technical Committee will submit the final guidelines to the Committee on Customs
Valuation when they are completed.
3) Taking into account relevant work of other bodies, indicate appropriate Customs tools,
mechanisms and practices in cases involvin g fraud and suspected fraud, in Customs
valuation; indicate the feasibility of making  a distinction between such cases in the
context of exchange of information on Customs value.
Customs tools, mechanisms and practices in cases involving fraud or suspected fraud
30. Many of the tools discussed previously in this response become very useful in addressing
cases involving fraud and suspected fraud.  Customs administrations should have in place a number oftools, mechanisms and practices, which have an essential role to play in preventing or minimising the
opportunities for, and incidence of, attempted fraud.  These should include : (1) an adequate general
legal framework, including the provision of general administrative powers, (2) adequate and well
functioning Customs procedures and controls, (3) knowledge of international trade and commercial
practices, (4) import verification, risk analysis and control capacity, (5) post import controls, (6) postimport audit capacity and powers to conduct such audi ts, (7) internal information systems to profile
and track importers and to keep adequate records, (8) internal information systems which takes into
account the relevant links between the import obli gations of economic operators and any further
obligations of a fiscal nature, (9) means to examine the accounting or financial (including bank)
records of an importer, (10) a legally based system for the imposition of sanctions and penaltiesrelating to Customs fraud, (11) a surety system to release goods and protect revenue, (12) automation
and selectivity systems to identify cases of suspected fraud, and (13) bilateral and/or multilateral
mutual administrative assistance agreements to help gather evidence that establishes fraud.
31. Customs administrations should have full access to, and should have developed operational
capacity in the use of, all of the various tools developed by the WCO and its respective committees
with respect to valuation fraud and suspected fraud.  Many of these tools are currently in development
but should all be available by the end of 2003.  These tools include :
• A post importation audit course.
• A risk assessment course on valuation fraud.
• A model operation to combat commercial fraud using false or double invoices.
• A publication on the essential elements for the control of fraud under the WTO Valuation
Agreement.
• A manual on measures to combat commercial fraud.
• A commercial fraud manual for senior Customs officials.
• A handbook for commercial fraud investigators.
Distinction between fraud and suspected fraud
32. Each administration may have a definition of fraud in its domestic legislation.  One
international definition is found in Article 1(c) of the International Convention on MutualAdministrative Assistance for the Prevention, Investigation and Repression of Customs Offences
(commonly referred to as the “Nairobi Convention”).  In the Nairobi Convention, fraud is defined as
“a Customs offence by which a person deceives the Customs and thus evades, wholly or partly, the
payment of import or export duties and taxes or the application of prohibitions or restrictions laid
down by Customs law or obtains any advantage co ntrary to Customs law”.  Further, a “customs
offence” is defined in Article 1(b) as any breach, or attempted breach, of Customs law.G/VAL/54
Page 8
33. With regard to the distinction between fraud and suspected fraud, such a distinction depends
on the burden of proof needed to establish fraud and the evidence that is available to meet that burden.
National laws need to be in place which specify th e burden of proof needed to establish valuation
fraud.  When there is sufficient evidence to meet the burden of proof, the suspicion of fraud is
confirmed and fraud is established.   Nothing in the Valuation Agreement prevents an administrationfrom enacting tough enforcement provisions in cases of valuation fraud.
4. Provide data and information on the principles and practices governing co-operation
and assistance between Customs administrations, including practical technical
assistance and capacity building initiative s that might be appropriate to address
concerns regarding the accuracy of the declared value.
Principles and practices governing co-operation and assistance between Customs administrations
34. Co-operation and assistance between Customs administrations can take many forms,
embracing activities such as seminars and joint training operations to the setting up of specific co-
operation mechanisms which are designed to address specific problems of common interest.  Asregards breaches of Customs legislation and the fight against fraud, the preferred way to provide co-
operation and assistance between individual administrations now consists of : (1) Customs co-
operation agreements and (2) mutual administrative assistance agreements.  These agreements provide
a concrete basis for reliable, committed and well structured assistance, which addresses a range of
Customs issues including problems relating to the correct determination of the Customs value.  Theseagreements can ensure that the real needs of the parties are addressed, while at the same time ensuring
that all necessary safeguards relating to the rights of all parties concerned are taken into account.
35. In the area of Customs valuation, the major attribute of co-operation between Customs
administrations is the ability to share lessons learned from practical application of the ValuationAgreement as well as the exchange of best practices for administration of the Agreement.
36. To assist the Technical Committee in responding to the request for the “provision of data and
information on the … practices governing co-operation and assistance between Customs
administrations” the WCO Secretariat circulated a questionnaire on current practices with regard to
the exchange of value information.  Responses were received from more than 50 Members and
Observers and indicated that the exchange of value information between Customs administrations is acommon practice and appears to be working reasonably well for most respondents.
Practical technical assistance and capacity building initiatives that might be appropriate to address
concerns regarding the accuracy of the declared value
37. The provision of technical assistance and capacity building initiatives will have a substantial
effect on the ability to deal with the challenges of implementing valuation rules in a manner that
ensures that declarations of the Customs value and the resulting controls are a sufficient basis for
revenue protection.  The Technical Committee subscribes fully to the emphasis on capacity building
which is a major part of initiatives at international level at the present time.  It is important to tailor
technical assistance and capacity building efforts to the specific needs of the recipient administration.
Existing forms of technical assistance
38. The Customs community has already developed focused technical assistance and capacity
building initiatives to establish :
• Comprehensive understanding of the Valuation Agreement.G/VAL/54
Page 9
• Adequate and transparent national laws, regulations and policies.
• A modern post importation audit system.
• A modern risk management programme.
• A modern surety system.
• Computer systems.
• Procedures relating to administrative/judicial appeals.
• Procedures to investigate cases of suspected fraud.
• Adequate training of Customs personnel regarding the above functions.
• Procedures to promote voluntary compliance.
• Bilateral or multilateral mutual administrative assistance agreements.
39. In addition, the following resources are available to assist administrations in the interpretation
and application of the Valuation Agreement :
• The Valuation Control Handbook.
• The Basic Valuation Training Module.
40. Further, the Technical Committee has established an alternative means of assisting
administrations in the exchange of practical experience on implementation and application of theValuation Agreement.  This assistance is the Theme Meetings that are held at alternative meetings of
the Technical Committee.  Each Theme Meeting is devoted to a topic or series of topics determined
by delegates.  The themes for the three Technical Committee Theme Meetings to date have covered :
• Application of Risk Assessment in Managing Valuation Risk (May 2000).
• Valuation Management in a Post Import Audit Environment (May 2001).
• Administrative Considerations in the Implementation and Application of the Valuation
Agreement (April 2002).
41. These meetings bring together guest speakers from Member administrations as well as from
the private sector.  They are highly regarded by Members as providing a more hands-on transfer of
knowledge and lessons learned through application of the Valuation Agreement.
42. The delivery of national and regional valuation technical assistance programmes by the WCO
Secretariat and other donor organisations (including Member administrations) to least developed and
developing country Members, as well as the WCO Fellowship Programme, have been effective.
Other international organisations, in partnership with the WCO, have been able to provide further
impetus in this area, for example, the WCO/USAID (US Agency for International Development)programme.  In addition, the Technical Committee noted that Member administrations provide
technical assistance both bilaterally and regionally.
43. The Technical Committee emphasised that all capacity building initiatives must be conducted
in such a way that the results of a preliminary diagnostic study will form the basis of an individuallytailored programme for that Customs administration.
New capacity building initiatives
44. The WCO Secretariat is currently developing a WCO Customs Capacity Building
Framework.  This framework is intended to assist its Members to be better equipped to become an
effective and efficient modern Customs administra tion in today’s internatio nal trading environment
and to also mobilise support from the donor community and governments.G/VAL/54
Page 10
45. The Customs Capacity Building Framework will consist of seven separate but inter-related
parts, including valuation, designed to :
• Promote the importance of effective Customs administrations to national governments,
international organisations and donor agencies.
• Promote a standardised diagnostic and project design and implementation guide for WCO
officials, Customs specialists from Member administrations and private sector consultants
engaged in capacity building projects in Customs administrations of developing countries.
• Promote the WCO’s conventions, instruments and best practice approaches.
• Provide an information and marketing tool for the WCO and senior officials from Member
administrations (to better equip senior Customs officials with the information necessary to
participate fully in discussions/negotiations with donor agencies and other government officials).
• Assist donor organisations such as the World Bank/IMF to understand and accurately diagnose
Customs capacity building needs and design programmes that achieve substantial results.
46. The Technical Committee also noted that the WCO’s Compendium of Capacity Building
Tools was now available to all Members.  The Compendium was developed to identify and describe
the wide-range of capacity building products currently available through the WCO Secretariat.
Potential additional capacity building initiatives that might be appropriate to address concerns
regarding the accuracy of the declared value
47. A suggested capacity building effort is the “twinning” of administrations to work and mentor
on specific cases.  Further, engaging importers and Chambers of Commerce in the effort is also
critical.
48. Finally, the trade has a major role and responsibility to provide correct, accurate and
unambiguous information to both the importing and exporting Customs administrations.  In order to
enable the trade to better meet its responsibilities,  consideration should be given to the following
measures :
• Work with appropriate international organisations to identify and investigate measures to
establish (or validate) the correctness of commercial invoices presented to Customs and devise a
data set of recommended content for such invoices.  The purpose would be to receive from
importers a more complete description of the imported goods that could lead more directly to the
identification (as necessary) of previously verified transactions.  Such information could be used
in an increased application of Articles 2 and 3 of the Valuation Agreement when Article 1 is
deemed inappropriate as well as for test value requests.
• Examine the functional use of the “declaration of value” and make appropriate recommendations
regarding possible strengthening of the obligations of importers in providing reliable data.
• Study the role and impact (including economic) of  the informal trade sector on Customs valuation
in Customs administrations experiencing such trad e.  Identify the problems encountered by the
administrations in this area and develop an international or national strategic solution.
• Develop and deliver education programmes in partnership with the private sector, including local
Chambers of Commerce, for local Customs administration’s personnel on business practices
techniques and trade trends while respecting business and Customs confidentiality standards.
CONCLUSION
49. The Technical Committee is pleased to have been able to respond to the Terms of Reference
from the Committee and stands prepared to carry out further work in this connection at the request ofthe Committee.G/VAL/54
Page 11
Annex
GUIDE TO THE EXCHANGE OF CUSTOMS VALUATION INFORMATION
Preamble
This Guide is designed to facilitate the ex change of valuation information among Customs
administrations. It consists of (1) a checklist regarding valuation verification actions to be taken by
the Customs administration of the importing country before requesting information from the Customs
administration of the exporting country and (2) a set of recommended procedures, applicable to the
Customs administrations of both the importing and exporting countries, for the exchange of valuation
information.
In accordance with the terms of the WTO Valuation Agreement, the basis for the valuation of
goods for Customs purposes should, to the greatest extent possible, be the transaction value of goods.
If (taking into account Decision 6.1 of the Committee on Customs Valuation and Case Study 13.1 of
the Technical Committee on Customs Valuation on the Application of Decision 6.1) the Customsadministration of the importing country has reasonable grounds to doubt the truth or accuracy of the
declared value, the administration may conclude that the Customs value of the imported goods cannot
be determined under the provisions of Article 1.
The exchange of valuation information between Customs administrations may be used when
there are reasonable grounds to doubt the truth or accuracy of the declared value and fraud is
suspected.  The information should not be used as a basis for the determination of Customs value.
Exchange of information is only part of the solution to effective valuation control and should
form part of a more comprehensive approach.  Successful valuation control depends on a long-termstrategy of reform and modernisation of Customs administrations.  In particular, Customs
administrations should rely on a control mechanis m, using intelligence-based risk assessment and
post-clearance auditing systems, which are fundamental to improving Customs valuation control
regimes.  Focused capacity building and technical assistance efforts are also called for.
In requesting valuation information, the requesting administration needs to bear in mind the
associated resource and cost implications for th e requested administration.  The proportionality
between the fiscal interest involved in a request and the efforts to be made in providing the
information should be considered and frivolous requests should be avoided.
Any information provided under the procedures of this Guide should be treated in accordance
with the applicable confidentiality provisions.G/VAL/54
Page 12
Checklist regarding valuation verification action s to be taken by the Customs administration of
an importing country before requesting information from
the Customs administration of the exporting country
1. Before requesting information from the Customs administration of the exporting country, the
requesting administration should ensure that, to the extent possible, all appropriate verification
procedures in the importing country have been undertaken.  The following listing, although not
exhaustive, provides requesting administrations with a checklist that confirms the substance of the
request being made.
Checks in regard to the value declaration or Customs entry
(a) That all appropriate documentation has been made available to the Customs administration
and has been inspected.  This may include :
(i) Customs entries;
(ii) bills of lading;(iii) commercial invoices;
(iv) contracts of sale;
(v) valuation declarations;
(vi) payment and bank records;
(vii) other legal documents, such as licence and warranty agreements;(viii) relevant correspondence.
(b) That internal (Customs) research and analysis has been conducted.  This may include :
(i) Records of previous importations by the same importer have been checked :
• Customs entries;
• declared values;
• duties paid;
• method of valuation;
• other historical records.
(ii) Risk assessment and risk analysis procedures have been fully undertaken; this may
include the use of appropriate database resources.
Checks relating to the status of the importer
This may include :(a) Customs offence records have been examined;
(b) compliance with the tax authorities has been checked;(c) the WCO CEN database has been checked.
Contacts with the importer
(a) The importer has been advised in writing of the administration’s reasons for doubt.
(b) The importer has been requested to supply additional information and advised of the level of
proof to be supplied, including copies of all correspondence between the exporter and theimporter.
(c) The importer has been interviewed, as appropriate.G/VAL/54
Page 13
Checks to be conducted during post importation audit (where appropriate).
(a) Verification of financial records pertaining to the transaction.
(b) Verification of trader's systems.
(c) Examination of commercial records, including contracts.(d) The importer has been interviewed.
2. If, after following the relevant checklist items, to the extent possible, there are still reasonable
grounds to doubt the truth or accuracy of the declared value and fraud is suspected, assistance from
the Customs administration of the exporting country may be sought, in accordance with the following
recommended procedures.G/VAL/54
Page 14
Recommended procedures for the exchange of valuation information
1. Valuation-related information to be requested from the Customs administration in the country
of exportation should be limited to information which is necessary for verifying the truth or accuracy
of the Customs value declared by the importer and fraud is suspected.  The requested information mayinclude the value of the goods stated in the export declaration/entry presented to the Customs
administration of the exporting country.
2. The use of bilateral or multilateral mutual administrative assistance agreements to delineate
the appropriate terms for the exchange of valuation information among Customs administrations is
recommended.
3. Communication in regard to the exchange of valuation information should take place between
appropriate offices designated for this purpose.  The designated offices should be notified to the
Secretary General of the WCO by the Customs ad ministrations concerned.  The Secretary General
will make the information concerning designated offices available to Members on the WCO Members
Web site.
4. Requests for information should be made in writing or electronically.  The requested Customs
administration may require written confirmation of electronic requests.  Where the circumstances so
require, requests may be made verbally.  Such requests shall be confirmed as soon as possible either
in writing or, if acceptable to the requested and requesting administrations, by electronic means.
5. Requests for information should specify :(a) the purpose of the request and the type of information requested;
(b) the measures taken by the requesting Customs administration in accordance with the
“Checklist”;
(c) the information necessary to identify the goods and their export declaration/entry, which may
include :
(i) details regarding the goods (name, quantity, tariff code number, shipping marks,
number of packages, invoice number, etc.);
(ii) name and address of the importer/buyer/consignee;(iii) name and address of the exporter/seller/consignor;
(iv) means of transportation and transport document number;
(v) date and place of departure/exportation;
(vi) date and place of arrival/importation;
(d) any other information deemed useful by the requesting administration.
6. The requested Customs administration should notify the requesting Customs administration of
the receipt of the request as soon as administratively possible.
7. The requested information should be provided as quickly as possible, preferably on the basis
of a mutually agreed time frame, in accordance with national legal and administrative provisions in
the country of exportation and within the limits of the Customs administration’s competence and
available resources.  The response to the request for information should provide the requested
information as fully and accurately as possible.  The response could also include, as appropriate, thefollowing information :
(a) whether the export consignment has been identified;
(b) whether the export entry documents have been verified;G/VAL/54
Page 15
(c) whether the Customs administration’s records have been consulted;
(d) whether relevant information has been sought from other government agencies concerned;
(e) whether the exporter/seller/consignor has been consulted.
8. Where the requested Customs administration cannot provide the information expeditiously, it
shall notify the requesting Customs administration of the reasons for its inability or delay in providing
the information.
____________