RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/91
15 October 2001
(01-5025)
Committee on Customs Valuation Original:  Spanish
COMMUNICATION FROM GUATEMALA CONCERNING ANNEX III,
PARAGRAPH 1 OF THE AGREEMENT ON IMPLEMENTATION OF
ARTICLE VII OF THE GENERAL AGREEMENT ON
TARIFFS AND TRADE 1994
The following communication, dated 11 October 2001, has been received from the Permanent
Mission of Guatemala.
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The WTO Secretariat and all the Members are hereby notified of a request by the Government
of Guatemala relating to the content of Annex III, paragraph 2, of the Agreement on Implementation
of Article VII of the GATT 1994, which provides that "developing countries which currently value
goods on the basis of officially established minimum values may wish to make a reservation to enablethem to retain such values on a limited and transitional basis under such terms and conditions as may
be agreed to by the Members".
In this respect, Guatemala wishes to apply officially established minimum values to the
following four products, for a period of three years fr om the entry into force of all the provisions of
the Valuation Agreement in Guatemala, that is to say from 21 November 2001.  These minimum
values are used in practice to deal with cases of fraudulent invoicing or other problems ofundervaluation.
Product Code Basis and criteria published in
Poultry, not cut in pieces, fresh
or chilled02.07 Government Decision No. 7-93
of 1993
Rice 10.06 Government Decision
No. 919.99 of 1999
Worn clothing 63.09 Circular No. 07-92 of 1992
Used motor vehicles Ex 87.01, 87.02, 87.03, 87.04,
87.05 and 87.11Decree No. 52-92 and
Ministerial Decision No. 4-91
of the Ministry of Public
Finance, 1992
The Government of Guatemala submits this proposal with the aim of highlighting the need to
continue using certain previously established minimum values for official purposes.
Background
Guatemala has previously negotiated an extension in the application of the Agreement on
Customs Valuation together with an extension for the same period of time (16 months) in the
application of minimum values with respect to four products:  rice, poultry meat, worn clothing andG/VAL/W/91
Page 2
used vehicles.  The WTO decision authorizing both requests was approved on 28 July 2000 in WTO
document G/VAL/33 and expires on 21 November 2001.
Moreover, and with reference to the content of paragraph 2 of Annex III to the Agreement on
Implementation of Article VII of the GATT, which provides that "developing countries whichcurrently value goods on the basis of officially established minimum values may wish to make a
reservation to enable them to retain such values on a limited and transitional basis under such terms
and conditions as may be agreed to by the Members", Guatemala entered the necessary official
reservation in respect of the products referred to by means of the instrument of ratification of the
Agreement Establishing the World Trade Organization (WTO) and the annexed multilateral trade
agreements, published in the Official Journal of Central America (Diario de Centroamérica) on 4, 5
and 6 September 1995.
Justification of the use of minimum prices
A. WORN CLOTHING
Imported worn clothing refers to articles of apparel showing some degree of use or wear and
originating mainly in the United States of America.  It should be pointed out that used goods
constitute one of the most conspicuous problem areas in the application of the Valuation Agreement
under the GATT 1994.
In the case of Guatemala, worn clothing is imported to satisfy the clothing needs of people
with scant resources;  hence the considerable  social importance of importing such products.
However, cases of false declaration of value have been identified in the absence of effective sales
transactions, to the detriment of the domestic clothing industry.
In order to reduce this problem, Guatemala has since 26 February 1992 applied a minimum
f.o.b. price of US$0.80 per kg. to imports of worn cl othing.  Imports for the previous year amounted
to a c.i.f. value of US$14.1 million, equivalent to US$4.8 million in taxes.
B. USED MOTOR VEHICLES
The application of minimum prices to the importation of used vehicles dates from 1989, the
year of publication of Legislative Decree No. 79-89, as amended by Legislative Decree No. 52-92.
The purpose of the relevant regulations was to adopt measures leading to a solution to the problem ofindividual and collective transport, so as to make the prices of vehicles affordable to the middle
income sectors of society, and to prevent tax evasion based on the declaration of fictitious prices.
Guatemalan imports of used vehicles generate substantial tax revenue.  Imports recorded over
the last 12 months have brought in Q. 1272 million in taxes, equivalent to US$159 million,representing 20 per cent of the total revenue from Guatemala's foreign trade.  Of this amount,
Q. 763 million corresponds to used vehicles (60 per cent) and the remaining Q. 509 million to new
vehicles (40 per cent).
C. 
POULTRY MEAT
A minimum c.i.f. price of US$56 per pound has been applied to this product since 1993, with
the aim of protecting domestic consumers, establishing the conditions for adequate supplies to the
market and promoting effective standards of quality, weight and measurement, while at the same time
preventing unfair competition for the domestic industry.G/VAL/W/91
Page 3
However, on the basis of Ministerial Decision No. 26-2001, provision has been made from
25 April for the temporary suspension of the application of the above-mentioned minimum value, and
poultry meat is valued in accordance with the provisions of the Brussels definition of value, currently
in force in Guatemala.
D. RICE
As in the case of the products referred to above, the minimum price for rice imports was
applied mainly to prevent tax evasion based on the declaration of fictitious prices.  The minimum
import prices for rice are determined in accordance with the report on international rice prices by the
Creed Rice Company Inc., and prices are monitored by the Ministry of the Economy.
Specific request
On the basis of the foregoing, authorization is respectfully requested for Guatemala to
continue to apply minimum values for a transitional period of three years from the entry into force of
all the provisions of the Valuation Agreement in Guatemala, i.e. 21 November 2001.
Guatemala certifies that minimum values will not be applied to products different from those
notified to the WTO Secretariat, viz. poultry meat, used motor vehicles, worn clothing and rice.
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