RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/M/10
6 September 1999
(99-3697)
Committee on Customs Valuation
MINUTES OF THE MEETING OF 26 APRIL 1999
Chairman: Mr. Mohammed Bentaja (Morocco)
The agenda proposed for the meeting, circulated in WTO/AIR/1064 was adopted as follows
with the addition of items under item "F. Other business".
A. R EPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS VALUATION .................2
B. I NFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENT ...................4
1. Notification of na tional legislation......................................................................................... ..4
(i) Brazil...................................................................................................................... .....................4
(ii) Ic eland .................................................................................................................... ....................5
(iii) I srael .................................................................................................................... .......................5
(iv) La tvia..................................................................................................................... .....................6
(v) Morocco..................................................................................................................... .................6
(vi) Panama ..................................................................................................................... ..................7
(vii) Poland.................................................................................................................... .....................8
(viii) Surin ame ................................................................................................................. ....................8
(ix) Trinidad and Tobago ........................................................................................................ ..........8
2. Notification that national legislation under the Tokyo Round Customs Valuation
Agreement remains valid under the WT O Customs Valuation Agreement........................8
3. Notification made by deve loping country members ..............................................................9
(i) Notificati on by Peru........................................................................................................ ............9
C. I NFORMATION ON THE APPLICATION  OF  DECISIONS OF THE COMMITTEE ON CUSTOMS
VALUATION ............................................................................................................................... 14
D. T ECHNICAL ASSISTANCE ..........................................................................................................14
1. Information on Technical Assistance....................................................................................14
2. Article 20.3: Technical Assistance Activities ........................................................................15
(i) Report from the Secretar iat on its ac tivities .............................................................................15
E. F OURTH ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION OF THE
CUSTOMS VALUATION AGREEMENT .........................................................................................17
F. O THER BUSINESS ......................................................................................................................26G/VAL/M/10
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1. Communication from Korea (G/VAL/W/33) .......................................................................26
2. United States – Minimum Pr ices ...........................................................................................28
3. Canada – Responses to Checklist of Issues...........................................................................29
4. India - Information on certain aspects of the European Communities Valuation
Policy......................................................................................................................... ...............29
5. India – Minutes of the last Committee meeting ...................................................................30
6. Date of the next meeting..................................................................................................... ....32
G. E LECTION OF OFFICERS ............................................................................................................32
_______________
A. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS VALUATION
1.1 The representative of the WCO,  Mr. H. Kapler, stated that Mr. Vicente, the Chairman of the
Technical Committee, was unable to attend this Session and had requested him to present the Report
of the Eight Session on his behalf. He was accom panied today by Mr. Manga, his deputy, for whom
this would be the last meeting of the Comm ittee since he would be returning to his home
administration in Cameroon.  He had submitted a written statement and the formal report of the
Technical Committee  would be published as WCO document VT0034E2.  He therefore intended to
highlight only certain aspects of the just completed meeting.
1.2 The meeting was well attended and delegates and observers from fifty-one countries and four
international organizations participated. In addressing the Technical Committee for the first time in
his capacity as the new Secretary General of the WCO, Mr. Michel Danet had stressed the need for
responding to the difficulties and problems confronted by developing countries in implementing the
WTO Customs Valuation Agreement. He commended the Technical Committee for the work
achieved toward this end.
1.3 The Technical Committee took note of the activities of the WCO Secretariat with regard to
training and other technical assistance on valuation.  The WCO Secretariat had organized and
participated in the following prog rammes since the Seventh Session:
- National seminars in November 1998 in Bolivia and in February 1999 in Nigeria.
- Regional training course in October 1998 in Korea.
- A joint regional valuation/valuation fraud workshop in India in September 1998
- A joint regional valuation/valuation fraud seminar in Madagascar in February 1999
- two expert missions in November 1998 in Oman and in February 1999 in Gambia
- A national workshop in February 1999 in Gabon.
1.4 The WCO was continuing with its technical as sistance activity in the area of valuation and
was coordinating its activities with that of the WTO Secretariat.  In that connection, the two
Secretariats had just completed recently a mission to Pakistan.
1.5 One of the more important items on the agenda for the Technical Committee at its last session
was the "future direction" of the Technical Committee.  The Technical Committee had convened a
working group on future direction in late March 1999. The mandate of the Working Group was to
develop action plans on the basis of the recommendations which had been adopted by the Technical
Committee at its Seventh Session. The Technical Committee had adopted the recommendations of theG/VAL/M/10
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Working Party which had made a number of useful suggestions for improving the functioning of the
Committee and the Secretariat.  In particular, the Technical Committee had agreed on a new reporting
format. It was agreed that all reports would be more summarized in the future focusing on the
consensus achieved and the main differing views that were expressed during the discussion of an
issue.  References to individual interventions were to be avoided to the extent possible. The
conclusions of the Technical Committee and future action to be taken by the Technical Committeewould be clearly indicated.
1.6 It was also agreed that there should be a new template format for questions submitted to the
Technical Committee in order to facilitate the Technical Committee's discussions.  This template
format would be designed to induce administration s to provide complete and relevant information
relating to the issues raised, such as the facts of the case, any references, any considerations including
potential legal position, the views of the administration on the matter and a proposed outcome.
1.7 And finally, and perhaps most significantly, the Technical Committee had agreed that more
time during the Committee meetings should be allocat ed to practical issues. The Technical Committee
therefore agreed to the concept of "theme" meetings once a year, i.e. its alternate meetings. Such an
approach was considered to be of prime importance for developing country members, especially foradministrations about to implement the Valua tion Agreement and to develop a new valuation
infrastructure. The "theme" meetings would consist of seminar type presentations on practical
valuation issues, an approach which was also designed to formalize the current informal sessions
which were very much appreciated by developing country members. The first such "theme" meeting
would be held in the spring of 2000 and would focus on risk management as it related to customsvaluation.
1.8 On the work concluded, the Technical Committee had adopted a draft case study on the
application of Article 15.4(e) which dealt with the issue of "control" and was based on the revised text
of Explanatory Note 4.1 and on the clauses of an agreement between a parent company and itssubsidiary. Consideration of this draft case study had been postponed, pending reconsideration of the
Explanatory Note 4.1 which among other things further elaborated on the definition of the term
"control" as referred to in the Interpretative  Note to Article 15.4(e). The Technical Committee
considered, in the new case-study, that the parent company exercised direction or restraint over its
subsidiary in respect of the management of positions ownership, voting control and the location ofplaces of business which were of course all essential aspects of management. Therefore, the two
companies were considered to be related.
1.9 A second document on the scope of the term "control" in article 15.4 of the Agreement was
also considered by the Technical Committee. However, in view of the fact that the Technical
Committee had already revised Explanatory Note 4.1 on the basis of which the above related party
transaction case study was adopted, it was felt that sufficient reference material to support "control"issues already existed. Therefore the Technical Committee agreed that no further instrument was
necessary at this time and that the Information Document on "scope of the term control" would be
included in Part I of the Conspectus.
1.10 As regarded examples submitted by Australia and the European Communities concerning the
relationship between paragraphs (c) and (d) of Article 8.1 on royalties and licence fees, there was
general agreement that the Technical Committee had devoted a very long time to the study of the
agenda item (ten Sessions).  Therefore, the Technical Committee had decided to conclude the study
for the time being and to place the issue together  with all the documents associated with the
discussions in Part III of the Conspectus.
1.11 The Secretariat had undertaken a study on valuation declaration forms, and the Technical
Committee had taken note of the Secretariat's analysis of the use of value declarations and in generalG/VAL/M/10
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endorsed the Secretariat's conclusion. The Technical Committee specifically endorsed the Secretariat's
recommendation to administrations to eliminate the need for value declarations by adopting risk
management systems supported by a post clearance audit approach.  In connection with this question,
the Secretariat was also instructed to monitor deve lopments with regard to the G-7 initiative aimed at
streamlining customs documentation requirements.
1.12 As regarded technical issues which are were currently being considered by the Technical
Committee, there were a number of examples submitted by Canada and Venezuela concerning the
meaning of the expressions "related to the goods being valued" and "as a condition of sale of the
goods being valued" in connection with Article 8.1(c). With respect to one of these examples
submitted by the Venezuelan administration, the Technical Committee had endorsed the conclusion
drawn by Venezuela and the Secretariat that where a licence fee must be paid by a buyer to a licensor
in consideration for the right to attach a trademark to goods which were manufactured by a sub-contractor not obliged to make any payment to the licensor, the licence fee was not a condition of sale
of the goods to be valued. However final approv al of this Case Study was postponed pending the
outcome of discussions regarding the two other examples.  With regard to the other examples, the
Secretariat was instructed to consult with Canada and Venezuela with a view to obtaining further
details pertaining to the sales and royalty agreements in question. The revised examples would beconsidered at the Technical Committee's Ninth Session.
1.13 Finally, he informed the Committee that Mr. Vicente of Argentina was unanimously re-
elected Chairman and Ms. V. Brown of the Unite d States was elected Vice-Chairperson of the
Technical Committee. The next meeting of the Technical Committee was scheduled for the 22-26November 1999.
1.14 The Committee took note of the report.
B. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENT
1. Notification of national legislation
2.1 The Chairman recalled that Article 22 of the Agreement required each Member to inform the
Committee of any changes in its laws and regulations relevant to the Agreement and any changes in
the administration of such laws and regulations.  In addition, the Decision on Notification and
Circulation of National Legislation, adopted by the Tokyo Round Committee, required each Member
to notify its legislation to the Committee.
(i) Brazil
2.2 The Chairman drew Members' attention to document G/VAL/N/1/BRA/2 which contained the
Brazilian notification of regulations regarding customs valuation.  Specifically, it contained Decree
No. 2.498, of 13 February 1998;  Ministerial Order No. 28/98 (which regulated the application of
Decree No. 2.498); and Normative Instructions Nos. 16, 17, and 18, of 16 February 1998.
2.3 The representative of the European Communities stated that his delegation had two queries on
Brazil's notification. The first related to the information requirements under the Brazilian legislation.
He took this to be governed by Article 18 which was followed up in a subsequent section of the
document in Annex 2 where there was an indication as to the kind of information needed in respect of
an import declaration. For example, "information concerning catalogue price on a domestic market,
export list price to Brazilian market, export list price to a further market free agreed price".  Looking
at this text, it would seem that the information requirements went beyond what was normally requiredfor the application of valuation rules and could prove to be burdensome to trade.  His delegation
would appreciate having more information from Brazil about the extent of these informationG/VAL/M/10
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requirements. Were they required on a systematic basis, and were they actually essential?  He had one
more question which referred back to the meeting of June 1986 of the Tokyo Round Committee.  It
was noted at that time that Brazil would abolish officially establish minimum values and reference
prices not later than July 1988.  It might be timely at this stage when looking at Article 21 of this
legislation which seemed to be relevant in this respect, to ask whether Brazil  provided for the
establishment of minimum import prices.  The notification would seem to indicate that Brazil did,which would also be consistent with reports by certain exporters to Brazil.
2.4 The representative of the United States associated his delegation with the questions by the
European Communities.2.5 The representative of Costa Rica expressed concern regarding certain aspects of Brazil's
legislation, in particular the classification of tax havens. Costa Rica had experienced a problem during
the last year caused by the detention by Brazilia n customs authorities of shipments with components
coming from Costa Rica on the grounds that Costa Rica was a tax haven which did not carry out
checks on value declarations.  Article 2 of Decree No. 2498 provided that checks on customs values
would be carried out on a selective basis, as confirmed by normative instruction No. 16 of
16 February 1998 supplementing that Decree.  What were the criteria on the basis of which theBrazilian customs administration made the selection referred to in its legislation, and specifically, was
one of these criteria the classification of a country as a tax haven?  Costa Rica requested Brazil to
explain the legal basis for the detention of goods by customs; the criteria for classifying a country as a
tax haven; and whether all countries classified as tax havens were subject to the same detention
process as Costa Rica?  These questions would be submitted in writing.
2.6 The representative of Brazil, while reserving the right to receive the questions in writing,
responded preliminarily that Brazil’s legislation was entirely consistent with the Customs Valuation
Agreement.  On the question specifically of elements which comprised the customs value, which was
also linked to the question of Article 12 on release of goods, he stated that Brazil used the expression"lower than a value considered reasonable for identical or similar goods".  This probably was the
formula which the United States used in its own legislation and left to the discretion of the customs
authorities the determination of what was "reasonable".  Brazil did not use minimum prices for
customs valuation purposes, instead Brazil used reasonable prices, which were what the European
Communities used also for the purpose of combatting fraud and circumvention.
2.7 The Chairman stated that any questions to the Brazilian delegation should be submitted before
31 October 19991.
2.8 The Committee agreed to revert to the Brazilian legislation at the next meeting.
(ii) Iceland
2.9 The Chairman drew Members' attention to Iceland's responses to the checklist of issues
contained in G/VAL/N/2/ISL/1.
2.10 The Committee agreed to conclude the examination of Iceland's checklist of issues.
(iii) Israel
2.11 The Chairman stated that at the previous meeting of the Committee, Israel's notification,
contained in G/VAL/N/1/ISR/1 was examined.  The representative of the European Communities had
                                                     
1 Questions from Costa Rica were circulated in document G/VAL/W/35.G/VAL/M/10
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raised two points:  the first referring to Ar ticle 8.1(b)iv of the Agreement, corresponding to
Article 33(a)(i)d of the Israeli legislation;  and the second referring again to Article 33 of the Israeli
legislation where the term "projected" was used.  It was agreed to revert to this legislation at this
meeting.
2.12 The representative of Israel stated that a full answer would be submitted in writing in the near
future. As notified by Israel on 22 April 1998, Israel had adopted a new law on customs valuation
which had entered into force on 1 January 1998.  The new law was in full conformity with the WTO
Agreement on Customs Valuation. Unfortunately, a number of mistakes had occurred in the
translation of the law from Hebrew to English, which his authorities believed to be the source of the
confusion which had prompted the European Communities to raise these questions. According to his
authorities, and with reference to the points  raised by the European Communities, the WTO
Agreement on Customs Valuation had been adopted verbatim into the Israeli Law.  The Hebrewversion prevailed, however,   his authorities were going to make the necessary corrections to the
English translation
2.
2.13 The Committee agreed to revert to this legislation at the next meeting.
(iv) Latvia
2.14 The Chairman drew the Committee's attention to documents G/VAL/N/1/LVA/1 and
G/VAL/N/2/LVA/1 which contained, in the former, the regulations of the Latvian Cabinet of
Ministers, procedures for the calculation of the customs value of goods, and the Customs Law;  and in
the latter, the responses to the Checklist of Issues.
2.15 The Committee agreed to conclude the examination of the legislation of Latvia.
(v) Morocco
2.16 The Chairman stated that at the last meeting, the Committee had taken note of the Moroccan
legislation circulated in G/VAL/N/1/MAR/1.  It was agreed to revert to this legislation at this meeting.
Since then, Morocco had circulated the final text of its national legislation in
G/VAL/N/1/MAR/1/Rev.1 and Corr.1 and its responses to the Checklist of Issues in
G/VAL/N/2/MAR/2.  At the last meeting, the Committee had also heard a report from the delegation
of Morocco on the status of its implementation of  officially-established minimum values for the
products listed in G/VAL/W/27.  In the Decision laying down the terms and conditions of Morocco's
invocation of paragraph 2 of Annex III, it was agreed that Morocco would make such a report at each
meeting.
2.17 The representative of Morocco reaffirmed Morocco’s commitment to implement strictly the
Agreement on Customs Valuation and to respect it s commitments within the established deadlines.
Since the last meeting of the Committee, there had been no change in the situation and thisnotification was still in effect.
2.18 The representative of India observed that page 8 of document G/VAL/N/1/MAR/1/Rev.1
contained a provision of the Moroccan legislation incorporating one of the Ministerial Decisions
which related to customs administration having reasons to doubt the truth or accuracy of anystatement, document or declaration made by the importer for customs valuation purposes.  India had
noted that the legislation of Iceland had also a similar provision and observed that this was a very
welcome trend. It had been India’s stand that this Ministerial Decision was as valid and as legal as the
main Agreement itself and should have been part of the Agreement. Page 9 of the same document
                                                     
2 Circulated as G/VAL/N/1/ISR/1/Corr.1G/VAL/M/10
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G/VAL/N/1/MAR/1/Rev.1 containe d a provision which set up an  "Advisory Committee on Custom
Valuation" to give advisory opinion on disputes.  India wished to know whether this Advisory
Committee was in addition to the appellate mechanism which every Member was required to set up in
light of Article 11.2 of the  Agreement, where an initial right of appeal was required to be provided
within the customs administration itself and a second right of appeal to a judicial body.  India sought
clarification as to whether Morocco had a system of two appeals, and what exactly the AdvisoryCommittee was required to do in case of a dispute.
2.19 The representative of Morocco requested that the questions be submitted in writing.
2.20 The representative of the European Communities stated that his delegation had no comments
on Morocco’s legislation but wished to refer to I ndia’s observations regarding the article in the
Moroccan legislation which incorporated the decision relating to cases where customs administrationhad doubts as to the truth or accuracy of information. It was not a bad thing for countries to
incorporate this decision into their legislation. However, he pointed out that this article did not
incorporate the full wording of the decision. There was a very small difference but it could be an
important difference and his delegation simply wished to point it out at this stage, for the benefit of
countries who might be thinking of doing the same .  The difference was the following: the relevant
provision of Morocco’s legislation stated that when information was requested, but was not made
available in the appropriate time or if it was not entirely satisfactory, the customs value of the
imported goods "cannot be determined under the provisions of the transaction value". In fact, the
Ministerial Decision stated that in such a case, the custom value may not be determined under the
provisions of  Article 1 of the Agreement.
2.21 The representative of India pointed out that the Ministerial Decision mentioned the words
"cannot be determined".  The language in the Moro ccan legislation was the same as in the Ministerial
Decision.
2.22 The representative of the European Communities stated that the text of the Decision
Regarding Cases Where Administrations have Reasons to Doubt the Truth or Accuracy of the
Declared Value stated that: "If in  the absence of a response or after receiving further information the
administration has reasonable doubts it may be deemed that the custom value of the imported goods
cannot be determined under the provisions of Article 1."  The comment he had made on Morocco’slegislation was that Morocco’s transposition of this Decision into a legal form was obviously not
verbatim.  It had perhaps been put into too strong a form,  perhaps not fully intended by the text of
that Decision. But he thought that the point he had made was a valid one with reference to the actual
text of the decision.
2.23 The Chairman stated that any questions to the Moroccan delegation should be submitted in
writing before 31 October 1999, and the Committee agreed to revert to this legislation at the next
meeting.(vi) Panama
2.24 The Chairman stated that at the last meeting, the Committee had examined the Panamanian
legislation and the responses to the Checklist of  Issues, contained in documents G/VAL/N/1/PAN/1
and G/VAL/N/2/PAN/1, respectively.  There was a request from the delegation of India that this
notification be translated into English. He reminded Members that according to the Rules of
Procedure concerning notification of legislation, Members had the right to submit their legislation in
any one of the three official languages of the WTO.  The texts of the legislations were not
automatically translated into the other languages, but were done so only at the request of a Member.In this case, there was such a request, so the text of the legislation had been translated and circulated
in English.  The delegation of India had also asked whether there was any difference between twoG/VAL/M/10
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Decisions in the legislation - one which entruste d the Ministry of Finance and the Treasury with
carrying out a modernization and decentralization programme in order to reorganize and simplify
customs procedures, and the second on modernization and administrative decentralization for the
purpose of simplifying customs procedures.
2.25 The representative of India stated that her delegation had not received any response thus far.
2.26 The Committee agreed to revert to this legislation at the next meeting.
(vii) Poland
2.27 The Chairman drew Members' attention to the legislation from Poland contained in document
G/VAL/N/1/POL/1.  This document contained the Customs Code of 9 January 1997;  the Regulation
of the Council of Ministers on the detailed procedure of determining customs valuation of importedgoods;  the Regulation of the Minister of Finance on principles of applying the rate of exchange of
foreign currencies;  and the Regulation of the President of the Central Customs Office "Explanations
Concerning Customs Valuation".
2.28 The Committee agreed to conclude the examination of the legislation of Poland.
(viii) Suriname
2.29 The Chairman drew Members' attention to document G/VAL/N/1/SUR/1 which contained the
customs valuation legislation of Suriname, namely the Customs Duties Tariff Act No. S.B. 1995
no. 111, dated 28 December 1995.
2.30 The Committee agreed to conclude the examination of the legislation of Suriname.
(ix) Trinidad and Tobago
2.31 The Chairman drew Members' attention to document G/VAL/N/1/TTO/1 which contained the
legislation of the Republic of Trinidad and Toba go implementing the Agreement, namely the Sixth
Schedule which was contained in paragraph 23 of the Customs Act, Chapter 78:01 of the Republic of
Trinidad and Tobago.  In addition, Trinidad and Tobago had notified its responses to the Checklist of
Issues in G/VAL/N/2/TTO/1.
2.32 The Committee agreed to conclude the examination of the legislation of Trinidad and Tobago.
2. Notification that national legislation under the Tokyo Round Customs Valuation
Agreement remains valid under the WTO Customs Valuation Agreement.
2.33 The Chairman stated that at  its meeting in May 1995, the Committee had agreed on
procedures for the notification and circulation of national legislation for Members who were Tokyo
Round signatories and whose legislation had already been examined (paragraph 34(1) and 35 ofG/VAL/M/1).  Since the last meeting, there had been no such notifications.
2.34 He also noted that there were still two Members, Botswana and Lesotho, which had notified
legislation under the Tokyo Round Agreement and which have not indicated the status of thatnotification in this Committee.  The previous Chairman had written to Members in November 1997
urging them to notify the situation of their legislati on.  He proposed that a similar letter be written to
these two Members by the new Chairman.G/VAL/M/10
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2.35 The Committee so agreed.
2.36 The Chairman urged those Members who had not made notifications on legislation as well as
replies to the Checklist of Issues, to submit the required notification and replies as soon as possible.
2.37 The Committee took note of the information.
3. Notification made by developing country members
2.38 The Chairman drew the Committee's attenti on to document G/VAL/2/Rev.8 which contained
the list of all Members who had invoked special and differential treatment provisions under the
Agreement.  It was a revision of the previous version of this document to add the Maldives which hadrecently notified its invocation of the five-year delay period in accordance with Article 20.1.  Inaddition, the Maldives and Senegal had notified invocation of paragraphs 2, 3 and 4 of Annex III indocuments WT/Let/283 and WT/Let/285.  For the Maldives, the five-year delay had begun from thedate on which it had become a WTO Member, 31 May 1995.  The document also listed thosedeveloping country Members which might still retain some of the special and differential treatmentprovisions according to the Decision on "Continued Application under the WTO Customs ValuationAgreement on Invocations of Provisions for Developing Countries for Delayed Application andReservations under the Customs Valuation Agreement 1979" (WT/L/38).
2.39 The representative of the European Communities referring to section two of this document
containing information regarding carry-over reservatio ns, stated that he wanted to make it clear that
the structure of this paragraph did not say which reservations applied to which countries.  Also, it didnot say that all of these countries applied all these reservations. If necessary, the Committee might
need to come back to this document when it discussed the Fourth Annual Review.
2.40 The representative of India noted that this was a document prepared by the Secretariat, on the
Secretariat's own responsibility. The fact of a Member listed thereunder having a reservation under
either of the three paragraphs listed in this section or all of them was a matter of interpretation and it
might not be appropriate to discuss it at this time.  She also noted that the Secretariat had used the
words "paragraphs 1, 2 and 3" under that section.
2.41 In response to a question raised by the representative of the WCO concerning time limits for
notifying reservations under paragraph 1 of Article 20 of the Customs Valuation Agreement, the
Secretariat stated that under Article 20.1, the delay-period for a developing country Member invoking
such a reservation was for a maximum of five years from the date of entry into force of theAgreement for such a Member.  As a result, it would not be useful to notify such a reservation after
the five years were over.
(i) Notification by Peru
2.42 The Chairman draw the Committee's attenti on to the communication from the delegation of
Peru contained in document G/VAL/W/31 which comm unicated the Government of Peru's invocation
of paragraph 1 of Annex III of the Agreement.  Paragraph 1 of Annex III read as followed:
2.43 "The five-year delay in the application of the provisions of the Agreement by developing
country Members provided for in paragraph 1 of Article 20 may, in practice, be insufficient for certain
developing country Members.  In such cases a developing country Member may request before the
end of the period referred to in paragraph 1 of Article 20 an extension of such period, it being
understood that the Members will give sympathetic consideration to such a request in cases where thedeveloping country Member in question can show good cause."G/VAL/M/10
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2.44 Specifically, in its notification, the Government of Peru was requesting an extension of the
five-year delay period, which expired on 1 April 1999, for another two years.
2.45 The representative of Peru stated that as Members were aware, Peru had submitted a request
for an extension of the delay in the application of the WTO Customs Valuation Agreement.  The
five-year delay period had lapsed, for Peru, on 1 April 1999. This in itself set Peru apart, from other
developing country Members of the WTO, who were  to begin applying the Agreement as from the
year 2000, a situation which had caused certain questions regarding the legal basis of Peru's request.
2.46 Peru had accepted the Agreement on Implementation of Article VII of the GATT, also known
as the Tokyo Round Customs Valuation Agreement on 2 March 1994.  Upon signing and accepting
this Agreement Peru had invoked, inter alia , paragraph 1 of Article 21 concerning the five-year delay
in the application of the provisions of the Agreement.  Thus, the Agreement was to be applied by Peru
on 1 April 1999.  When the WTO Agreement on Customs Valuation, which was to replace theTokyo Round Agreement on Customs Valuation, came into force, the WTO General Council adopted
the Decision of 31 January 1995 entitled "Continued Application under the WTO Customs Valuation
Agreement of Invocations of Provisions for Developing Countries for Delayed Application and
Reservations under the Customs Valuation Agreement 1979".  This Decision provided, inter alia , that
the period for delayed application, invoked by a developing country party under paragraph 1 ofArticle 21 of the Tokyo Round Customs Valuation Agreement would continue under the WTO
Customs Valuation Agreement for the developing country party concerned.  By virtue of this General
Council Decision, the five-year period for delayed application of the Agreement, which began under
the previous Agreement for Peru, continued to run under the new Agreement.  Since that five-year
period had begun in 1994, it would lapse in 1999.  The purpose of the Decision was to preserve, underthe new Agreement, the rights of the developing countries that were also parties to the previous
Agreement, these rights having naturally been recognized for all of the developing country Members
of the WTO in the new Agreement on Customs Valuation.
2.47 The Tokyo Round Agreement on Customs Valuation also had a Protocol.  Paragraph 2 of
Section I of that Protocol recognized that the five-y ear delay in the application of the provisions of the
Agreement might, in practice, be insufficient for certain developing countries.  In such cases a
developing country party to the Agreement could re quest before the end of the delay an extension of
such period.  Annex III of the current WTO Agreement on Customs Valuation contained an identical
provision.
2.48 Although not expressly mentioned in the General Council Decision referred to above, the
possibility of requesting an extension of the five-year period was implicitly provided for, in that it was
not explicitly ruled out.  In other words, if the delay period was to continue, the possibility of
requesting its extension should also continue, since it was a principle of legal interpretation that the
subsidiary matter (the extension) must follow the principal matter (the five-year delay period).  Any
other interpretation would amount to discrimination against developing country Members of the WTOwhich were parties to the former Customs Valuation Agreement.  Peru would then be in the unique
position of not being able to use the extension mechanism made available to the other developing
countries parties to the Tokyo Round Customs Valuation Agreement and now also available to the
other developing countries parties to the WTO Agreement on Customs Valuation.
2.49 Moreover, such an interpretation of the General Council Decision would be contrary to its
purpose, i.e. to protect the rights that developing country Members had under the preceding
Agreement and to avoid discrimination against WTO Members that were parties to the former
Customs Valuation Agreement.  There were no legal or practical grounds for such discrimination, norG/VAL/M/10
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was there any evidence that this was the express inte ntion of the authors of the Decision.  In any case
it would be illogical not to have the same rights when the purpose was one and the same.
2.50 In short, the request for extension submitted by Peru was covered by Section I, paragraph 2 of
the Protocol of the Tokyo Round Agreement on Customs Valuation, corresponding to Annex III,
paragraph 1 of the WTO Agreement on Customs Valuation, which continued to apply for thedeveloping countries that were parties to the previous Agreement on the basis of the interpretation of
the General Council Decision of 31 January 1995.
2.51 Peru was aware that the special nature of the case thus presented was apt to create a certain
amount of confusion and doubt as to its legal basis,  and this was why her delegation wanted to explain
the legal arguments underlying Peru’s request for an extension.
2.52 Having done so, she wished to add that it was not Peru's intention to provoke a legal
discussion within the Committee regarding the request, particularly since the main objective of the
provisions relating to the developing country Members was to ensure treatment that was adapted to
the difficulties they might encounter in fully applying the Agreement.  It was on this objective that the
Committee should be focusing its attention.
2.53 The representative of Peru stressed that Peru was a country that respected its international
commitments, including those assumed in this Organization, and it was also a country that was
convinced of the benefits for development of free trade and trade facilitation.  Thus, Peru had been
making serious and extensive efforts over the past years to prepare for the application of the WTOAgreement on Customs Valuation.  These efforts had included a far-reaching reform process in the
Peruvian customs administration to convert it into a modern service whose principal objectives were
facilitation of foreign trade operations, timely and efficient collection of foreign trade taxes, and
prevention and suppression of smuggling and customs tax fraud.
2.54 There had also been an increase in imports presenting a risk of valuation fraud, and therefore
the Peruvian customs had been working hard to avoid possible cases of under-valuation in customs
operations.  However, despite the progress made, the reforms had not yet been completed, and there
were further targets to be achieved in order to consolidate the changes introduced.  These targets,
which were outlined in the background section of Peru's request, had a timetable which her delegationdid not intend to discuss in detail at this point, but which could be examined by Members.
2.55 Peru considered that in order to comply full y and properly with the provisions of the WTO
Agreement on Customs Valuation, Peru had to complete the above-mentioned reform process.  This
would require postponing the application of the Agr eement for a period of two years.  These reforms
included: the complete adaptation of national legislation to the Agreement; preparation of the
necessary infrastructure; implementation of a quality control system;  and above all efforts to trainpersonnel and subsequent dissemination of the Agreement among users.
2.56 Peru was not yet in a position to fully apply the Agreement, and it was this exceptional
circumstance that had resulted in the need to request the extension of the delay in application.  Peru
had opted for this course because it would have been irresponsible not to have done so, given thatPeru was not yet in a position to fully assume its obligations.  This was why Peru thought that it
would be useful to explain to Members, in a sincere and transparent manner, the real problems facing
Peru and the efforts being made to tackle them.  Peru appreciated the Committee’s understanding in
this respect.  Additionally, as an indication of Peru's seriousness in this matter, her authorities had sent
to Geneva a delegation of technical authorities from the different sectors involved who, over the nextfew days, would be able to explain to interested Members the details of Peru's application, the work
being done in this respect and the timetable for that work.  In concluding this statement, she reiteratedG/VAL/M/10
Page 12
Peru's firm intention to continue to work hard to ensure the full application of the provisions of the
Agreement by the end of the additional period requested.
2.57 The representative of Thailand stated that Peru was in a rather unique situation as it was a
signatory of the Tokyo Round Agreement on Custom s Valuation, and the delay period had began as
of that moment, and at the same time, Peru had not invoked the delay period under the WTO CustomsValuation Agreement.  He had taken note of the po int that Members should examine not so much the
legal arguments concerning this request or the impli cations that such an examination would entail, but
the main objective of the Agreement which was to provide appropriate treatment to those Members
which needed this flexibility.  The Agreement did in fact provide flexibility for those developing
country Members finding themselves in a situation where the delay period was insufficient.  The
Agreement clearly stated that sympathetic consideration shall be given to those Members if that
particular Member could show good cause. But with out prejudice to the reasons put forward by Peru
for this request, his delegation expressed its full understanding.  He hoped that fruitful consultations
could take place, and that sympathetic consideration could be given to this request in order that the
necessary time period might be provided to Peru in order for the reforms to be completed fully.
Additionally, his delegation recognized the serious and enormous efforts of Peru in undertaking the
necessary reforms and while lending its support to this request, also urged Peru to try and completethe reforms in time, perhaps even earlier than the requested extension.
2.58 The representative of the United States noted that with regard to issues dealt within the WTO,
implementation deadlines were of paramount importance. His delegation had examined Peru’s
request,  but did not share the suggestion with regard to the legal basis for the request.  His delegationwas, however, ready to undertake the consultations n ecessary to address the situation that Peru was
now in.
2.59 The representative of Canada stated that his delegation had a number of questions about the
legal form and technicalities of Peru's request. However, at this stage, Canada’s main focus would be
on the merits of the request itself both in terms of the reasons for the request and the plans Peru would
have of moving towards full implementation during any extension period that might be given.
Therefore, Canada was prepared to enter into consultations with Peru.
2.60 The representative of Brazil stated that his authorities had examined the request submitted by
Peru, and were convinced that the concrete reasons given for the requested extension were well-
supported.  It was apparent that the Peruvian customs administration was clearly involved in a major
re-organization programme which needed more time to be concluded.
2.61 The representative of Colombia stated that as indicated by the representative of Canada, his
delegation wished to consider this matter from the point of view of its merit. As concerned the legal
basis, Colombia had not thoroughly studied this matter but thought that it was strange that Peru wouldnot have the right to ask for an extension.  From the previous agenda item, the Committee had been
informed that more than fifty Members had asked for a delay in the application of the WTO Customs
Valuation Agreement and many Members had the right to ask for a further delay, if the necessary
conditions existed. Furthermore, he wished to echo what Peru had said to the effect that Peru
respected its international commitments.  Colombia was well aware of this since Colombia and Peru
were trading partners in integration agreements, and Colombia had noted Peru's respect for its
international commitments. The fact that Peru wa s requesting an extension to a commitment meant
that it was having problems in implementing it.  Customs matters were discussed in various fora in
WTO, including the Working Party on Preshipment Inspection, the Council for Trade in Goods where
trade facilitation was discussed, and in this Committee. It was a subject which came up time andagain.  It concerned the structural change in customs for developing countries which would enable
them to implement their commitments in customs matters. As Peru had pointed out, it was already in
the final stages of modifying the customs administration and had committed itself to implementing theG/VAL/M/10
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WTO methods of valuation.  Consequently, Colomb ia viewed with sympathy this request for an
extension.  Colombia believed that Peru had presented valid arguments, and within two years Peru
would be in a measure to fully implement the Customs Valuation Agreement.
2.62 The representative of the European Communities stated that like the United States, his
delegation considered implementation deadlines of paramount importance. However, his delegation
wished to associate itself fully with the remarks of the representative of Canada.  His delegation was
quite impressed with the preparations Peru had actually made, and in fact, felt that Peru might be
underestimating its own capabilities. His delegation looked forward to being associated with
consultations on this issue with Peru.
2.63 The representative of Ecuador  stated that, in view of the variety of comments made during
this meeting, his delegation felt that the Committee should give necessary importance to this request
and react favourably.  He supported Colombia's comments on the important work carried out by the
Peruvian authorities in reforming the customs administration, and believed that Peru was on the
proper path.
2.64 The representative of Australia stated that her delegation was still considering the issues and
expressed interest in discussing this matter further with Peru.2.65 The representative of New Zealand thanked the delegation of Peru for being willing to enter
into further discussions on this issue. Like the United States and the European Communities, her
delegation considered implementation deadlines to be a paramount importance.  As a result, herdelegation was slightly disappointed to receive the request for an extension from Peru. However, her
delegation had noted the reasons for delayed implementation of the Customs Valuation Agreement,
and would be willing to explore with Peru the requested extension.
2.66 The representative of Venezuela supported Peru's request.  Venezuela agreed with the points
made by Thailand, Colombia, Ecuador and Brazil, pertaining to the conditions of developing country
Members and the special and differential treatment for these Members in the WTO.
2.67 The representative of Philippines stated that without dwelling on the legal basis of this
request, although it was very important, her delegation wished to look into the request on the merits of
the case.  Her delegation had noted in a previous information session the enormous reform being
undertaken by the Peruvian customs authorities, and it was on that basis that the Philippines wished to
consider this request.
2.68 The representative of India stated that his delegation had noted the reform programme of Peru
and appreciated Peru's difficulties in implementi ng the Customs Valuation Agreement.  India wished
to join in the consultations.
2.69 The representative of Japan stated that it was clear that the situation of Peru was very unique
and Japan was of the view that sympathetic consideration was necessary, and that consultations were
required.
2.70 The representative of Korea  stated that his delegation wished to join in the consultations.
During those consultations, his delegation wished to hear views from the international organizations
who had provided technical assistance to Peru.
2.71 The Chairman proposed that the Committee take note of  all the statements.  He invited the
delegations concerned to hold consultations and to inform the next Chairman of the results of those
consultations so as to be able to revert to this matter, if necessary, at the next meeting or later.G/VAL/M/10
Page 14
2.72 The Committee so agreed.
C. INFORMATION ON THE APPLICATION  OF  DECISIONS OF THE COMMITTEE ON CUSTOMS
VALUATION
3.1 The Chairman stated that under this agenda item the Committee took note of any new
notifications of application of the decisions of the Committee on Customs Valuation 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 adopted by the Committee and contained in
document G/VAL/5.  Since the last meeting there had been no such notifications.
3.2 The Committee took note of the information.
D. TECHNICAL ASSISTANCE
1. Information on Technical Assistance
4.1 The Chairman stated that, under this item, there were two sub-items.  The first was
information on technical assistance which was contained in document G/VAL/8/Add.5.  This
document provided additional information on technical assistance activities already conducted and to
be conducted by WTO.  The second sub-item Article: 20.3 "technical assistance activities" had been
added to the Agenda following agreement by the Committee at the October 1996 and April 1997
meetings.
4.2 The representative of Canada recalled that in a previous informal meeting of the Committee,
Canada had identified some of the technical assistance that Canada had provided on customs
valuation.  Canada was distributing a paper3 at this meeting which summarized that statement and was
only being provided for information purposes.  Also, only for information, Canada had attached tothat document a summary of the current APEC project on customs valuation.  In doing this, Canada
had wished to indicate that, as the Committee conti nued to think about how to improve the delivery of
technical assistance, some of the ideas that had ev olved in APEC in terms of developing an overall
game plan, in terms of developing various phases, all directed towards the full and successful
implementation of the Customs Valuation Agreement, might be ideas that the Committee might wishto keep in mind.
4.3 The representative of United States informed the Committee that his delegation had made a
factual submission4 in regard to its recent activities in providing technical assistance.
4.4 The representative of Colombia requested that the final letter on technical assistance which
had been sent to international organizations be distributed with a list of the addressees.4.5 The Chairman stated that the Secretariat could give this information to Colombia
immediately, and would distribute it in general to all Committee Members.4.6 The representative of the European Communities stated that it would be useful for all
Members to give more information on what was happening in the field of technical assistance.4.7 The Committee took note of the statements.
                                                     
3 Circulated subsequently as G/VAL/W/37.
4 Circulated subsequently as G/VAL/W/36.G/VAL/M/10
Page 15
2. Article 20.3: Technical Assistance Activities
4.8 The Chairman stated that under this agenda item, the Secretariat  had circulated, a document
under G/VAL/W/30 which listed the technical assistance priorities in order to help Members  to
identify the gaps in activities in implementation of the Agreement.  In addition, Mr. Hoda, Deputy
Director-General of the WTO, had sent a letter out to international organizations working in the areaof customs matters.  This letter was meant to draw the attention of these organizations to the
Committee's activities with regard to technical assistance in customs matters and, in particular, to
encourage them to take into account, in their activities, the needs expressed by developing country
members in their responses to the Chairman's request for information, contained in document
G/VAL/W/27/Rev.1.  This letter was sent to The African Development Bank, The Asian
Development Bank, The European Bank for Construction and Development, The Inter-American
Development Bank, The International Monetary Fund, UNCTAD, The World Bank and the WorldCustoms Organization.  There were now 53 developing countries that had invoked the special and
differential provisions under paragraph 1 of Article 20 , which allowed them to delay application of
the Agreement for a period not exceeding five years.  For twenty-eight of these Members the delay
period would expire on 1 January 2000, which was close. For another twenty, the end of the year 2000
would signal the end of the delay period and for another five, the end of the year 2001 would signal
the expiration of the delay period.  Furthermore, there were twenty-seven Members which had not
notified their legislation nor had invoked the five-year delay period.  As Members were reminded at
the last meeting, Members having taken this delay period should be using this time to prepare for
implementation of the WTO Agreement.  Paragraph 3 of Article 20 also contained provisions for the
furnishing of technical assistance on a request basis, which developing country Members could utilizefor this purpose.
4.9 The Committee took note of the statement.
(i) Report from the Secretariat on its activities
4.10 The Secretariat updated the Committee on the activities of the Market Access Division
programme on technical assistance.  Following the last report that was made to the Committee, the
programme had been quite active. In January 1999, letters explaining the programme were sent again
by the Deputy Director-General, Mr. Hoda to Members which were included under the second phase
of the programme, i.e. Members which had delayed implementation of the Agreement and wereexpected to apply during the year 2000.  She recalled that the first phase was for those Members
which were supposed to apply by 1 January 2000.  In addition, reminder letters were sent to those
Members which had been targeted in the first phase of the programme and which had not previously
responded or which had responded but which had then not followed through on their initial request.
Since the last report, five more missions to Ba ngladesh, Bolivia, Cuba, Pakistan and Uruguay had
been carried out and two more were being carried out at the present time, one in Costa Rica and one in
Ghana, which amounted to seven missions being conducted since January 1999.  In total,  17 missionshad been undertaken since the programme began in August 1998.  In addition, the Secretariat had
received another 12 requests of which 10 were actively in the pipeline and it was hoped to carry out
these missions between now and August 1999.  The technical consultants who had conducted these
missions had prepared mission reports at the end of each mission which included information  on the
activities carried out during the week, their findings and recommendations.  These reports were sent tothe Members concerned to assist then in guiding their follow-up work and, in addition, copies were
kept in the Secretariat and were available if delegations wished to consult them.
4.11 The representative of India stated that he was encouraged by the Chairman's comment that
possibly Members could identify the gaps which existed in the technical assistance which was
provided. India was in a unique position to fill the gaps because India was one of the very few
countries who was a developing country, whose dependence on customs revenue was very high, andG/VAL/M/10
Page 16
who had been implementing this legislation for the last ten years.   In addition, he wished to indicate
the appreciation of the assistance being provided by the WCO and WTO. Particularly, the WCO
Directorate on Valuation had been doing a commendable job in providing assistance in drafting
legislation and also in making developing country  Members understand the rules of valuation which
were complicated.  A lot was being done, but more was required in this regard, particularly in the
context of legislation.  As India had pointed out earlier, the Ministerial Decision where customs haddoubts about the truth or accuracy of the declared value, needed to be part of the law of the countries,
and in fact, it needed to be part of the Agreement. This was very important for those Members who
relied largely on customs revenue.  On the aspect of burden of proof, he understood that some
developing countries, for example Pakistan and Malaysia, had a provision in their law which provided
that when a doubt was raised, the burden of proof was on the importer who was suspected of
undervaluing.   He believed that, in the context of transfer pricing, many developed countries also had
similar provisions.  This was an area that needed to be looked into; whether valuation laws shouldhave a clause for burden of proof.  On the question of training, India was having extensive training
under the WCO programmes.  In fact, recently Indi a had assisted the WCO in a training programme
conducted in India, for officers from other developing countries.  India itself had also conducted a
training programme for the SAARC Member countr ies on how to implement the Customs Valuation
Agreement.  Though, as a developing country India was not obliged to assist, India had felt that itsexperience was very relevant in this regard because the kind of problems India faced were similar to
those faced by other  participants. For this reason, he requested that both the WTO and the WCO
when designing their training programme think about co-opting resource personnel from countries
like India. A third aspect that he wished to mention was in the context of the requirement under
Article 23. One of the elements lacking in Article 23 was when customs doubted the truth or accuracyof the value in the importing country and wished to know the value declared in the exporting country.
There was no provision under which a Member could request this information. The Ministerial
Decision as well as the Nairobi Convention stated that the different countries could bilaterally agree
between each other and provide a forum for obtaining this information. But Members would
appreciate the complexity of having bilateral agreements between 134 Members and the effectivenessof such a system was questionable. India had flagged this issue elsewhere, i.e. that there should be a
multilateral agreement, maybe as a part of the Customs Valuation Agreement itself which enabled
developing country customs administrations to ask for such information from the countries from
where the goods were originating.  Such an agreement, would go a long way in removing the
hesitation of developing countries vis-à-vis  the Agreement as they could be sure that the declared
value was correct and reflected the transaction value.  Otherwise, the current practice of accepting the
declared value without knowing if the value wa s the true and correct transaction value would
continue.  Additionally, a new concern was appearing in the context of electronic money payment.  If
the money was paid in encryptic form, developing countries might not have the necessary
technological capability to ascertain how much m oney had been paid for a particular consignment.
This was an issue that  needed to be discussed and technological assistance in this area was very much
required.  Technical assistance programmes should not only be the responsibility of the WCO as wasthe case under the Tokyo Round Agreement, the WTO should involve itself in providing the
necessary technical assistance to developing countries to ensure smooth transition.
4.12 The representative of the United States stated that he was not sure as to the relevance of some
of the comments with regard to technical assistance.  Nonetheless, he wished to respond to one of the
comments that was just made with regard to the is sue of seeking a multilateral solution with regard to
export values.  He noted many countries, including the United States, did not routinely require export
declarations, and therefore would have immense concerns about India's proposal which would slow
down trade.
4.13 The Committee took note of the statements.G/VAL/M/10
Page 17
E. FOURTH ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION OF THE CUSTOMS
VALUATION AGREEMENT
5.1 The Chairman recalled that the Committee had adopted the text contained in G/VAL/W/29 on
an ad referendum basis, taking into account the comments made at the November 1998 meeting.
Final adoption was pending clarification of a matte r raised by the delegation of India concerning
paragraph I(b)(iii) of the document.
5.2 The representative of Mexico enquired as to when the final version of the document,
reflecting the discussion of the November 1998 meeting of the Committee, was going to be issued.5.3 The representative of India stated that his delegation was very concerned by this matter.  His
delegation had pointed out earlier that India's reservation had not been properly recorded. In the
meantime, India had had some discussions with the Secretariat, and had examined previous
documents in order to trace India's reservation which was made as early as 11 July 1980.  He wished
to state India's position in this regard.  Document G/VAL/W/1, dated 28 April 1995, reproduced the
decisions adopted by the Tokyo Round Committee concerning the interpretation and administration of
the Agreement.  This information was compiled in order to assist the Members in considering Agenda
Item I of the Committee's first meeting on 5 May 1995.  Under paragraph B.4, on pages 5 and 6, the
said document clearly outlined two kinds of reservations:  reservations which were made under
Article 23 of the Tokyo Round Agreement by a government accepting the Agreement before
1 January 1981.  Such a reservation was deemed to be accepted unless any particular party notified to
the contrary by 1 February 1981.  The other kind of reservation that this document referred to wasunder paragraph 3 of the Protocol regarding mini mal customs values.  Document G/VAL/M/1, dated
11 August 1995, contained the minutes of the first meeting of the WTO Committee on Customs
Valuation which was held on 12 May 1995.  Under paragraph J.75 on page 11 of this document, it
was clearly recorded "that the Chairman proposed that the Committee adopt  decision B4 on
reservations under the Agreement with relevant changes to Article numbers or dates."  Thesubsequent paragraph, J.76,  on the same page 11, indicated that the Committee so agreed.  The
implication of this was that all the reservatio ns that were made under the Tokyo Round, whether
under Article 23 or the Protocol, were  adopted at the very first meeting of this Committee.  India had,
in accordance with paragraph C of its own terms of acceptance of the Agreement on 11 July 1980,
continued to reserve the right to retain fixed tariff values.  This was reflected in pages 21 and 27 ofdocument L/6212.  India had provided copies of this document to the Secretariat shortly before this
meeting and requested their circulation. The position of India's reservation regarding the right to retain
fixed tariff values was discussed at subsequent meetings and the minutes bear evidence to this.  India's
system of  fixing tariff values was slightly different to minimum tariff values. The concept of
minimum value was that if there was a consignment with a higher value and a minimum value then
customs would accept the higher value for customs purposes.  However, a fixed tariff value was
almost like a maximum value also, and duties were collected on the basis of that tariff value.  In away, it was not very different from the practice of the European Community concerning the fixing of
standard values for some items of vegetable and fruit.  On the basis of these factual records of the
earlier Committee and this Committee, where the Indian reservation had been clearly noted, India had
requested that the Secretariat should reflect India's reservation to fix tariff values in all the documents
appropriately.
5.4 The representative of the United States stated that India had not sought agreement on terms
and conditions with regard to such a reservation, therefore it did not have a valid reservation.5.5 The representative of Japan stated that at the Committee's last meeting, his delegation had
hoped to see this matter resolved through consultations between the Secretariat and India, but
unfortunately this problem still remained. However, he wished to have on record that Japan's
understanding and India's understanding on this question was different.G/VAL/M/10
Page 18
5.6 The representative of the European Communities stated that his delegation's views were
identical to those expressed by the United States.  In response to India's reference that the tariff value
system was the same as the particular system empl oyed in the European Communities, he stated that
this was not at all the case.  This question would be clarified under "other business", when his
delegation intended to respond to the question put forward by India during the Committee's lastmeeting.
5.7 The representative of India stated that she would like to reserve opinions and comments on
similarities between the European Communities' and Indian systems at a later and more appropriate
time.  As concerned the United States' allegation that India had not sought conditions and terms for
the reservation,  she  drew the attention of the United States delegation to document L/6212 of
18 September 1987 where the first paragraph read "The following Protocols, Agreements andArrangements have been accepted by the governments listed on the dates and with the conditions or
declarations specified".  India's conditions of acceptance of the Agreement, as well as the Protocol
under the Tokyo Round Customs Valuation Code were very well documented therein.  India would
appreciate it if the United States and other delegations that had spoken in this regard could peruse
those documents and verify for themselves the facts of the matter. This item was on the agendaprimarily because at the last meeting it was agreed that the status of India's reservation with regard to
the Annex was a factual matter which had to be clarified between the Secretariat and India.  India and
the Secretariat had held discussions in the presence of the Chairman of the Committee on
24 November 1998.  In those discussions, factual as pects were discussed.  India had given to the
Secretariat all the details that India had at its disposal at that time and indeed this morning India hadshared with the Secretariat and the Chairman further details that had been outlined by her colleague
before.  However, until now the Secretariat had not been in a position to indicate exactly when the
question of imposing new conditions or terms a nd conditions on India's reservation were either
discussed in the Committee or when such a need had actually arisen.  At the last meeting as well as at
this meeting, India had given instances of when and how this Committee had agreed to extend thereservations of Members under the Tokyo Round Codes into the WTO Agreement.  India believed
that the tenor of this discussion at this meeting infringed India's rights and obligations and India
would view this very seriously.  At this point in time the only requirement of this Committee was to
reflect India's position on the reservation factually in accordance with what India had just stated.
India had until now not heard a factual revocation of this aspect.  All India had heard wereinterpretations of what the possible meaning or appl ication of that reservation would be.  India did not
believe this to be a justified course of action.
5.8 The representative of the United States understood that there was a need to reflect various
views, but wished to state that this was an issu e of the rights and obligations of every Member.
5.9 The representative of Switzerland supported the statements by the European Communities
and the United States.  Her delegation felt that this matter affected all delegations because it
concerned the application of the Agreement.  It was not just a factual matter which could be resolved
between India and the Secretariat.
5.10 The representative of Canada stated that the Committee was considering a Committee Report
and WTO rights and obligations.  Canada fully agreed with the views expressed by the European
Communities, the United States and Switzerland.  This was not an issue for one Member and the
WTO Secretariat to decide on.  Issues or decisions with regard to rights and obligations were issues
for all Members.  India had cited a number of documents that Canada would like to review.  The
question seemed to be whether or not a reservation made under the Tokyo Round Agreementautomatically extended into the WTO era.  He noted that in August 1988,  India had implemented the
Customs Valuation Agreement.  At that time there was no record of a decision being taken by the
Committee under the Tokyo Round Agreement setting out terms and conditions for India to maintainG/VAL/M/10
Page 19
minimum values.  Canada made this as an observation and not as an argument at this point in time.
However, it was certainly Canada's understanding that such a reservation came to an end when a
country implemented the Agreement.  If a Member wanted to continue using minimum values a
formal decision of the Committee was required.  Canada would be pleased to look at the further
documentation that India had referred to, to see if Canada could come to a final conclusion in this
matter.  But, he underlined again that this was not a matter for the WTO Secretariat.  This was amatter for all the Members, as it concerned rights as to the conditions that they might expect upon
importation into any other Member, including India.
5.11 The representative of India believed that this issue was escalating to a point where India's
rights were very seriously affected.  They had been affected for the last four years and by virtue of the
fact that the Secretariat, in some documents, had been reflecting India's position correctly and in
others incorrectly.  That was the point of time from which Members had started discussions in thisCommittee at the last meeting.  The minutes of that Committee would reflect that all Members who
had spoken at this meeting had in fact agreed that this was a factual matter for discussion between the
Secretariat and India.  Accordingly India had held bi lateral discussions with the Secretariat.  The issue
before Members today was for the documents to correctly reflect India's position, based on facts.  The
interpretations that Members might have on the validity or otherwise of India's reservation was amatter for them to raise in other appropriate bodies.  It was not a matter for discussion under this
agenda item at this point in time.   At this point of time, she wished the Secretariat to confirm for all
Members whether it had any factual evidence which would show that India had revoked its
reservation as set out in its Protocol of Acceptance to  this Agreement.  If not, on a factual basis, her
delegation wished India's reservation to be appropriately reflected.  Other issues that had been raisedby Members could be raised by them at any point of time.  Her delegation would make all efforts to
answer those questions as well as to address the concerns that other Members might have, but that
was not the issue that Members were discussing at this meeting, at this point.
5.12 The representative of Canada requested the Indian delegation to quote specifically where in
the minutes of the last meeting, the Committee had agreed that this issue be left solely between the
WTO Secretariat and India.
5.13 The representative of India stated that at the start of this meeting, she had already invited the
attention of this body to the fact that under "Other Business",  her delegation would be raising the
matter of the reflection of the minutes of the last meeting.  She was glad to have an opportunity to
discuss them now.  She had the transcript of that meeting of the Customs Valuation Committee, as
well as the draft that the Secretariat had prepared and sent to India and the comments that India had
subsequently made to the Secretariat based on this transcript.  While making the comments on the
record of the meeting, India had drawn the Secretariat's attention to the fact that India was offering
only typographical and grammatical changes to the transcript of the meeting of the Customs Valuation
Committee.  Therein it was clearly noted that when India had initially raised the matter of documentG/VAL/W/29, nobody had made any objections and the Chairman had noted "We take note of your
comment".  To her mind that meant that the issue was agreed on.  Subsequently India had taken the
floor again and pointed out that there were similar documents where India's position was not correctly
reflected and had asked that the same treatment be given to those documents.  There was a lot of
discussion thereafter and finally, in the concluding part, the Chairman had stated that "In the light ofthis discussion, I think that the best thing is to adopt this text ad referendum  while waiting to proceed
to check between the Secretariat and the delegations concerned so as to make this question quite clear
and we could agree ad referendum  while waiting to carry out bilateral consultations as other
delegations proposed".  She recalled that this proposal for a bilateral discussion between the
Secretariat and India had been made by the European Communities.
5.14 The representative of the European Communities stated that during the consideration of the
Fourth Annual Review at the last Committee meeting, Members were satisfied with the document asG/VAL/M/10
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drafted, and had not wanted to change that document in the light of India's interventions.  This was
very much the tenor of the discussion. While the role of the Secretariat had to be acknowledged in that
respect,  as it had the records that India had referred to in the course of the discussions, that did not
mean that the matter was solely one for the Secretariat, since all Members were concerned.  It would
not be appropriate to read otherwise from the account of the discussion.  The question of any
subsequent contact with either the Secretariat or the interested Members was simply one ofestablishing whether there was any information that had to be taken into account.  But, at the close of
the meeting his delegation was in no doubt that the general appreciation of the treatment of the issue
was that there was no acceptance of the statements made by India with respect to minimum values.
This would also be very much his delegation's understanding from the discussions at this meeting.
5.15 The representative of India requested a clarification from the Secretariat on the factual matter
that was discussed between India and the Secretariat.5.16 The representative of the United States reiterated that this was not a factual matter between
one delegation and the Secretariat.  It involved the rights and obligations of all Members.5.17 The representative of Canada thanked India for its response to Canada's question. India had
quoted a number of things which he could not find in the minutes.  However, he had observed that
most of the words seemed to be in the plural.  Bilateral meetings with Members, meeting between
Members and so forth.  He also noted that paragraph 6.14 of the minutes of the last meeting stated that
"the Chairman, in the light of the discussion, proposed adopting the text of the Fourth Annual Review
ad referendum  while waiting for clarification of the matter between the Secretariat and the delegations
concerned.".  His understanding of the words ad referendum  was very simple. There was a situation
where one Member did not agree with that text.  All other Members appeared to agree with that text,
so the ad referendum,  was a  question of whether or not that Member could join the text as written.
Clearly this was not the case.  The text continued: " The Committee took note of the statements
made".  Taking note of the statements did not mean agreeing with the statements. The text furthercontinued: "and agreed to the document ad referendum,  until a mutually agreeable solution could be
found."  It seemed fairly clear that Members were not at the stage of a mutually satisfactory solution.
His delegation wished to reiterate the point that when it came to rights and obligations, it was not an
issue for the WTO Secretariat, it was an issue for Members.  His delegation would review the
documents provided by India. But the question was that even if in September 1987 contracting partieshad indicated that they had a reservation to maintain or apply minimum values, what happened if
some time later, i.e. when they had implemented the Agreement, they had not sought the terms and
conditions as prescribed.  That question was more than just factual.
5.18 The Secretariat stated that at the last meeting of this Committee, a draft Fourth Annual
Review document was put before the Committee and there was one issue that was not agreed to.  On
the basis of that situation, the Committee had agreed to adopt that document ad referendum .  At the
end of the discussion, the Chairman had asked that consultations be held with interested delegations
and also with the Secretariat to clarify the matter.  In light of that, the Secretariat had held a meeting
with the Indian delegation in the presence of the Chairman, where India had presented its arguments
in support of its request that it should be listed in the document among the Members maintaining
minimum values.  The Secretariat had taken note of these arguments.  However it was not the role ortask of the Secretariat to accept, reject or to interpret the arguments. He also had not felt entitled to
change the document as such, because it was adopted by the Committee ad referendum.  It was,
therefore, up to the Committee to tell the Secretariat what to do with this document.
5.19 The representative of India stated that she was grateful for the clarifications by the Secretariat.
Of course, it begged the question whether the Se cretariat had agreed with India's arguments.
However, her question was a little more precise and that was whether the Secretariat had factual
evidence which would help clarify when India had either revoked its right for reservation, or whetherG/VAL/M/10
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there was any need for terms and conditions to be discussed in the Committee on the basis of the
manner in which the Tokyo Round Code was accepted by India through its accession document.  She
would await the necessary clarifications from the Secretariat on this question.  On the issue raised by
Canada, she stated that Canada had seemed to suggest that in a number of places the term
"delegations" in the plural had been used.  She accepted the fact that many times "interested
delegations" was a term that was used.  However, the proposal and conclusion were very clear.  Theproposal was that of the European Communities,  the st art of which was: "this appeared to be a factual
matter", in other words, of verifying the facts of the situation.  In conclusion, the representative of the
European Communities had stated that "perhaps this issue could be verified between India and the
Secretariat." Before the European Communities had spoken, the United States delegation had also
placed the responsibility on the Secretariat for clarifying this.  The representative of the United States
had stated that: "based on some background searching as we did in the context of Morocco there was
a situation in which India did invoke under the Tokyo Round Agreement the identical reservation, andthere was an agreement with the parties to that Agreement to a reservation which was time-limited
and it then expired and was effectively disinvoked ".  The tenor of the arguments was not as Canada
would suggest and also what the United States seemed to be alluding to, but perhaps on whether the
reservation by India was time-limited in any manner or not.  On that, India had already requested the
Secretariat to clarify the matter. The Chairman had taken up the proposal of the EuropeanCommunities for bilateral consultations between India and the Secretariat.  That was why he had said
"while waiting to carry out bilateral consultations as other delegations proposed."  So it was their
proposal that he was talking about and this was the motion that was carried through.  India had
responded thereafter to the Chairman's proposal by saying that she "was always willing to consult
with the Secretariat to address factual issues".  These were some points which this Committee didneed to take into account.  Additionally, the Secretariat had also called India for bilateral discussions
following the Secretariat's understanding of th e discussion, as reflected in the transcript.
5.20 The representative of Canada stated that in regard to the Indian intervention which had
referred to the United States statement and which in India's view made it clear that this was a factual
matter only for the Secretariat and the delegation of India, he wished to make two observations.  From
the minutes (G/VAL/M/9) and from what he understood to be the transcript of other statements made,
both the United States and the European Communities had underlined every time they had spoken
about the possibility of this matter being verified be tween India and the Secretariat, that "perhaps" the
issue could be verified, "perhaps" the WTO Secretariat could clarify.  For example, paragraph 6.12 ofthe minutes states that the representative of the European Communities "thought this appeared to be a
factual matter".  So the statement of this being a factual matter for reference to the Secretariat was
couched in a lot of conditional words.  Indeed, he would also point to the fourth sentence of the
European Communities' intervention which stated th at "If it was something beyond a factual matter, it
would have to be considered further".  This issue was beyond a factual matter at this stage.  The main
question was whether or not India had the right at this point in time to use minimum values.  In this
connection, he wished to make the following observations starting with the document that India haddistributed before the end of the morning session, namely L/6212, dated 8 September 1987.  The
document clearly showed that in 1987, India along  with various other Members, had made a
reservation with regard to paragraph 3 of the Protocol to the Tokyo Round Customs Valuation
Agreement.  The question that needed to be addressed, not by the WTO Secretariat but by Members,
was whether there was evidence that India had revoked its right or whether there had been ever anyneed for terms and conditions. While, it was clear from the records of 1987, that India, upon joining
the Tokyo Round Customs Valuation Agreement, had made a reservation with regard to the then
equivalent of the current paragraph 2 of Annex III of the WTO Customs Valuation Agreement, what
happened in 1988 when India implemented its legislation?  He recalled that the rules and procedures
adopted for the Tokyo Round Customs Valuation Agreement were clear. A Member, having made areservation "shall communicate to the Committee (through the Secretariat) in due course a proposal
containing the terms and conditions under which it wants to retain minimum customs values (or
similar schemes).  This was to be done no later than the date in which the Member having availedG/VAL/M/10
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itself of this reservation, started implementing the provisions of the Agreement".  The procedures, as
established in 1981 by the Tokyo Round Customs Valuation Committee and subsequently adopted by
the WTO Customs Valuation Committee in 1995 made it clear that a proposal needed to be tabled
setting out the terms and conditions, that a decision needed to be taken by the Committee, and that the
agreement on these terms and conditions needed to be reached, at any rate, not later than the date at
which the Member started to apply the Agreement. Based on Canada's research of the records, itappeared that India had implemented the Customs Valuation Agreement in its domestic legislation in
August 1988.  Canada had no knowledge or record that, at that time, or any time before then,  India
had submitted a proposal setting out the terms and conditions for invoking that reservation to maintain
minimum values.  The fact that there was no record of a formal decision taken by the Customs
Valuation Committee that set out the terms and conditions for India to continue to use minimum
values was a critical point.
5.21 The representative of the European Communities supported entirely Canada's intervention. In
addition, he wished to refer to India's remark made at the morning session and wished to register an
objection to the selective references made by India to comments made by his delegation at the
Committee's previous meeting.  India could not draw such conclusions from his delegation's
comments at the last meeting when the entire discussion was taken into account.  It was quite clear atthat time that India's right to establish minimum values was very much questioned.  The issue was a
much broader one and was not for the Secretariat to handle.
5.22 The representative of India wished to address the issues raised by Canada and by European
Communities in their observations.  She noted that Canada had referred to the use of the word
"perhaps" and "appeared" in the comments of the European Communities and the United States at the
Committee's last meeting when they were proposing or  suggesting that India and the Secretariat could
address this factual matter. Obviously the European Communities and USA could only just propose
and perhaps suggest that a factual bilateral discussion between India and the Secretariat could sort the
issue out.  She also highlighted the relevance of her acceptance of such a bilateral discussion. She alsonoted that Canada had said that India had indeed had a reservation under Paragraph 3 of the Protocol.
Canada had also suggested that the matter was not something that could be addressed only by the
Secretariat and India, and that it was for the Members as it affected the rights of Members.  However,
she noted that the debate had arisen because the Secretariat had interpreted in some documents that
India had a reservation and in other documents that India did not have a reservation.  This was a factorwhich Members of this Committee had put at the back of their minds, but it was the crux of the
matter.  There had been a lot of observations based on how the 1988 meeting had proceeded and
whether, to the best of the knowledge of the Canadian delegation, before or after India had
implemented the Agreement in August 1988, India had proposed terms and conditions or not.  At the
beginning of the discussion, India had pointed out that the terms and conditions for India's reservation
were set out in document L/6212, where the paragraph very clearly stated:  "The following Protocols,
Agreements and Arrangements have been accepted by the Governments listed on the date and withthe conditions or declarations specified".  India's conditions had not "time-limited" the reservation in
any manner. She reminded the Committee that in 1988 and in the discussions that continued in 1989,
India had mentioned that the Customs Valuation Agreement was new for India and some time would
be required before India would disinvoke its reservation on minimum values.  It was these terms and
conditions which the Committee had also agreed to.  She did not see any decision of the Committeestating that this condition was not acceptable. The European Communities had also raised some
objection to India's "selective references".   She was quite willing to circulate the transcript of the
Committee's last meeting. However, while she was reading out selectively from the European
Communities' statement made at the Committee's last meeting, she did not think she had presented
wrongly what had actually been said.  Her emphasis was on the proposal that the Communities hadmade because it was on the basis of that proposal that the Committee had come to a decision that
India was to consult bilaterally with the Secretariat on a factual matter.  That was the crux of theG/VAL/M/10
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matter today.  Also, she wished to see a single actual reference where India had disinvoked its right to
make a reservation on minimum values.
5.23 The representative of Canada stated on I ndia's characterisation of how Canada might be
interpreting the words "perhaps" and "appeared" in the minutes of the last meeting, that his delegation
had simply responded to India's suggestion that the minutes had led to an agreement by thisCommittee that this issue was a bilateral matter between India and the WTO Secretariat. He had
listened carefully to what India had said with rega rd to the argument that nothing demonstrated that
India had disinvoked the right to minimum values, but  that seemed to overlook two points.  One, as
was agreed earlier, in 1987 India clearly had a rese rvation. Indeed India had made that reservation in
1981 when it joined the Tokyo Round Customs Valuation Agreement, so he was not disputing what
had happened in 1987.  The question now was, did India have the reservation today?  The reason why
Canada had referred to 1988 was because India had implemented the Customs Valuation Agreementat that time.  India had, as set out on page 21 of L/6212, stated under paragraph 3 of the Protocol that:
"The Government of India reserves the right to retain the system of fixed tariff values".  Paragraph 3
of the Protocol was almost the same as paragr aph 2 of Annex III of the WTO Customs Valuation
Agreement, which made it clear that at the time a contracting party joined the Customs Valuation
Agreement, it could maintain a reservation which stated that it could invoke the use of minimumprices at the time it implemented the Agreement.  The procedures with reference to both the Tokyo
Round Committee and the subsequent WTO Committee were clear. Paragraph 2 of Annex III of the
WTO Agreement stated:  "For reservations made under paragraph 2 of Anne x III, the Member having
made the reservation shall communicate to the Committee (through the Secretariat) in due course a
proposal containing the terms and conditions under  which it wants to retain the minimum customs
values (or similar schemes)."  He wished to emphasize the words: "wants to retain the minimum
customs values (or similar schemes)".  The text continued: "This proposal would be discussed by the
Committee with the aim of reaching an agreement on the terms and conditions of such reservation.
Agreement should be reached as quickly as possible and at any rate not later than the date at which the
Member having availed itself of the possibility of Article 20.1 starts implementing the provisions ofthe Agreement."  So the first factual question was: when in 1988 did India activate its reservation to
continue to retain minimum values and where was the decision that was taken by the Committee at the
time?  As he had understood it, India had referred to the minutes of the meeting that were held in
21 March 1989 (VAL/M/24), when the then Customs Valuation Committee had discussed the Indian
legislation.   The discussion was very interesting.  It began with the European Communities noting:"that paragraph 3 of the Protocol implied that a system of minimum values could only be applied
concurrently with the provisions of the Agreement if they were in force prior to implementation of the
Agreement". So the Communities had taken the view that at the time a contracting party implemented
the Agreement, in activating its reservation to in voke minimum values, it first had to have these
minimum values.  The representative of India had responded that: "India had not made use of
minimum values for more than four years. Notwithstanding the existence of enabling provisions in the
statutes, his authorities did not have the intention of applying minimum values in the near future.  Theenabling provisions would be revoked after India had gained sufficient experience with the
implementation of the Agreement."  Canada did not see this as the terms and conditions. It struck him
more as an inconclusive discussion. India had not contested the European Communities'
interpretation, but it was also true that nobody had followed up on the point that India was going to
maintain the enabling provisions in its legislation.  The question here was not whether WTO rightsand obligations were consistent with Members' laws and regulations but whether the laws and
regulations of Members were consistent with WTO rights and obligations. Canada believed that in
addition to the points raised by India, Members needed to factor into this discussion the procedures
that had been established by the Tokyo Round Customs Valuation Committee, which were
incorporated into the WTO Committee on activating or invoking such a reservation to maintain theuse of minimum prices.  Therefore, Canada did not  think the issue was that straightforward.  Until
Members had a better picture of how the rules and procedures fitted into this equation, his delegation,G/VAL/M/10
Page 24
based on the information it had, could not at this stage agree that India maintained the right to use
minimum prices at this point.
5.24 The representative of the United States stated that his delegation was of the view that the
matter was fairly straightforward.  What was just described with regard to reservations under the
Agreement was correct in that reservations "shall not come into force if no agreement has beenreached on the content, (terms and conditions)".  It had been suggested that document L/6212
contained terms and conditions of some sort.  This document referred to the Protocol of Acceptance in
1980.  He pointed out that during a Committee meeting held on 23 January 1986 (VAL/M/16), at
which time there was a discussion with regard to India's implementation of the Agreement, the
United States had made reference to India's reservation in the 1980 Protocol with regard to minimum
values.  At that time the United States had noted that , in its view, any eventual request by India for a
reservation under paragraph I:3 of the Protocol would not be justified.  The representative of India hadresponded that India continued to reserve the right to retain the system.  What was clear to the
United States was that there was no agreement reached on the terms and conditions of the reservation.
5.25 The representative of India did not wish to reiterate all her delegation’s views on this matter,
however, she wished to respond very briefly to a question which was raised.  When did India activate
the reservation? She was not sure that Members having a reservation were required to activate it,
unless it was deactivated.  Therefore, she would come back to the question, when was India's
reservation deactivated?
5.26 The representative of the United States stated that in his delegation’s view, it was in 1988
upon implementation, because without agreement, the reservation could not come into force.5.27 The representative of India requested the representative of the United States to indicate the
document which reflected this.
5.28 The representative of the United States responded that it would be in VAL/M/1 which
contained the procedures for reservations under the Agreement of Customs Valuation.
5.29 The representative of Canada stated that if India wished to know when its reservation was
deactivated and which document showed that, Canada’s answer, at this stage, was that it was the lack
of a document setting out terms and conditions to continue using minimum values, which was the
issue at hand. It was the lack of a decision by  the Committee in 1988, at the time India implemented
the legislation.
5.30 The representative of the United States agreed with Canada that it was, in fact, the absence of
an agreement that precluded the reservation from coming into force upon implementation in 1988.
5.31 The representative of India stated that she was aggrieved and confused by what she had heard.
Sometimes, it was a document which reflected India's revocations, sometimes it was the lack of the
document which reflected India's revocation. She wished to remind Canada as well as the
United States that in 1989, the specific fact of India having the right to apply minimum values was
very much in existence.  This was apparent from the statement of the Indian delegation which was notcontradicted by anybody and the Committee had so agreed.  The fact that India had requested time to
gain sufficient experience with the implementation of the Agreement appeared to be the terms and
conditions which Members appeared to be looking for.  Albeit, the open ended nature of the terms and
conditions were not to their liking now.  She also wished the Committee to reflect on the fact that at
the first meeting of the WTO Customs Valuation Committee, a decision on "Continued Applicationunder the WTO's Customs Valuation Agreement of Invocations of Provisions for Developing
Countries for Delayed Application and Reserva tions under the Tokyo Round Customs Valuation
Agreement" (WT/L/38) was considered and adopted.  During the course of the discussions at thatG/VAL/M/10
Page 25
meeting, some Members had tried to suggest that such Members who had reservations under the
Tokyo Round Customs Valuation Agreement, needed to notify and to apply for terms and conditions.
However, she did not think that the Committee had ever seen any applications and this was not
surprising because at that time Members had agreed that this would be a new notification requirement
which would be contrary to the single undertaking of the Uruguay Round Agreements and the
decision contained in WT/L/38.  Therefore the proposal for some Members to introduce thisnotification requirement did not find acceptance in the Committee.  It made her wonder whether all
the reservations listed under minimum prices for other countries in the document were falsely
reflected.
5.32 The representative of Japan stated that, at the last meeting, he had also recommended bilateral
consultations between India and the WTO Secretariat.  However, hearing the statements at this
meeting, he thought that it was not a matter betw een the Secretariat and Members, but a matter for
Members themselves.  He also welcomed the statement of Canada which was a very good reflection
of the current situation.  He requested the representative of India to specify the year of the document
which contained the statement she had made reference to.
5.33 The representative of India stated that the document to which India had referred to was
VAL/M/24, page 5, paragraph 21.5.34 The Chairman stated it was difficult for the Committee at this stage of the discussions to
adopt the Fourth Annual Review on the Implemen tation and Operation of the Customs Valuation
Agreement (G/VAL/W/29). He believed that it would be necessary to continue consultations becausethe problem had become broader and there were substantial issues to clarify which would require
several consultations, in-depth consultations in fact.  He proposed that informal consultations continue
on this matter in order to be able to find a mutually satisfactory solution, as he had said at the
Committee’s last meeting, and if necessary before the next meeting of the Committee.
5.35 The representative of India stated that her delegation had heard the Chairman’s proposal and
wished to reflect upon it.  However, in the meantime, what about India's rights and obligations?
5.36 The representative of Canada stated that his delegation welcomed the Chair’s proposal.  His
delegation wished to clarify this matter and wished to be part of these consultations.  His delegation
wished to see this reflected in the records so that another discussion would not have to be held on who
was consulting with whom, on what.  As regarded India's question concerning India's rights and
obligations, he thought that the real question was rather about all Members' rights and obligations?
5.37 The representative of the United States stated that while his delegation could accept the
Chair’s proposal, he would also note that again the United States did not see this as an issue that
necessarily needed clarification, given that his delegation viewed this as a straightforward matter.  Hisdelegation echoed the comments made by Canada that this was a matter of all Members’ rights and
obligations.  Certainly, the US believed that its rights and obligations were at issue.
5.38 The representative of the European Communities agreed with the representative of the United
States.  An in-depth consultation to clarify matters was perhaps overstating the objective here.
However, in case there were further discussions, his delegation would like to participate.  The
objective should be to clarify the issue and not just to seek a mutually satisfactory solution.
Furthermore, the rights and the obligations of all Members were at stake.
5.39 The representative of Switzerland stated that her delegation wished to be associated with any
consultations as Switzerland's rights could also be affected.5.40 The representative of Japan stated that his delegation supported the Chair’s proposal.G/VAL/M/10
Page 26
5.41 The representative of India recalled that her delegation would like to reflect on the Chair’s
proposal.  At the last meeting, the Committee had agreed that consultations be held between the
Secretariat and India on the basis of factual evidence.  She wished to know the status of that matter
and whether that matter was to form a part of the consultations.  This was in order to inform her
authorities so that they could take a decision with regard to the Chair’s proposal.
5.42 The representative of Australia stated that her delegation could accept the Chair’s proposal.
The Committee needed to agree on the annual review and her delegation thought that consultations
such as the Chair had suggested, open to all Committee Members, would be a useful standard way of
proceeding.
5.43 The Chairman sought clarification on what the delegation of India understood by the term
factual evidence?5.44 The representative of India stated that India’s two questions to the Secretariat had already
been addressed and she thought that the Secretaria t was already privy to the discussion that was held
on 24 November 1998 as well as early this morning.
5.45 The Secretariat stated that all it could do in this particular instance was to provide the Indian
delegation, like any other delegation which requested the Secretariat to do so, with documentation and
records on that matter.  But he did not think that the Secretariat could produce what was now called
"evidence",  because the Secretariat was not party to a dispute.  If a Member or the Committeerequested the Secretariat to provide an opinion or legal clarifications the Legal Division could be
requested to provide a view on the matter.
5.46 The Chairman proposed that the Committee take note of all the statements made, and leave
the matter with the new Chairman.5.47 The Committee so agreed.
F. OTHER BUSINESS
1. Communication from Korea (G/VAL/W/33)
6.1 The representative of Korea stated that the government of Korea had been implementing the
GATT Valuation Code since 1981 and during the course of Korea’s application of the Valuation
Code, Korea had found some cases which revealed a lack of uniformity in the interpretation and
application of the Code.  Such discrepancies should be removed through technical discussions
possibly to be held by the Technical Committee on Customs Valuation, because the WTO Committee,as he understood it, was a rule making body.  However, Member countries of this body should also be
aware of these issues.  The GATT Valuation Code was erected as a new structure which established a
fair, uniform, and neutral system for the valuation of goods for customs purposes replacing the use of
arbitrary or fictitious customs value.  The most important question was whether uniformity in terms of
interpretation and application of the Agreement throughout the WTO Members was ensured since aharmonized and uniform understanding of the Agreement in all WTO Members was  key, in fact, to a
successful implementation and operation of the Agreement.  However, the Agreement had not been
uniformly applied in a number of limited cases.  There existed controversial cases which had been
subject to different interpretations among major trading countries resulting in disharmony and
uncertainty in the implementation of the Code.  Ko rea wished to address in this document two legal
issues which had been subject to different interpretations thus creating conflicts of interpretation and
application of the Code by some Members.   The first issue was whether quota charges paid by the
seller (exporter) on behalf of the buyer (importer) were part of the "price actually paid or payable" forG/VAL/M/10
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the imported goods.  The European Court of Justice in 1984 ruled in the case Ospig Textilgesellschaft
KG W. Ahlers v. Hauptzollamt Bremen-Ost-Germany  (7/83, European Court Reports 1984) and
rejected the German customs appeal, whereas the US Federal Circuit Court answered affirmatively in
the case Generra Sportswear Co. v. U.S  (905 Fl. 2d 377, 380 (Fed. Cir. 1990).  The second legal case
related to the base to be used for customs appraisa l under the actual transaction value when there was
more than one sale to the country of importation.  In December 1992, the US Federal Court ofAppeals had ruled that: "the manufacturer’s price constitutes a viable transaction value when the
goods are clearly destined for export to the United States and when the middleman deals with each
other at arm's length, in the absence of any non-market influences that affect the legitimacy of the
sales price ( Nissho Iwai American Corp v. US ) (982 F. 2d 505 (1992).  However, the European Union
had expressed a different stance by adopting an amendment of Article 147 of the Communities
Customs Act in the manner of enacting the European Commission Regulation No. 1762/95 of
1 July 1995.  Article 147, as amended, stipulated that a declarant could ask the customs to accept anexport price of an earlier sale if he or she had demonstrated that there were relevant circumstances
which led to the export of the goods to the customs territory of the European Union.  Japan for its part
regulated that "an importing transaction provided in Article 4 of the Tariff Act occurs principally
when a bona fide  sale is consummated between an exporter and an importer which was destined for
export to Japan from abroad."  This view was in line with Article 4-1 of the Administrative Instructionof the Minister of Finance concerning the Tariff Act of Japan.  Japan therefore ruled that the
transaction price at the time of arrival of the imported goods at the customs territory in Japan should
be used principally as the basis for determining th e customs value. The crux of the issue was that in
cases where there was a manufacturer, a middleman, an importer and a purchaser, and the sale
between the manufacturer and the middleman involved goods that were for exportation to a country ofimportation, which of the two or three possible sales prices should be used as the basis for appraising
the transaction value?   In sum, major trading part ners had been at variance with each other in the
interpretation and implementation of the Valuation Code. Because of this discord, Korea believed that
responsibility for solving the above mentioned issues was in the hands of the WTO Committee on
Customs Valuation and the Technical Committee on Customs Valuation of the WCO.  Hence takinginto consideration the issues underlined in this document, Korea concluded that both Committees
faced a number of tasks before uniformity and certainty in the implementation and operation of the
Customs Valuation Agreement were reached.  He proposed that the Technical Committee should
handle and discuss those legal issues and report the results of those discussions to this body.
6.2 The representative of the WCO, stated that the representative of Korea had presented three
issues which could be the subject of different interpretations by various countries.  They were quota
charges, royalties or license fees and successive sales. Quota charges had been dealt with by the
Technical Committee on Customs Valuation at the Twelfth and Fifteenth Sessions.  At the Fifteenth
Session, the Technical Committee had reached two decisions in the form of draft advisory opinions on
quota charges.  One concerning a case where the quota charges was paid by the buyer to the seller,
and the other one where the payment was made by the buyer to a third person.  The TechnicalCommittee had reached two different conclusions.  In the first case the quota charges were dutiable
and in the second one, they were not dutiable. Subsequently, the draft advisory opinions were
submitted to the Tokyo Round Committee.  On royalties and license fees, the representative of Korea
had referred to the practise in the US administration and had specifically referred to three questions
raised by US Customs to establish whether the royalty payment was dutiable or not. These were alsoquestions raised by other customs administrations to determine whether the payment was a royalty or
license fee.  The customs administration had to de termine whether the conditions were met for the
royalty or license fee to be dutiable, by examining whether the payment was related to the goods
being valued and whether it was a condition of sale of the goods being valued.  The Technical
Committee had discussed and was currently still discussing the meaning of the expression "conditionof sale" and "related to the goods" which were critical to establishing dutiable royalty payment.  On
the question of "successive sales", he stated that the issue had not as yet been addressed formally byG/VAL/M/10
Page 28
the Technical Committee.  It had been addressed in an informal manner, and any submission by any
delegation to discuss this issue would be welcome.
6.3 The representative of the European Communities stated that the representative of Korea had
suggested that the Technical Committee and this Committee might be facing tasks of evolving
uniformity and certainty in the application operation of the Agreement. His delegation believed thatthis was an important function of these Committees. In reference to comments made by the
representative of Korea, he stated that the quota charge case was one which was last dealt with ten
years ago in this Committee.  It sufficed to say that the Committee had simply taken note of the
matter.   It was a particular case, in that it was one of the very few examples where a divergence of
views could not be resolved in the Technical Comm ittee.  His delegation did not see any need at this
time to revive it.  With respect to the second case, there was no divergence in the treatment of
transactions by the European Communities or the United States.  In fact, both these administrationswere applying Article 1 of the Agreement correctly.  So, there was no issue which demonstrated a real
discord.  He pointed out that the objective of ensuring uniformity and certainty in the implementation
and operation of the Agreement was one to which his delegation subscribed and he believed that the
Technical Committee continued to do good work in this respect.
6.4 The representative of Japan welcomed the discussion of such issues in the Technical
Committee, if the Technical Committee so felt it necessary.  In relation to Korea's statement, there
were several points that had to be considered such as the fact that the United States applied the
free-on-board (f.o.b.) basis of valuation, while the European Communities and Japan applied the
cost-insurance-freight (c.i.f.) basis of valuation. Also the Customs Valuation Agreement was based on
commercial practices, and the fact that the geographical situation could influence commercial
practices, as in the case of Japan which had no land border, should also be taken into account.
6.5 The Committee took note of the statements.
2. United States – Minimum Prices
6.6 The representative of the United States stated that his delegation had indicated in several
WTO fora increasing concern over the inappropriate use of price databases and in particular the
apparent increasing use of minimum prices, minimum import prices and minimum reference pricesfor determining customs valuation.  This was a very important issue to the United States.  The use of
minimum or floor prices as part of making custom s valuation determinations could be an abusive use
of what should be a strictly technical undertaking and was contrary to how valuation was to be
conducted under the WTO Agreement.  The Agreement explicitly prohibited the use of arbitrary
values and just as explicitly recognized that custom s valuation was not to be used to combat dumping.
The US concern on this issue had heightened through increased reports about the use of minimum
reference prices both to reject a declared transaction value as well as to set a minimum customs valuefor assessing customs duties.  His delegation had also had reports of minimum prices being used as
part of a regime for determining the amount of surety, deposit and was very concerned about that, in
that it subordinated the reference price with regard to Articles 1 through 7 in favour of Article 13 of
the Agreement which existed to enhance trade and not to result in further market access barriers.  The
fundamental basis for determining customs valuation was the "price actually paid or payable whensold for export to the country of importation."  Minimum import prices taken from specialized
publications or provided by domestic producers had little or no connection with the actual transaction
involving again a price actually paid or payable and sold for export to the country of importation.  His
delegation understood that one effect of using minimum import prices or minimum reference prices
was to create an incorrect presumption of doubt on every import transaction.  A presumption thatcreated an unwarranted burden on importers and exporters.  In such situations an arbitrary price was
presumed to be correct while the importers' prices were presumed to be incorrect and even in some
cases were presumed to be fraudulent.  Such a scenario was not, in the US view, contemplated underG/VAL/M/10
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the Agreement and could result in unacceptable market access barriers.  Finally, the use of minimum
import prices resulted in a clear absence of fundamental transparency for the private sector, if customs
valuation was conducted by simply rejecting a declared transaction value and assigning a different
price based on a minimum price list.  This practise raised questions such as were minimum reference
prices publicly available to allow scrutiny for accuracy?  If so was business confidentiality respected?
If there was no public scrutiny allowed for such prices, how could there be an appeal with regard toany element that might be included in a minimum import price that might be inaccurate or otherwise
might be an element that might actually be prohibited by the Agreement as a valid basis for
determining valuation?  The use of customs valuation regimes to address domestic market-place
behaviour failed to provide any measure of administrative transparency or due process to importers or
exporters, unlike more appropriate WTO consistent measures that could be taken.  His delegation
reserved its right to address the situation.
6.7 The representative of the WCO stated that he agreed with the United States that the
Agreement prohibited recourse to minimum values and  reference prices.  However, he wished to
point out that  many developing countries had conc erns about informally traded goods which could be
described as cross border transactions which were not accompanied by invoices.  As a result, if there
was no transaction value that could be used then the subsequent methods of valuation needed to beapplied.  The methods relating to the transaction value for identical or similar goods, or to Article 5
were difficult, therefore, Article 7 was often used.  In this situation, these countries sometimes
referred to minimum values which were based on the prices of goods that had already been imported.
6.8 The Committee took note of the statements.
3. Canada – Responses to Checklist of Issues
6.9 The representative of Canada wished to inform Members that Canada would be submitting an
updated Check-list of Issues.  The main changes actually involved the re-numbering of the sections in
the Canadian legislation that occurred a number of years ago.  There had been no real substantive
changes to Canada's customs value legislation with regard to the questions raised by the check-list.
But Canada was raising this matter, as it appeared that there was some discrepancy between WTO
documentation concerning Canada's submission of this checklist.  In Committee documents such as
the annual reviews, for example G/VAL/W/29, Canada was reflected as having submitted thechecklist of issues.  However, in the report to  the Council for Trade in Goods, on the "status of
notifications under provisions of the agreement, in Annex 1 of the WTO Agreement",
(G/L/223/Rev.2), it was indicated that Canada had not submitted a check-list. In fact, Canada had
submitted a Checklist of Issues prior to 1995, to the Tokyo Round Committee on  Customs Valuation.
6.10 The Committee took note of the statement.
4. India - Information on certain aspects of the European Communities Valuation Policy
6.11 The representative of India stated that India had received a communication at the beginning of
the meeting from the European Communities concerning the point India had raised in the previous
meeting regarding the fixation of standard values for fruits and vegetables.  He had more questions forthe Communities. It appeared that standard values were being used for valuation purposes and for
calculating duty on the fixed values.  His delegation wished to know whether any of the particular
values and methods in the Agreement were being used for this purpose.  Secondly, his delegation
wished to know on what basis the standard values were determined before they were notified.
6.12 The representative of the European Communities stated that his delegation had responded
informally to the query raised by India at the Committee's last meeting under "Other Business".  He
requested that all questions be provided in writing, in order for his delegation to give complete replies.G/VAL/M/10
Page 30
With respect to references to terms like "standard values", he wished to flag that the regulation in
question concerned agriculture, not customs valuation.
6.13 The representative of India stated that his delegation would provide the questions in writing.
He requested that this item be kept on the agenda for the Committee's next meeting.
6.14 The Committee took note of the statements.
5. India – Minutes of the last Committee meeting
6.15 The representative of India suggested that in the light of the discussions that took place at the
Committee's last meeting on 13 November 1998, a paragraph be added after paragraph 6.2 of the
minutes (G/VAL/M/9) indicating that the Committee had taken note of the comments made.  Also, inparagraph 6.14, she felt that the Chairman's concluding remarks needed to more appropriately reflect
that agreement to the text of the fourth annual review was ad referendum  pending bilateral
consultations as other delegations had proposed.
6.16 The representative of the United States sought clarification on the Indian suggestion relating
to paragraph 6.14. Was this to mean that the paragraph should not refer to clarifications of the  matter
between the Secretariat and the delegations concerned but only to bilateral consultations between the
Secretariat and India.  If this was Indian's suggestion he was going to have to reflect upon it.
6.17 The representative of Australia requested India to give more details concerning its proposals.
Given the fact that there had been differences of views on this question, her delegation would need to
see the exact wording to ensure that it conformed with her delegation's memory of the Committee's
last meeting.
6.18 The representative of the European Communities, while seeking further clarification on
India's suggestions, said that his delegation was not in favour of modifying the minutes.6.19 The representative of India recalled the discussions of the last Committee meeting when the
Chairman had introduced document G/VAL/W29 which contained the Fourth Annual Review of the
Implementation and Operation of the Agreement.  He had asked for comments on the documentsection by section.  There was no speaker other than India on that matter and the Indian delegate, as
reflected in paragraph 6.2 of the minutes, had noted that "India was not reflected in section 1(b)(iii) of
the document, although by reference to footnote 1 of the Section, India was appropriately and
correctly reflected in sections I(b)(iv) and I(b)(v).  Her delegation requested an amendment to reflect
India in the list as well." Thereafter, there was no speaker at all on any of the other sections of the
report,  and the Chairman, according to the transcript, had stated, "we take note of your comment".
Her first suggestion was therefore to insert a paragraph after her intervention, reflected inparagraph 6.2, to the effect that the Chairman of the Committee took note of the comment.  Then
following paragraph 6.3 onwards, there was a discussion when India had raised another matter
concerning other documents where India's position had not been reflected correctly and India had
sought an amendment to them as well.  The discussion that was reflected in the rest of the minutes
followed from that intervention by India. Paragraph 6.14 of the minutes tried to summarise what theChairman had concluded on the basis of which India had made a final observation in paragraph 6.15.
She was quite willing for the Committee to reflect in the minutes the complete statement of the
Chairman as it was: i.e. "In the light of this discus sion, I think that the best thing is to adopt this text
ad referendum  while waiting to proceed to check between the Secretariat and the delegations
concerned so as to make this question quite clear and we could agree ad referendum  while waiting to
carry out bilateral consultations as other delegations proposed and we will try to find some solution
that is mutually satisfactory".   She noted the concern expressed by the Communities that they would
not like to modify the structure of this document because they had a reservation on this entire issue ofG/VAL/M/10
Page 31
bilateral discussions between the Secretariat and India.  However, the minutes had to reflect
discussions accurately, irrespective of whether the delegations today had a reservation about the
discussions that were held on that day.
6.20 The representative of the United States stated that his delegation objected to any addition as
proposed by India, particularly if it was being suggested as, he believed it to be the case, that a
Committee decision was taken at the time of India's statement as reflected in paragraph 6.2 of the
minutes.  It was quite clear in paragraph 6.4 that the United States had requested further clarification
with regard to section 1(b)(iii). His delegation would not agree to any alternation of the text.
6.21 The representative of India stated that it was not unknown for Members to reflect or to
express opinions on issues that had been considered earlier and gavelled. What the representative of
the United States was referring to in paragraph 6.4 was clearly such a situation. However, she hadbefore her a verbatim transcript of the discussions, and she could not see how the United States could
object to an introduction of such a sentence from the transcript.
6.22 The Chairman stated that with respect to paragraph 6.14, the text read out by the
representative of India appeared to reflect his statement.  He did not see any problem with reflecting
that language in the minutes.
6.23 The representative of the United States said that his delegation was objecting to any
suggestion that a decision was taken by this Committee following India's statement reproduced in
paragraph 6.2, and to the reflection of that in the minutes.
6.24 The representative of Australia stated that both in terms of her delegation's recollection of the
meeting and the statement in paragraph 6.4, her delegation was not sure what the status of the Chair's
"taking note" would be. It was not her delegation's recollection that it had happened, but she
wondered whether such a statement in the minutes  would make any sense given the existence of
paragraph 6.4.  On the other proposal made by India, her delegation noted that delegations always had
different understanding of the facts, but in this connection she wished to flag the issue of putting one
statement in verbatim but not the others.
6.25 The representative of India thanked Members for agreeing to the changes proposed by her
delegation in paragraph 6.14.  While, she took Australia's point that there were many things in many
documents that did not always make sense to all people, the fact of the matter, as the minutes should
reflect, was that after India had made its statement as reflected in paragraph 6.2, there was silence.
Then the Chairman had said "We take note of your comment", and then there was silence again.
Following this, India had made the statement reflected in paragraph 6.3 pursuant to which a
discussion had followed.  Whether that discussion was relevant to the matter discussed in
paragraphs 6.1 and 6.2 was a question of interpretation and Members could agree to disagree on thattoday. However, the fact of the matter was that the Chairman had stated "We take note of your
comment" and she believed that this needed to  be appropriately reflected in the minutes.
6.26 The representative of the European Communities stated that his delegation had not, as
apparently thought by India, agreed that paragr aph 6.14 could be amended.  Members had to look at
this matter in a general sense.  A detailed discussion on a particular issue had taken place, and it
would be inappropriate if delegations would seek to rely further on what was said at a previous
meeting in order to make a case on one side or another.  Additionally, inserting statements, even if
they had been made, at a later stage in light of intervening discussions could change the weight and
balance of the minutes.  This should be done only as a very exceptional issue and was perhaps notjustified in any event. This was a matter that had to be approached with a great degree of caution and
his delegation could not agree today to the introduction of the statement proposed by India.  The
minutes had been submitted to all delegations for their comments, and the Committee would not doG/VAL/M/10
Page 32
itself a good service if it continued to review what  was said and change the balance of how it was
reflected.  His delegation was not going to refer to the minutes further.
6.27 The representative of India stated that she disagreed with the representative of the European
Communities.  Minutes of meetings were meant to be a factual and an accurate summarization of
discussions which had taken place.  The question of whether the discussions were balanced or not,whether Members on further reflection agreed with what the balance of those discussions was or not,
was something quite apart. This was something  that could be taken up in the future. The fact
remained that this discussion had taken place and this was the balance of the discussion as reflected in
the transcript. To not reflect in the minutes that balance was prejudicial to India's interest, and she
could not agree to that.
6.28 The representative of the United States stated that his delegation could not accept a
suggestion that would indicate that a decision was made at the point of the meeting in paragraph 6.2,
particularly if there was a suggestion that would then raise questions.
6.29 The representative of Mexico proposed that the relevant sections of the draft minutes of the
current meeting be given to delegations for comments, prior to circulation.6.30 The representative of India requested the Secretariat to prepare very full minutes for this
meeting which completely and accurately reflected all the views made.  She added that when the draft
minutes in question were sent informally to India for comments, India had made various points.
Unfortunately, they were not all incorporated which was why India had had to raise the matter in theCommittee. She hoped that the Committee would be able to sort this matter out before any other issue
was dealt with. Until then the status of the minutes of the last meeting would continue to be in
question.
6.31 The Committee took note of the statements.
6. Date of the next meeting
6.32 The next meeting of the Committee was scheduled for 12 November 1999, subject to
confirmation.
G. ELECTION OF OFFICERS
7.1 The Chairman recalled that the Rules of Procedures for meetings of the Committee on
Customs Valuation provided that the Committee elect a Chairperson at the end of the first meeting of
the year.  The Chairman of the Council for Trade in Goods had carried out informal consultations on a
slate of names for appointment as chairpersons of standing bodies in accordance with the established
guidelines for appointment of officers.  On the basis of the understanding reached, he proposed thatthe Committee elect M. Edward Brown (United Kingdom) as Chairperson.
7.2 The Committee so agreed.
7.3 The Chairman added that the Rules of Procedure also allowed the possibility of electing a
Vice-Chairperson.  He asked for nominations from Members.7.4 The representative of the European Communities nominated Mr. Syed Habib Ahmed
(Pakistan) as Vice-Chairperson of the Committee.
7.5 The Committee so agreed.G/VAL/M/10
Page 33
7.6 The new Chairman wished to raise a couple of points for reflection.  The first concerned the
organization of the Committee's work. For example, the Committee had heard an interesting
presentation from the WCO on the work of the Technical Committee on Customs Valuation and he
wondered whether it would not be better to receive the presentation in written form before the
meeting.  This would allow  Committee Member s to have more time to examine the report
beforehand, and if necessary, to put questions to the WCO representative at the meeting, thusfacilitating an effective dialogue. Likewise on notifications of national legislations, he thought that
delegations having questions should submit them in writing before the meeting so that the delegation
concerned would have had an opportunity to consult its authorities and thus be better placed to
provide an answer during the meeting, which in turn, would help to promote a more meaningful
exchange of views. Additionally, he wished to point out that under "other business" substantial
discussions should not be held, instead a problem could be highlighted or information provided.
Finally, on the Fourth Annual Review, he proposed th at unless he heard from India within the next
two weeks as to whether it was prepared to ente r into consultations, he would then, under his own
authority, seek guidance from the Chairman of the Goods Council on how to proceed with the Annual
Review.
7.7 The representative of India stated that there was a fourth matter which perhaps the Chairman
needed to address in his concluding remark and that was the matter of the minutes of the last meeting.
On the issue of holding informal consultations, she would try to encourage her capital to send
instructions within the two-week deadline.  Howe ver, she drew attention of the Committee to the
special situation her government was in, at the moment. She understood that her President had called
for fresh elections. So,  while she would try and meet the deadline of two weeks, she could not
guarantee it.
7.8 The Chairman stated that if India could let him know nearer the time if more time was
required, a reasonable extension could be given. Howe ver, the main point was that the work of the
Committee should go forward, and in his view consul tations were the most efficient way of trying to
move this problem forward.  Likewise the issue of the minutes from the last meeting could be dealt
with at the same time.
7.9 The Committee took note of the statements.
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