RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/M/12
19 January 2000
(00-0219)
Committee on Customs Valuation
MINUTES OF THE MEETING OF 12 AND 25 NOVEMBER AND 17 DECEMBER 1999
Chairman: Mr. Edward Brown (United Kingdom)
The agenda proposed for the meeting, circulated in WTO/AIR/1212 and Add.1 was adopted
as follows, with agreement to take up the items A and B.3 at the end of the meeting, immediatelybefore item F, Other Business.
A. REPORT ON THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS
VALUATION...................................................................................................................... ...2
B. I
NFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENT ...............2
1. Notification of nati onal legislation.......................................................................................2
(i) Brazil ...................................................................................................................... ................2
(ii) Canada..................................................................................................................... ...............3
(iii) Czech Republic ............................................................................................................ ...........3
(iv) Gabon...................................................................................................................... ................3
(v) Israel ...................................................................................................................... ................4
(vi) Mo rocco.................................................................................................................... ..............4
(vii) Namibia ................................................................................................................... ...............4
(viii) Panama ................................................................................................................... ...............5
(ix) Romania.................................................................................................................... ..............5
2. Notification that national legislation under the Tokyo Round Customs Valuation
Agreement remains valid under the WTO Customs Valuation Agreement....................5
C. I NFORMATION ON THE APPLICATION  OF  DECISIONS OF THE COMMITTEE ON CUSTOMS
VALUATION .............................................................................................................................6
D. T ECHNICAL ASSISTANCE ........................................................................................................6
1. Information on Technical Assistance..................................................................................6
2. Article 20.3: Technical Assistance Activities ......................................................................6
E. INDIA - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN
COMMUNITIES VAL UATION PO LICY ............................................................................8
F. FOURTH AND FIFTH ANNUAL REVIEW OF THE IMPLEMENTATION AND
OPERATION OF THE CUSTOMS VALUATION AG REEMENT .....................................9G/VAL/M/12
Page 2
G. PRESHIPMENT INSPECTION.............................................................................................9
H. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE
AGREEMEN T...................................................................................................................... 10
1. Notification made by deve loping country members ........................................................10
(i) Reservation on Minimum Prices...........................................................................................10
(ii) Extension of  delay period.................................................................................................. ....12
_______________
A. REPORT ON THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS
VALUATION
1.1 The Chairman informed Members that the WCO Technical Committee on Customs Valuation
had not yet held its ninth session.  He proposed that the Committee postpone this item and revert to it
after the WCO Committee would have met and a WCO representative would be present to give the
report.
1.2 The Committee so agreed.
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.  In addition,document G/VAL/W/35 contained questions by Costa Rica on this legislation.
2.3 The representative of Brazil stated that his delegation had recently responded to Costa Rica's
questions and he would send a copy of these responses to the Secretariat for circulation.2.4 The representative of the European Communities noted that at the last meeting his delegation
had stated its intention to provide questions to Brazil which it had done through informal
consultations.  Because they involved the legislation in question, his delegation requested the
Committee to revert to this item at its next meeting.   Responding to a query from the Chairman on
whether his delegation would circulate its questions, he indicated that it had no objection to doing so.
2.5 The representative of the United States noted that his delegation had requested to join in the
EC-Brazil consultations.G/VAL/M/12
Page 3
2.6 The representative of Brazil stated that his delegation had accepted the US request to join the
consultations.  He was puzzled as to why questions that were posed in the context of bilateral
consultations under the DSU would be circulated to the Committee.  His delegation had no problem
with this if the EC wished to duplicate efforts by circulating the questions to the Committee for
transparency purposes. His delegation also questioned keeping the Brazilian legislation on the
Committee's agenda if the EC was the only Member which had raised questions.
2.7 The Committee agreed to revert to the Brazilian legislation at the next meeting.
(ii) Canada
2.8 The Chairman drew Members' attention to Canada's responses to the Checklist of Issues
contained in G/ VAL/N/2/CAN/1.
2.9 The Committee agreed to conclude the examination of Canada's checklist of issues.
(iii) Czech Republic
2.10 The Chairman stated that the Czech legislation was contained in document
G/VAL/N/1/CZE/3 whic h contained the Customs Act, as amended, and the Decree of the Ministry of
Finance implementing some of the provisions of the Customs Act, as amended.  In addition, the
responses to the Checklist of Issues were contained in document G/VAL/N/2/CZE/1.
2.11 The representative of the Czech Republic stated that a previous notification had been made in
1996.  The new text contained the recent legislation on customs valuation, Articles 65 through 79 of
Law 13/1993 of the Customs Law modified by  Law 113/1997, valid to 1 July 1999, as well as
Articles 15 through 23 and Annexes V through X of  the Decree of the Finance Ministry, 135/1998 on
the implementation of some provisions of the Customs Law, amended by Decree 125/1999.
Document G/VAL/N/2/CZE/1 contained the responses to the Checklist of Issues.  In Article 73 of the
Customs Law, his Government had incorporated  the Decision Regarding Cases Where Customs
Administrations Have Reasons to Doubt the Trut h or Accuracy of the Declared Value.  His
Government had transformed the provisions of Annex I of the Agreement in Annex 5 of the Decree of
the Finance Ministry on the implementation of some customs provisions.
2.12 He added that the provisions concerning customs valuation in the Customs Law and in the
Finance Ministry Decree are in conformity with the customs regulation of the European Communities.
For the implementation of the Agreement, his Government transformed the provisions of its
Article 11.3.  The Customs Law contained a right of  appeal and did not yet contain any provisions
whereby a higher administrative body could addres s the appeal.  If the decision of customs was
confirmed, the appellant would have to be informed within two months.  By 1 December 1999, the
Ministry of Finance had to submit to the Government the draft modification of the Customs Law.
One of the amendments would be a condition for the acceptance of the Protocol to the Convention forthe Simplification and Harmonisation of Customs Regimes of 26 June 1999.  His Government
planned to sign this Convention within the time-limit allowed and ratify the modifications in the
Customs Law by 1 December 2001.
2.13 The Committee agreed to conclude examination of this legislation.
(iv) Gabon
2.14 The Chairman drew the Committee's attention to documents G/VAL/N/1/GAB/1 which
contained the Central African Customs and Economic Union (CEMAC) regulation on customsG/VAL/M/12
Page 4
valuation;  Act No. 3/98 amending Article 132 of  the Customs Code of CEMAC and Act No. 4/98
amending Article 140 of the Customs Code.
2.15 The representative of Gabon stated that his Go vernment's customs law, as in other domains,
followed the law of the Central African Customs and Economic Union.  CEMAC ensured that WTO
was integrated into the Community legislation.  Act 3/98 organized the procedure regardingapplication of the Agreement and Act 4/98 organized the procedures for sequestering goods in cases
of doubt about the value.  His delegation wished to inform Members that the Gabon Government will
apply the Agreement as of 1 January 2000.
2.16 The Committee agreed to conclude examination of this legislation.
(v) Israel
2.17 The Chairman stated that at the last meeting, the Israeli delegation had responded to two
points raised by the European Communities on its legislation contained in G/VAL/N/1/ISR/1.  The
representative of Israel stated that some mistakes had occurred in the translation of the law from
Hebrew into English which his authorities believed to be the source of the EC's concerns.  The
necessary corrections were made to the English translation and were circulated inG/VAL/N/1/ISR/1/ Corr.1.  It had been, nevertheless, agreed to revert to this legislation at this
meeting.
2.18 The representative of the European Communities thanked the Israeli delegation for the
follow-up action it had taken.2.19 The Committee agreed to conclude examination of this legislation.
(vi) Morocco
2.20 The Chairman stated that at the last meeting, the Committee took note of the Moroccan
legislation circulated in G/VAL/N/1/MAR/1, Rev.1 and Corr.1 and the responses to the Checklist of
Issues in G/VAL/N/2/MAR/1.  There were a number of questions posed to the delegation of Morocco
which it was agreed would be furnished in writing.  It was also agreed that the Committee would
revert to this item at this meeting.  At the last meeting, the Committee also heard a report from the
delegation of Morocco on the status of its implementation of officially-established minimum valuesfor the products listed in GV/AL/W/27.  In the Decision laying out the terms and conditions of
Morocco's invocation of paragraph 2, Annex III, it was agreed that Morocco would make such a
report at each meeting.
2.21 The representative of Morocco stated that his delegation had received questions from certain
Members and it had furnished replies directly to these Members.  Concerning the report on the status
of the implementation of minimum values, he stated that there was no change since his delegation'slast report.
2.22 The Committee agreed to conclude examination of this legislation, however, Morocco would
still provide a report on implementation under paragraph 2, Annex III at the next meeting.
(vii) Namibia
2.23 The Chairman drew Members' attention to  document G/VAL/N/1/NAM/1 which contained
the portion of Namibia's Customs and Exci se Act 1998, relevant to customs valuation.
2.24 The Committee agreed to conclude the examination of this legislation.G/VAL/M/12
Page 5
(viii) Panama
2.25 The Chairman recalled that the legislation of Panama was circulated in document
G/VAL/N/1/PAN/1 and the responses to the Check list of Issues in document G/VAL/N/2/PAN/1.  At
the last meeting, the delegation of India informed the Committee that it had not received a response to
the question that it had posed at the November 1998 meeting of the Committee.  Therefore, it had
been agreed to maintain this item on the agenda of this meeting.
2.26 The representative of Panama wished to reply to the Indian question orally at the present
meeting.  He recalled that the Indian questions related to items 4 and 5 of the Panamanian legislation.
In order to clarify matters, he stated that Resolution 704/04/528 under item 4 of the legislation,
contained provisions relating to the organization and operation of diverse Government institutions.
These provisions were adopted with a view to simplifying customs procedures and to offer better
service to users.  Resolution 704/04/532 under item 5 of the legislation related to provisionsgoverning administrative procedures on how an individual would declare the components of customs
valuation calculations.
2.27 The representative of India stated that she was satisfied with the response and had no further
questions.2.28 The Committee agreed to conclude the examination of this legislation.
(ix) Romania
2.29 The Chairman drew Members' attention to the document G/VAL/N/1/ROM/2 which
contained the relevant provisions for customs va luation of the Customs Code of Romania.  The
legislation maintained and detailed the principles and rules previously in force, already notified in
document VAL/1/Add.8/Suppl.2 of 20 May 1992 and G/VAL/N/1/ROM/1 of 28 August 1995.
2.30 The representative of the United States stated that his delegation had two questions on this
legislation.  First, it sought confirmation that the legislation provided for the use of minimum import
prices;  and second, it sought confirmation as to  whether Romania was not using minimum import
prices for certain commodities.
2.31 The representative of Romania stated that the new customs legislation did not have any
specific provisions on the use of minimum import prices.  He considered that the question related to
the internal order of the Customs Authority of Romani a.  In the context of the Trade Policy Review of
Romania, his delegation was questioned on this matter.  His Minister had provided an answer in that
context.  The Customs Authority of Romania had put into place a database for use in cases where the
declared customs value was not the real one or the authorities had doubts about the truth of this value.
However, this database was used only in a very limited number of cases and was not a minimum price
database.  If more details were requested, he agreed to discuss this matter in bilateral discussions.
2.32 The representative of the United States stated that his delegation would follow-up with a
more detailed question concerning the operation of Romania's regime.2.33 The Committee agreed to revert to this legislation at the next meeting and that any questions
should be provided by 31 March 2000.
2. Notification that national legislation under the Tokyo Round Customs Valuation
Agreement remains valid under the WTO Customs Valuation Agreement.G/VAL/M/12
Page 6
2.34 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 not been any such notifications.
2.35 He urged Members who had not notified their legislation as well as replies to the Checklist of
Issues, to submit the required notification and replies as soon as possible.
2.36 The Committee took note of the information.
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 was to take note of any new
notifications of application of the Decisions of the Committee on Customs Valuation on the
"Treatment of Interest Charges in the Custom s 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, document G/VAL/W/5/Rev.6 wascirculated containing the reference of the notification by Peru.  Specifically, in document
G/VAL/N/3/PER/1, Peru notified that as from  1 August 1999, it was applying the Decision on
Valuation of Carrier-Media Bearing Software for Data Processing Equipment.
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 the document series G/VAL/8.  Since the
WCO had not held its ninth session yet he suggested that the Secretariat prepare and circulate for
Members' information this document as soon as this information was received from the WCO.
4.2 The Committee so agreed.
2. Article 20.3: Technical Assistance Activities
4.3 The Chairman stated that 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.  He noted, for information, that there were presently 55 developing countries which weredelaying implementation of the Agreement in accordance with Article 20.1.  For 28 of these countries,
the delay period would expire on 1 January 2000.  This meant that the end of the period in which they
should have made the transition was imminent. Another 21 Members would have to apply by various
dates during the year 2000, and another 6, by various dates during the year 2001.  Furthermore, there
were 25 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 these delay periods should be
using this time to prepare for implementation of the WTO Agreement.  Article 20.3 also contained
provisions for the furnishing of technical assistance on a request basis, which developing country
Members could utilise for this purpose.  He requested the Secretariat to update the Committee on its
technical assistance activities related to implementation of the Agreement.G/VAL/M/12
Page 7
4.4 The Secretariat informed the Committee that, under its technical assistance programme, 32
missions to developing country Members which had requested assistance had been completed.
Eleven requests for assistance were pending and these missions would likely be carried out early next
year.  In addition, four Members had requested follow-up assistance and it was hoped that the WTO
would be in a position to also deal with these re quests.  Recalling that the programme was organized
into three phases of activity, the Secretariat informed the Members that the third phase of activity, tobe initiated early next year, would target thos e Members who had not notified legislation nor had
invoked the five-year delay period.
4.5 The representative of Canada welcomed the work by the Secretariat on technical assistance.
He noted that his Government was also making efforts in this regard.  At the last meeting, his
delegation had tabled a paper indicating the work it had been doing.  Since that time, under the APEC
Programme on Customs Valuation Technical Assistance,  officials had been sent from Canada to run
the Module2 part to Brunei, Papua New Guinea, Malaysia, China, Chile, Indonesia, the Philippines,
Thailand, Peru and Vietnam.  In some cases, Canadian officials were joined by officials from New
Zealand.  In addition, a new programme was being initiated for Barbados next year.
4.6 The representative of the European Communities informed the Committee that the EC was
working on the preparation of a technical assistance programme for Russia which would imply
coordination among various Members.   In the field of technical assistance, the EC had established a
programme to assist in the implementation of the Agreement that would cover all of the ACP
countries.  Finally, he added that many of the EC Member countries were providing assistance on a
bilateral basis.  For example, this year, France deliv ered technical assistance to eleven countries in the
ACP area.
4.7 The representative of New Zealand informed the Committee that he was circulating a paper
outlining recent New Zealand technical assistance activities.  Importance was placed on
implementation of the Agreement mainly in the Asia-Pacific region among WTO Members as well asacceding countries.  Most recently, New Zealand had been involved in the APEC training modules in
Malaysia, Papua New Guinea, Brun ei, Vietnam, Chinese Taipei, Myanmar, Laos, Cambodia and Fiji.
4.8 The representative of Australia informed Members that her delegation was working on a
paper explaining its technical assistance activities to be circulated soon.  At previous meetings, her
delegation had praised the document G/VAL/W/25 in bringing together information on technical
assistance and in providing a basis for coordination and prioritisation of technical assistance.  Her
delegation urged developing countries to respond to the Chair's request for information on technical
assistance needs as the provision of this kind of information could assist the Secretariat and the Chair
in updating this document.
4.9 The representative of Switzerland informed Members that her Government had been
providing direct and indirect assistance on customs matters.  She focused her comments on three main
areas.  In the field of the Agreement, her Government had financed 9 WTO technical assistance
missions in 1998.  Secondly, under the Joint Implemented Technical Assistance Program (JITAP)
which mobilized the expertise and support of UNCTAD, ITC and the WTO to assist countries to
strengthen their national capacities in order to pa rticipate in and benefit from the new multilateral
trading system, Switzerland maintained national projects in Ghana and Uganda.  Information and
training was provided to the national authorities on the implementation of the WTO Agreements.  The
information focused mainly on notification procedures and all other issues related to implementation.
Thirdly, Switzerland was planning a project on trade facilitation measures to be initiated during the
year 2000.  One component of this project was im plementation of the Customs Valuation Agreement,
in collaboration with private sector entities.  The objective was to target skilled service providers
which would offer low-cost services to least-developed countries in order to implement theG/VAL/M/12
Page 8
Agreement efficiently.  Because it was an ambitious project and finance authorities would have to be
involved, it would need to be discussed in the broader context of trade facilitation.
4.10 The representative of Madagascar informed Members that in July 1999, his Government had
benefitted from the WTO technical assistance programme.  Two experts came to Madagascar in order
to assist in developing a strategy for implementation of the Agreement.  During the mission, the draftlegislation was reviewed and a study was made of the training for customs agents and for the private
sector operators, and of the impact of the legislation on preshipment inspection.  In 1997, Madagascar
had received assistance from the World Customs Organization.  He added that much was still left to
do before the legislation was in place, in particular the implementing legislation would have to be
drawn up.  Further training was necessary as was assistance to the private sector operators and
education to the public.  He noted that, most likely, further technical assistance would be required and
requested.
4.11 The representative of Japan informed Members that his Government provided many technical
assistance activities and that it was in the process of preparing a paper explaining them.  He agreed
with Australia that responses to the Chairman's request for information were important for planning
such assistance.
4.12 The representative of Mauritius noted the growth of the Secretariat programme on technical
assistance from which his Government had benefitted.  He also thanked other Members who were
providing technical assistance, in particular the European Communities.  However, it was clear that
many Members were still having difficulties in making the transition and this would have to beunderstood.
4.13 The representative of Cuba thanked the Secretariat for the technical assistance mission which
had been carried out early this year.  Following this mission, a number of the recommendations made
had been followed up to better adapt national legislation to the provisions of the Agreement.
4.14 The Chairman urged developing country Members to make known to the Committee their
technical assistance needs in the area of customs valuation.  At the same time, he added that technical
assistance was not sufficient to solving implementation problems;  political commitment was also
essential to ensuring resolution of problems.  The Committee took note of the statements.
E. INDIA  - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN
COMMUNITIES VALUATION POLICY
5.1 The Chairman recalled that at the last meeting it had been agreed that this item would be kept
on the agenda for the Committee's next meeting and that the Indian delegation would provide
questions to the European Communities in writing.  He asked if these questions had been provided.
5.2 The representative of India stated that her delegation intended to provide questions in writing
to the European Communities at this meeting.  For purposes of transparency, she wanted also to
present them orally.  First, since when had the system of fixing standard import values been in
operation in the EC?  In particular, how long was it in operation before 1 January 1995, the date of the
WTO coming into force?  Second, was the duty calculated and paid with reference to the standardimport values fixed for the products in question or was it paid on the basis of the transaction value?
Third, under which article of the Agreement on Customs Valuation were the standard import values
fixed?  Fourth, had the EC had made any reservation at any time to fix standard import values either
under the Tokyo Round or WTO Agreements?  Fifth, what was meant by tariff position in the EC's
oral statement at the April 1999 meeting of the Committee?  Did the tariff position correspond to thetariff classification under the Harmonised System?  Sixth, if so, how could this be determined with
reference to CIF price average value, entry price, or fixed standard import values?  In the interest ofG/VAL/M/12
Page 9
transparency, she requested the EC to explain its position with examples of standard import values.
Finally, she noted that it was apparent to her delegation that the EC was using a system of fixed
standard import values for customs purposes on imports of fruits and vegetables instead of
determining value under the Agreement on Customs Valuation.  She asked what was the justification
for making such a departure from the Agreement?
5.3 The representative of the European Communities stated that his delegation would take note of
the questions and follow-up with responses as soon as possible.
5.4 The Committee agreed to revert to this item at its next meeting.
F. FOURTH AND FIFTH ANNUAL REVIEW OF THE IMPLEMENTATION AND
OPERATION OF THE CUSTOMS VALUATION AGREEMENT
6.1 The Chairman recalled that at the meeting of 13 November 1998, the Committee had adopted
the Fourth Annual Review on an ad referendum basis pending the resolution of an issue raised by one
delegation on paragraph I.b(iii).  At the April 1999 meeting of the Committee, an extensive discussion
of this item ensued, at the end of which it had been agreed to leave the matter with the in-coming
Chairman.  Following that meeting, the Chairman had informally consulted among a few Memberswith the aim of trying to resolve the matter.  Unfo rtunately, his efforts had not borne fruit.  He added
that at this meeting, the Committee had before it  the Fifth Annual Review.  Given that the problem
with paragraph I.b(iii) remained in this Annual Review, he suspected that the Committee would find
itself in the same situation as in November 1998.  He, therefore, held informal consultations with the
Member which had raised the issue.  While construc tive, these consultations were not able to resolve
this impasse.  He suggested it would be prudent if Members reflected further upon this particular
matter and associated related matters, and the Committee would revert to it at its next meeting in
April 2000.
6.2 The Committee took note of the Chairman's statement and agreed to revert
 to this issue at the
next meeting.G. PRESHIPMENT INSPECTION
7.1 The Chairman noted that, following adoption of the final report of the Working Party on
Preshipment Inspection in document G/L/300, the Gene ral Council agreed that future monitoring of
the Agreement on Preshipment Inspection should be undertaken initially by the Customs Valuation
Committee, where PSI would be a standing agenda item.  Therefore, this subject had been included on
the agenda of this meeting.  He noted that the Wo rking Party, in its final report, requested that this
report be read in conjunction with its two previous reports, contained in G/L/214 and G/L/273.
7.2 The representative of the United States noted that his delegation attached great importance to
the operation and implementation of the Agreem ent on Preshipment Inspection.  Consequently, he
suggested that this item remain a standing agenda item and that the Secretariat update in advance of
the next meeting the situation with regard to coun tries using PSI regimes.  This information had been
part of the final report of the Working Party and, gi ven that the situation changed regularly, it would
be useful to have such a listing for each meeting.
7.3 The Committee took note of the statement and agreed  that the Secretariat would prepare such
an information document.G/VAL/M/12
Page 10
H. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE
AGREEMENT
1. Notification made by developing country members
8.1 The Chairman drew the Committee's attenti on to document G/VAL/2/Rev.9 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 Niger and Tanzaniawhich had notified  their invocation of the five-year delay period in accordance with Article 20.1.  Inaddition, Niger notified invocation of paragraphs 2, 3 and 4 of Annex III in documents WT/Let/301.For Niger, the five-year delay will terminate on 13 May 2001 and for Tanzania on 1 January 2000.
The document also listed those developing country Members which might still retain some of thespecial and differential treatment provisions according to the Decision on "Continued Applicationunder the WTO Customs Valuation Agreement on Invocations of Provisions for Developing Countriesfor Delayed Application and Reservations under the Customs Valuation Agreement 1979" (WT/L/38).
8.2 The Committee took note of this information.
8.3 The Chairman proposed taking up the second sub-item first, namely the reservations on
minimum values under paragraph 2 of Annex III.
(i) Reservation on Minimum Prices
8.4 Under this sub-item, invocation of the reservation on minimum prices under paragraph 2 of
Annex III, the Chairman noted that Gabon, Honduras and Malta had presented their requests and
arguments in documents G/VAL/W /38, G/VAL/W/44, and G/VAL/W/47, respectively.  He added his
understanding that Honduras had revised its request which was circulated officially as a revision in
document G/VAL/W/44/Rev.1.
8.5 The representative of Malta told the Committee that his delegation would appreciate
agreement by the Committee on its request to retain the application of minimum values on motor
vehicles beyond the year 2000.  As indicated in his Government's document, it still needed time to
find alternative means to collect the revenue lost.  In addition, Malta needed to discourage theimportation of used motor vehicles.  Its limited territory, i.e. 320 square kilometres of the Maltese
islands, a dense population of about 400,000, and the high rate of per-capita cars together indicated
the need for these values.  Like in many other countries, in Malta there was a high awareness of
environmental issues such as pollution.  His Government would endeavour to find an alternative
quickly so that these values could be phased out and complete compliance with the Agreement couldbe achieved.
8.6 The representative of Honduras stressed that his Government's request was for a small group
of used goods and was based on a series of justifications intended to promote fair practices in trade
and to ensure that his country's population enjoyed the highest possible standard of living and
guaranteed consumer products.  He informed the Committee that about six years ago, Honduras
observed, with concern, an increase in imports of used goods.  This resulted from reduced income andemployment opportunities among the population which was exacerbated by the hurricane Mitch.
Furthermore, his Government was engaged in adapting its procedures and legislation to the task of
reconstructing a country which was destroyed by a di saster which was unique in history and for which
it was not prepared.  This required a balance between allowing an increase in the capacity to increase
donated resources and exercising due control and monitoring of these resources.  Imports of usedclothing had generated a massive displacement of la bour in small and medium sized enterprises and
had led to their closures.  It had also made available second-hand products which could affect theG/VAL/M/12
Page 11
health of the population by exposing them to diseases.  Likewise, the import of used vehicles and used
tires had led to traffic accidents plus damage to the environment.  These imports were often
accompanied by doubtful documentation which his Government did not have the capacity to monitor
and verify.  With regard to used electrical appliances, there was a danger that they would damage the
ozone layer because of refrigeration gases used as well as risks of accidents through explosions.  The
buying and selling conditions under which these products were purchased did not guarantee thecorrect application of the Agreement since these operations often went through the informal sector of
the economy.  This situation was further aggravated by the human and material resource limitations in
Honduras to check values.  In addition, Honduras did not receive sufficient collaboration from the
exporting countries of such merchandise.  He added that his Government's request was not based on a
desire to restrict trade flows.  On the contrary, his Government supported fair trade practices within
the framework of free competition.  Finally, Honduras had not received the necessary technical
assistance from developed countries to apply the Agreement.  It was only with its limited resourcesand the assistance of organizations in the region that his Government could apply the Agreement by
1 January 2000.  However, it sought due regard for its request under paragraph 2 of Annex III.
8.7 The Chairman stated that these requests had been the subject of informal consultations among
interested Members.  He understood that possible agreements may be reached on the terms and
conditions for these requests based on the Decision adopted by the Committee for Morocco's
reservation (G/VAL/M/8).  He circulated three draft Decisions for consideration by Members.
8.8 The representative of Gabon stated that his Government was committed to apply the
Agreement by 1 January 2000, the date on which it was obliged to do so.  However, it requested a
reservation under paragraph 2 of Annex III to retain minimum values for a limited number of products
for a transitional period of at least four years.  Gabon's exports were based on exhaustible natural
resources which was the reason for the request.
8.9 The representative of the United States noted that his delegation had engaged in informal
consultations with the three requesting Members and could endorse the three draft Decisions.  His
delegation also considered it significant that these three Members were moving towards applying on
time and recognized that a great deal of work had gone into the implementation process.  His
delegation considered that implementation of the Ag reement was a very important step to improving
the overall trade environment.
8.10 The representative of Cuba considered that the products covered by the Honduran request
reflected the types of problems it was facing during the last year owing to the natural hurricane
disaster.  Because the Decision was for a limited number of products and for a limited time-period, his
delegation could support it.
8.11 The representative of Mauritius noted his agreement with the delegations of the United States
and Cuba.  His delegation had sympathy for the three Members and supported the proposals.8.12 The representative of the European Communities supported the statement by the United
States and also endorsed the draft Decisions which would contribute towards these Members'
implementation of the Agreement.
8.13 The representative of Canada noted the fact that these three Members would all implement
the Agreement on 1 January 2000 except for the limited number of products which would be subject
to minimum values for a limited number of time.  Their implementation was very important and the
reasons given to justify the requests were valid.  Therefore, his delegation could support the draftDecisions.G/VAL/M/12
Page 12
8.14 In addition, the representatives of New Zealand, India , Colombia , Guatemala , Switzerland ,
Australia, Morocco , Venezuela , Egypt , Japan,  Hong Kong, China , Dominican Republic , Nicaragua ,
Madagascar, Uruguay , El Salvador , Senegal , Kuwait , and Panama  voiced their support for the three
draft Decisions.
8.15 The representative of Honduras stated for the record his delegation's understanding that
implementation of this Decision would not prevent any further requests for extensions, if the situation
and circumstances so required.  His delegation appreciated Members' support and understanding after
the devastating natural disaster experienced by Honduras.  Finally, his delegation requested the
Committee's approval of this draft Decision at this meeting.
8.16 The representative of Gabon thanked Members who had given support for his country's
request.  In the spirit of compromise, his delegation could accept the period of three years as
contained in the draft Decision without prejudice to its rights and obligations.
8.17 The representative of Malta thanked Members for their support and noted that his delegation
was in agreement with the draft Decision.
8.18 The Committee adopted the three draft Decisions which were circulated in documents
G/VAL/14, G/VAL/15, and G/VAL/16.
(ii) Extension of delay period
8.19 The Chairman stated that of the 28 Members who were obliged to implement the Agreement
by 1 January 2000, Kuwait, Myanmar, Sri Lanka, Para guay, Senegal, and Côte d'Ivoire had thus far
requested extensions of the five-year delay period in accordance with paragraph 1 of Annex III of the
Agreement.  They had circulated their requests and arguments in the documents G/VAL/W/34,
G/VAL/W/40, G/VAL/W/41, G/VAL/W/42, G/VAL/W/ 45, and G/VAL/W/47, respectively.  He
noted that consultations were still ongoing among Members on these requests.  Therefore, after ageneral discussion, he proposed suspending the meeting until a later date, to be announced at short
notice.  He hoped that when the Committee resumed its meeting, it would be in a position to conclude
these requests.
8.20 The representative of Kuwait stated that his delegation was holding fruitful consultations with
its major trading partners concerning its request for an extension of the transitional period for two
years.  His Government was making a serious effort to implement the Agreement.  The two years
requested would enable Kuwait Customs to:  deve lop the necessary knowledge on how to bring the
national legislation, rules and procedures into conformity with the Agreement which required
consultations with other Government bodies;  complete the training of customs officials to acquaint
them with the provisions of the Agreement, of new techniques and of procedures;  modernise and
computerise customs valuation data and procedures in order to connect all ports, airports and customsstations;  and obtain approval of this legislation by the Cabinet and then the Parliament.  Once
implementation of the Agreement was established, a training programme would be set up for the
business community to develop a common understanding between the Government and the private
sector.  Therefore, he appealed to Members to consider positively his delegation's request.
8.21 The representative of Senegal expressed his hope that the Members of the Committee had
been able to study his Government's request contained in G/VAL/W/45.  He informed the Committee
that his delegation had been in consultations with interested Members on this request.  Four points
emerged from these consultations.  The first was that Senegal's trading partners seemed to understand
the difficulties encountered by the Senegalese administration to satisfactorily implement theAgreement.  Second, if the extension was granted, it would serve as a multilateral framework for
monitoring the process of implementation.  Third, a programme for implementation with target datesG/VAL/M/12
Page 13
would have to be drawn up by his Government and submitted as soon as possible.  Fourth, the
consultations would have to continue on the optimum period covered by the extension.  His
delegation welcomed the evolution of events until now and reiterated his Government's commitment
to the multilateral trading system and to implementing its WTO obligations.
8.22 The representative of Sri Lanka stated that her Government's request, contained in
G/VAL/W/41, was self-explanatory.  She reiterated Sri Lanka's desire to fulfill its obligations under
this Agreement.  Her delegation had held consultatio ns with some interested Members with a view to
arriving at mutually agreed conclusions on this request.  Her delegation wished to continue these
consultations and expressed the hope that the Committee would eventually grant a favorable outcome
to this request.
8.23 The representative of Paraguay stated that his Government had found the period of five-years
too short for its transitional process and therefore requested an extension of this period for two years.
Through Law 444/94 which ratified the Final Act of the Uruguay Round, and other norms and rules,
Paraguay had incorporated in its legislation the provisions of the Agreement.  However, his
Government was encountering many technical difficulties in applying the WTO system of valuation.
Nevertheless, his Government undertook to work towards implementation of this Agreement.  It waslargely applying the Agreement and the impediments would be overcome but more time was
necessary.  His delegation was consulting with other Members on the request and would be reporting
on the advances made in due course.
8.24 The representative of Côte d'Ivoire thanked the Members of the Committee for the time they
had devoted to his Government's request.  Côte d'Ivoire was committed to applying the Agreement.
However it continued to face a number of difficulties which it was not yet in a position to overcome,
despite the many efforts made after the devaluation of the currency in 1993 and other liberalization
measures.  Furthermore, implementation of the Agreement required an adequate regulatory and
administrative environment to be created.  Finally, as a member of the West African Monetary Union,Côte d'Ivoire was engaged with other members in a reform programme comprised of, in particular,
adoption of the Agreement.  Côte d'Ivoire had started consultations with interested Members and
would continue them to examine a progamme of implementation with a precise agenda and time-table
for activities.
8.25 The representative of Gabon stressed that in spite of the political will in many countries to
apply the Agreement, there were major problems which existed.  These problems were linked to, inter
alia, human resources, technological problems, and the legal and regulatory framework of these
countries.  Often, these problems had to be solved in order to implement the Agreement.  Therefore,
his delegation understood the requests made by these Members and would study them with special
attention.
8.26 The representative of Colombia stated that his delegation had sympathy with these requests.
It understood the difficulties which were being encountered by these countries and other Members as
they attempted to apply the Agreement.  His delegation expressed the hope that these requests and
others that were made would be resolved favorably to the requesting Member.  He noted that the
Spanish version of document G/VAL/W/46 stated that Côte d'Ivoire was ready to apply theAgreement on 1 January 2000.  He asked Côte d'Ivoire to precise how long it was seeking an
extension.
8.27 The representative of Côte d'Ivoire specified that this request was for an additional five years.
8.28 The representative of Mauritius highlighted that two of the six requests were from African
countries with which his Government had extensive relations.  His delegation was keenly aware of the
problems faced by these Members.  The other requests showed similar types of difficulties such asG/VAL/M/12
Page 14
human resource development, problems with budg etary implications, the legal framework and
infrastructure, institutional capacity building, administration, technology, and changing management
and adaptation.  Also, educating the public and administrations would be necessary.  These difficulties
boiled down to systemic issues for the macro-economic management of a country.  He concluded that
the problems were relevant and that these requests should be viewed with the utmost sympathy.
8.29 The Chairman commended the consultations that had been initiated by the six Members and
urged them to continue over the coming days and weeks.  He reiterated that this process was moving
forward because the Committee had a mandate to give sympathetic consideration to such requests.
He urged any additional Members who would be re questing extensions to communicate them to the
Secretariat as soon as possible.  Further, he reminded all those Members which were scheduled to
implement the Agreement, that according to the Decision on Notification and Circulation of National
Legislation, adopted by the Tokyo Round Committee in 1981 and subsequently by the WTOCommittee in 1995, Members availing themselves of the provisions of Article 20.1 and 2, were
obliged to notify the text of their national legislation to the Committee before the developing country
Members began the application of the Agreement.  This meant that all those Members which were
obliged to apply the Agreement by 1 January 2000, must notify their legislation by that date.
8.30 The Committee agreed to suspend this meeting in order to continue consideration of this
agenda item and the remaining items on the agenda.
Resumption of meeting on 25 November 1999
1.1 The Chairman drew Members' attention to a draft Decision on the terms and conditions for
Paraguay's request for an extension of the delay in applying the Agreement.  This draft had been
circulated to Members in advance of the meeting.
1.2 The representative of Paraguay expressed his delegation's gratitude for those Members which
had entered into consultations on its request.  He reiterated his Government's commitment to comply
with the terms of this Decision and its understanding that this Decision would not prejudice
Paraguay's rights and obligation under the WTO Agreements.
1.3 The representative of Brazil joined the consensus in adopting this Decision with the
understanding that this would not prejudice Paraguay's obligations and Brazil's rights on agreements
reached in its regional forum.
1.4 The representative of Colombia informed the Committee that his Government was drafting a
request for an extension which it would submit to the Committee shortly.1.5 The Committee adopted the draft Decision on Paraguay's reservation under paragraph 1,
Annex III which would be circulated to Members as an official document.  The Comm ittee  agreed to
suspend further the meeting in order to continue co nsideration of this agenda item and the remaining
items on the agenda.
Resumption of meeting on 17 December 1999
1.1 The Chairman proposed that the Committee take up the first item of its agenda, namely the
report on the work of the Technical Committee on Customs Valuation.1.2 The representative of the World Customs Organization presented his report on the ninth
session of the Technical Committee, which took place from 22 to 26 November 1999.  It is
reproduced as an Annex to this report.G/VAL/M/12
Page 15
1.3 The Committee took note of the report, in particular the request from the Technical
Committee that it address an issue raised by Mexico on the proper application of the principle of
differential and most favoured treatment for developing countries in the Agreement.
1.4 The Chairman noted that there were six requests pending under paragraph 1, Annex III for
extensions of the Article 20.1 delay period beyond 1 January 2000.  The outstanding requests were
from Côte d'Ivoire, Myanmar, Senegal, Sri Lanka, Kuwait and Tanzania.  Further there were three
requests pending for Members who were obliged to implement the Agreement during the year 2000.
These requests were from Colombia (G/VAL/W/53), Dominican Republic (G/VAL/W/54) and
Guatemala (G/VAL/W/52).  He drew Members' attention to two draft Decisions which had been
circulated to Members in advance of this session of the meeting.  He proposed that the Committee
adopt these Decisions.
1.5 The Committee adopted the draft Decisions on Kuwait's and Tanzania's reservations under
paragraph 1, Annex III which would be circulated to Members as official documents.
1.6 The representative of Mexico stated that his delegation had no objection to adoption of the
two draft Decisions.  However, he noted his delegation's understanding that their adoption did not
prejudice attempts following from the Seattle Ministerial to search for a global solution to transition
periods which should be taken up in the WTO General Council.
1.7 The representative of Uruguay informed the Committee that his delegation would be
requesting a reservation for minimum values under paragraph 2, Annex III for one year.  His
Government had been reducing the extent and scope of applying minimum values and its goal was
their total elimination.  The request would be sent to the Secretariat shortly and he underlined his
Government's intention to apply the Agreement by 1 January 2000.
1.8 The Chairman stated that it was his understanding that as long as Members made requests for
extensions by 31 December 1999, the Committee was bound to consider them.  Therefore, he
proposed that the Committee hold a formal meeting in mid January to take stock of any new requests
received from the present to the end of the year.  All requests would be circulated as they were
received and that, following the January meeting, the Committee would meet as often as necessary to
address these requests as well as the outstanding unresolved requests.
1.9 The Committee so agreed.G/VAL/M/12
Page 16
Annex
Report to the Committee on Customs Valuation on the 9th Session of the
Technical Committee on Customs Valuation
Mr. Chairman, Members of the Committee,
I am Merv Kemp the new Deputy Director, Valuation at the World Customs Organization.
Mr. Vicente, the Chairman of the Technical Committee on Customs Valuation, is unable to attend this
Session of the Committee and has asked me to present the Report of the 9th Session of the Technical
Committee on Customs Valuation on his behalf.
The formal  report of the Technical Committee has been published as WCO doc. VT0076E2.
I intend to highlight only certain aspects of the November meeting.  The 9th Session was very well
attended with delegates and observers from 63 countries and two international organizations.
In opening the 9th Session the Director gave a report on intersessional developments.  This
included references to the Council's revised strategic plan;  relationships with key international
organizations;  and the planning for the WTO Ministerial Conference  in Seattle.  Under the item
Future Direction the Technical Committee took note of the status of each of the recommendations for
improving the work of the Technical Committee and in doing so instructed the WCO Secretariat to
review those relating to the timely distribution of working documents.  In terms of Technical
Assistance, the Technical Committee took note of the various seminars, training courses and expert
missions that had been carried out by WCO Secretariat staff during the intersession.  Canada, the USand Japan also gave details of activities undertaken by them during the past six months.
The Technical Committee was advised that many requests for technical assistance were still
being received from developing countries.  Here it was agreed that there was a need to enhance
further the work undertaken by the WCO and the WTO to ensure that the limited resources available
were being used to greatest effect.  In this contex t the need to exchange, between the two Secretariats,
training programmes and the benefits of closer liaison and cooperation were emphasised.  The
Technical Committee noted the potential for more coordination between the WCO and WTO and Iwill be following this up with your Secretariat as a matter of priority.  On implementation the
Technical Committee received six excellent presentations from Indonesia, Sri Lanka, Kenya, Chile,
Morocco and Ghana.
A number of Specific Technical Questions were examined by the Technical Committee at its
9th Session.  These included:
(a) The meaning of the expressions (in the Agreement) of "the goods being valued" and "as a
condition of sale";
(b) Matters linked to Advisory Opinion 4.8 "Royalties and licence fees";
(c) The treatment of Accrued credits;
(d) The Valuation treatment of importations by joint venture;(e) The application of Article 1 when dealing with goods imported below cost;(f) Sufficient guarantees in relation to Article 13 of the WTO Valuation Agreement.G/VAL/M/12
Page 17
All these matters will be further examined by the Technical Committee at its 10th Session and
I will of course keep you fully informed of developments.
There was one matter that the Technical Committee decided fell outside its mandate.  This
concerned a request from Mexico to "Review the proper application of the principle of differential and
most favoured treatment for developing countries in the Valuation Agreement".  The TechnicalCommittee was of the view that this question was more appropriate for consideration by the WTO
Valuation Committee and asked that I take the necessary steps to refer this question to you.
Mr. Chairman I will today brief the WTO Secretariat on this matter with a view to their
deciding the most appropriate course of action.
The Technical Committee spent some time discussing the programme of the Theme Meeting
to be held at the WCO headquarters in Brussels next May.  Here it was finally agreed that a series of
presentations on for example the management of va luation risk, Customs controls, computerization,
risk assessment, profiling and targeting would be a great benefit to Members, particularly developing
countries.  So the agreed focus of the two day meeting will be risk assessment and management as
those issues relate to Customs Valuation.  The draft programme will be available soon as will the draftagenda for the Technical Committee 10
th Session which will be held over the period 22/26 May.
Mr. Chairman, I would be happy to answer any questions that the Committee may have.
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