RESTRICTED
WORLD TRADE G/VAL/M/6
19November 1997
ORGANIZATION(97-5097)
Original: English Committee onCustoms Valuation
MINUTES OFTHE MEETING OF23OCTOBER 1997
Chairman: Mr.T.diPietro (Italy)
Theagenda proposed forthemeeting, circulated inWTO/AIR/702, wasadopted asfollows:
Page
1. Report onthework oftheTechnical Committee onCustoms Valuation ..... 2
2. Information onimplementation andadministration oftheAgreement ....... 5
(a) Notification ofnational legislation ....................... 5
- India (G/VAL/N/1/IND/2; G/VAL/W/8; G/VAL/W/14;
G/VAL/W/19) ............................... 5
- Mexico (VAL/1/Add.25/Suppl.1, 2and3;
VAL/2/Rev.2/Add.8) .......................... 5
- Singapore (G/VAL/N/1/SGP/1; G/VAL/N/2/SGP/1) ....... 6
(b) Notification thatnational legislation under theTokyo Round
Customs Valuation Agreement remained valid under theWTO
Customs Valuation Agreement .......................... 7
(c) Notifications made bydeveloping country members (G/VAL/2/Rev.6) .. 8
3. Information ontheapplication ofDecisions oftheCommittee onCustoms
Valuation (G/VAL/W/5/Rev.3) ............................... 8
4. Technical assistance ...................................... 8
(a) Information ontechnical assistance (G/VAL/8/Add.2) ............ 8
(b) Article 20.3technical assistance activities (G/VAL/W/20) .......... 9
5. Report oftheCommittee onCustoms Valuation totheCouncil forTrade
inGoods (G/VAL/W/21) ................................... 14
6. Third Annual Review oftheImplementation andOperation oftheCustoms
Valuation Agreement (G/VAL/W/22) ........................... 14
7. Other business ......................................... 14
(a) Dateforthenextmeeting .............................. 14G/VAL/M/6
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1. Report onthework oftheTechnical Committee onCustoms Valuation
1.1 Theobserver fromtheWCO presented, onbehalf ofChairman Mr.H.Vicente (Argentina),
areport onthework oftheFifthSession oftheTechnical Committee onCustoms Valuation (hereafter,
theCommittee), heldinBrussels from6to10October 1997. Henoted thatattendance atthissession
wasverygoodwith60Members andMembers intransition toimplementation oftheAgreement present.
1.2 OnIntersessional Developments, theCommittee wasinformed thatatthe90thSession ofthe
Council heldinBudapest, Hungary inJune1997, theCouncil hadindicated itsfullsupport forthe
valuation work undertaken bytheCommittee andthetechnical assistance being provided toMembers.
TheCommittee wasalsoinformed about thelastmeeting oftheWTO Committee onCustoms Valuation
andtheseries ofinformal meetings overthesummer ontechnical assistance forMembers required
toimplement theAgreement. TheCommittee devoted much ofthe5thSession toissues related to
theneeds andactivities ofMembers intransition totheAgreement. TheCommittee wasalsoadvised
thattheneweditionoftheWCO's"CustomsValuation-GATTAgreement"Compendiumwasavailable.
TheCompendiumreproducedthefulltextoftheAgreement,alloftheDecisionsoftheWTOCommittee,
alloftheinstruments issued bytheCommittee (including those oftheWCO Tokyo Round Committee
which ithadadopted) andanindex ofMembers 'rulings onissues associated withtheapplication of
theAgreement.
1.3 AttheFifthSession, theCommittee heldbothinformal andformal discussions ontheFuture
Direction oftheCommittee. TheCommittee recognised thatithad,inthepast,correctly concentrated
itsefforts ontheessential work ofproviding technical interpretations oftheAgreement tofoster
harmonization intheapplication oftheAgreement, which wasanimportant partofitsmandate. The
Committee expressed itsgeneral satisfaction withitsprevious work; ithadproduced awide range
oftopquality products which identified bestpractices inrelation totheAgreement. Itwasfeltthat
thiswork provided invaluable assistance toallMembers andparticularly toMembers preparing to
implement theAgreement inthenearfuture.
1.4 TheCommittee believed that,aswithallorganizations, there wasneedtoreassess itsrole,
itsobjectives andworking practices toensure thatitremained relevant totheneeds ofMembers and
totrade, andwasconsistent withbestpractices. Itconsidered thatthemandate provided toitunder
Annex IIoftheAgreement provided ample scope toserve theinterests ofitstwoprinciple reference
organizations,theWCOandtheWTO.TheCommitteefeltthatanumberofissuesofcurrentimportance
impacted onthework oftheCommittee, including, among others:
(a) theneeds, obligations andexpectations ofMembers inrelation totheimplementation
oftheAgreement:
(b) theinter-relationship between thework andresponsibility oftheWCO andother
international organizations (particularly theWTO);
(c) technical assistance, including needs analysis andtheevaluation ofitseffectiveness;
(d) theWCO environmental scan(avision ofwhatissues customs willhavetoconfront
inthemillennium);
(e) practical application oftheAgreement byMembers andtheneedtoensure thatthe
agenda items focused onsuchissues;
(f) theexpectations oftrade, including theneedtoensure thedelivery oftheobjectives
oftheAgreement inrelation topredictability andtransparency initsadministration.
1.5 With aviewtobringing some order andcoherence totheabove issues (many ofwhich were
inter-related) itwasagreed thatasmall working group beformed tomeetintheweekoftheCommittee 's
nextSession. Thisgroup would, inlightoftheabove, begiven thetaskofdeveloping anaction plan
and/or work procedures forconsideration bytheCommittee atitsnextSession. Itwasagreed thatG/VAL/M/6
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thespecial needs ofdeveloping country Members preparing toimplement theAgreement should be
addressed bytheworking group, particularly from thepoint ofviewofpractice andadministration.
Noting thatthedelay period forimplementation oftheAgreement formany Members waspassing
rapidly, theCommittee decided tointroduce anewitemintheagenda offuture meetings titled"Practical
Application oftheAgreement". Itwasagreed thatthisnewaspect oftheagenda would aimtoaddress
thepractical needs ofMembers intransition aswellaslong-standing signatories, fromacustoms view
point. Thisaspect oftheagenda would contain twoelements: discussion ofspecific items from the
tradeperspective (onthebasisofpresentations bytheICCasobserver totheCommittee, forexample);
andpractical issues ofconcern toadministrations. Anexample ofthetypeofissue foreseen under
thisitemwould betheadvantages anddisadvantages ofintroducing avaluation declaration procedure.
1.6 OnProgress Reports onImplementation, herecalled thattheCommittee haddecided, atits
First Session in1995, totakeamore active roleinmonitoring newMembers 'progress towards
implementation withaviewtoproviding afurther toolforidentifying theirtechnical assistance needs.
Inthisregard, anewagenda itementitled, "Progress onimplementation" hadbeenincluded aspart
oftheagenda itemontechnical assistance. TheCommittee examined Document 41.707 which contained
information regarding implementation oftheAgreement provided byChile, Fiji,Malta, SriLanka,
andSuriname. FijiandSuriname informed theCommittee thattheyhadimplemented theAgreement
on1January 1997and1January 1996, respectively. Chile hadimplemented theAgreement inrespect
ofimports fromcertain countries under theprovisions ofother trade agreements. Malta hoped tobe
inaposition toimplement theAgreement nextyear. SirLanka saidthatpreparations forimplementation
oftheAgreement by2000 hadcommenced.
1.7 TheCommitteewasinformedaboutthedevelopmentoftheAPECValuationTechnicalAssistance
Project sincethelastmeeting. TheProject which isforAPEC Members intransition totheAgreement
wasco-sponsored byCanada andtheUSandwasalsobeing coordinated withtheAustralian and
NewZealand Administrations aswellaswiththeWCO. TheDelegate ofIndonesia reported onhis
country 'sexperience aftersixmonths ofimplementation oftheAgreement. TheCommittee wasalso
informedabouttheprogresstowardsimplementationinHaiti,NigeriaandZambiaandaboutthetechnical
assistance theyhadreceived. TheCommittee expressed itsgratitude toMembers whohadmade reports
ontheirprogress andencouraged allMembers toprovide up-to-date reports onprogress forthenext
meeting.
1.8 OnTechnical Assistance, theCommittee tooknoteofinformation document 41.719 which
updated theinformation onseminars andtraining courses organized ontheWTO Agreement andthe
activities oftheWCO inthisarea. During theintersession, theWCO hadorganized and/or participated
inthefollowing seminars, expert missions, andworkshops oncustoms valuation. Regional seminars
were heldin:Brasilia, Brazil on10-14 March 1997 (sponsored byJapan andincluded 10countries
fromtheCaribbean andSouth America); andinRigaud (Quebec), Canada on5-9May1997(sponsored
bytheCanadian International Development Agency, Revenue Canada andtheUnited States Customs
Service andincluded 17countries from theCaribbean andLatin America). Expert Missions were
conducted inCaracas, Venezuela on17-19 March 1997; Nairobi, Kenya on21-25 April 1997;
Nouakchott, Mauritania on17-20 May1997; Beijing, China 11-21 May1997; Panama City, Panama
on5-6June1997; andinOuagadougou, Burkina Fasoon8-12September 1997. Atraining course
washeldinManila, Philippines on26-30 May1997andincluded 10countries fromSouth EastAsia.
1.9 Workshops onmarket access, including customs valuation, wereheldinCartagena, Colombia
on2-4June1997, organized bytheEconomic Commission forLatin America, andinAbidjian, Côte
d'Ivoire on16-18 July1997, organized bytheWTO for17countries from West andCentral Africa.
Theaimofeachofthese activities wastoassist Members tounderstand thechanges necessary to
implement theWTO Valuation Agreement, toidentify thetasksthathadtobecarried out,andtodevelop
theiraction plans forimplementation by2000 orbefore. These technical assistance activities wentG/VAL/M/6
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beyond purevaluation issues andencouraged Members to,inconjunction withthechange totheir
valuation system, taketheopportunity toreview allaspects oftheir legislation, procedures and
administration tobring them intolinewithbestpractices inusearound theworld. Topics examined
during thecourse ofthese assistance activities included facilitation, useofcomputers, declaration
procedures, adoption ofriskmanagement techniques andpostclearance audit techniques. Members
were encouraged toadopt practices which reduced theburden onhonest traders andwhich focused
ontheareas ofgreatest compliance andrevenue risk.
1.10 Under Technical issues currently being considered bytheTechnical Committee, theCommittee
hadmade substantial progress inrelation totherevision ofitsExplanatory Note4.1which ithaddecided
tore-examine inorder toaddress concerns expressed byMembers. Aproposed newExplanatory Note
4.1which incorporated amendments suggested byMembers would beconsidered attheSixth Session.
TheCommittee alsoconsidered aninformation document prepared bytheSecretariat which examined
theissues associated withtheconcept ofcontrol within theterms ofArticle 15.4(e) oftheAgreement.
Thisitemarose inthecontext ofconsideration ofcases involving importations bysoleagents, sole
concessionaries andsoledistributors. Atthecentre ofthediscussion wastheextent towhich such
associations might, incertain situations, result intheestablishment of"control" andthusrelationship
forthepurposes oftheAgreement. Other issues under consideration included loanandfinancing
arrangements aswellasdistribution androyalty agreements. TheCommittee would decide whether
toadopt thisdocument asaCommentary oftheCommittee afterithadconcluded itsrevision of
Explanatory Note 4.1.
1.11 TheCommittee continued itsconsideration ofthecorrelation between paragraphs (c)and(d)
ofArticle 8.Atthecentre ofthediscussion wasthequestion ofwhether aroyalty orlicence feewhich
failed tomeettherequirements forinclusion incustoms value under Article 8.1(c) could beincluded
incustoms value under Article 8.1(d) when itwasaproceed ofsubsequent resale, disposal oruse
accruing tothevendor. Members oftheCommittee continued tobedivided intheirpositions relating
totheanswer tothisquestion. Anumber expressed theview thatthequestion was,perhaps more
theoretical thanpractical. TheCommittee therefore decided tocontinue itsconsideration ofthismatter
onthebasis ofactual situations encountered byMembers.
1.12 Arising fromthediscussion ofthescope ofthetermmaintenance during theSecond Session,
theCommittee examined adraftcommentary prepared bytheSecretariat andaninformation document
prepared bytheICCwhich explained warranty scenarios andconsiderations fromthetradeperspective.
TheCommitteemadeanumberofproposalstoamendtheSecretariat'sdocumentwhichitwouldconsider
atitsnextmeeting.
1.13 TheCommittee would continue itsexamination ofthescope oftheterm "control" in
Article 15.4(e), therelationship between paragraphs (c)and(d)ofArticle 8.1onthebasis ofactual
situations encountered byMembers, warranty charges andthemeaning oftheexpressions "related
tothegoods being valued" and"condition ofsale"inArticle 8.1(c). Inaddition, theCommittee would
consider proposals toamend Explanatory Note4.1andexamine adraftinformation document which
would examine freight equalisation schemes. Theagenda would alsoinclude thenewitem"Practical
application oftheAgreement". NewMembers 'progress toward implementation andtechnical assistance
needs would continue tobeamajor topic ofinterest totheCommittee. TheCommittee would also
discuss thefuture direction ofthework oftheCommittee toensure thatitswork wasrelevant tothe
needs ofMembers, particularly thenewsignatories totheAgreement. TheSixth Session would take
place from 27April to1May1998. Members andtheWTO Secretariat maywishtoobserve that
thenextmeeting oftheCommittee would takeplace laterintheyearthanusual.G/VAL/M/6
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2. Information onimplementation andadministration oftheAgreement
2.1 TheChairman explained thatthere were three sub-items toexamine under thisagenda item
andproposed toexamine eachseparately. Herecalled thatArticle 22oftheAgreement required each
Member toinform theCommittee ofanychanges initslawsandregulations relevant totheAgreement
andanychanges intheadministration ofsuchlawsandregulations. Inaddition, theDecision on
notification andcirculation ofnational legislation, adopted bytheTokyo Round Committee, required
eachMember tonotify itslegislation totheCommittee.
(a) Notification ofnational legislation
India
2.2 The Chairman recalled that thenotification made byIndia and circulated in
document G/VAL/N/1/IND/2 concerned recent amendments totheCustoms Valuation Rules 1988
bringing these Rules intoconformity withthemethod ofdetermination ofcustoms value aslaiddown
intheAgreement. AttheApril 1996 meeting oftheCommittee, theUnited States hadposed several
questionsduringthediscussionofIndia'slegislationwhichhadbeencirculatedindocumentG/VAL/W/8.
Theresponses byIndia hadbeen circulated attheOctober 1996 meeting oftheCommittee and
subsequently indocument G/VAL/W/14. AttheApril 1997 meeting, theUnited States hadposed
anadditional question which hadbeencirculated inG/VAL/W/19. India circulated written responses
tothese question toMembers forinformation atthismeeting. Ithadbeenagreed torevert tothisitem
atthismeeting.
2.3 Therepresentative oftheUnited States stated that,asithadjustreceived theresponse from
theIndian delegation, itwould needtimetoreview it.Hisdelegation planned tofollow upinformally
withtheIndian delegation aswellasformally atthenextmeeting oftheCommittee.
2.4 TheCommittee tooknoteofthestatements made andagreed torevert tothisitematitsnext
meeting.
Mexico
2.5 TheChairman recalled thatdiscussion onthemodifications thathadbeenintroduced toMexico 's
customs legislation hadbeenon-going forseveral years bothintheTokyo Round Committee andin
theWTO Committee onCustoms Valuation. TheAmendments andMexico 'slegislation hadbeen
circulated indocuments VAL/1/Add.25/Suppl.1, 2and3.Mexico 'sresponses totheChecklist ofIssues
hadbeencirculatedindocumentVAL/2/Rev.2/Add.8.Healsonotedhisunderstandingthatconsultations
were continuing onthismatter pursuant toArticle XXII:1 oftheGATT 1994 andArticle 4ofthe
UnderstandingonRulesandProceduresGoverningtheSettlementofDisputesaswellasintheCommittee
onRegional Trade Agreements. Ithadbeenagreed torevert tothisitematthismeeting.
2.6 TherepresentativeoftheEuropeanCommunitiesconfirmedthatconsultationshadbeenon-going
andnorealprogress hadbeennoted since thelastmeeting. Theparties concerned were stillinthe
same situation. TheMexican legislation stood asitwasandhisdelegation wasstillnotsatisfied with
itsprovisions andthewayinwhich ittreated transport andinsurance costsformany WTO Members.
Hisdelegation stillconsidered thisissueacontentious oneinwhich therewasnottotalacceptance and
invited Mexico tocome forward withfurther steps andproposals toseehowthislegislation could be
modified orsomehow changed totakeintoaccount theconsultations which hadtaken place. His
delegation continued toreserve itsrights onthisissue andrequested thatitremain ontheagenda of
theCommittee.G/VAL/M/6
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2.7 Therepresentative ofNorway stated thatherdelegation tookagreatinterest inthisissueboth
from anational aswellasasystemic point ofview. Shenoted thatthematter wasunder discussion
inotherforaincludingtheTradePolicyReviewMechanism.Herdelegationwasgratefulfortheprogress
made sofar.However, asitwasanimportant issueforthisCommittee, shesupported thatitremain
ontheCommittee 'sagenda forthenextmeeting.
2.8 Therepresentative ofSwitzerland stated thatherdelegation wasstillinterested inreceiving
further information ontheMexican customs legislation; ithadbeenwaiting forresponses from the
Mexican delegation onquestions ithadearlier posed. Herdelegation reserved itsrights torevert to
thismatter atalaterdateaswellastodiscuss itinother pertinent fora.
2.9 Therepresentative ofNewZealand stated thathisdelegation shared theviews expressed on
thisissue.
2.10 TheCommittee tooknoteofthestatements made andagreed torevert tothisitematafuture
meeting.
Singapore
2.11 TheChairman drew Members 'attention tothenotification made bySingapore circulated in
document G/VAL/N/1/SGP/1. Thisnotification included theDraft oftheCustoms (Valuation) (Import
Duty) Regulations; theCustoms (Amendment) Bill; andSection 90DoftheCustoms Act,asinserted
bytheCustoms (Amendment) Act1996. Singapore explained thatitsimplementing legislation consisted
ofanAmendment Billtoinstitutionalise theAgreement onCustoms Valuation intotheCustoms Act.
Theoperational details oftheAgreement onCustoms Valuation wereintheRegulations made pursuant
totheAmendment Act. These werethedrafts ofthedocuments which would become operative law
inSingapore. Henoted thattheCustoms Amendment Billhadbeenrecently passed intheSingapore
Parliament on7October 1997. Headded thatSingapore hadsubmitted itsresponses tothechecklist
ofissues, which hadbeencirculated indocument G/VAL/N/2/SGP/1.
2.12 Therepresentative ofHong Kong, China welcomed thelegislation from Singapore andtheir
commitment toimplement theCustoms Valuation Agreement bytheendof1997. Hisdelegation had
questions ontherighttoappeal inrelation toArticle 11oftheAgreement. Henoted fromtheresponse
toQuestion 9AoftheChecklist, thattherighttoappeal totheDirector-General ofSingapore Customs
wasprovided forunder Section 22BoftheCustoms Act. Healsonoted fromapassing reference in
Regulation 10.2thatimporters could raiseobjections tothedetermination ofvalue byCustoms. He
asked ifthesetwostatements referred tothesameappeal procedures; would suchobjections orappeals
beconsidered byaseparate unitwithin theCustoms Authority; andwere there anytime-limits for
lodging suchobjections orappeals andforresponding?
2.13 Therepresentative oftheUnited States alsowelcomed thenotification andSingapore 's
commitment toimplement theAgreement wellbefore theexpiration ofitsfive-year delay period under
Article 20oftheAgreement. Hisdelegation viewed thisasanimportant, concrete contribution to
enhancing trade facilitation. Hisdelegation sought clarification onafewtechnical points. Regarding
Regulations 3.1and3.2concerning thetransaction value between related parties, noreference to
circumstances ofsaleregarding theacceptance oftransaction value wereprovided. TheRegulation
appeared tostateonlythatthetransaction value would beacceptable iftherelationship didnotinfluence
thepriceoriftheimporter demonstrated thatthetransaction value approximated atestvalue. Heasked
whether theRegulations would provide foranimporter toshow thattheprice wasnotinfluenced by
utilizing theexamination ofthecircumstances ofsalebetween therelated parties, asprovided forunder
Article 1.2(a) oftheAgreement. Additionally, hisdelegation hadsome questions regarding theinitial
rightofappeal assetforth inArticle 11oftheAgreement andnoted thatHong Kong, China raisedG/VAL/M/6
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similar questions. Hisdelegation inquired whether Singapore 'sRegulations would beinaccordance
withthetransparency requirements ofArticle 12and13oftheAgreement which required that,
notwithstanding adelay inthedetermination ofthecustoms value, animporter shallbeabletowithdraw
thegoods fromcustoms uponproviding sufficient guarantee intheformofanappropriate instrument
suchassurety.
2.14 TherepresentativeoftheEuropeanCommunitiesalsowelcomedthiscomprehensivenotification.
Hisdelegation hadnotcompleted itsexamination ofthelegislation andwould forward questions at
alaterdate. Henoted whatthese questions would concern. First, inArticle 2.5where reference was
made to"intheinterpretation ofthese Regulations, regard shallbehadtotheInterpretative notes to
theAgreement", hisdelegation wanted confirmation thattheInterpretive Notes inAnnex Iofthe
Agreement would beapplied inafullandliteral sense. Second, inArticle 3ofSection 2,anaddition
could bemade toreflect fullythecontent oftheAgreement. Third, inArticle 4,paragraph 3,sections
AandB,therewasareference totheprovision intheAgreement which allowed forthenon-inclusion
ofcertain costs thatrelated tomeasures thattookplace afterimportation. Anadditional proviso that
thesecosts, charges andexpenses should bereasonable andwasnot,strictly speaking, intheAgreement.
Finally, inArticle 8,paragraph 2(b),therewasareference tooneofthesecondary methods ofvaluation
andtheprofits andexpenses incurred insalesofgoods tobuyers inSingapore. Thecountry-specific
reference wasnotintheAgreement andmight beallowable, buthewould needmore timetoexamine
thelegislation indetail.
2.15 Therepresentative ofSingapore responded thattheappeals procedure under Regulation 10.2
wasdifferent from thatunder Section 22B. Thefirststage ofanappeal procedure wassetupunder
Regulation 10.2which provided theimporter ortrader theopportunity toappeal tothecustoms officer
whomade thevaluation toreview itsactions. Thiswaslessformal and,although there wasnofixed
time-frame, itwasexpected thatthisappeal would bemade within areasonable time. Iftheimporter
orthetrader wasnothappy withthedecision made bytheofficer, ithadasecond venue toappeal
totheDirector-General ofCustoms under Section 22B. Thiswasmore formal innature andwould
havetobedone within 14days. Ifthetrader ortheimporter wasstillnothappy withthefinding,
itcould further appeal totheHigh Court within 28days. Regarding theUSquestion onArticles 12
and13,heresponded thatSingapore would accept asurety against acaseunder anappeal. Regarding
Regulations 3.1and3.2,hisdelegation would waitforthewritten question before responding. With
regard totheECquestion onArticle 2.5,heanswered thattheInterpretative Notes would, infact,
beapplied infullandthatwasthereason whyhisGovernment specifically provided foritinthe
Regulations.
2.16 TheCommittee tooknoteofthestatements made andagreed torevert tothisitematthenext
meeting. Delegations withquestions wereinvited tosubmit themtothedelegation ofSingapore through
theSecretariatby31March1998.TheChairmannotedthatIcelandhadnotifieditslegislation,contained
indocument G/VAL/N/1/ISL/1, andthatitwould betaken upatthenextmeeting oftheCommittee.
(b) Notification thatnational legislation under theTokyo Round Customs Valuation
Agreement remained valid under theWTO Customs Valuation Agreement
2.17 TheChairman stated thatatitsmeeting inMay1995, theCommittee agreed onprocedures
forthenotificationandcirculationofnationallegislationforMemberswhowereTokyoRoundsignatories
andwhose legislation hadalready beenexamined (paragraph 34(1) and35ofG/VAL/M/1). Since
thelastmeeting, there hadbeennosuchnotifications. Henoted thatthere werefiveMembers which
hadnotified legislation under theTokyo Round Agreement andwhich hadnotindicated thestatus of
thatnotification inthisCommittee. Those Members wereBotswana, Lesotho, Malawi, Cyprus, and
Poland. TheCommittee agreed thattheChairman would write tothese Members toinquire about
thestatus ofthese notifications.G/VAL/M/6
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2.18 Therepresentative ofPoland stated thatherdelegation would notify itslegislation inthenear
future.
(c) Notifications made bydeveloping country members
2.19 TheChairman noted thatdocument G/VAL/2/Rev.6 contained alistofdeveloping country
Members thathadinvoked special provisions available tothem under Article 20.1and20.2and
paragraphs 2,3and4ofAnnex IIIoftheCustoms Valuation Agreement. TheDocument listed also
thedeveloping country Members affected bytheDecision on"Continued Application under theWTO
Customs Valuation Agreement onInvocations ofProvisions forDeveloping Countries forDelayed
ApplicationandReservationsundertheCustomsValuationAgreement1979"(WT/L/38).Thedocument
hadbeenupdated toinclude Bahrain which hadrecently notified itsinvocation ofArticle 20.1, 20.2,
andparagraphs 2,3,and4ofAnnex III.
2.20 Headdedthattherewere51developingcountries,nowthatSingaporehadnotifieditslegislation,
thathadinvoked thespecial provisions under Article 20.1which allowed them todelay application
oftheAgreement foraperiod notexceeding fiveyears. For27ofthese countries, thedelay period
would expire on1January 2000. Thismeant thattheperiod during which theyshould bemaking this
transition wasalready half-way finished. Foranother 20,theendoftheyear2000 willsignal the
expiration oftheirdelay period. AsMembers hadbeenreminded attheprevious meeting, Members
having taken these delay periods should beusing thistimetoprepare forimplementation oftheWTO
Agreement. Article 20,insub-paragraph 3,alsocontained provisions forthefurnishing oftechnical
assistance onarequest basis, which developing country Members could utilize forthispurpose. This
would betaken uplaterinthediscussion under theagenda itemTechnical Assistance.
2.21 TheCommittee tooknoteoftheinformation.
3. Information ontheapplication ofDecisions oftheCommittee onCustoms Valuation
3.1 TheChairman drewMembers attention todocument G/VAL/W/5/Rev.3 which contained the
document references ofnotifications thathadbeenreceived pursuant totheDecision onthe"Treatment
ofInterest Charges intheCustoms Value ofImported Goods andtheDecision ontheValuation of
Carrier Media Bearing Software forDataProcessing Equipment", bothadopted bytheCommittee and
contained indocument G/VAL/5. Thisrevised document updated theinformation contained in
G/VAL/W/5/Rev.2 withtheaddition ofanewdocument reference forSingapore. Specifically, in
document G/VAL/N/3/SGP/1, theGovernment ofSingapore notified thatitwould apply theabove
twoDecisions when theCustoms (Valuation)(Import Duty) Regulations would come intooperation,
andthatthere wascurrently noimport dutyoncarrier media inSingapore.
3.2 TheCommittee tooknoteoftheinformation.
4. Technical assistance
(a) Information ontechnical assistance
4.1 TheChairman noted thatthere were twosub-items under thisagenda item. Thefirstwas
information ontechnical assistance which wascontained indocument G/VAL/8/Add.2. Thisdocument
provided additional information ontechnical assistance activities conducted bytheWCO.
4.2 TheCommittee tooknoteoftheinformation contained inthisdocument.G/VAL/M/6
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(b) Article 20.3technical assistance activities
4.3 TheChairman noted thatthissub-item hadbeenadded totheagenda following agreement by
theCommittee attheOctober 1996meeting andtheproposal made bytheUnited States attheApril 1997
meeting, circulated inG/VAL/W/18. Hereported ontheseries ofinformal meetings thathehad
convened overthesummer. Following thediscussion which hadbeenprompted bytheUSproposal
attheprevious formal meeting, theCommittee agreed thattheChairman should conduct informal
consultations withaview tofurther exploring Members 'views regarding anincreased roleforthe
Committee intechnical assistance activities, inaccordance withthemandate given inArticle 20.3of
theAgreement.
4.4 Atthefirstofthese informal meetings, which washeldon4June, aconsensus hademerged
onthemainthrust oftheUSproposal: thatfacilitating andaccelerating application oftheAgreement
required theCommittee toengage itselfindiscussion oftechnical assistance inamore structured and
systematic manner thaninthepast. However, ithadbeenstressed thatthere should benoduplication
ofactivities carried outbyinternational organizations suchastheWCO, which, itwasagreed, had
animportant roleasapoint ofreference fortechnical assistance. Ithadbeenalsogenerally agreed
thatitwould notbenecessary toestablish another formal body inwhich toconduct thisroleandthat
theCommittee, either informal orinformal sessions, could dealwithanyissueontechnical assistance.
Finally ithademerged thattechnical assistance activities should remain onarequest andneeds basis
andthateachdeveloping country Member wasinaunique situation regarding implementation ofthe
Agreement and,therefore, haditsownparticular technical assistance needs.
4.5 Headdedthatithadbeenagreedatthismeetingthatthenextinformalmeetingswouldbedevoted
toimproving awareness andunderstanding oftheactivities carried outorbeing carried outby
internationalorganizationsandMemberseitherbilaterallyorregionally.Atthesecondinformalmeeting,
heldon11July,theCommittee heard apresentation bytherepresentative oftheWCO onitsactivities
andthemethodology usedtoassess developing country needs. Atthethirdinformal meeting, held
on26September, theCommittee heard fromtheWorld Bank, UNCTAD, theWTO Secretariat, and
Members themselves ontheiractivities. Itemerged from these twomeetings thatthere wasagreat
dealofactivity related toimplementing theCustoms Valuation Agreement, andthatactivities originating
fromdifferent sources where often aimed atthesame regions orcountries. Repetition ofefforts was
notnecessarily negative ortobeavoided, asitwaslearned thattheimplementation process involved
many stages ofwork inavariety ofgovernmental sectors. However, whatwasneeded wasaclearer
assessment ofwhere theimplementation process wasineachparticular developing country Member,
andwhatwere theparticular needs inorder toaccelerate andfacilitate thisimplementation process.
4.6 Henoted thatinthecontext oftheHigh-Level Meeting onIntegrated Initiatives for
Least-Developed Countries 'Trade Development, there wasanextensive needs assessment exercise
going onfortechnical assistance inalltrade-related areas. Specifically, theWTO, UNCTAD andITC
Secretariats, withthestaffoftheIMF, theWorld Bank andtheUNDP, haddeveloped whatwascalled
an"Integrated Framework" fortheprovision oftrade-related technical assistance. Within this
Framework, least-developed countries hadbeen asked tocomplete a"Checklist forConducting
Trade-Related Technical Cooperation". Theobjective wastoobtain anoverall appreciation ofthe
needs fortechnical cooperation intrade-related matters inthesecountries soastoensure thatassistance
wasdemand-driven. Once needs wereassessed, thesixinternational agencies involved would consult,
withthegovernments involved, toputtogether aprogramme oftrade-related technical assistance
activities. TheIntegrated Framework andtheChecklist werecontained indocument WT/LDC/HL/1.
TheWTO Secretariat hadreceived about 30responses fromleast-developed countries tothisChecklist,
12ofwhich werecomplete andactionable andwerecontained inthedocument series WT/LDC/HL/12
andAdd.1 to12.Itappeared thatoneoftheareas frequently citedbytheleast-developed countries
asinneedoftechnical assistance wascustoms valuation, andtheagencies involved werecoordinatingG/VAL/M/6
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theirassistance intheareaofcustoms valuation forthese countries. Heconsidered thatthisactivity
washighlyrelevanttotheCommittee'sneedsassessmentexercise,andwouldcomplementitbyproviding
more information tofillinthepicture oftheimplementation situation.
4.7 Hesummarized hisinformal consultations withthefollowing points:
(a) TheCommittee would engage indiscussions oftechnical assistance activities inamore
systematic andformal manner.
(b) These discussions would beheldintheformal meetings oftheCommittee, under the
agenda itemtechnical assistance activities, andininformal meetings tobeheldin
between theformal meetings asandwhen appropriate; thefirstofthese informal
meetings would occur inthefirstquarter ofnextyear.
(c) TheCommittee agreed tocirculate the"Request forInformation Concerning the
Implementation oftheAgreement", contained inG/VAL/W/20, asaformal Committee
document forcompletion byalldeveloping country Members.
(d) Aninformal meeting devoted totechnical assistance activities inthefirstquarter of
1998 would focus onreviewing theresponses tothis"Request forInformation" with
aview towards identifying where eachdeveloping country wasintheprocess of
implementation andwhere assistance activities should befocused. Thisreview could
contribute tostreamlining andtailoring thetechnical assistance activities oftheWTO
Secretariat, theWCO andMembers 'activities. Healsorequested, atthisinformal
meeting early nextyear, theWTO Secretariat tobrieftheCommittee ontheprogress
andplans ofitstechnical assistance programme oncustoms valuation. Members and
otherorganizations should alsoshare suchinformation withtheCommittee atthistime.
Further, hesuggested thatforthismeeting, theSecretariat prepare acomplete inventory
ofthetechnical assistance activities related toimplementation oftheCustoms Valuation
Agreement, taking intoaccount theresults oftheCommittee 'sRequest forInformation,
theinformation gathered onleast-developed countries through theprocess ofthe
High-Level Meeting, theactivities oftheWTO andother international organizations,
andanyother information available. Thiswould contribute totheoverall picture of
theimplementation process.
4.8 Therepresentative ofMexico asked forconfirmation that,intheevent thattechnical assistance
wasrequested forspecific aspects connected withcustoms matters notdirectly connected withvaluation,
inorder nottoduplicate work, theWCO would beinformed ofactivities. Herequested clarification
onthispoint, particularly because there wereaspects under WTO 'scompetence where itwould take
overtechnical assistance.
4.9 TheChairman stated thathedidnotviewanyoverlap withtheWCO intechnical assistance
matters because theprocess wastotally transparent andoneofthetasks ofthisprocess wastoavoid
duplication. ItwasclearthattheWCO hadalarge roletoplayincustoms matters and,atthesame
time, theWTO dealtwithcustoms valuation; theirroles were complementary andrelated.
4.10 Theobserver fromtheWCO stated thatthisquestion wasrelevant andthatinhisorganization 's
point ofview, thework related tocustoms valuation wentfarther thanonlylooking atthelegislative
aspects oftheAgreement. TheWCO treated valuation asacustoms function andlooked athowthat
function wasintegrated intothewhole ofthecustoms administration. Much oftheWCO 'stechnical
assistance work related tocustoms valuation included considerable coverage oftheareaofcompliance
andthecontrol aspects. Headded thatanother areaofwork related tothepowers ofcustoms authorities
tobeabletoexamine therecords ofimporters todopost-entry verification work. These aspects of
valuation alsoneeded tobetaken intoconsideration. Inpreparing legislation forvaluation, therewere
anumber ofperipheral aspects associated withtheimplementation oftheAgreement thatalsoneededG/VAL/M/6
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tobeincluded. Headded thattheWCO wasinvolved inmany other aspects ofcustoms work such
asthevarious conventions administered bytheWCO aswellasthenecessity fortheWCO toensure
thecorrect application oftheseconventions dealing withtheprocedures, enforcement andother aspects
ofcustoms work.
4.11 TherepresentativeoftheUnitedStatesagreedwiththeChairman'sopinionregardingduplication
ofwork withtheWCO. Hisdelegation didnotenvisage theWTO process asduplicating anyofthe
activities ofother organizations, norofanybilateral initiatives. Theobjective wastolendsome
coherence totechnical assistance activities thatcurrently didnotexistamong thevarious institutions
involved. TheWCO clearly acknowledged thatitsactivities wentbeyond valuation although theywere
veryrelevant totheAgreement. Hisdelegation hoped thattheWTO process, inproviding coherence,
could provide guidance andadvice totheWCO andtootherinstitutions onhowtheirtechnical assistance
activities could respond specifically totheneeds ofdeveloping countries withrespect toimplementation
oftheAgreement.
4.12 Therepresentative ofCanada stated thathisdelegation supported theideatocontinue discussions
ontechnical assistance inasystemic andformal manner withaviewtocontributing tostreamlining
andtailoring technical assistance toparticular needs ofeachcountry.
4.13 Therepresentative oftheEuropean Communities welcomed theChairman 'sstatement and
supported thework program outlined. Hisdelegation agreed thattheelement oftransparency was
essential tocoordination andstreamlining oftechnical assistance.
4.14 Therepresentative ofHong Kong, China supported theprogram ofwork outlined bythe
Chairman. Hisdelegation believed thattherewasaneedtodomore inproviding technical assistance
todeveloping countries andwaslooking athowitcould contribute inapractical way.
4.15 Therepresentative ofJapan stressed thattheCommittee 'sworkwould needtoavoid duplication
andshould focus onthepolitical sideoftechnical assistance; thetechnical sideshould becoordinated
bytheWCO. Hisdelegation believed thatitwasimportant tonotethatbilateral technical assistance
should becoordinated bythecountry receiving technical assistance.
4.16 Therepresentative ofKorea supported thestatement bytherepresentative ofJapan. Thetask
oftheWTO should belimited toefforts suchasassessing theneeds ofdeveloping countries fortechnical
assistance, arranging thepriority countries, andcooperation withthesuppliers oftechnical assistance.
4.17 Therepresentative ofMorocco supported theChairman 'sprogram ofwork. Heasked what
wasthelegal status oftherequest forinformation; wasitaDecision oftheCommittee orwasita
report oftheChair which reflected hisviews? Hefurther asked ifdelegations wereobliged torespond
toparagraphs 3and4.
4.18 TheSecretariat added thattheRequest forInformation wasarequest from theChairman for
information fromMembers which, astheCommittee hadagreed, would becirculated asaformal WTO
document. There wasnoobligation torespond, butMembers should respond attheirwill. The
Chairman stated thatthiswasnotaDecision bytheCommittee butadocument representing aresult
oftheCommittee 'swork which would becirculated asaformal document. Heurged Members to
respond totherequest because itwasintheirinterest. Thefocal point oftheCommittee 'sexercise
ontechnical assistance wastheneeds ofdeveloping countries, andtheCommittee could onlyproduce
apositive outcome based onthedemands ofdeveloping countries. Sowhile therewasnoformal, legal
obligation, heconsidered thatthere wasamoral one.G/VAL/M/6
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4.19 Therepresentative ofPerureiterated herdelegation 'sunderstanding thattheCommittee 'swork
ontechnical assistance fellstrictly within theframework ofArticle 20.3oftheAgreement. The
information requested from developing countries concerning implementation activities during the
transitionalperiodwouldbestrictlylimitedtomakingsurethattechnicalassistancewasusefulinassisting
Members toimplement theAgreement.
4.20 TheChairman assured Members thatthelegalbasisoftheentire technical assistance exercise
wasArticle 20.3.
4.21 Theobserver oftheWorld Bank recalled thathehadmade astatement atthethirdinformal
meeting oftheCommittee inwhich hehadreferred toaproject inthePhilippines. During thesubsequent
discussion, therepresentative oftheUnited States hadasked whatsteps theBank tooktocoordinate
itsactivities withthose fromother sources andalsohadnoted itsactivity inthePhilippines. Following
hispromise toseekfurther information, theobserver recently received aresponse from theBank's
headquarters which applied totheBank'sactivities ingeneral. Thestatement hereceived wasasfollows:
"The Bank usesawiderange ofapproaches tocoordinate itsassistance withthatofother providers.
Consultative groups areanimportant means fordonors andthecountry concerned toexchange
information onthecountry 'smostpressing development needs. TheWorld Bankdevelops andregularly
updates acountry assistance strategy toidentify andaddress itspriorities ineachcountry. Individual
projects inpriority areas areassessed inconjunction withthegovernment andafterconsulting with
other relevant donors. Project supervision involves regular consultations withthegovernment and
withallother suppliers totheproject, including bilateral, regional andmultilateral donors. TheBank's
assistance tothePhilippines Customs Service wasinitiated afterajointmission bytheWorld Bank
andtheIMF focused onimproving revenue mobilization. Aresulting project, called theTax
Computerization Project, hasbeenrunning forthree years andhasbeenhighly successful. Itgoes
wellbeyond computerization andincludes animportant emphasis ontrade facilitation. Thisproject
involves anumber ofcontributors including theWorld Bank, UNCTAD, andtheUnited States, which
hasbeenhelping theGovernment withcomputerization. USAID hasalsofunded aone-stop shop
responsible forpayment ofcustoms credit including dutydrawback within 30days". Hehoped this
statement provided reassurance thatwhattheWorld Bank didwastheresult ofcoordination andwould
fitinwiththework ofother agencies andgovernments.
4.22 Therepresentative ofIndiathanked theChairman forhisinitiatives andstated thathisdelegation
would respond totheRequest forInformation. Hestated thatthere weresome developing countries
which could share theirfacilities withother developing orleast-developed countries andthiswasa
source thatcould alsobetapped. Headded thatcountries acceding totheWTO would alsorequire
considerabletechnicalassistancewhichwasapparentfromaccessionmeetings.HeaskedthattheRequest
forInformation besenttothese countries sothattheymayalsofurnish therequested information and
receive technical assistance.
4.23 TheChairman replied that,asaformal WTO document, theRequest forInformation would
automatically besenttotheobserver Members. Itwould depend onthemtorespond toitduring their
accession toidentify theirneeds intheareaofcustoms valuation.
4.24 Therepresentative oftheUnited States considered theIndian request important because it
anticipated theneeds ofcountries thatwould beacceding totheWTO andwould belikely tohave
problems withimplementation oftheAgreement andinneedofassistance. Hesuggested thatthe
Committee alsoforward theRequest forInformation totheChairs oftherespective accession working
parties sothattheywould bemade aware it.Ascustoms valuation would bediscussed intheindividual
working parties, there would beanawareness onthepartoftheChair oftheCommittee 'sactivities.G/VAL/M/6
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4.25 Therepresentative ofCanada supported theIndian request. Heunderstood thatthedocument
would beavailable totheacceding countries anyway butheagreed withtheUnited States thatthey
could bereminded thatitexisted andthattheycould reply toit.
4.26 Therepresentative ofJapan alsosupported theIndian request andasked iftheChairman would
senditdirectly topotential Members oftheWTO.
4.27 TheChairman replied thathisideawastourgetheChairs oftheaccession working parties
todistribute theRequest forInformation toacceding delegations. Buthestressed again thatobservers
would receive thedocument anyway. Distributing thedocument beyond Members andobserver
governments could bediscussed atalatertime, although there might besome legalimplications with
spreading thedocument universally.
4.28 Therepresentative ofAustralia explained thatoneoftheproblems thatmostacceding countries
hadwasdealing withtheircustoms valuation systems andbringing themintoconformity withtheWTO
Agreement. Herdelegation supported theIndian proposal toanticipate theproblems ahead ofconcluding
accession. Sherequested, either formally orinformally, drawing theRequest forInformation tothe
attention ofacceding countries andexplaining thatitwould beuseful forthem toprovide some
informationwhetherintermsofwritingtotheChairoftheaccessionworkingpartiesortotheAccessions
Division sothattheycould advise theacceding countries thatitwould beintheirinterest toprovide
some information.
4.29 Theobserver oftheWCO alsosupported theChairman 'swork programme inthatitwould
provide transparency tothetechnical assistance process. TheWCO regularly provided itsMembers
withinformation ontheactivities intheWTO andshared information onitsactivities totheWTO.
Headded thattheTechnical Committee wasprovided, onayear-by-year basis, withthefullprogramme
ofactivities anticipated fortheyear. TheWCO Council hadmentioned several times thattheWTO
Customs Valuation Agreement wasoneofthepriority areas oftheorganization. So,inproviding
technicalassistance,theWCOtriedtotargetWTOMembersasthefirstrecipientsoftechnicalassistance.
Ontheother hand, many oftheWTO observers werealsoWCO observers andwereabletoreceive
technical assistance withrespect tovaluation. Countries which hadreceived assistance onvaluation
andonimplementation oftheAgreement included China andPanama. Thepoint raised, thattheWTO
could haveastrong political impact, wasimportant. Thiswasoneofthereasons thattheWCO was
infavour ofanyprogramme which could provide transparency totechnical assistance. Headded that
coordination bytherecipient country wasextremely important andtheWCO demanded thistypeof
information fromthem. Finally, headded thatAnnex IIoftheAgreement incorporated arequirement
bytheTechnical Committee toprovide technical assistance andcooperation which waswhyitkept
itselfinvolved inthiswork, anddirected andmonitored theWCO Secretariat initsefforts inthisarea.
4.30 Therepresentative ofEgypt stated thathisdelegation supported thesuggested proposal byIndia.
However, itwasequally important tomake surethattechnical assistance wasnotspread toothin.
Priority should begiven toWTO Members.
4.31 TheChairman appealed todeveloping country Members interested intechnical assistance to
respond totheRequest forInformation, evenifthere wasnodeadline torespond. These responses
were important totheSecretariat initspreparation oftheInventory. Information ontheneeds was
alsoimportant tobegin arealdiscussion andactivities ontechnical assistance.
4.32 TheCommittee tooknoteofstatements made andagreed tocirculate thedocument contained
inG/VAL/W/20 asaformal Request forInformation; torequest theSecretariat toprepare andcirculate
anInventory oftechnical assistance activities oncustoms valuation; andtoholdaninformal meeting
oftheCommittee inearly 1998.G/VAL/M/6
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5. Report oftheCommittee onCustoms Valuation totheCouncil forTrade inGoods
5.1 TheChairman drew attention todocument G/VAL/W/21 which contained thedraft Report
oftheCommittee totheCouncil forTrade inGoods. Herecalled thatArticle 23oftheAgreement
stated that"theCommittee shallreview annually theimplementation andoperation ofthisAgreement
taking intoaccount theobjectives thereof. TheCommittee shallannually inform theCouncil forTrade
inGoods ofdevelopments during theperiod covered bysuchreviews". Hesuggested thattheCommittee
review thedocument paragraph-by-paragraph.
5.2 Therepresentative oftheCzech Republic noted thatIceland should beremoved fromAnnex IV
ofthetext.
5.3 Therepresentative ofSingapore noted thatitwasnolonger appropriate torefertohiscountry
under those Members delaying application under Article 20.1inthedocument.
5.4 Therepresentative ofKorea stated thatinparagraph 8,twoMembers hadnotified thedate
ofapplication oftwoDecisions. Henoted thatoneofthese Members hadonlynotified under one
ofthese Decisions. Heasked thatacorrection bereflected inthefinaldocument.
5.5 TheCommittee tooknoteofthestatements made. Itwasagreed tosubmit theReport tothe
Council forTrade inGoods asrevised according tothestatements made andreflecting theproceedings
ofthepresent meeting.
6. ThirdAnnualReviewoftheImplementationandOperationoftheCustomsValuationAgreement
6.1 TheChairmandrewattentiontothebackgroundworkingdocumentfortheThirdAnnualReview
oftheImplementation andOperation oftheCustoms Valuation Agreement. Henoted thatthere was
anerror onpage5ofthedocument inthelistofMembers which hadinvoked Article 20.2ofthe
Agreement. Thecorrection would beincluded inthefinalversion oftheAnnual Review. Hesuggested
again reviewing thedocument paragraph-by-paragraph.
6.2 Therepresentative ofCanada noted thatthefootnote onpage6,sub-paragraph 5onBrazil
should bea"1"andnota"2".
6.3 TheCommittee tooknoteofthestatements made. Itwasagreed torevise theThird Annual
Review according tothestatements made andtotheproceedings ofthepresent meeting, andcirculate
itasaformal Committee document.
7. Other business
(a) Dateofthenextmeeting
7.1 Thenextmeeting oftheCommittee willbeheldon23April 1998.
7.2 Theobserver oftheWCO noted thatthemeeting oftheTechnical Committee would betaking
place after23April. Thismight betaken intoaccount when planning thedateofthenextmeeting.
7.3 TheChairman tooknoteofthestatement andstated thathewould consult onthematter.