. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/41/Add.2
11 October 2000
(00-4171)
Committee on Customs Valuation Original:  English
COMMUNICATION FROM SRI LANKA CONCERNING ANNEX III, PARAGRAPH 1,
OF THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF
THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Addendum
The following communication, dated 5 October 2000, has been received from the Permanent
Mission of the Republic of Sri Lanka.
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The Government of Sri Lanka wishes to refer to the decision contained in WTO document
G/VAL/23 of 10 March, whereby an extension was granted to Sri Lanka under the provision of
para. 1 of Annex II of the Agreement on Implementation of Article VII of GATT 1994 ("WTO
Customs Valuation Agreement") to extend its delay in the application of provision of that Agreementuntil 1 January 2001.
In this connection, Sri Lanka also wishes to refer to notification No. G/VAL/N/4/LKA/1 of
14 August and G/VAL/N/4/LKA/1/Corr.1 of 17 Au gust, reporting to the Committee on Customs
Valuation on the progress made in fulfilling the Programme of Work by Sri Lanka and the status of
the implementation of the Agreement.
The Government of Sri Lanka wishes to inform the Committee on Customs Valuation that
although concerted efforts are being made by Sri Lanka to implement the Work Programme and that
the Government of Sri Lanka was hopeful of being able to implement the Customs Valuation
Agreement by 1 January 2001, on reviewing the progress made thus far and taking into account
certain developments particularly in the political sphere, Sri Lanka now is of the view that it will notbe able to meet this deadline and is therefore compelled to seek a further extension in the application
of provisions of the WTO Agreement on Customs Valuation for a period of 12 months from 1 January
2001.  The reasons are:-
(a) Although the Government of Sri Lanka was hopeful of being able to secure parliamentary
sanction of amendments to the Customs Ordinance, the Parliament of Sri Lanka stands
dissolved as of 25 August, with a general election called for 10 October 2000.  The new
Parliament will be convened only thereafter, following its procedures and the Ministry of
Finance responsible for this legislation is of the considered view that enactment of this
legislation will go beyond the first half of 2001.  Sri Lanka being a country wedded to thedemocratic tradition, the legislative review pr ocess on pending legislation in a new Parliament
cannot be predetermined and the delay in enacting the enabling legislation on Customs
Valuation cannot be avoided and could go well beyond the first half of 2001.
(b) Although a Post-Clearance Audit Branch and a Valuation Investigation Unit have been
created to target valuation based on risk assessment, the operation of these units is yet to
reach the desired standard of efficiency.  Therefore, the requested extension for delayedG/VAL/W/41/Add.2
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application by one year will provide additional time for the Post Clearance Audit Branch and
the Valuation Investigation Unit to become effective.
(c) The delay in the enactment of the legislation by the Parliament is expected to further prolong
the preparation of the required administrative regulations and procedures, until the third andthe fourth quarters of the year 2001.  Although measures have been taken to develop human
resources and to provide awareness and training programmes for Customs house agents,
importers etc., the current assessment is that capacity development and resource availability
are not sufficient for the effective implementa tion of the Agreement.  Hence, the delayed
application of the agreement by twelve months will provide additional time to undertake to
further activities in this area, particularly, development of data bases, expansion of computer
systems, further advance training of personnel, preparation of additional information to usersand concerned private sector entities and to consolidate the re-structuring and reform
programme undertaken in the customs department, so that the Customs Valuation Agreement
could be effectively implemented from 1 January 2002.
Hence, considering the special circumstances enumerated above which are legitimate and
justifiable and taking into account the fact that the Government of Sri Lanka has taken meaningful
steps and commenced implementing the work prog ramme and noting the long standing commitment
and considerable efforts made in the implementation and application of WTO Agreement on Customs
Valuation, the Government of Sri Lanka requests th at, it be allowed to delay the application of the
provisions of the WTO Agreement on Customs Valuation for a further period of one yearcommencing 1 January 2001.
The request by Sri Lanka for an extension of the delayed application will not prejudice the
rights and obligations of Sri Lanka under the WTO Agreements in particular, the rights and
obligations under the WTO Agreement on Customs Valuation.  The Government of Sri Lanka alsotakes this opportunity to re-assure her trading partne rs its firm commitment to the multilateral trading
system and to faithfully implementing Article VII of the General Agreement of Tariffs and Trade
(GATT) 1994.
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