RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/47
8 November 1999
(99-4808)
Committee on Customs Valuation Original:  English
COMMUNICATION FROM MALTA CO NCERNING ANNEX III,  PARAGRAPH 2,
OF THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF
THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
The following communication, dated 4 November 1999, has been received from the
Permanent Mission of Malta.
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Following the signing of the WTO Marrakech Agreement, Malta took on the task for an
efficient transition from a valuation system prevailing for several years within the Maltese Customs
and based on the Brussels Definition of Value, to the GATT/WTO System of Customs Valuation.
During the last five years, apart from the legislation on Customs Valuation, the Maltese
Customs underwent a programme of radical reforms in its infrastructures as well as in its systemsparticularly in the field of computerization and risk management.  The change of a new system of
valuation was indeed a hard task as it implied a transition from a system prevailing for many years
within the Maltese Customs to that of the WTO System of Customs Valuation.  Through this
programme of modernization minimum values, traditionally imposed on a list of products, were
reduced to only three HS headings, whose sub-head ings cover used motor vehicles and motor cycles.
The Maltese Customs took its task seriously to introduce and implement, in the coming year,
the Agreement.  Following the signing of the Agreement on 1995, a working group of officials from
the Maltese Customs was set up to study the provisions of the WTO Valuation System and to prepare
the necessary legislation, procedures and training for the implementation of the GATT System.  The
legislation was drafted and has since been published in a Bill to amend the Import Duties Act.
A training programme was scheduled to reach the various levels of personnel.  In fact
in-service seminars providing an overview of the system were organized for a good number of
Customs Officials and members of the commercial community.  Malta obtained technical assistance
from the WTO and the WCO in the form of three task force missions on the valuation legislation,
procedures and enforcement, which were organized in Malta.  The programmes were very beneficialto the Maltese Administration.
All the provisions of the agreement will be adopted by the 1
st of January 2000, except for the
clause on minimum values.  On its application to sign the Agreement, Malta obtained a reservation to
retain officially established minimum values on a limited and transitional basis.  As indicated above,minimum values are currently applied only on a range of motor vehicles in HS tariff headings 8703,
8704 and 8711.  The table herewith attached gives more details and it can be seen that the number of
subheadings covering motor-vehicles subject to minimum values are just 50 compared with those
Maltese tariff, which total more than 10'000.  The value of vehicles imported during the year and the
duty collected on same are of a low percentage of the goods and revenue collected.  Should minimum
values be removed, the problem will not be of revenue in duty but in other taxes such as the VAT andG/VAL/W/47
Page 2
car registration fax.  It follows that a plan has to be drawn to find an alternative means to collect the
same amount of revenue and enabling Malta to adopt in its entirely the Agreement.
Malta needs to discourage the importation of used motor vehicles.  Its limited area
(320 square kilometres of land of the Maltese Islands), a dense population (375'000), a high rankingof per capita  cars, indicate such a need.  Like many other countries in this age, in Malta there is high
awareness on environmental aspects such as pollution.  Emissions emanating from the influx of used
motor vehicles are not welcome in such a small place depending mainly on the tourism industry.  It is
an objective of the local administration to avoid the increase in the average age of cars on the road.  In
fact measures are being taken by means of a vehicle road test exercise on cars of five years.  The poor
condition of used vehicles is conducive to traffic accidents.
The valuation of second-hand cars has always created difficulties to the Maltese Customs.  In
fact in its requests for technical assistance from WTO and WCO and to individual Member-states of
the Organizations, the need for assistance in valuing second-hand cars was consistently the common
denominator.  Unfortunately to-date, training in this area was not provided.
Due to the foregoing Malta should invoke a derogation from the WTO to retain the
application of minimum values on motor vehicles beyond year 2000.  However, it will endeavour to
find another alternative in the shortest possible period for such minimum values to be phased out in
order to comply with the Agreement in its entirety.G/VAL/W/47
Page 3
HS Code No. Minimum Values
(Lm)HS Code No. Minimum Values
(Lm)
8703.21.90.90 1453 8703.22.90.90 2264
8703.23.90.19 4103 8703.23.90.99 6638
8703.31.90.90 2264 8703.32.90.19 4103
8703.32.90.99 6638 8704.10.11.91 2045
8704.10.19.91 2045 8704.10.90.91 2045
8704.10.90.99 2272 8704.21.31.10 2045
8704.21.31.20 2045 8704.21.39.10 2045
8704.21.39.20 2045 8704.21.39.90 2113
8704.21.91.10 2045 8704.21.91.20 2045
8704.21.99.10 2045 8704.21.99.90 2113
8704.21.99.20 2045 8704.22.91.10 2045
8704.22.99.10 2045 8704.22.99.90 4090
8704.23.91.10 2636 8704.23.99.10 2636
8704.23.99.90 4500 8704.31.31.10 2045
8704.31.31.20 2045 8704.31.39.10 2045
8704.31.39.90 2113 8704.31.91.10 2045
8704.31.91.20 2045 8704.31.99.10 2045
8704.31.99.20 2045 8704.31.99.90 2113
8704.32.91.10 2045 8704.32.99.10 2045
8704.32.99.90 4090 8704.90.00.90 4500
8711.10.00.90 150 8711.20.91.90 250
8711.20.93.90 250 8711.20.98.90 400
8711.30.10.00 500 8711.30.90.00 500
8711.40.00.00 650 8711.50.00.00 1350
8703.24.90.90 10000 8703.33.90.90 10000
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