G/VAL/Q/GBR/2  
 
21 October  2021 
(21-7968) Page: 1/2 
Committee on Customs Valuation  Original: English  
 
 
NOTIFICATION UNDER ARTICLE 22 OF AGREEMENT  ON IMPLEMENTATION  
OF ARTICLE VII OF THE GENERAL AGREEMENT  
ON TARIFFS AND TRADE  1994  
QUESTIONS  FROM CHINA  TO THE UNITED KINGDOM   
REGARDING DOCUMENT S G/VAL/ N/1/GBR/1 AND G/VAL/ N/2/GBR/1 
UNITED KINGDOM  
The following communication, dated 21 October 2021, is being circulated at the request of the 
delegation of China . 
 
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The China would like to thank the United Kingdom for notification of its customs valuation legislation 
contained in document G/VAL/N/1/GBR/1.  Having reviewed the notification, taking into account the 
information provided in G/VAL/N/2/GBR/1,  China would like to ask the United Kingdom to respond 
to the following questions:  
 
Question 1:  
 
The Customs (Import Du ty) (EU Exit) Regulations 2018 PART 12 CHAPTER 5 124(2)  provides that 
"The valuation of the goods is to be determined by reference to the wholesale price of the goods at 
the date of import, being the price as set out in a notice published by HMRC ".  
 
However, according to the CVA, the primary basis for customs value should be "transaction value"; 
alternative methods should be used in sequential order where transaction value method is not 
applicable; the use of arbitrary or fictitious customs value shou ld be precluded.  
 
Could the United Kingdom explain or clarify:  
 
1. Whether method 4 set out in regulation 124 is in accordance with the principles of the CVA;  
2. Whether regulation 124 implements any provisions of the CVA;  
3. How the wholesale prices of th e fresh fruit and vegetables (published by HMRC)  are 
formulated?  
 
Question 2:  
 
Article 8.1(c) of the CVA states that, royalties and license fees to be added to the price paid or 
payable for the goods shall be related to the goods and  constitute a condition of sale of imported 
goods. In other words, there are two conditions for the inclusion of royalties in customs value, which 
are "related to the imported goods " and "constitute a condition of sale ". Could the United Kingdom 
clarify wh ether its valuation legislation implements Article 8.1(c) of the CVA?  
  G/VAL/Q/GBR/2  
 
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  Question 3:  
 
According to information provided in G/VAL/N/2/GBR/1 (checklist of issues), the UK has responded 
to "1. Questions concerning Article 1, (a) Sales between related persons ". We noticed, in particular, 
the following points:  
- "(ii) the UK will consider the details of the sale to decide if influencing has occurred ". 
- "(iv)  the UK will consider the details of the sale to determine if any relationship between the 
buyer and seller has influenced that transaction value ". 
 
The Customs (Import Duty) (EU Exit) Regulations 2018 PART 12 CHAPTER 2 108(9) provides  that 
"HMRC may presume that where the buyer and seller of chargeable goods are related persons, in 
the application of Met hod 1 valuation, the transaction value of the goods is not the full value unless 
HMRC are satisfied to the contrary ". 
 
Could the United Kingdom explain or clarify:  
 
1. Whether the provisions regarding "examination of circumstances surrounding the sale " as 
specified in Article 1.2 （a）and "test values " in Article 1.2  (b) are reflected in the UK’s 
legislation;  
2. The process for "examination of circumstances surrounding the sale "; 
3. The criteria for "examination of circumstances surrounding the sale ". 
 
 
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