G/VAL/Q/ISL/4  
 
29 November  2022 
(22-8891) Page: 1/3 
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  
REPLIES FROM ICELAND TO QUESTIONS FROM THE UNITED STATES  
REGARDING DOCUMENT G/VAL/N/1/ISL/2  
ICELAND  
The following communication, dated 25 November  2022, is being circulated at the request of the 
delegation of Iceland , and responds to questions from the United States contained in document 
G/VAL/Q/ISL/3 . 
 
_______________  
 
 
Question 1 
 
Does Iceland intend to notify its updated Customs Law, No. 88/2005, or its responses to the Checklist 
of Issues?  
 
Response  
 
Iceland does intend to notify articles relevant to customs valuation from its updated Customs Law 
No. 88/2005. It should be noted that Iceland 's Customs Law No. 88/2005 does not contain significant 
changes of substance from legislation on customs valuation previously notified to the Committee 
and can be accessed in its entirety on Iceland Revenue and Customs ' official website: 
https://www.skatturinn.is/media/efni -med-greinum/Customs_law_11_3_2015.pdf  
 
Iceland has notified its responses to the Checklist of Issues (G/VAL/N/2/ISL/1). The principles on 
which those answers were based still apply.  
 
Question 2 
 
Would Iceland please identify the provisions implementing the Interpretative Notes to the 
Agreement?  
 
Response  
 
The Interpretative Notes to the Agreement have not been incorporated directly into Icelandic 
Customs legislation in their entirety. The interpretative Notes to the Agreement are reflected in Art. 
14, 15 and 118 of the Customs Law, No. 88/2005, and articles 55, 56, 57, 58, 59, 60, 61, 62, 63, 
64, 65, 66, 67, 68, 69, 70 and 71 of Regulatio n No. 1100/2006.  
 
Question 3 
 
Article 52 of the regulations provides that shipping, handling and insurance costs shall be included 
in the customs value, "regardless of whether the costs and charges were actually paid or not", if 
based on objective and quan tifiable data. How does Iceland determine the objective and quantifiable 
costs and charges if they are not actually paid?  
 G/VAL/Q/ISL/4  
 
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  Response  
 
According to the Icelandic Customs Law, the customs value of imported goods shall be the 
transaction value, i.e. the price actually paid or payable for the good. The same methodology applies 
to other factors that are included in the customs value such as insurance  and transportation cost. 
The procedure in cases where transaction value cannot be used as a basis can be found in Art. 57. -
62 of Regulation No. 1100/2006. The same procedure applies for costs that shall be added to the 
price actually paid or payable for the imported goods.  
 
Question 4 
 
Under Article 56 of the regulations, when customs is contesting a transaction value , what provision 
accounts for the following in the Decision Regarding Cases where Customs Administrations have 
Reasons to Doubt the Truth or Accuracy of the Declared Value: "Before taking a final decision, the 
customs administration shall communicate to th e importer, in writing if requested, its grounds for 
doubting the truth or accuracy of the particulars or documents produced and the importer shall be 
given a reasonable opportunity to respond. When a final decision is made, the customs 
administration shal l communicate to the importer in writing its decision and the grounds therefor."  
 
Response  
 
According to Art. 110 of the Customs Law, No. 88/2005, Customs Authorities can order correction 
of an import declaration prior to customs clearance, according to the following procedures: 
"…Director of Customs considers further explanations needed concerni ng some items, the importer 
must be exhorted to make amendments within a specified time limit and to submit explanations and 
such documentation as the Director of Customs deems necessary.  
 
Exhortation according to paragraph 1 can be either written or elect ronic, in the form stipulated by 
the [Director of Customs].  
 
If the Director of Customs receives satisfactory explanations and data within the specified time limit 
in accordance with paragraph 1, he must levy duty and other charges according to the import 
documents and the explanations and data submitted. " 
 
Question 5 
 
Has Iceland implemented Article 16 of the Agreement, which provides that "[u]pon written request, 
the importer shall have the right to an explanation in writing from the customs admini stration of the 
country of importation as to how the customs value of the importer 's goods was determined".  
 
Response  
 
The Administrative Procedures Act No. 37/1993 applies to state and municipal administration in 
Iceland where otherwise not specified in l ex specialist . According to Art. 21 of the Act, a party to a 
case can demand a written statement from a public authority (including Iceland Revenue and 
Customs) of the reasons for a decision where they were not given on notification. An application for 
the reasons for a decision shall be lodged within 14 days of its notification to a party; the relevant 
authority must reply thereto within 14 days of receipt. Rulings in cases involving a complaint shall 
always be accompanied by a statement of reasons.  
 
Quest ion 6 
 
Do the special provisions for vehicles in Articles 63 -70 authorize Iceland Customs to proceed directly 
to the fallback method of valuation when it has reasons to doubt the declared transaction value, 
rather than first verifying the truth or accuracy  of the transaction value and, if necessary, 
subsequently applying the remaining valuation methods in sequential order?  
 
Response  
 
Article 65 of the regulation in question stipulates that the determination of the value of vehicles 
under the fallback method should be done on the basis of the "reference value of a new vehicle of G/VAL/Q/ISL/4  
 
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  the same type and subtype as specified in the List of Vehi cles prepared by the Director of Internal 
Revenue", calculated according to the rules in article 66.  
 
Up until 2016, the Director of Internal Revenue published a list of new vehicles, which was based on 
information from all the car dealerships in Iceland, and the list was used to determine the tax value 
of new vehicles. Today, Icelandic customs uses the retail price from car dealerships for new vehicles 
on the grounds of analogia iuris, if the price in the published list is higher than that of new vehicles 
today. Article 66 provides that when computing customs value on the grounds of article 65, one 
must first deduct VAT, excise tax and 12% mark -up as well as the cost of freight, insurance etc. to 
determine the FOB price for a new vehicle of the same type an d subtype of the vehicle which is 
being imported. After the FOB price is determined, depreciation is calculated according to the age of 
the imported vehicle by 1,5% per month for the first 12 months, 1% per month for the next 24 
months and 0,5% for each mo nth after that until a depreciation of 90% has been reached. The 
calculations provide customs with a reasonable FOB price for the imported vehicle. Due to the 
relatively high depreciation values, the calculated price is usually lower than the price of comp arable 
vehicles in databases such as DAT and Redbook.  
 
As a consequence of Iceland’s small market size and geographical location, it can be difficult to find 
identical or similar goods sold and imported to Iceland at or about the same time as the goods bei ng 
valued. Articles 65 and 66 of the regulation in question are meant to guarantee a fair customs price 
for used vehicles in a clear and predictable manner.  
 
Question 7 
 
In cases where Iceland Customs determines the customs value of goods under Article 62 of 
Regulation No. 1100/2006, does the importer have the right to request a written explanation of the 
customs value and the method used to establish it, as required by Article 7.2 of the Agreement? If 
so, what provision provides for that right?  
 
Response  
 
Please refer to Iceland’s answer to question five.  
 
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