G/VAL/Q/MNG/4  
 
31 May 2023  
(23-3718) Page: 1/5 
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 MONGOLIA TO QUESTIONS FROM THE UNITED STATES  
REGARDING DOCUMENT G/VAL/N/1/MNG/1  
MONGOLIA  
The following communication, dated 23 May 202 3, is being circulated at the request of the delegation 
of Mongolia . 
 
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Question  1 
 
Article 8.3: According to Article 7.1, a declarant must determine Customs value based on required 
documents and  declare it to Customs, but in certain cases where Customs deems the documents 
invalid, Customs may choose to determine Customs value by an alternative method, according to 
Article 8.3. Under Article 8.3, how does Mongolia determine the applicable valuatio n method?  
 
Response  
 
Article 9 of the Law of Mongolia on Customs Tariffs and Customs Duties lists the Customs valuation 
methods to use them in the following sequences:  
 
9.1.1. the transaction value method;  
9.1.2. the transaction value method of identical goods;  
9.1.3. the transaction value method of similar goods;  
9.1.4. the deductive method;  
9.1.5. the computed method; or  
9.1.6. the fall -back or residual method.  
 
Therefore, when Customs chooses to determine Customs value by a method other than t hat applied 
by a declarant, it should follow the above -mentioned sequences. Article 9.2 of the Law says that at 
the request of a declarant the sequences of deductive method and computed method may be 
reversed.  
 
Question  2 
 
Article 8.5: Article 8.5 assures that declarant may get an explanation of a Customs determined value 
upon request. Please confirm whether this Article would include an explanation of the method used 
under Article 15, the fall -back or residual method?  
 
Response  
 
Article 8.5 of the Law of M ongolia on Customs Tariffs and Customs Du ties says that in case where 
the Customs determines the Customs value in accordance with Article 8.3, a declarant may get an 
explanation in writing upon a written request to Customs. This paragraph covers all cases where the 
Customs value is determined by a method other than that applied by a declarant.  G/VAL/Q/MNG/4  
 
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  Question 3  
 
Article 10.3.1.1: Article 10.3.1.1 lists charges for transportation, and appears to be associated with 
CVA Article 8.2, but it refers to charges for the u se or lease of means of transport or 'containers'. 
Could Mongolia clarify the nature of this charge for containers?  
 
Response  
 
The CVA Article 8.2 says that in framing its legislation, each Member shall provide for the inclusion 
in or the exclusion from th e customs value, in whole or in part, of the cost of transport of the 
imported goods to the port or place of importation. Therefore, the charges for use and lease of 
containers incurred in transportation of goods to the place of importation are included in  the Customs 
value.  
 
Question 4 
 
Article 10.3.2: According to CVA Article 8.1(a)(i), buying commissions are to be excepted  from the 
types of commissions that can be added to transaction value. However, it is not clear that this is 
specified in Article 10.3.2. Could Mongolia clarify whether or not buying commissions are excluded 
from Article 10.3.2 and if not, why?  
 
Response  
 
For the purposes of implementation of the Law of Mongolia on Customs Tariffs and Customs Duties 
in general and its Articles 8 to 15 in particular, the Guidelines for Checking the Customs Value of the 
Imported Goods and Determining the Customs Value was ado pted by the Directive of the Director 
General of the Customs General Administration No. A/30 of 2012. Paragraph 4.4 of the Guidelines 
says that the commissions to be added to the transaction value provided for in Article 10.3.2 of the 
Law on Customs Tariff s and Customs Duties are commissions other than the buying commissions. 
Therefore, the buying commissions are not included in the Customs values.  
 
The Revised Draft Customs Law and the Draft Law on Amendments to the Law on Customs Tariffs 
and Customs Dutie s were completed in 2021. The Draft Law on Amendments to the Law on Customs 
Tariffs and Customs Duties includes such provision.  
 
Question 5 
 
Article 10.7.6: Article 10.7.6 deals with related parties and allows the use of transaction value if test 
values in  Article 10.9 are closely approximated. Yet, under CVA Article 1.1(d), if the circumstances 
of the sale test in CVA Article 1.2(a) is satisfied, transaction value may also be used. How does 
Mongolia's law account for CVA Article 1.2(a)?  
 
Response  
 
The prov ision providing for examination of circumstances surrounding the sale in accordance with 
paragraph 2(a) of Article 1 of the CVA is included in Article 11.9 of the Draft Law on Amendments 
to the Law on Customs Tariffs and Customs Duties as following:  
 
"11.9 . The transaction value method is used if the relationship did not influence the price when 
circumstances surrounding the sale between the related persons provided for in 11.8 of this Law are 
examined and the transaction value of the sale between the relat ed persons closely approximates 
to the following test values by indicators such as characteristics of the imported goods, production 
features, season of crossing Customs territory, price difference, et c.…". 
 
Question 6 
 
Article 11.10: Article 11.10 prohibi ts sales of certain types of goods for use as comparisons for the 
identical goods method of CVA Article 2. Please explain why goods listed in Article 11.10.6 through 
11.10.11 cannot be used for identical goods comparison?  
 G/VAL/Q/MNG/4  
 
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  Response  
 
Article 2.1(a) of the CVA says that "if the customs value of the imported goods cannot be determined 
under the provisions of Article 1, the customs value shall be the transaction value of identical goods 
sold for export to the same country of importation and exported at or about the same time as the 
goods being valued". And in Note to Article 2 it is said that in applying Article 2, the customs 
administration shall, wherever possible, use a sale of identical goods at the same commercial level 
and in substantially the same qu antities as the goods being valued.  
 
The goods listed in Article 11.10.6 through 11.10.11 do not meet the requirement "sold for export 
to the same country of importation", therefore, they cannot be used for Customs valuation purposes.  
 
Question 7 
 
Article 12.10: The same goods listed in Article 11.10 cannot be used as comparisons for the similar 
goods method of CVA Article 3. Please explain why goods listed in Article 11.10.6 through 11.10.11 
cannot be used for similar goods comparison?  
 
Response  
 
Article 3 .1(a) of the CVA says "if the customs value of the imported goods cannot be determined 
under the provisions of Articles 1 and 2, the customs value shall be the transaction value of similar 
goods sold for export to the same country of importation and export ed at or about the same time 
as the goods being valued". And in Note to Article 3 it is said that in applying Article 3, the customs 
administration shall, wherever possible, use a sale of similar goods at the same commercial level 
and in substantially the same quantities as the goods being valued.  
 
The goods listed in Article 11.10.6 through 11.10.11 do not meet the requirement "sold for export 
to the same country of importation", therefore, they cannot be used for Customs valuation purposes.  
 
Question 8 
 
Article 13.4: Article 13.4 defines 'goods of the same class or kind' as used in Article 13.3.1 for the 
deductive value method (CVA Article 5). However, in CVA Article 15.3, 'goods of the same class of 
kind' is defined to include identical or similar goods. Please explain why identical or similar goods 
are not included in Article 13.4?  
 
Response  
 
Article 13.4 of the Draft Law on Amendments to the Law on Customs Tariffs and Customs Duties 
defines "the goods of the same class of kind" as following:  
 
"13.4. The term "goods of the same class of kind" referred to in Article 13.3.1 of this Law means a 
group of goods produced at a particular enterprise or its branch industry and it covers both identical 
goods and similar goods.".  
 
Question 9 
 
Article 15.2. 1.1: Article 15.2.1.1 allows for the us e of 'reliable similar data available to Customs and 
other importers and compare with other costs' when there is no documentary evidence to justify 
transaction value or its components. Please specify which resources a re used by Customs to collect 
the data referred to in this article?  
 
Response  
 
Customs collects data provided for in Article 15.2.1.1 of the Law on Customs Tariffs and Customs 
Duties from the Customs database which is based on Customs declarations, cost in formation from 
carriers and freight forwarders and other related data from importers.  
 G/VAL/Q/MNG/4  
 
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  Question 10 
 
Article 15.2.2: Article 15.2.2 specifies prices that may be used under the fall -back method (CVA 
Article 7) based on 'international trade practices and other commercial data valid at that time.' Does 
Customs use the prices under 15.2.2 before it considers the flexibilities set out in Article 15.2.1? If 
so, how is this consistent with WCO TCCV Advisory Opinion 12.1 which provides that the methods 
used unde r Article 7 should begin with applying Articles 1 to 6 with reasonable flexibility, and only 
use other reasonable methods as a "final resort".  
 
Response  
 
Article 9 of the Law of Mongolia on Customs Tariffs and Customs Duties provides for use of the 
Customs  valuation methods in their sequences. Therefore, in accordance with such sequences, 
where it is not possible to determine Customs value using methods provided for in Article 15.2.1, it 
should be determined using methods provided for in Article 15.2.2.  
 
Question 11 
 
Article 41.4: Article 41.4 provides for regulations on the issuance of a guarantee to pay the Customs 
duties and other taxes. When will Mongolia notify these regulations to the WTO?  
 
Response  
 
Article 41.4 of the Law on Customs Tariffs and Customs Duties states that "the regulations on 
issuance of a guarantee to pay the Customs duties and other taxes shall be adopted by the 
Government". Accordingly, the "Procedures for Issuance of Guarantees for  Payment of Customs 
Duties and Other Taxes" were adopted by the Government Resolution No. 89 of 2009. However, the 
notification of these Regulations to the WTO is not within the competence of the Customs. It is the 
responsibility of the Government of Mongo lia, the Ministry of Finance or the Ministry of Foreign 
Relations.  
 
Question 12 
 
Article 5.3: Article 5.3 cites to the Law on Confidential Information as governing the use and storage 
of confidential information. When will Mongolia notify these regulations  to the WTO?  
 
Response  
 
The Law on Privacy of State and Official Information was adopted by the Parliament of Mongolia in 
2016. The notification of that Law to the WTO is not within the competence of the Customs. It is the 
responsibility of the National Se curity Council, the Ministry of Foreign Relations or the General 
Intelligence Agency.  
 
Question 13 
 
We note that some provisions of the CVA are not reflected in Mongolia's notified measures, including:  
 
a. Article 1.2(a) concerning the circumstances of sale t est. 
b. Article 1.2(b)(ii) -(iii) and Article 1.2(c) concerning requirements for test values.  
c. Article 8(1)(b)(i) -(iv) concerning goods and services.  
d. Article 8.4 concerning limits on the types of additions that can be made to transaction value.  
e. Article 9.2 conc erning conversion of currency.  
f. Article 14 states that the Interpretative Notes at Annex I and the notes in Annexes II and 
III form an integral part of the CVA, and that the articles of the CVA are to be read and 
applied in conjunction with their respective  notes.  
 
What are Mongolia's plans for incorporating these provisions into its national legislation?  
 G/VAL/Q/MNG/4  
 
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  Response  
 
Provisions mentioned in points "a", "b", "c" and "d" are included in the Draft Law on Amendments 
to the Law on Customs Tariffs and Customs Duties. Provisions mentioned in point "c" are included 
in paragraph 4.5 of the Guidelines for Checking the Customs Value of the Imported Goods and 
Determining the Custom s Value which was adopted by the Directive of the Director General of the 
Customs General Administration No. A/30 of 2012. The provision mentioned in point "e" is included 
in Article 35.3 and Article 35.4 of the Law on Customs Tariffs and Customs Duties. A nswer to the 
point "f" would be found in the following Answer to Question 14 (The Interpretative Notes in Annex 
I of the CVA).  
 
Question  14 
 
It does not appear that all of the Interpretative Notes in Annex I of the CVA have been included in 
Mongolia's legislation, as provided in CVA Article 14. How and when does Mongolia intend to 
implement the Interpretative Notes in their entirety?  
 
Response  
 
Mongolia became the WTO Member on 29 January 1997 and acceded to all its agreements other 
than its Plurilateral Trade Agreements. Article 2.2 of the Law on Customs Tariffs and Customs Duties 
says that if the provisions of any international treaties of Mongolia differ from those specified in this 
Law, the former shall prevail.  
 
Therefore, all provisions of the CVA are applied and implemented in Mongolia together with the 
Interpretative Notes in its Annex I and the Notes in its Annexes II and III.  
 
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