G/VAL/W/352  
 
3 December 2019  
(19-8314) Page: 1/3 
Committee on Customs Valuation  Original: English  
 
NOTIFICATION UNDER ARTICLE 22 OF THE AGREEMENT ON  
IMPLEMENTATION OF ARTICLE VII OF THE GENERAL  
AGREEMENT ON TARIFFS AND TRADE 1994  
NIGERIA  
Replies from Nigeria to the Questions from the United States  
contained in document G/VAL/W/337  
The following communication, dated 27 November  2019, is being circulated at the request of the 
delegation of Nigeria . 
 
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Question 1  
In response to the first question from the United States, which concerns the language in 
Article 1.2(a) of t he CVA clarifying that "the fact that the buyer and seller are related 
within the meaning of Article 15 shall not in itself be grounds for regarding transaction 
value as unacceptable," Nigeria states that language to this effect is included in the 
Nigeria Customs Service Act, 2013, which is not yet in effect.  
Nigeria further notes that "it may appear that Article 1(d) of the current Act omits the 
language from Article 1.2(a) of the CVA as stated above, but nonetheless, Article 1(d) of 
the Act provides for f air hearing for the buyer to prove to the Customs that the relationship 
has not influenced the price."  
In relation to Nigeria's second point, would Nigeria please clarify whether Nigeria ensures 
that the fact that the buyer and seller are related is not in  itself grounds for regarding 
transaction value as unacceptable, as required by Article 1.2(a) of the CVA?  
Answer : 
Paragraph 1(d) of Nigeria 's Customs and Exercise Management ACT 2003 (CEMA 2003) envisage d 
a two -tier test. That is, whether the buyer and se ller are related and if they are related, whether the 
relationship influenced the price.  
Paragraph 1(d) is consistent with Article 1.2(a) of the CVA, in particular 2nd sentence which states 
that "in such case the circumstances surrounding the sale shall be  examined and the transaction 
value shall be accepted provided that the relationship did not influence the price ". 
Under  Paragraph  1(d) of CEMA 2003, even if the buyer and the seller are related, and it is established 
that the relationship does not influen ce the price, the transaction value is by default accepted.  
Furthermore, the first sentence of Paragraph 2(2) of Interpretative Note to Article 1 of the CVA 
states that "Paragraph 2(a) provides that where the buyer and the seller are related, the 
circumst ances surrounding the sale shall be examined and the transaction value shall be accepted 
as the customs value provided that the relationship did not influence the price. " It is pertinent to 
note that the CVA does not provide any tool or window for sellers and buyers to collude and present 
lower price for the purpose of paying lower duties  G/VAL/W/352  
 
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  Question 2  
Further responding to the first question, Nigeria suggests that for purposes of its customs 
administration, "the test is, whether the buyer and seller are rela ted? And if related, that 
buyer has proved to the satisfaction of the Board that the relationship has not influenced 
the price of the goods."  
Paragraph 2(2) of Interpretative Note to Article 1 of the CVA states, in part, that "[i]t is 
not intended that th ere should be an examination of the circumstances in all cases where 
the buyer and the seller are related. Such examination will only be required where there 
are doubts about the acceptability of the price. Where the customs administration have 
no doubts a bout the acceptability of the price, it should be accepted without requesting 
further information from the importer."  
Nigeria's response appears to indicate that the buyer is required to prove that transaction 
value is acceptable in every related -party im port transaction. Will Nigeria please explain 
whether this is the case, or whether it implements the language from Paragraph 2(2) of 
Interpretative Note to Article 1 of the CVA, which provides that the declared price should 
be accepted without requesting f urther information from the importer unless the customs 
administration has doubts about the acceptability of the price.  
Answer : 
Nigeria is mindful of her obligation under Article 1 of the CVA, including paragraph 2(2) of 
Interpretative Note to Article 1 of  the CVA. The first sentence of paragraph 2(2) of the Interpretative 
Note, states in part that "(…) where the buyer and the seller are related, the circumstances 
surrounding the sale shall be examined and the transaction value shall be accepted as the cust oms 
value provided that the relationship did not influence the price ". Furthermore, the provisions of the 
second  and third sentence s of Paragraph 2(2) of Interpretative Note to Article 1 of the CVA does not 
prevent any Member from taking proactive steps to  check possible collusion of related buyers and 
sellers to present lower price for the purpose of paying lower duties. This notwithstanding, we have 
taken note of the issues raised and as stated in our earlier submission, the issues are being explicitly 
addressed in the revised "Nigeria Customs Services Act, 2013 ". 
Question 3  
In response to the second question from the United States, which concerns Articles 2.3 
and 3.3 of the CVA, Nigeria responded that its current customs legislation does not provide 
that "where more than one transaction value of identical or similar goods is found, the 
lowest value shall be used to determine the Customs value."  
However, Nigeria stated that language to this effect is included in the Nigeria Customs 
Service Act, 2013, which is not yet in effect. Nigeria cites to provisions in that Act stating 
that "[w]here more than one transaction value of identical goods is found, the lowest of 
such value shall be used to determine the Customs value of the imported goods."  
Would Nigeria please confirm whether that is also the case with similar goods (i.e., th at 
when one or more transaction values of similar goods is found, the lowest of such value 
is used to determine the Customs value)?  
Answer : 
Regarding the issues raised under Article s 2.3 and 3.3 of the CVA, it is pertinent to note that in 
analysing the ext ent of inconsistency of a Members legislation with her WTO commitments, both 
de jure and de facto  analysis are key. Though we admitted in our submission G/VAL/W/321 that our 
CEMA 2003 does not explicitly provide for "where more than one transaction value o f identical or 
similar goods is found, the lowest value shall be used to determine the customs value," however, 
we believe paragraph 6(1) of the Act in effect will ensure that the lowest value of identical or similar 
goods that is fair, transparent and ver ifiable for the parties involved will be used to determine the 
Customs value. This notwithstanding, we have taken steps to ensure that the provision of Article s 2.3 
and 3.3 of the CVA are explicitly reflected in section s 69(3) and 70(3) of the "Nigeria Cus toms G/VAL/W/352  
 
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  Service Act, 2013," legislation currently undergoing due process. We have also noted the United 
States concern regarding the omission of the phrase "similar goods " in Nigeria 's draft Customs 
Service Act, 2013 and we shall ensure the inclusion of the p hrase in the act.  
Question 4  
In response to the third question from the United States, which concerns the importer's 
right to reverse the order of application of Articles 5 and 6 of the CVA, Nigeria states that 
it has not made a reservation under Annex I II.3 concerning the reversal of sequential 
order of Articles 5 and 6. Nigeria further notes that, under Article 8(4) of the Act, "every 
buyer has a right, on request to the Board, to have a written explanation from the Board 
as to how the Customs Value of goods imported by him into Nigeria was determined…"  
Given that Nigeria has not made a reservation under Annex III.3, would Nigeria please 
explain why an importer is required to seek approval from the Board for the sequence of 
Articles 5 and 6 to be revers ed? Does Nigeria plan to provide for the order to be reversed 
at the request of the importer, given that Article 4 of the CVA provides that "at the request 
of the importer, the order of application of Articles 5 and 6 shall be reversed"?  
Answer : 
Regarding  United States concerns on Paragraph 8 of Nigeria 's CEMA 2003, which appears to require 
Importers to seek approval from the Board for the sequence of Articles 5 and 6 of the CVA to be 
reversed, we wish to state that we are mindful of our CVA Article 4 obli gation. We are also conscious 
of the fact that we have not made any reservation pursuant to paragraph 3 of Annex III of the CVA 
that would have allowed us as a Developing Country to derogate from our CVA Article 4 obligation. 
However, if an importer makes a formal request as envisaged under Article 4 of the CVA, such 
request ordinarily should be assessed by a Customs authority. It is also pertinent to note that 
Paragraph 14 of the CEMA 2003, took cognizance of the principle of consistent interpretation of t he 
provisions of the Act with "the provisions of Article VII of the General Agreement on Tariffs and 
Trade 1994 as contained in the Agreement on the implementation of Article VII, together with all 
the notes to the Articles, and all the Annexes to those Ar ticles,(…) ". This notwithstanding, we will 
take into account the United States concerns on this issue in the ongoing consultation on the Nigeria 
Customs Services Act, 2013 legislation. We could also explore the chances of obtaining a reservation 
from WTO M embers, in accordance with paragraph 3 of Annex III of the CVA.  
Question 5  
In response to the fifth question from the United States, which concerns the incorporation 
of the Interpretative Notes of the CVA into Nigeria's legislation, Nigeria indicates tha t "the 
revised legislation titled "Nigeria Customs Service Act, 2013" yet to be applied appears to 
have taken care of this under Section 64 of the Act…"  
Would Nigeria please explain how Section 64 of the Act addresses the Interpretative Notes 
to the CVA a nd confirm that each Interpretative Note is incorporated into the legislation?   
Answer : 
On the issue of the United States'  concern regarding the incorporation of the Interpretative Notes of 
the CVA into Nigeria's legislation, we wish to state that Paragra ph 14 of the CEMA 2003, took 
cognizance of the principle of consistent interpretation of the provisions of the Act with "the 
provisions of Article  VII of the General Agreement on Tariffs and Trade 1994 as contained in the 
Agreement on the implementation of  Article VII, together with all the notes to the Articles, and all 
the Annexes to those Articles,(…) ". What is of utmost importance is whether the concerns of the 
United States on the need for Nigeria to incorporate the Interpretative Notes of the CVA into  her 
legislation have been addressed or is being addressed and not the specific text of paragraph 64 of 
the "Nigeria Customs Service Act, 2013 " which is currently being reviewed by our National Assembly.  
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