G/VAL/Q/NPL/1  
 
5 May 2022  
(22-3539) 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  
RESPONSES FROM NEPAL TO QUESTIONS  POSED  BY THE UNITED STATES  
REGARDING DOCUMENT G/VAL/N/1/NPL/11 
NEPAL 
The following communication, dated 3 May 2022, is being circulated at the request of the delegation 
of Nepal.  
 
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Follow -up Question 1 : 
With respect to Question 2 in G/VAL/W/286 and Nepal 's response in G/VAL/W/300 it does not appear 
that all of the WTO Customs Valuation Agreement (CVA) pro visions referred to in Question  2 were 
implemented in the Valuation Directive 2010 provided in the Annex, or in the other sources listed in 
response to Question 2. In particular, could Nepal please provide fu rther information as to how it 
intends to implement the following provisions of the CVA (including the respective Interpretative 
Notes):  Article s 1.2(a), 7.3, 8.1(a)(ii), 8.3, 8.4, 12, 15.3, and the Note to Article 3.4?  
 
Response to follow -up question 1 : 
 
The Customs Valuation Agreement (CVA) provisions are currently in a scattered form in Customs 
Act 2007 and Customs Valuation Directives. The Customs Act of 2007 has substantive requirements 
to guarantee compliance with the WTO CVA. Customs Val uation Directives provide detailed 
provisions based on interpretive notes and procedural provisions. The government of Nepal has 
drafted a new Customs Bill, which is under consideration in the federal Parliament of Nepal for 
enactment. The Bill has reformu lated the provision governing the CVA. A new Customs Regulation 
will have to be enacted within 90 days of the promulgation of the new Customs Act. The new Customs 
Bill and Regulation are anticipated to deliver the CVA requirements more uniformly.  
 
Follow -up Question 2 : 
The WTO CVA establishes a system of valuation based on actual values, as opposed to notional or 
estimated values. Article 8.3 provides that additions under Article 8 should be "made only on the 
basis of objective and quantifiable data ". As su ch, freight, insurance, and other related costs should 
be made on the basis of actual costs rather than estimated amounts as determined by customs 
officers. What is the basis for "estimates " by the customs officers? Could Nepal please clarify how it 
ensure s compliance with Article 8.3 with respect to additions for freight, insurance, and related 
expenses?  
Response to follow -up question 2 : 
 
CVA provisions in the legislation adhere to article 8.3, which states that addition under article 8 
should be "made onl y on the basis of objective and quantifiable data". The legislative provision allows 
 
1 Previous documents containing questions or replies pertaining to the customs legislation of Nepal were 
issued in the G/VAL/W series as follows: G/VAL/W/ 286, G/VAL/W/ 300 and G/VAL/W/ 301. G/VAL/Q/NPL/1  
 
- 2 - 
 
  importers to request Customs valuation officers' assistance in "estimating" the freight, insurance, 
and other costs incurred, due to the failure to submit the actual cost paid or payable at the time of 
submission of the declaration at Customs for clearance. This allows the importers to release goods 
subject to adjusting such estimated costs within 90 days, facilitating the prompt clearance of the 
goods. These estimates are neither notional nor arbitrary but based on the database of the freight, 
insurance, and other costs incurred in other contemporary imports of identical or similar goods.  
 
Follow -up Question 3 : 
Please clarify how the ability of a customs officer to purchase  goods alleged to be undervalued fits 
within the sequential methods of valuation under the CVA. In addition, please explain the potential 
outcomes of an appeal by the importer in circumstances where a customs officer seeks to purchase 
goods alleged to be u ndervalued. If the importer succeeds on an appeal, how is the value of the 
goods determined?   
Please explain this treatment, under which goods alleged to be undervalued are permitted to be sold 
with an addition of 5 % to the declared value, in light of the  prohibition on use of arbitrary or fictitious 
prices under Article 7.2(g) of the CVA. How will Nepal ensure that the treatment of undervalued 
merchandise complies with the WTO CVA?  
Response to follow -up question 3 : 
 
The provision concerning the purchase of the goods is regarded as a measure to encourage the level 
of compliant importers. There is evidence that the practice of such measures is rarely exercised. In 
case such a measure is adopted, and if the importer is not satisfied with this decision, he or  she has 
the right to file an application before the Valuation Review Committee, an independent 
administrative committee, for review no later than 30 days after such decision is made by the 
customs officer, under section 61 of Customs Act 2007. If the impo rter is dissatisfied with the 
decision made by the Valuation Review Committee, he or she has the right to appeal to the Revenue 
Tribunal (a judicial body) within 35 days from such decision made by the Valuation Committee under 
section 62 of Customs Act 200 7 and Revenue Tribunal Act, 1974. The Customs recognizes the 
Valuation Review Committee's rulings or the Revenue Tribunal's judgments and executes them 
appropriately.  
 
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