G/VAL/N/2/TON/1  
 
1 April  2021 
(21-2796) Page: 1/11 
Committee on Customs Valuation  Original: English  
 
INFORMATION ON IMPLEMENTATION AND ADMINISTRATION  
OF THE AGREEMENT ON CUSTOMS VALUATION  
CHECKLIST OF ISSUES  
TONGA 
The following communication, dated 1 April  2021, is being circulated at the request of the delegation 
of Tonga . 
 
_______________  
 
 
1. Questions concerning Article  1: 
(a) Sales between related persons:  
(i) Are sales between related persons subject to special provisions?  
Yes, see Part 3 -Section 9 (2) and Section 11 (d) of the Customs Act 2007. Please refer 
below:  
https://ago.gov.to/cms/images/LEGISLATION/PRINCIPAL/2007/2007 -
0005/CustomsAct_2.pdf  
 
PART 3 - CUSTOMS VALUATION OF IMPORTED GOODS  
9 Interpretation  
(2)  For the purposes of this Part, two persons are related persons if : 
(a)  both being natural persons : 
(i)  they are connected by family; or  
(ii)  one of them is an officer or director of a company controlled, directly 
or indirectly, by the other;  
(b)  both being companies :  
(i)  that are controlled, directly or indirectly, by a third person (whether 
or not a company);  
(ii)  that together control, directly or indirectly, a third company; or   
(iii)  where the same person (whether or not a company) is in a position 
to cast, or control the casting of 5% or more of the maximum number 
of votes that might be cast at a general meeting of each company;  G/VAL/N/2/TON/1  
 
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  (c)  one person being a company is, directly or indirectly, controlled by the 
other person (whether or not a company);  
(d)  one person being a natural person, is an employee, officer, or director of 
the other person; or  
(e)  they are members of the same partnership.  
11 Transaction value of imported go ods not to apply  
The transaction value of imported goods will not determine the customs value if : 
(d)  the vendor and purchaser are related persons at the time the goods were 
sold for export unless :   
(i)  the Chief Commissioner is satisfied that the rela tionship did not 
influence the price paid or payable for the goods; or  
(ii)  the importer satisfies the Chief Commissioner that the transaction 
value of the goods closely approximates the transaction value, 
deductive value, or computed value of identical or similar goods sold 
at comparable trade and quantity levels to unrelated buyers in the 
Kingdom at or about the same time as the goods to be valued.  
(ii) Is the fact of intercompany prices prima  facie considered as grounds for 
regarding the respective pri ces as being influenced?  
No, please refer to Section 11(d)(i) of the Customs Act 2007. Please refer below:  
 
11 Transaction value of imported goods not to apply  
The transaction value of imported goods will not determine the customs value if : 
(d)  the vendor and purchaser are related persons at the time the goods were sold 
for export unless :                   
(i)  the Chief Commissioner is satisfied that the relationship did not influence 
the price paid or payable for the goods; or  
(iii) What is the pro vision for giving the communication of the afore -mentioned 
grounds in writing if the importer so requests? (Article  1.2(a))  
Section 18 and 20 of the Customs Act 2007. Please refer below:  
 
18 Importer advised of method of determination  
The Chief Commission er shall, upon written request, advise the importer, by notice in 
writing, of the method used to determine the customs value of imported goods.  
  G/VAL/N/2/TON/1  
 
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  20 Review of customs value determinations  
(1)  
(a)  At any time after the making of a determination or other decision by a Customs 
officer under this Part in relation to imported goods, the Chief Commissioner may 
review the determination or other decision and may : 
(i)  affirm the determination or other decision;  
(ii)  vary the determination or other decision; or  
(iii)  revoke the determination or other decision and make any other 
determination or decision that is required to be made for the purpose of 
determining the customs value of the goods in accordance with this P art; 
Customs Act 2007 Section 21 to Act No. 5 of 2007 Page 21 . 
https://ago.gov.to/cms/images/LEGISLATION/PRINCIPAL/2007/2007 -
0005/CustomsAct_2.pdf  
(b)  Wher e, by reason that the Chief Commissioner, under paragraph (a), has varied 
or revoked a determination or other decision of a proper officer : 
(i)  the amount of duty that was levied is less than the amount that should 
have been levied; or  
(ii)  the amount o f duty that was refunded is greater than the amount that 
should have been refunded;  
a letter of demand will be issued by the Chief Commissioner for the payment of the 
amount of duty so short levied or so erroneously refunded, as the case may be.  
(2)  Where a Customs value has been reviewed and a re -determination made, the 
re-determined Customs value shall be taken to be the correct Customs value.  
(iv) How has Article  1.2(b) been implemented?  
Section 11(d)(ii) of the Customs Act 2007. Please refer below:  
 
11 Transaction value of imported goods not to apply  
(d)  the vendor and purchaser are related persons at the time the goods were sold for 
export unless : 
(ii)  the importer satisfies the Chief Commissioner that the transaction value of 
the goods closely approximates the transaction value, deductive value, or 
computed value of identical or similar goods sold at comparable trade and 
quantity levels to unrelated buyers in the Kingdom at or about the same 
time as the goods to be valued.  
(b) Price of l ost or damaged goods:  
Are there any special provisions or practical arrangements concerning the valuation 
of lost or damaged goods?  
No.  
 
  G/VAL/N/2/TON/1  
 
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  2. How has the provision of Article  4 to allow the importer an option to reverse the 
order of application of Article s 5 and 6 been implemented?  
This option to reverse the order of application is not provided.  
 
3. How has Article  5.2 been implemented?  
See section 15 of the Customs Act. This is implemented using the Deductive value method. Please 
refer below:  
 
15 Deductive value  
(1)  Subject to section 10, if the customs value of imported goods cannot be determined 
under sections 12, 13 or 14, the customs value shall be the deductive value of the 
goods.  
(2)  If: 
(a)  the imported goods, or identical or similar  goods are sold in the Kingdom at or 
about the time of importation of the imported goods;  
(b)  the goods were sold in the Kingdom in the same condition in which they were 
imported;  
(c)  the sale was made at the first trade level after importation; and  
(d)  the Chief Commissioner is satisfied that the purchaser in the sale was not related 
to the importer and did not incur any costs referred to in section 12(2)(h) in 
relation to the goods sold,  
the deductive value of the imported goods is the unit price o f the imported goods, or identical 
or similar goods, as the case may be, at which the greatest number of the goods are sold, at 
the earlier date after importation, reduced by the following amounts determined on a per unit 
basis:   
(i) the amount of any com mission;  
(ii) an amount for profit and general expenses, including all costs of marketing 
the goods based on sales in the Kingdom of goods of the same class or kind 
as the goods sold;  
(iii) the cost of transportation of the goods in the Kingdom (including loading, 
unloading, handling and other expenses associated with transportation) 
and insurance in relation to such transportation to the extent not deducted 
under subparagraph (ii); and  
(iv) any amount referred to in 12(3)(c).  
(3)  If:  
(a)  the imported goods, or identical or similar goods are not sold on or about the 
same time as the time of importation but are sold within 90 days after the time 
of importation; and  
(b)  subsection (2)(b) to (d) are satisfied,  G/VAL/N/2/TON/1  
 
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  the deductive value of the imp orted goods is determined in accordance with subsection (2) by 
reference to such later sale.  
(4)  If: 
(a)  the imported goods, or identical or similar goods are not sold in the Kingdom at 
the time of importation or within 90 days after that time;  
(b)  the goods are sold in the Kingdom, after being assembled, packaged, or further 
processed, within 90 days after the time of importation; and  
(c)  sub-section (2)(b) to (d) are satisfied,  
the deductive value of the imported goods shall be determined, at the r equest of the importer, 
in accordance with subsection (2) by reference to such sale and making a reduction on a per 
unit basis for the value added attributable to the assembly, packaging or further processing 
in the Kingdom.  
(5)  Subsection (4) shall not apply if the Chief Commissioner has insufficient information to 
determine the amount of the value added attributable to the assembly, packaging or 
further processing in the Kingdom.  
4. How has Article  6.2 been implemented?  
Powers of Customs Officers to req uest information are provided for under sections 74 and 78 of the 
Customs and Excise Management Act. Please refer below:  
https://ago.gov. to/cms/images/LEGISLATION/PRINCIPAL/2007/2007 -
0004/CustomsandExciseManagementAct_3.pdf  
 
74 Request of information  
(1)  Where reasonable grounds exist, a Customs officer may question any person about any 
matter in the performance of his duties under customs laws, and may include a request 
to produce any documents.  
(2)  Any person to whom sub -section (1) applies shall provi de such information and produce 
such documents.  
78 Notice to produce  
(1)  The Chief Commissioner may, by notice in writing, require a person, as and when 
specified in the notice : 
(a)  to produce for inspection by a specified Customs officer, documents or records 
that the Chief Commissioner considers necessary to facilitate : 
(i)  an investigation under the Customs laws;  
(ii)  an audit under this Act; or  
(iii)  the recovery of a debt du e and payable to the Crown under the Customs 
laws; and  
(b)  allow the Customs officer to take extracts from, or make copies of, documents or 
records of the kind referred to in paragraph (a).  G/VAL/N/2/TON/1  
 
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  (2) In this section, person includes an officer employed in, or  in connection with, a 
government department, corporation, or local authority, or employed in or in connection 
with a bank.  
5. Questions concerning Article  7: 
(a) What provisions have been made for making value determinations pursuant to 
Article  7? 
See Sec tion 17 of the Customs Act. This is implemented using the Fall Black value method. 
Please refer below:  
 
17 Fall back value  
If the customs value of imported goods cannot be determined under sections 12, 13, 14, 15 
or 16, the fall-back method shall be used and is such value as the Chief Commissioner 
determines, having regard to the preceding methods of valuation in this Part in the order in 
which those methods would ordinarily be considered and of such other matters the Chief 
Commissioner considers relevant but not including the following :  
(a) the selling price in the Kingdom of goods produced in the Kingdom;  
(b)  any system tha t provides for the acceptance for valuation purposes of the higher 
of two alternative values;  
(c)  the selling price of goods on the domestic market of the country of exportation of 
the imported goods;  
(d)  the cost of production, other than computed val ue of identical or similar goods in 
accordance with section 14;  
(e)  the price of the goods for export to a country other than the Kingdom;  
(f)  a system of minimum customs values; or  
(g)  arbitrary or fictitious values.  
(b) What is the provision for in forming the importer of the customs value determined 
under Article  7? 
See Section 18 of the Customs Act. Please refer below:  
 
18 Importer advised of method of determination  
The Chief Commissioner shall, upon written request, advise the importer, by notice  in writing, 
of the method used to determine the customs value of imported goods.  
(c) Are the prohibitions found in Article  7.2 delineated?  
Yes, Refer to Section 17 of the Customs Act. Please refer below:  
 
17 Fall back value  
If the customs value of imported goods cannot be determined under sections 12, 13, 14, 15 
or 16, the fall-back method shall be used and is such value as the Chief Commissioner 
determines, having regard to the preceding methods of valuation in this Part in the order in G/VAL/N/2/TON/1  
 
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  which those methods would ordinarily be considered and of such other matters the Chief 
Commissioner considers relevant but not including the following :  
(a) the selling price in the Kingdom of goods produced in the Kingdom;  
(b)  any system tha t provides for the acceptance for valuation purposes of the higher 
of two alternative values;  
(c)  the selling price of goods on the domestic market of the country of exportation of 
the imported goods;  
(d)  the cost of production, other than computed val ue of identical or similar goods in 
accordance with section 14;  
(e)  the price of the goods for export to a country other than the Kingdom;  
(f)  a system of minimum customs values; or  
(g)  arbitrary or fictitious values.  
6. How have the options found in  Article  8.2 been handled? In the case of f.o.b. 
application, are ex -factory prices also accepted?  
See Section 12 subsections (2) and (3) of the Customs Act. Please refer below:  
 
12 Transaction value of imported goods  
(2)  For the purposes of determining t he transaction value of imported goods, the price 
actually paid or payable for the goods is increased by the sum of the following amounts 
paid or payable, directly or indirectly, by or on behalf of the purchaser in respect of the 
goods to the extent that t he amount is not already included in the price :  
(a)  commission and brokerage, other than buying commission;  
(b)  packing costs, including any labour and material costs;  
(c)  the cost of containers that are treated as being one with the goods;  
(d)  royalties or licence fees payable as a condition of sale, other than for the right to 
reproduce the goods in the Kingdom;  
(e)  the cost of foreign inland freight and foreign inland insurance;  
(f)  the cost of overseas freight and overseas insurance;  
(g)  the whole or any part of the proceeds of any subsequent use, resale or disposal 
of the goods by or on behalf of the purchaser that accrues to the vendor;  
(h)  finance cost to purchase the finance f or imported goods; and  
(i)  the value of any of the following goods and services supplied, directly or 
indirectly, by the purchaser free of charge or for a reduced consideration for use 
in connection with the production and sale for export of the imported  goods, 
apportioned to the goods in a reasonable manner and in accordance with 
generally accepted accounting principles : G/VAL/N/2/TON/1  
 
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  (i)  any materials, components, parts, and other goods incorporated in the 
production of the imported goods;  
(ii)  any tools, dies, mol ds, and other goods utilised in the production of the 
imported goods;  
(iii)  any materials consumed in the production of the imported goods; and  
(iv)  any engineering work, development work, art work, or design work, plans 
or sketches undertaken outside the Kingdom and necessary for the 
production of the goods.  
(3)  For the purposes of determining the transaction value of imported goods, the price 
actually paid or payable for the imported goods is decreased by the sum of the following 
amounts to the exten t only that these amounts are separately identified in the price 
paid or payable for the goods : 
(a)  any expenditure incurred for the construction, erection, assembling or 
maintenance of, or technical assistance provided in respect of the goods after 
importation;  
(b)  the cost of transportation (including loading, unloading, handling and other 
expenses associated with transportation) of the goods after importation, and the 
cost of any insurance relating to such transportation;  
(c)  any duties or taxe s paid or payable by reason of the importation or sale of the 
goods in the Kingdom; and  
(d)  financing costs paid or payable to the supplier in connection with the purchase of 
the imported goods.  
7. Where is the rate of exchange published, as required by Article  9.1? 
The rates of exchange are published by the National Reserve Bank of Tonga (NRBT). The NRBT 
publishes monthly exchange rates for Customs purposes. 
http:// www.reservebank.to/index.php/financials/financial -markets/mer.html  
8. What steps have been taken to ensure confidentiality, as required by Article  10?  
See Section 125 of the Customs and Excise Management Act. Confidentially is required and breach 
amounts to an offence. Please refer below:  
125 Confidentiality  
(1)  A Customs officer shall not communicate or allow to be communicated, any information 
obtained under the Customs laws, to any person not legally entitled to such information.  
(2)  Any per son who contravenes this section commits an offence and shall be liable upon 
conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 
10 years, or both.  
  G/VAL/N/2/TON/1  
 
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  9. Questions concerning Article  11: 
(a) What rights of appeal are open  to the importer or any other person?  
See Section 20 of the Customs Act and section 126 of the Customs and Excise Management 
Act. Appeal to the Minister or to the Tax Tribunal. Please refer below:  
 
20 Review of customs value determinations  
(1)  
(a)  At an y time after the making of a determination or other decision by a Customs 
officer under this Part in relation to imported goods, the Chief Commissioner may 
review the determination or other decision and may : 
(i)  affirm the determination or other decision;  
(ii)  vary the determination or other decision; or  
(iii)  revoke the determination or other decision and make any other 
determination or decision that is required to be made for the purpose of 
determining the customs value of the goods in accordance with this Part; 
Customs Act 2007 Section 21 to Act No. 5 of 2007 Page 21 . 
(b)  Where, by reason that the Chief Commissioner, under paragraph (a), has varied 
or revoked a determination or other decisi on of a proper officer : 
(i)  the amount of duty that was levied is less than the amount that should 
have been levied; or  
(ii)  the amount of duty that was refunded is greater than the amount that 
should have been refunded; a letter of demand will be issue d by the Chief 
Commissioner for the payment of the amount of duty so short levied or so 
erroneously refunded, as the case may be.  
(2)  Where a Customs value has been reviewed and a re -determination made, the 
re-determined Customs value shall be taken to be  the correct Customs value.  
126 Appeal  
Any person may appeal to the Tax Tribunal within 30 days of receipt of a decision of the Chief 
Commissioner under Customs laws . 
(b) How is he to be informed of his right to further appeal?  
When decisions are made, th e concerned person is informed of his or her right to appeal . 
 
10.  Provide information on the publication, as required by Article  12, of:  
(a) (i) The relevant national laws;  
Published in the government gazette and also online on the website of the Attorn ey 
General’s office. Customs Act 2007.  
https://ago.gov.to/cms/legislation/gazettes/gazettes -by-year.html  
 
  G/VAL/N/2/TON/1  
 
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  (ii) The regulations concerning the application of the Agreement:  
Published in the government gazette and also online on the website of the Attorney 
General’s office. Customs and Excise Management Regulation s 2008.   
https://ago.gov.to/cms/images/LEGISLATION/SUBORDINATE/2008/2008 -
0011/CustomsandExciseManagementRegulations2008_3.pdf   
(iii)  The judicial decision and administrative rulings of general application relating 
to the Agree ment:  
Judicial decisions are published by the Courts and also by the Attorney General’s Office 
online. Valuation rulings are published in public notices by Customs.  
https://ago.gov.to/cms/judgements.ht ml 
 
(iv)  General  or specific laws being referred to in the rules of implementation or  Application  
Published in the government gazette and also  online on the website of the Attorney 
General’s office. https://ago.gov.to/cms/legislation/gazettes/gazettes -by-year.html  
(b) Is the publication of further rules anticipated ? Which topics would they cover?  
Yes, possible revisions of the Customs Act 2007 are currently under consideration.   
 
11. Questions concerning Article  13: 
 
(a) How is the obligation of Article  13 (last sentence) being dealt with in the respective 
legislati on? 
Refer PART 9 Customs Securities: Sections 50 -52 of the Customs and Excise Management Act. 
Provisional entries may also be made. Please refer below:  
 
PART 9 - CUSTOMS SECURITIES  
50 Chief Commissioner' s powers  
(1)  The Chief Commissioner may take securities for compliance with the Customs laws.  
(2)  The Chief Commissioner may : 
(a)  allow a Customs security to be provided by a bond, guarantee, or cash or by a 
combination of these; and  
(b)  impose such conditions as he deems necessary.  
(3)  Securities collected under this Part shall be cancelled or returned by Customs promptly 
once the Chief Commissioner is satisfied that the security is no longer required for the 
purpose of this Act.  
51 Release of goods  
Goods subj ect to a Customs security shall not be released from Customs control until the 
Customs security is provided.  
52 Forfeiture of security  
A Customs security collected under this Part shall be forfeited to the Crown if any condition 
imposed is not complied w ith. G/VAL/N/2/TON/1  
 
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  (b) Have additional explanations been laid down?  
No.   
 
12. Questions concerning Article  16: 
(a) Does the respective national legislation contain a provision requiring customs 
authorities to give an explanation in writing as to how the customs value was 
determined?  
Yes, see section 18 of the Customs Act. Please refer below:  
 
18 Importer advised of method of determination  
The Chief Commissioner shall, upon written request, advise the importer, by notice in writing, 
of the method used to determin e the customs value of imported goods.  
(b) Are there any further regulations concerning an above -mentioned request?  
No further regulations are provided in relation to Article 16 requirements . 
 
13.  How have the Interpretative Notes of the Agreement been in cluded?  
Interpretive notes have been included in the legislative provisions (to add).  
 
14. How have the provisions of the Decision on the Treatment of Interest Charges in the 
Customs Value of Imported Goods been implemented?  
Charges for interest on financing arrangements entered into by the buyer in relation to the purchases 
of the goods are not included in determining Customs value.  
 
15. For those countries applying paragraph  2 of the Decision on the Valuation of Carrier 
Media Bearing Software for Data Processing Equipment, how have the provisions of 
this paragraph been implemented?  
The decision on carrier media can be emphasized and published by way of a written ruling under 
regulation 131 of the Customs and Excise Managemen t Regulations 2008.  Although carrier media 
are currently being valued in accordance with the decision following notification of Tonga Customs 
from the WCO, a ruling was not issued by Customs under Reg.131 to reflect this at the time.  
 
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