G/VAL/W/241/Rev.1  
2 May 2014  
(14-2675)  Page: 1/3  
Committee on Customs Valuation  Original: Spanish  
 
  PROPOSAL FOR UPDATING THE "DECISION ON THE VALUATION 
OF CARRIER MEDIA BEARING SOFTWARE FOR 
DATA PROCESSING EQUIPMENT" 
Revision 
The following communication, dated 24 April 2014, is being circulated at the request of the 
delegation of Uruguay. 
 
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1  BACKGROUND 
1.1 On 17 May 2013, the Chairman of the Technical Committee on Customs Valuation advised
1 
that, at its 36th Session, held in Brussels from 15 to 19 April 2013, the Technical Committee 
had examined the question raised by Uruguay co ncerning the application of WTO Decision 4.1 
(Valuation of Carrier Media Bearing Software for Data Processing Equipment) in cases where the carrier media are in the form of "U SB flash drives or similar devices". 
1.2 Pursuant to this Decision, Members applying the second paragraph determine the customs 
value of imported carrier media bearing data or instructions (software) by taking into account only the cost or value of the carrier medium itself. The customs value does not, therefore, in such cases include the cost or value of the data or instructions (software), provided that this is distinguished 
from the cost or the value of the carrier medium. 
1.3 In mentioning this "unique situation", the Decision refers, in its footnote, to paragraph 5 
of GATT document VAL/M/10, which reproduces the statement made by the Chairman 
of the Committee on Customs Valuation at the meeting of 24 September 1984.
2 On that occasion, 
the Chairman underscored, among other things, that: 
"In the case of imported carrier media bearing data or instructions for use in data processing 
equipment (software), it is essentially the carrier  media itself, e.g. the tape or the magnetic 
disc, which is liable to duty under the Customs tariff. 
However, the importer is, in fact, interested in using the instructions or data; the carrier 
medium is incidental. Indeed, if the technical facilities are available to the Parties 
to the transaction, the software can be transmitted by wire or satellite, in which case 
the question of Customs duties does not arise. In addition, the carrier medium is usually a temporary means of storing the instructions or data; in order to use it, the buyer has 
to transfer or reproduce the data or instructions into the memory or data-base of his 
own system. 
… 
In taking this decision on the valuation of carrier media bearing software for data processing 
equipment, it is understood that should an y difficulties arise in the implementation 
                                               
1 See document G/VAL/W/229. 
2 This statement is reproduced on  page 9 of document G/VAL/W/229. G/VAL/W/241/Rev.1 
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  and application of the decision, it would be useful for those difficulties to be considered 
by the Parties to the Agreement. " [Emphasis added.]  
2  PROBLEM IDENTIFIED 
2.1 Given the definition of "carrier medium" se t forth in the third subparagraph of paragraph 2 
of the Decision3, data and instructions (software) imported by means of one of the new types 
of carrier medium (e.g. a USB key) must be subject to treatment different from that which they would have been granted if they had been carried on an optical or magnetic medium 
(e.g. a CD-ROM). Because of the rapid advances in the development of new information 
technologies, there is obviously a risk that trade in software may be adversely affected as a result of the type of carrier medium used, which woul d run counter to the spirit of the Decision. 
2.2 Uruguay accordingly considers that the Decision should be updated to take into account 
situations in which data or instructions (software) are carried and presented to Customs on new 
types of carrier medium (e.g. of the "USB flash drives" type or similar devices, which have been developed or are to be developed in the future). 
3  SPECIFIC PROPOSAL 
3.1 At its 36
th Session, the Technical Committee examined the question of updating this second 
paragraph. Some Members, including Uruguay,  pointed out that the wording of the third 
subparagraph could be amended to include carrier media which, although containing integrated 
circuits, semiconductors and similar devices, are presented to Customs solely as means of temporary software storage, for subsequent tr ansfer to data processing equipment in order 
to be used. The Technical Committee unanimously decided to request that the Chairman refer 
the matter to the Committee on Customs Valuation in order for the latter to take whatever action 
it deemed appropriate. 
3.2 Consequently, Uruguay, which shares the position taken by the Technical Committee 
as a whole, proposes that the third subparagraph of paragraph 2 of the Decision be worded 
as follows: 
Current version of the third subparagraph 
of paragraph 2 of the Decision Proposed version (new text in bold) 
For the purpose of this Decision, the expression 
"carrier medium" shall not be taken to include integrated circuits, semiconductors and similar devices or articles incorporating such circuits or devices; the expression "data or instructions" shall not be taken to include sound, cinematic or video recordings. For the purpose of this Decision, the expression 
"carrier medium" shall not be taken to include integrated circuits, semiconductors and similar devices or articles incorporating such circuits or devices, with the exception of those which are 
presented to Customs so lely as a means of 
temporary storage for transfer of data or instructions (software) to data processing equipment in order to be used ; the expression 
"data or instructions" shall not be taken to include sound, cinematic or video recordings. 
 
                                               
3 "The expression 'carrier medium' shall not be ta ken to include integrated circuits, semiconductors 
and similar devices or articles incorporating such circuits or devices." G/VAL/W/241/Rev.1 
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  ANNEX 
Full Text of the Decision, Including Uruguay's Proposal 
"Decision on the Valuation of Carrier Media Bearing Software for Data Processing 
Equipment (VAL/8) 
Adopted by the Committee on 24 September 1984 (VAL/M/10, paragraph 7) The Committee on Customs Valuation DECIDES as follows: 1. It is reaffirmed that transaction value is the primary basis of valuation under 
the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 
(the Agreement) and that its application with regard to data or instructions (software) recorded on carrier media for data processing equipment is fully consistent with the Agreement. 
2. Given the unique situation
1 with regard to data or instructions (software) recorded on carrier 
media for data processing equipment, and that some Parties have sought a different approach, 
it would also be consistent with the Agreement for those Parties which wish to do so to adopt the following practice: 
In determining the customs value of imported carrier media bearing data or instructions, 
only the cost or value of the carrier medium itself shall be taken into account. The customs value shall not, therefore, include the cost or va lue of the data or instructions, provided that 
this is distinguished from the cost or the value of the carrier medium. 
For the purpose of this Decision, the expre ssion "carrier medium" shall not be taken 
to include integrated circuits, semiconductors and similar devices or articles incorporating such circuits or devices,
 with the exception of those which are presented to Customs 
solely as a means of temporary storage fo r transfer of data or instructions 
(software) to data processing equipment in order to be used ; the expression 
"data or instructions" shall not be taken to include sound, cinematic or video recordings. 
3. Those Parties adopting the practice referred to  in paragraph 2 of this Decision shall notify 
the Committee of the date of its application. 
4. Those Parties adopting the practice in pa ragraph 2 of this Decision will do so on 
a most-favoured-nation (m.f.n.) basis, without prejudice to the continued use by any Party 
of the transaction value practice." 
Note: Uruguay's proposal is highlighted in bold. 
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1 See paragraph 5 of document VAL/M/10.