RESTRICTED  
  
G/VAL/M/60  
 
2 September 2015  
(15-4435)  Page: 1/24  
Committee on Customs Valuation    
 
MINUTES OF THE MEETING OF 21 MAY 2015 
CHAIRPERSON:  MRS. JOANNA K.Y. CHEUNG (HONG KONG, CHINA) 
 The agenda proposed for the meeting, circulated in WTO/AIR/4368, was adopted as follows: 
 
1   REPORT OF THE WORK OF TH E TECHNICAL COMMITTEE ON CUSTOMS 
VALUATION ...................................................................................................................... 2  
2   INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT .....................................................................................................................  3 
2.1   Notification of national legislation ................................................................................. 3  
A. Kingdom of Bahrain .................................................................................................. 3  
B. Belize ..................................................................................................................... 4  
C. Cabo Verde ............................................................................................................. 4  
D. Colombia ................................................................................................................ 4  
E. Ecuador .................................................................................................................. 5  
F. The Gambia ............................................................................................................. 6  
G. Guinea.................................................................................................................... 6  
H. Honduras  ................................................................................................................ 6  
I. Lesotho .................................................................................................................. 6  
J. Mali ........................................................................................................................ 7  
K. Republic of Moldova .................................................................................................. 7  
L. Montenegro ............................................................................................................. 7  
M. Nicaragu a ............................................................................................................... 7  
N. Nigeria ................................................................................................................... 8  
O. Russian Fede ration ................................................................................................... 8  
P. Rwanda ................................................................................................................. 10 
Q. Saint Vincent and the Grenadines .............................................................................. 10 
R. South Af rica ........................................................................................................... 10 
S. Sri La nka ............................................................................................................... 11 
T. Uruguay ................................................................................................................. 11 
U. Ukraine .................................................................................................................. 11 
3   INFORMATION ON THE APPLICATIO N OF DECISIONS OF THE COMMITTEE ON 
CUSTOMS VALUATION .................................................................................................... 12  
3.1   Uruguay's proposal to upda te the carrier me dia decision ................................................ 12 
4   TECHNICAL ASSISTANCE ........................................................................................... 16  G/VAL/M/60 
 
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  5   UNITED STATES - ARMENIA'S RE FERENCE PRICE SYSTEM IN CONNECTION 
WITH THE VALUATIO N OF GOODS.................................................................................. 17  
6   PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION:  
IMPLEMENTATION-REL ATED ISSU ES ............................................................................. 17  
7   PRESHIPMENT INSPECTI ON ...................................................................................... 18  
7.1   Status of notifications by Memb ers and information pr ovided by IFIA ............................... 18 
7.2   The replies by Indonesia to questions posed by the United States .................................... 19 
8   OTHER BU SINESS ...................................................................................................... 19  
8.1   Elections of officers ................................................................................................... 20 
 
_______________ 
 
1  REPORT OF THE WORK OF THE TECH NICAL COMMITTEE ON CUSTOMS VALUATION 
1.1.  The Chairperson of the Technical Committee on Customs Valuation, Mr. Ian Cremer, reported 
on the activities of the Technical Committee at its 40th session, which had been held on 
4-8 May 2015.  His report is contained in the Annex of this document. 
1.2.  The Chairperson thanked Mr. Creamer for his report. 
1.3.  The representative of the European Union thanked the WCO for a very comprehensive report.  
It showed that the WCO and the Technical Comm ittee on Customs Valuation (TCCV) created under 
this Agreement was alive and well and delivering on its mandate. The European Union was encouraged to hear that things were happening  and that high-quality technical assistance and 
capacity building was being delivered.  It was inte resting to hear the WCO representative refer to 
the upcoming Trade Facilitation Agreement and its new focus on technical assistance and capacity building and the inevitable linkages between it and technical assistance and capacity building 
under very important areas like customs valuation.  The European Union looked forward to having 
a more in-depth discussion on that, possibly at a forthcoming meeting of the Committee on Customs Valuation. The Revenue Package Initiative of the WCO seemed to be providing some new 
diagnostic tools and guidelines on how to deliver transparent rulings and other issues - a guide to 
customs valuation and transfer pricing was of part icular note.  The TCCV had looked at transfer 
pricing issues over the past while and now the WCO itself, and not the Technical Committee, was providing a guide to transfer pricing and customs valuation.  Transfer pricing was quite a complex 
and challenging issue for many administrations and Members ought to be allowed sufficient time to 
examine the issues in the Technical Committee on Customs Valuation. In the past, the WCO had issued a guide on the Agreement as a whole, which was a very good instrument, (on the basis, of 
course, of review and contribution by the Member s).  The guide on transfer pricing had not been 
seen by the Members and it would be necessary to ha ve a good look at it, especially as the overall 
context seemed to be revenue collection.   It would be worth devoting some attention to any such 
guides where the need for the review and contri bution by Members and the TCCV would seem to 
be an indispensable step.  The European Union looked forward to having a discussion and working with the WCO primarily through the TCCV on those issues in the future.  He thanked the WCO for bringing the Committee on Customs Valuation up to date. It was clear that some quite good work 
was being done there.   
1.4.  The representative of China thanked the WCO Secretariat for its report on the last session of 
the TCCV.  He congratulated the Technical Committee on its ability to tackle some of the most 
complex customs valuation issues that customs administrations had been dealing with for years 
and he encouraged a closer relationship between the two committees. He had previously encouraged delegates at the TCCV to attend the Committee on Customs Valuation meetings and 
he now encouraged delegates of the Committee on Customs Valuation to attend the TCCV 
meetings to get a sense of the work being conduc ted in providing very practical assistance to 
customs administrations on applying the Customs Valuation Agreement fully and correctly.  The Agreement had been negotiated to be implemented.   Very complex issues were being faced by all 
administrations, and developing countries' administrations were grappling with very basic issues 
35 years after the implementation of the Agreement.  G/VAL/M/60 
 
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  1.5.  The representative of the WCO thanked the European Union and China for their appreciation.  
The WCO would be quite happy to give a fuller report on technical assistance activities, in 
particular on the cooperation programmes with the WTO.  Regarding the document it had prepared on transfer pricing, the Secretariat had been ve ry careful to present it as a guide and not as 
guidelines, in the sense that the Secretariat was de liberately not stepping on the toes of the TCCV.  
The guide did not present the interpretation of the Agreement in that regard, which was clearly the responsibility of the TCCV.  It was designed more to assist a reader to navigate those two highly 
technical subjects, to provide detailed techni cal background on the topics, and how they 
overlapped.  The guide would work very comforta bly in parallel with the work of the TCCV and 
could help to push it in the right direction.  The WCO Secretariat was very happy to discuss it in greater detail and have a dialogue within the TCCV on the document.   
1.6.  The Committee took note of the report and the statements. 
2  INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENT 
2.1  Notification of national legislation 
2.1.  The Chairperson recalled that, pursuant to Article 22 of the Agreement and the Decision on 
"Notification and circulation of national legislation in accordance with Article 22 of the Agreement", 
Members must submit the complete texts of their national legislation on customs valuation in one 
of the three official WTO languages.  They shou ld also inform the Committee of any changes in 
their laws and regulations relevant to this Agreement and in the administration of such laws and regulations.  The notification procedures had been adopted by the Committee at its meeting of 12 May 1995 and were contained in section B.2 of document G/VAL/5.  As agreed at the 
Committee's meeting of 25 October 2012, the Secretariat had issued a document, with the symbol 
G/VAL/W/232/Rev.2, which summarized the status of those notifications.   
2.2.  Since the circulation of G/VAL/W/232/Rev.2, notifications had been received from 
10 Members.  Those notifications that were received too late for circulation before the meeting 
would be addressed at the next Committee meeting.  
2.3.  The notification of national legislation su bmitted by Chinese Taipei remained suspended since 
the Committee's meeting on 4-5 November 2002 pend ing resolution of the differences in views 
between the parties involved on notifications across the WTO.   
A. Kingdom of Bahrain 2.4.  The Chairperson recalled that it had been agreed at the last meeting to revert to the 
examination of national legislation and responses to the checklist of issues which had been 
circulated in documents G/VAL/N/1/BHR/2 and G/VAL/N/2/BHR/1, respectively.  The United States had submitted questions, which had been circul ated in G/VAL/W/181, and Bahrain had provided 
responses in document G/VAL/W/191. The United States had submitted follow-up questions in 
document G/VAL/W/201, which Bahrain had replied to in document G/VAL/W/217.  Bahrain had submitted a copy of the "Common Customs Law of the Gulf Co-operation Council", which had been 
circulated in document G/VAL/N/1/BHR/2.  Follow-up questions submitted by the United States 
had been circulated in document G/VAL/W/223.   
2.5.  The representative of the United States  noted that his delegation had submitted those 
technical questions prior to the May 2013 meeting of the Customs Valuation Committee.  
He understood that consultations were ongoing in Bahrain and the United Stated continued to look 
forward to receiving Bahrain's written responses to those questions.   
2.6.  The representative of the Kingdom of Bahr ain acknowledged that the responses to the United 
States' follow-up questions had been pending for some time.  His capital had forwarded the 
questions to the Committee in charge of reviewing the Gulf Cooperation Council Common Customs Law.  The Committee was in the process of reviewing the questions and it was hoped to have the 
responses to them as soon as possible.  This had already been communicated to the United States.  
2.7.  The Committee took note of the statements made and agreed to revert to the issue at the 
next meeting.   G/VAL/M/60 
 
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  B. Belize 
2.8.  The Chairperson recalled that it had been agreed at the last meeting to revert to the 
examination of national legislation and responses to the checklist of issues, which had been 
circulated in G/VAL/N/1/BLZ/1 and G/VAL/N/2/BLZ/1 , respectively.  Canada and the United States 
had submitted questions in G/VAL/W/176 and G/VAL/W/175, to which Belize had replied in 
G/VAL/W/183. The United States had submitted follow-up questions in G/VAL/W/188.   
2.9.  The representative of the United States re called that at previous meetings they had sought 
further clarification on two points highlighted in their written questions, specifically information 
regarding how Belize had fully incorporated aspects of the WTO Customs Valuation Agreement into its legislation, including the Article 16 requirement to provide importers with a right to an explanation in writing in the interpretative note s of the agreement. They were interested in 
receiving a written response to those questions.   
2.10.  The representative of Canada supported the United States' intervention.  Canada also 
believed that it was a very important issue, which required clarification.  He reiterated Canada's 
general position that interpretative notes were ex tensions of obligations included in the agreement 
and should therefore be reflected somewhere in each Members' legal framework.  
2.11.  The Committee took note of the statements made and agreed to revert to the issue at the 
next meeting. 
C. Cabo Verde 2.12.  The Chairperson recalled that at its last meeting, the Committee had agreed to revert to the 
examination of Cabo Verde's notification of national legislation which had been circulated in 
G/VAL/N/1/CPV/1.  The United States had raised a number of questions in G/VAL/W/224, to which 
Cabo Verde had replied in G/VAL/W/239.  The Unit ed States had submitted follow-up questions in 
G/VAL/W/244.  Cabo Verde had submitted responses to the checklist of issues and a notification of 
national legislation but they had arrived too late  for the meeting and would be addressed at the 
next Committee meeting.   
2.13.  The representative of Cabo Verde thanked the United States for their comments on Cabo 
Verde's national legislation.  A notification had been submitted on 13 May 2015 and that contained 
all the explanations which they had deemed necessar y to respond to the United States.  As he had 
said at the previous meeting, there had been a number of difficulties with the translation of Cabo Verde's published legislation into English but this had now been achieved.   
2.14.  With regard to question 3 in G/VAL/W/244,  Cabo Verde's newer customs regulations, a very 
extensive document of around 90 pages, had now been produced.  Hopefully the explanations contained in the notification would be of use to the United States' delegation. On the final question 
in G/VAL/W/244, regarding Articles 272 and 273 of th e national customs legislation, those Articles 
were in line with Article 2.1(b) of the Customs Valuation Agreement.  However, in Article 272 of their national code, the word "similar" should be replaced with "identical" and this was been looked 
into.   
2.15.  The representative of the United States th anked Cabo Verde for submitting their answers in 
writing.  The United States would review them for the next meeting.    
2.16.  The Committee took note of the statements made and agreed to revert to the issue at the 
next meeting.   
D. Colombia  
2.17.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Colombia's notification of changes to its national legislation and revised 
responses to the checklist of issues, which we re circulated in documents G/VAL/N/1/COL/2, 
G/VAL/N/1/COL/3, and G/VAL/N/2/COL /2.  The United States had submitted questions which were 
circulated in G/VAL/W/258.   G/VAL/M/60 
 
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  2.18.  The representative of Canada thanked Colombia for providing a translated version of its 
legislative notification.  They noted that Colombia had mentioned the use of reference pricing and 
databases in its notification.  In particular, Canada was concerned that Colombia was using a private reference price database for purposes other than as a risk assessment tool.  Canada had 
been informed that the database was being maintained in a non-transparent matter.  
They reminded Members that reference price databa ses were not to be used as substitute values 
for imported goods or as a means of establishing minimum values.  Canada urged Colombia to 
ensure its customs practices were in line with its WTO obligations, in particular the Agreement on 
Customs Valuation.   
2.19.  The representative of the European Union thanked Colombia for its notifications.  It was 
quite a substantial notification as such, consisting of regulations, resolutions and of course, in 
Colombia, adopted at the level of the Andean Community.  A number of substantial resolutions had 
been presented and notified.  The European Union would very much like to have more time to look them over.  They had noted a number of issues that  they were still reflecting on, for example, as 
had just been mentioned, provisions on data banks that were separate from provisions on 
reference prices.  The European Union wanted to be  sure that these provisions, at least in these 
legal instruments, were alright.  There were a numbe r of additional provisions that were well worth 
more scrutiny, for example, on leasing, discounts,  transfer pricing and some other very specific 
resolutions dealing with very specific kinds of transactions or specific goods, for example, specific provisions on artwork, works of art, goods for processing, goods of various special situations.  
Plus there was a criteria for "other unregulated special cases".   
2.20.  The European Union was not saying that these were problematic for the time-being, but it 
was quite a substantial body of legislation, both in terms of its structure and its content.  The 
European Union would like to keep this notificati on open for the time-being and they would decide 
soon if they wanted to propose particular questions.  One question which maybe Colombia could 
address informally at least, would be to have an understanding of the legal status of resolutions of 
the Commission of the Andean Community, whether these formed part of the Law on Customs 
Valuation in Colombia as well.  The four resolutions were quite substantial and it would be good to 
know where they stood in the legal order.   
2.21.  The representative of Honduras thanked Colombia for the notification.  Honduras shared the 
concerns expressed by Canada, in particular concerning the reference price system which the 
Colombian customs authorities used.  They requested more information on this.   
2.22.  The representative of the United States thanked Colombia for its notification.  
The United States had carefully reviewed the legi slation in the document circulated.  They had 
recently submitted questions and looked forward to receiving responses.  He noted that US traders 
had expressed concerns with Colombia's implem entation of the Customs Valuation Agreement, 
including specific concerns with how Colombia set guaranteed amounts at the time of release of 
goods from customs custody.  The United States had raised written questions about this portion of 
the legislation and looked forward to Colombia's response.   
2.23.  The representative of Colombia thanked Canada, the European Union, Honduras and the 
United States for their interest.  Colombia had received the questions from the United States very 
recently and they had been sent to capital.  They  would be grateful if the additional statements 
made at the meeting could be sent to them in writing so that the authorities could study them in detail.  They would also welcome any further questions or concerns which might arise in that 
regard.  Colombia would provide responses to all questions in due course and they would provide 
the European Union with a written response to the question about the legal nature of resolutions of the Andean Community.  
2.24.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
E. Ecuador  
2.25.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Ecuador's responses to the checklist of issues, which had been circulated in 
G/VAL/N/2/ECU/1.  The United States had submitted questions, which were circulated in G/VAL/M/60 
 
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  G/VAL/W/220, to which Ecuador had replied in G/ VAL/W/226.  Subsequently, Ecuador had notified 
a compilation of changes to its national legislation in document G/VAL/N/1/ECU/3.  The United States had submitted questions which had been circulated in G/VAL/W/260.   
2.26.  The representative of the United States noted that their questions to Ecuador had been 
recently posed, and they looked forward to receiv ing written responses and reverting back to this 
at the next meeting.  
2.27.  The representative of Ecuador stated that they were preparing responses to questions 
received by the Ecuador national customs service an d that they would be submitted in due course.  
2.28.   The Committee took note of the statements made and agreed to revert to this issue at the 
next meeting.   F. The Gambia  
2.29.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of the Gambia's notification of national legislation, which had been circulated in 
G/VAL/N/1/GMB/1 and G/VAL/N/4/GMB/1. The United States had submitted questions in 
G/VAL/W/245.  Guinea had notified changes to its national legislation, which had been circulated in 
G/VAL/N/1/GIN/1.   
2.30.  The representative of the United States no ted that they were looking forward to receiving 
replies to their questions. 
2.31.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
G. Guinea 
2.32.  The Chairperson drew the Committee's attention to Guinea's notification with changes to its 
national legislation, which had been circulated in N/1/GIN/1. 
2.33.  The representative of the United States than ked Guinea for its notification of changes to its 
national legislation.  The United States was still reviewing it and would submit any questions that 
they might have in writing for the next meeting.   
2.34.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
H. Honduras  
2.35.  The Chairperson drew the Committee's attention to Honduras' notification of national 
legislation and responses to the checklist of issues, which had been circulated in G/VAL/N/2/HND/1 
and G/VAL/N/1/HND/1 respectively.   
2.36.  The representative of the United States th anked Honduras for the notification of its customs 
valuation legislation.  They were currently reviewing it and would revert to the item at the next 
meeting with any questions in writing.   
2.37.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
I. Lesotho  
2.38.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Lesotho's notification of its national legislation, which had been circulated in 
G/VAL/N/1/LSO/1.   G/VAL/M/60 
 
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  2.39.  As there were no further outstanding issues on the notification, the Committee agreed to 
conclude the examination of Lesotho's national legislation.   
J. Mali  
2.40.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Mali's notification of national legislation, which had been circulated in 
G/VAL/N/1/MLI/1.  Canada had submitted questions in G/VAL/W/238 to which Mali had replied in G/VAL/W/255.   
2.41.  The representative of Canada thanked Mali for its responses and had no further follow-up 
questions at that time. 
2.42.  The representative of the United States said  that they had reviewed the national legislation 
notified by Mali and they had submitted question s to the Committee.  They looked forward to 
receiving Mali's responses in writing. 
2.43.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
K. Republic of Moldova 
2.44.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Moldova's notification of changes to its national legislation, which had been 
circulated in documents G/VAL/N/1/MDA/2 an d G/VAL/N/1/MDA/3.  The United States had 
submitted questions which had been circulated in G/VAL/W/259.   
2.45.  The representative of the United States th anked Moldova for its notification and said that 
the United States had again submitted questions and looked forward to receiving written replies at 
the next meeting.  
2.46.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
L. Montenegro  
2.47.  The Chairperson drew the Committee's attentio n to Montenegro's notification of its national 
legislation and responses to the checklist of issues, which had been circulated in documents 
G/VAL/N/2/MNE/1 and G/VAL/N/1/MNE/1, respectively.   
2.48.  The representative of the United States thanked Montenegro for its notifications.  They had 
been forwarded to Washington for review and if there were any questions they would be submitted 
in writing before the next meeting.  They would like a chance to revert to the issue at the next 
meeting.  
2.49.  The representative of Canada thanked Montenegro for their two notifications.  With respect 
to the check-list of issues notification (G/VAL/N/2/MNE/1), there was a mention that Montenegro 
did not publish judicial decisions and administra tive rulings of general application related to 
customs valuation.  However, Article 12 of the Cu stoms Valuation Agreement required that judicial 
decisions and administrative rulings of general application giving effect to the Customs Valuation 
Agreement be published.  Canada urged Montenegro to ensure that its customs practices were in 
compliance with the Customs Valuation Agreement.   
2.50.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
M. Nicaragua  
2.51.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Nicaragua's notification of legislation and responses to the checklist of issues, G/VAL/M/60 
 
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  which had been circulated in documents G/VAL/N /1/NIC/1 and GAL/VAL/N/2/NIC/1, respectively.  
The United States had submitted questions which had been circulated in document G/VAL/W/261. 
2.52.  The representative of the United States stated that they had reviewed the documents and 
had again submitted questions, rather late before  the meeting, and they were looking forward to 
receiving written replies, hopefully by the next Committee meeting. 
2.53.  The representative of Nicaragua stated that the replies would be sent in writing to the 
United States as soon as they were ready.  
2.54.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
N. Nigeria  
2.55.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Nigeria's notification of nation al legislation and responses to the checklist of 
issues, which had been circulated in documents in G/GAL/N/1/NGA/1 and G/VAL/N/2/NGA/1, respectively. The United States and Canada had posed questions, which had been circulated in 
documents G/VAL/W/175 and G/VAL/W/176, respectively.   
2.56.  The representative of Canada said that they had raised questions to Nigeria, quite a few 
years ago, in 2009.  When might Nigeria be able to  indicate when Canada could expect an answer 
to their questions? 
2.57.  The representative of the United States sa id that they had put forward questions to Nigeria 
over six years ago and they would certainly apprec iate an update of when they might receive a 
response.  They would keep this agenda item open until those questions had been addressed.   
2.58.  The representative of the European Union also requested clarification and responses from 
Nigeria and said that the legislation should remain in on the table.  The European Union  would like 
to have assurance that the legislation which had b een notified after such a long delay was capable 
of being implemented, and that it ensured the full and comprehensive implementation of the 
Customs Valuation Agreement. 
2.59.  The representative of Nigeria thanked the delegations of Canada, the United States and the 
European Union for their understanding and cooperation on the long-standing issue.  The issue had 
been on the agenda for quite some time.  She reca lled that at the last meeting of the Committee, 
her delegation had stated that efforts were being made to resolve the matter without delay, including consulting with the relevant ministries and agencies in capital. 
2.60.  Regarding the progress made so far since the last Committee meeting, Members' concerns 
had already been looked at by the relevant agencies during a recent meeting in Abuja and the meeting had come up with some suggestions and amendments both on the legislation and the 
check-list, which would be forwarded to the na tional assembly for further suggestions and 
probably approval.  The representative was awai ting the official response from capital.   
2.61.  Nigeria was in transition following its gene ral election, and the next session of the national 
assembly was due to be inaugurated in June 2015. After the settlement of the new government, it 
was believed that Nigeria would provide a positive, substantive and detailed response on or before the next meeting of the Committee.   
2.62.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
O. Russian Federation  
2.63.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of the Russian Federation's notification of legislation and responses to the 
checklist of issues, which had been circulated in G/VAL/N/1/RUS/1, G/VAL/N/1/RUS/2 and G/VAL/N/2/RUS/1, as well as a new notification of national legislation, relating to the Federal Law G/VAL/M/60 
 
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  on Commercial Secrecy, No. 98-FZ of 29 July 2004, which had been circulated in 
G/VAL/N/1/RUS/3.  The legislation notified in documents G/VAL/N/1/RUS/3 and G/VAL/N/1/RUS/2 
had been subsequently circulated in documents G/VAL/N/1/RUS/3/Add.1 and G/VAL/N/1/RUS/2/Add.1. 
2.64.  The representative of the European Union sa id that they continued to carefully reflect and 
review the legislation and its implementation.  Maybe there were some new developments, as the 
European Union believed, and a question for the Russian Federation would be whether it was now 
the intention, as seemed to be the case, to have  a new, modernised customs code at the level of 
the Eurasian Customs Union.  If that would be the case, the questions then would have to include whether this would address valuation issues or whether the legislation at the level of the Russian Federation would still continue? Or would there be a combination of the two?   
2.65.  The European Union requested an update from the Russian Federation with respect to their 
plans and the reality of legislation that might be in the pipeline, as this would help the European Union to plan its ongoing work on that legislation and its implementation. Questions had been 
raised with regard to implementation. The overall legislation with the different instruments 
remained a package that merited close attention.  There remained some lack of clarity on certain 
provisions, which could be due in part to draf ting to an English language environment.  
The European Union was not sure about that and so it remained concerned.  They needed to keep 
the legislation under review, certainly at the Committee on Customs Valuation.  
2.66.  On the ground, and presumably on the basi s of current legislation, the European Union was 
hearing from trade and traders of an ongoing level of checks, controls and enquiries by the 
relevant customs service of the Russian Federation, which included verifications and requests for 
information to trading partners and trading companies on their trading partners, which seemed to g o rathe r too far.  T he y s e e med  not to b e jus tif i e d , whic h p rob ab ly c aus ed  s ome  p roble ms  for 
economic operators on both sides.  The European Union would like to keep this problem under 
review.  If it related to the current legislation and the application of current valuation legislation, this would surely be something that was going to have to be addressed if such requirements by 
the relevant customs services were based on other legislation. But they were clearly having an 
impact of the business of customs valuation and the European Union would need to know what legal basis was being used, how it could be explained, and how it could be justified. 
2.67.  The European Union continued to have quite a number of issues with the overall notification.  
It would like the notification to remain on the ta ble and, if necessary, questions might be prepared 
for the next meeting.  It would be necessary to know if there were going to be a further set of legislative initiatives, and everyone would benefit from an advance warning of that.  
2.68.  The representative of the United States expressed support for much of the European Union's 
statement.  The United States' experts were revi ewing the legislation and they would submit any 
questions in writing.  Capital-based experts had indicated that a number of documents that had 
been referenced in the Russian notification and check-list of issues had not been made available 
for Members' review and, therefore, Russia was urged to make all relevant legislation and documents available to Members. 
2.69.  The representative of the Russian Federati on responding to the European Union questions, 
noted that a new version of the customs code of  the customs union was still under preparation and 
it would be notified to the Committee when the work was finished.  They requested any further 
questions in writing.  As regards the addition al legislation, their officials would check the 
notification and all necessary legislation would be available for all Members' consideration.  
Regarding the European Union's questions on the action of customs bodies, he requested that 
these questions be presented in writing so that they could be sent to Moscow for consideration by 
the relevant authority.   
2.70.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   G/VAL/M/60 
 
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  P. Rwanda  
2.71.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Rwanda's notification of nation al legislation and responses to the checklist of 
issues, which had been circulated in documents G/VAL/ N/1/RWA/1 and G/VAL/N/2/RWA/1, 
respectively.  The United States had posed questions, which were circulated in document 
G/VAL/W/215.   
2.72.  The representative of the United States stated for the record that they remained interested 
in receiving Rwanda's written response to their questions.  
2.73.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
Q. Saint Vincent and the Grenadines  
2.74.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Saint Vincent and the Grenadin es' notification of national legislation and 
responses to the checklist of issues, which had been circulated in documents G/VAL/N/1/VCT/1 
and G/VAL/N/2/VCT/1, respectively.  The United States had raised questions which had been 
circulated in document G/VAL/W/181, to which St. Vincent and the Grenadines had responded in document G/VAL/W/250.   
2.75.  The representative of the United States thanked Saint Vincent and the Grenadines for its 
replies. They did not have any further questions.  However, they had posed questions at the last 
Committee meeting regarding the results of the furthe r review on the issues that had been raised 
by the United States, and, therefore, they would li ke to keep the item open.  They would follow up 
with St. Vincent and the Grenadines before the next meeting. 
2.76.  The Committee took note of the statement ma de and agreed to revert to this issue at the 
next meeting.   
R. South Africa  
2.77.  The Chairperson drew the Committee's attention to South Africa's notification of new 
customs valuation legislation which had been circulated in document G/VAL/N/1/ZAF/2.   
2.78.  The representative of Canada raised a technical question related to South Africa's 
notification.  On pages 14 and 15 of the South Africa notification (G/VAL/N/1/ZAF/2), under 
Article 136, sub-section 2, South Africa listed th e number of prohibited methods of evaluation and 
they were enumerated in Article 7.2 of the Customs Valuation Agreement.  However, what 
followed in sub-section 3 were scenarios in which those prohibited methods of valuation could 
actually be used as methods to determine the customs value.  He queried how this could be consistent with the application of the Customs Valuation Agreement, specifically Article 7.   
2.79.  The representative of the European Union thanked South Africa for the notification.  It was a 
complete notification and the European Union were still reviewing it internally.  Their experts had 
already flagged a number of items.  For example, Article 129.1(b) talked about not being able to 
use the main valuation method for goods where the trade contracts were concluded "otherwise 
than in the ordinary course of trade under fully competitive conditions", which was a citation reflective of Article VII of the GATT.  It was unusual to find the principles or primary language of GATT Article VII reused in an application of the transaction value method, and in this particular 
case, the non-application.  It was puzzling in terms of the legal construction, and the European 
Union were still wondering whether it could potentia lly cause problems, even to South Africa itself.  
2.80.  In the same Article, 129.1(g), the notification talked about non-use of the primary valuation 
method where there were abnormal or arbitrary pric e reductions or discounts.  Again, this kind of 
language combined with reference to the ordina ry competitive price of goods was a little bit 
unusual, so it was worth taking the time to consider it further.  A final example, (which was not a 
critique), was to note that the legislation looked into some new issues and dealt with them in legal 
format in relation to currency conversion.  In Article 145 there was provision for use of forward G/VAL/M/60 
 
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  exchange contracts and so-forth.  It was very interesting to see that and no other Member had 
provided for such financial operations in the valuation legislation.  That was not to say that there was anything wrong with it, but it might be worth more time to see possible implications in operational terms.  The notification was a substantial and complex document and more time would 
be required to study it further.  
2.81.  The representative of the United States thanked South Africa for the notification of its 
implementing legislation and the check-list of i ssues.  These had been forwarded to their experts 
for review and they would submit any questions they might have in writing before the next 
meeting.  
2.82.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
S. Sri Lanka  
2.83.  The Chairperson drew the Committee's attent ion to Sri Lanka's notification of national 
legislation and responses to the checklist of issues, which had been circulated in documents 
G/VAL/N/1/LKA/1 and G/VAL/N/2/LKA /1, respectively.  The documents were currently available 
only in English; the French and Spanish translations would follow.   
2.84.  The representative of the United States thanked Sri Lanka for the notifications of 
implementing legislation and the check-list of issu es.  They had been forwarded to their experts in 
capital and if there were further questions raised , they would be submitted in writing before the 
next meeting.   
2.85.  The representative of the European Union thanked Sri Lanka for the notification which was 
quite recent and substantial.  They were looking over it and would consider further on whether 
there would be a need to raise some points or ques tions with Sri Lanka.  Right at the very end of 
the notification, in the last section of the docu ment, there was a reference to the possibility of 
minimum prices and of particular situations.  The European Union would like to take more time on 
this section.  There was also a reference in Article 51(a) and (b), to implementation of the decision of this Committee about accuracy of declarations.  It seemed to capture the letter and the spirit of 
the decision of the Committee on Customs Valuation,  but it changed one word which might be a bit 
significant for some operators.  The decision talked about something which "may be deemed to be not acceptable", but here it was talking about "shall be deemed", which was a small change of word, but it might make a big difference in practice.  The notification merited more time to study 
it.    
2.86.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.   
T. Uruguay  
2.87.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Uruguay's notification of changes to its national legislation, which had been 
circulated in G/VAL/N/1/URY/2.   
2.88.  The Chairperson noted that there were no more outstanding issues on these notifications. 
2.89.  The Committee agreed to conclude the examination of Uruguay's national legislation.  
U. Ukraine  
2.90.  The Chairperson recalled that at the last meeting, the Committee had agreed to revert to 
the examination of Ukraine's notification of national legislation and responses to the checklist of 
issues, which had been circulated in docu ments G/VAL/N//1/UKR/1, and G/GVAL/N/2/UKR/1, 
respectively.  Ukraine had notified amendments to its Custom Code, which had been circulated in 
document G/VAL/N/1/UKR/2.  The European Union had raised questions to Ukraine in document G/VAL/W/179, to which Ukraine had answered in document G/VAL/W/182.  Questions were also 
submitted by Norway G/VAL/W/199, which were answered by Ukraine in G/VAL/W/248.  G/VAL/M/60 
 
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  The United States had submitted questions in G/VAL/W/188, G/VALW/207, G/VAL/W/221 and 
G/VAL/W/235, which Ukraine had answered in G/VAL/W/200, G/VAL/W/212, G/VAL/W/230 and G/VAL/W/247.   
2.91.  The Chairperson noted that there were no more outstanding issues on these notifications. 
2.92.  The Committee agreed to conclude the examination of Ukraine's national legislation.  
2.93.  The Chairperson thanked those Members that had notified their national legislation and had 
provided responses to the checklist of issues.  She encouraged the still considerable number of 
Members who had not notified their national legislation nor provided responses to the checklist of 
issues to do so as soon as possible.  She encouraged these Members to work with their capitals and to submit their notifications as soon as possi ble.  She reminded Members that the Secretariat 
was available for any assistance in fulfilling the notification obligations.   
2.94.  The Committee took note of the information.   
3  INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE ON 
CUSTOMS VALUATION 
3.1.  The Chairperson recalled that, under this ag enda item, the Committee examined notifications 
pursuant to two Decisions that had been adopted by the Committee at its meetings of 
12 May 1995 and contained in document G/VAL/5.  These were the Decisions on "Treatment of 
Interest Charges in the Customs Value of Imported  Goods" and "Valuation of Carrier Media Bearing 
Software for Data Processing Equipment".  A report by the Secretariat listing notifications received had been circulated in document G/VAL/W/5/Rev.24.  Since the circulation of that document, new notifications had been received from Sri Lanka, which had been circulated in documents 
G/VAL/N/3/LKA/1 and G/VAL/N/3/LKA/2; from So uth Africa, which had been circulated in 
G/VAL/N/3/ZAF/1, and from Montenegro, which ha d been circulated in G/VAL/N/3/MNE/1.   
3.2.  The Committee took note of the information. 
3.1  Uruguay's proposal to update the carrier media decision 3.3.  At the last meeting, the Committee had agreed to revert to the proposal by Uruguay 
contained in document G/VAL/W/241/Rev.1 to amen d the Carrier Media Decision, also known by 
Customs as "Decision 4.1".  According to Uruguay, software was increasingly being imported using 
new types of carrier media, e.g. "USB flash drives" or other similar devices, which might not fall under the definition of "c arrier medium" in the Decision.  This meant that such importations of software would be treated differently from those imported using other types of media, such as CDs 
or DVDs.  Switzerland had submitted comments on Uruguay's proposal, which were circulated in 
document G/VAL/W/254.  At the request of the Committee, the Secretariat had also prepared a report with statistics on imports of these products, which had been circulated in G/VAL/W/249 and 
had been presented at the last Committee meeting.   
3.4.  The Chairperson reported on an informal meeting of 29 April 2015 that she had convened to 
discuss Uruguay's proposal.  The meeting had allowed for a good exchange of views on individual 
Members' concerns regarding the proposed amendment.  The views expressed covered some 
substantive issues about the necessity of the pr oposed amendment, systemic issues about the 
procedure for making the amendment, and the impact of any such amendment on Members' 
obligations to notify under the Decision.  Some delegations had considered that further discussions 
of the proposal were required in order for Members to fully understand the implications, or 
consequences, of the proposed amendment.  Du ring the meeting, one delegation had posed a 
series of questions to Uruguay.   
3.5.  While no consensus had been reached on ad opting the proposed amendment at the meeting, 
quite a number of delegations had expressed their support for Uruguay's proposal and the changes 
contained in the Swiss proposal circulated in document G/VAL/W/254.  At the end of the informal 
meeting, the Chairperson had urged Uruguay and other interested delegations to work together to 
get a better understanding of their respective concerns and try to find ways to address them.   G/VAL/M/60 
 
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  3.6.  The representative of Uruguay agreed that the Chairperson's report accurately described the 
exchanges which delegates had had at the information meeting.  He also thanked Members that 
had offered support and shown interest in the issue. Some questions had been raised at the informal meeting by the European Union and Uruguay had provided written responses which he 
would now read to the Committee.   
3.7.  The first question from the European Union was whether Uruguay could confirm that the 
principal (and only) issue related to the non-eligibility of USB drives in the context of the 
application of Decision 4.1.  In response, Uruguay confirmed that, to date, the main problem had 
related to USB flash drive HS 85.23.  The ITC had informed the WCO TCCV that other storage devices existed which involved integrated circuits for their functioning under the heading HS 82.53 but were not marked with pre-installed software to be transferred to a data processing device.  
(Reference document VT0889 of 36th Session of Spring 2013.) 
3.8.  The second question concerned Harm onized System (HS) Explanatory Notes. 
The Harmonised System (HS) Explanatory Notes to Chapter 85.23 under "semiconductor media" 
defined the group as "solid state, non-volatile data storage devices for recording data from an 
external source" and explained that it referred to both USB and Smart cards (decoders), which were not "carrier media". Therefore the broad defi nition provided "circuits, semiconductors and 
similar devices which are presented to customs solely as a means of temporary storage for 
transfer of data or instructions (software) to da ta processing equipment in order to be used" might 
have the purpose of indeed limiting the scope to "carrier" media. Could this be confirmed?  In response, Uruguay could confirm that yes, in line with the original Decision 4.1 which currently 
applied only to magnetic and optical devices, it was very clear then in the statement made by the 
Chair of the WTO CCV on 24 September 1984 that that was the case and that was what was applied by customs authorities today. 
3.9.  The third question was, if this were the case, why was it considered that USB keys were not 
covered by the existing text of the decision (data or instructions (software) recorded on carrier media for data processing equipment)?  Uruguay's response was that the Decision and the drafting 
of it expressly excluded these and that did not give rise to any other possible interpretation. 
3.10.  The fourth question was what was the difference between "recording" and "storage" with 
reference to the suggested drafting?  The response was that they had two different meanings in two different applications in the Decision.  For ex ample, the statement of the Chair of the CVA of 
the WTO stated: "furthermore, carrier media are generally a transitory medium to store 
instructions or data; and in order to use them the purchaser has to transfer those data or instructions to the memory or database of their own system, or reproduce them on it.  
The mention of "recordings" came from that decision itself but it was for another application.  
The text said the data or instructions shall not be taken to include sound, cinematographic or video recordings.  They had two different meanings and applications in this Decision. 
3.11.  The fifth question was that the same HS Explanatory Notes indicated that "products of this 
group contain one or more electronic integrated circuits". Were those circuits functional only to storage and transport of data?  Uruguay replied that in the case of USB Flash Drives itself, yes. For other devices, according to the ITC itself, that was not the case.  
3.12.  There had been a couple of general questions in relation to Uruguay's wording suggestions: 
Related customs text:   6(a) What was the scope and meaning of the expression "presented to customs"? Uruguay's response was that this was an expression which was used in customs 
administration.  It related to the time at which a good was presented for inspection in order to be 
imported.  Finally, there had been a question 6( b) which related to why data storage should be 
temporary and what was the scope of the expression "for transfer".  Uruguay replied that the 
Swiss delegation had suggested removing the word "temporary".  There had been discussions 
about that at the informal consultations and conclusions were drawn there.  
3.13.  These responses
1 would be submitted to the Secretariat for distribution to the Members.   
                                               
1 Circulated as G/VAL/W/264. G/VAL/M/60 
 
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  3.14.  The Chairperson agreed that Uruguay should provide their responses to the Secretariat for 
circulation to the Members. 
3.15.  The representative of the European Union thanked Uruguay for a speedy and 
comprehensive response. His delegation was extremely interested to review the answers.  
In addition, the informal meeting organized recent ly by the Chairperson had been very useful.  
In the spirit of being helpful, the European Unio n had thought it would be useful to prepare some 
preliminary questions to advance the discussion in a helpful way.  It was becoming clearer that 
there were a number of strands to the issue.  On the one hand, it was a high-tech issue because it 
was looking at issues such as what was a solid-state flash non-volatile flash drive or flash memory, or indeed what other products were out there.  Bu t at the same time, obviously in order to have a 
good assessment of the problems raised by Uruguay, it was necessary to have a wider view as 
well.   
3.16.  The European Union was taking careful no te and requested Uruguay's responses in writing 
for passing to the European Union's technical expe rts.  They would see if the answers provided 
greater clarity as to the scope of the current proposal and what might be the scope of any revised 
definition or description of carrier media.  Noting the genesis of the issue, which was Uruguay raising it in the WCO in the context of particular problems for customs,  Uruguay had been very 
clear that the primary, indeed, for the time-being at least, the only products in mind were the 
so-called "clé USB", also known as "pen-drives", also known as "non-volatile solid-state flash memories".  If this were the real focus, it was a case of seeing if the issues could be advanced on that basis.   
3.17.  Some rather fascinating technical issues had come up but the European Union would have 
to get some input from technical services to know the actual scope of the immediate products, which would be a further useful input.  The Europe an Union had no further questions at that point, 
having posed the preliminary questions in order to get the ball rolling.  They would now like to see 
if there was need for any further technical explorations or clarifications, but they would be relying on technical input for that.  They would come back soon, with the benefit of further inputs that 
they would have gathered, including from Member s. Thanks to Uruguay there was more food for 
thought, and the European Union would continue to work on the issue, or issues which inevitably had come up in relation to a certain time-gap in relation to technologies.  They would be glad to continue to participate in that work.   
3.18.  The representative of the United States thanked Uruguay and the European Union for their 
dialogue.  The United States would review Uruguay's replies to the questions posed by the 
European Union.  The United States supported Ur uguay's proposal to expand the definition of 
carrier media to include semiconductor media, such as USB flash drives and they also agreed with 
Switzerland's comments and proposal, to remove the word "temporary" as had been circulated in document G/VAL/W/254. 
3.19.  The representative of Colombia stated that his authorities had still been assessing the 
Uruguay proposal and the amendment suggested by Switzerland at the time of the informal 
meeting so they had not made a statement at that time.  His authorities had now finished their examination and they believed that the propos als both from Uruguay and Switzerland were 
acceptable.  Therefore, Colombia could support th em, particularly as these proposals would clarify 
and bring up to date the technical aspects of the valuation of carrier media, without undermining the spirt of the agreement.  They echoed the wo rds of other delegations that had supported the 
proposal.  
3.20.  The representative of Chile said that, as they had stated at the informal consultations, Chile 
agreed with the suggested amendments put forwar d by Uruguay and as mentioned at the TCCV of 
the WCO at the 36th session on the 15 April 2013.  Chile believed that both Uruguay's proposal and 
the Swiss proposed amendment were relevant and necessary.  In light of that, as some other 
Members had said at the informal consultations, they believed that the outcome would be a positive one. 
3.21.  The representative of Canada noted that his government was still positively considering the 
proposal, but as they had noted at the informal  meeting, it might require changes in their G/VAL/M/60 
 
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  domestic legislation and as such, they needed to conduct further domestic consultations before 
they could express their unqualified support or not for the proposal.   
3.22.  The representative of Ecuador said that his authorities could support the Uruguayan 
proposal along with the Swiss comments, but they would like to know the scope and relevance of 
keeping the word "solely" because if the word "temporary" were removed this could exclude all 
temporary storage media for data instructions.  "F or application", should also be removed because 
customs authorities were interested in the process to be followed at the point of import, rather 
than the subsequent use to which the product would be put. 
3.23.  The representative of Argentina reiterated their statement from previous meetings that they 
were in agreement with the Uruguayan proposal, in principle.  At the same time, they noted that 
the matter was still being studied by a number of Memb ers.  In light of that, they would follow the 
future debates and would submit further developmen ts to their authorities.  They were awaiting 
circulation of the questions raised by the European Union and Uruguay's responses. 
3.24.  The representative of Chinese Taipei reiterated his delegation's support expressed at the 
informal consultations.  They were supportive of Uruguay's proposal to expand the scope of carrier 
media of the Decision 4.1 and they were also su pportive of Switzerland's proposal to delete the 
word "temporary".   
3.25.  The representative of Costa Rica echoed those Members that had supported the Uruguayan 
proposal and the Swiss amendment.  
3.26.  The representative of China stated that his authorities had carried out their internal analysis 
and could now say that, in principle, they supported  the expansion of the scope of Decision 4.1 to 
cover the USB flash drives which would, according to their industry, become the main form of 
carrier media carrying instruction and information. He thanked Uruguay and Switzerland for their proposals and China appreciated the questions ra ised by the European Union and the answers 
given by Uruguay.  China had expressed caution wi th regard to its approach to the amendment to 
Decision 4.1 and the dialogue taking place within the Committee was the kind of dialogue that they would like to see.  It was a process that coul d lead to a final decision and they looked forward 
to the circulation of the questions and answers from Uruguay and the European Union.   
3.27.  His impression, from the exchange of di alogue between the European Union and Uruguay, 
was that the classification of USB flash drives ha d been quite clear, and this had also been made 
clear in the document VT0863E1 provided by the WC O TCCV and based on classification opinions 
from the WCO.  The European Union's question was also valid with regard to the compatibility of 
the definitions for heading HS 85.23 with the notion of carrier media, which was the subject matter of Decision 4.1.  The sub-headings of products covered under HS 85.23 were "magnetic 
media, optical media and semiconductor media".  The European Union's question could be how 
those sub-headings related to carrier media, es pecially the semiconductor media.  The second 
layer of the question could be the merit of the qu alifying language proposed in Uruguay's proposal, 
i.e., "secure semiconductors", which were similarly presented to customs solely as a means of 
temporary storage, and the deletion of the word "t emporary", for storage for transfer of data or 
instructions to data processing equipment for use.  That was the second layer of the question to be considered, whether the language exactly served th e purpose of the intention to expand the scope 
of Decision 4.1.   
3.28.  Uruguay's response had been quite clear that Uruguay wanted to limit the kind of USB key 
drives to those that have only the kind of function described in the qualification and not to include 
other functions.  This could have been the European Union's concern because some USB keys had 
functions that were much more than simply carrying or recording the instructions or the information.  
3.29.  His delegation would bring back the issues and involve their classification colleagues to 
study them carefully, and hoped that they would be able to arrive at a good decision as to how to 
go about the terminology and the definition for the expansion of Decision 4.1 to cover specifically the USB flash drive.   G/VAL/M/60 
 
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  3.30.  The representative of Norway repeated her statement from the informal meeting that 
Norway supported the Uruguay proposal with the amendments proposed by Switzerland. 
3.31.  The representative of Japan appreciated the efforts of the Chairperson in convening the 
informal meeting, which had been very useful.  Ja pan also appreciated the efforts of the European 
Union and Uruguay.  The European Union's point was really relevant in terms of Japan's practice at 
the border.  Japan was generally supportive to Uruguay's proposal and the Swiss amendments, but would like to reserve its position because they would like to closely study Uruguay's responses to 
the questions from the European Union. 
3.32.  The representative of Uruguay expressed his thanks for the statements made and the 
questions raised in connection with their proposal.  He thanked the European Union for the 
exchange that had taken place between them.  It  was a complicated issue, and the basic aim was 
to come up with a focused, precise decision.  Sometimes in connection with information technology 
it was a case of taking two steps forward and one step back.  
3.33.  The representative of Korea repeated thei r statement from the informal meeting that, in 
general, Korea supported Uruguay's proposal in te rms of reflecting the technology advances that 
had happened over the past years.  Korea was flexible regarding the language, as long as it had a clear, legal certainty.   
3.34.  The representative of Mexico repeated what they had already said on previous occasions in 
connection with Mexico's support to Uruguay's proposal.  They would need a clear reflection of a 
commercial situation which occurred in trade relations between their countries. 
3.35.  The Chairperson saw that that many Members in the room actually supported Uruguay's 
proposal as well as the proposed amendment put forward by Switzerland.  Some Members had 
indicated that they would need some more time to consider the proposal.  At the same time, they had also expressed their willingness and openness to continue discussing the proposal.  
She proposed that the Committee take note of all the statements made and that the incoming 
Chair of the Committee would continue to conduct further informal consultations to try to take forward the proposal.   
3.36.  The Committee took note of the statements ma de and agreed to revert to this matter at the 
next meeting. 
4  TECHNICAL ASSISTANCE 4.1.  The Chairperson recalled that the Committee's Work Programme on Technical Assistance for 
Capacity Building as Regards the Implementation  and Administration of the WTO Agreement on 
Customs Valuation was now incorporated in the overall technical assistance program of the WTO.  The WTO was currently implementing the 2014-2015 Biennial TA Plan, which was contained in 
document WT/COMTD/W/200.  Unlike previous years, there were no regional activities planned on 
customs valuation.  Requests for technical assistance could be made by individual Members at any time, which would be met by a national activity designed to meet the needs of the recipient.  
In this regard, two national technical assistance missions had been held so far this year - in 
Comoros, from 10-12 March and in Saint Lucia, from 2-6 March.  Both activities had been carried out in cooperation with the WCO. 
4.2.  The representative of the European Union no ted that the issue of technical assistance was a 
standing item on the Committee's agenda but at the same time, for the last period of several 
years, there had not been any substantive discussion.  The European Union would be interested in associating with other Members on perhaps opening up this point for more elaboration or 
discussion going forward, for a number of reasons.  A great deal of technical assistance and 
capacity building had been supplied by Member s and international organizations, including 
obviously the WCO and WTO.  From what they ha d heard, anecdotally, there still seemed to be 
significant demand for technical assistance and capacity building, particularly in relation to 
valuation.  Looking to the future, there would be a series of substantial commitments coming on-stream under the umbrella of the Trade Facilitation Agreement, which would, of course, have some relevance (possibly a lot), for how customs administrations carried out their work, including G/VAL/M/60 
 
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  on customs valuation.  There were synergies ther e, and certainly justification for some kind of 
discussion, at the Committee on Customs Valuation and involving the WCO and perhaps others.   
4.3.  The European Union wanted to flag this as something that they would like to return to if they 
managed to do some homework on it themselves , and they would be glad to share it with 
Members and the Committee, bearing in mind that  an agreement of three decades and more was 
still alive and well, but still needing support in terms of technical assistance and capacity building.  There was real demand out there, and they would have to see whether or not there were new 
initiatives that could be considered.  They would co me back to that point at a future meeting.   
4.4.  The Chairperson thanked the European Un ion for its comment, which was very valid.  
She suggested that Members share their concerns, do some homework, and if they had any 
suggestions for a way forward they could bring them to the Committee for further discussions.   
4.5.  The Committee took note of the statements made. 
5  UNITED STATES - ARMENIA'S REFERENCE PRICE SYSTEM IN CONNECTION WITH THE 
VALUATION OF GOODS  
5.1.  The Chairperson recalled that at the last m eeting, the Committee had agreed to revert to this 
issue.  Armenia had notified its national legislation in document G/VAL/N/1/ARM/1 in August 2003, 
as well as its responses to the checklist of i ssues in document G/VAL/N/2/ARM/1.  The Committee 
concluded its examination of this legislation at its meeting on 18 October 2005.  The United States 
had posed follow-up questions in document G/VAL/W/208, to which Armenia had replied in document G/VAL/W/213.  Canada had subsequently submitted questions in document G/VAL/W/214.   
5.2.  The representative of Canada reminded the Committee that it had submitted questions to 
Armenia in 2012 regarding the possible use of reference prices.  Canada believed that it was an 
important issue and looked forward to receiving replies as soon as possible.   
5.3.  The Committee took note of the statement made and agreed to revert to the issue at the 
next meeting.   
6  PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION:  IMPLEMENTATION-
RELATED ISSUES 
6.1.  The Chairperson recalled that, at its meeting of December 2002, the General Council had 
authorized the Committee to continue its work under the existing mandate in paragraph 8.3 of the 
"Decision on Implementation-Related Issues and Concerns", and had asked the Committee to 
report back to the General Council once its work had been completed.  At the last meeting, India 
had indicated that it would like to retain this item on the agenda as it needed to discuss the issue with its capital.  However, some other Members had been of the view that the Agreement on 
Trade Facilitation that had been agreed in the Ministerial Conference at Bali would have already 
taken care of this issue.   
6.2.  The representative of India reported th at they had reviewed the matter in capital, 
comprehensively, and there had been no change in their position with regard to the item.  
As pointed out by his delegation in other meetings, the mandate contained in paragraph 8.3 of the Ministerial Decision of 14 November 2001 on im plementation-related issues and concerns, as 
distinct from that contained in paragraph 1(g) of the July framework under which the TFA had 
been negotiated.  Moreover, Article 12 of the Trade Facilitation Agreement covering customs 
cooperation, that included provisions on exchange of information, had not entered into force yet.  
At the same time, as they had noted in previous meetings of the Committee, the concerns relating 
to under-valuation, transfer pricing and customs fraud continued to haunt customs 
administrations.  As such, the actual working an d effectiveness of Article 12 in strengthening the 
hands of customs administrations in dealing with those issues was to be assessed or proven. 
6.3.  In the light of those reasons, his delegation could not agree or concur in the 
proposal/suggestion to omit the item from the agenda of the Committee.   G/VAL/M/60 
 
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  6.4.  The representative of the United States repeated his delegation's general position from the 
last meeting that they believed the issue had been resolved by the new article on customs 
cooperation in the Trade Facilitation Agreement, agreed to by Ministers in Bali.  Their ability to actually utilise this new cooperation mechanism was dependent on that Agreement's entry into 
force, so they urged Members to complete their domestic procedures so that they might notify 
their acceptance of the TFA.  
6.5.  The representative of the European Union stated that their view was still the same as 
expressed at the previous meetings.  The issue ha d been resolved and they were looking forward 
to seeing, via the Trade Facilitation Agreement, fu ll implementation and a satisfactory response to 
the kind of situations which had been mentioned.  There was no change in their position.   
6.6.  The representative of Japan joined the Unit ed States and the European Union in their view 
that the mandate from paragraph 12 of the Doha Ministerial Declaration had been fulfilled by the 
Trade Facilitation Agreement. 
6.7.  The representative of Canada echoed th e statements issued by the United States, the 
European Union and Japan, and believed that the i ssue had been resolved through Article 12 of the 
Trade Facilitation Agreement. 
6.8.  The representative of Argentina said that the question of customs cooperation was important 
to their customs authorities in capital.  His delegation took note of the comments made in 
connection with Article 12 of the Trade Facilita tion Agreement and its entry into force.   
6.9.  The Committee took note of the statements ma de and agreed to revert to this issue at the 
next meeting.  
7  PRESHIPMENT INSPECTION 
7.1.  The Chairperson noted that Preshipment Inspection was a standing item on the agenda of the 
Committee on Customs Valuation, and that there were two items to discuss:  1) the status of 
notifications, and information received from the International Federation of Inspection Agencies 
(IFIA), and 2) the replies by Indonesia to questions posed by the United States.   
7.1  Status of notifications by Memb ers and information provided by IFIA 
7.2.  The Chairperson drew attention to the compilati on of notifications pursuant to Article 5 of the 
Agreement on Preshipment Inspection, contained in document G/PSI/N/1/Rev.2.  Some 
notifications on PSI had been received very recent ly and they would be circulated for consideration 
by the Committee at its next meeting.  
7.3.  Regarding the report that was periodically  received from the International Federation of 
Inspection Agencies (IFIA) on countries that used preshipment inspection services, the Secretariat had received further information which had been  circulated in document G/PSI/W/63/Rev.17.  
7.4.  The Committee took note of the two documents.   
7.5.  The representative of China noted that there seemed to be a trend that more and more 
countries which had used PSI before were now mo ving away from PSI companies and were taking 
full responsibilities in the area of customs valuation and other related areas.  At the last WCO 
TCCV meeting, the Democratic Republic of Congo had made an excellent presentation on the challenges they had been facing in this area and the preparations that their customs administrations had made to take full responsibility.  This Committee could note the developments 
and the trend. The issue had a very obvious po licy dimension and had a lot to do with the 
implementation of the Trade Facilitation Agreem ent.  Perhaps in the future, the Committee could 
arrange presentations by countries that were moving away from PSI to share their challenges and 
to see whether the Committee could be of any help.  
7.6.  The Committee agreed to continue consultati ons under the incoming Chairman if there were 
any proposals to look further into this subject. G/VAL/M/60 
 
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  7.2  The replies by Indonesia to questions posed by the United States 
7.7.  With regard to the second issue, the Unit ed States had submitted questions to Indonesia in 
documents G/PSI/W/167, G/PSI/W/180 and W/237 to which Indonesia has issued replies in documents G/VAL/W/256, G/VAL/W/257 and G/VAL/W/257/Corr.1 
7.8.  The representative of the United States said  that they had reviewed Indonesia's replies in the 
two documents cited.  While they appreciated Indonesia's responses they continued to have 
concerns.  Indonesia had notified some of the regulations to the Committee of Import Licensing, 
however, for purposes of transparency and to have a robust discussion, the United States wished 
to see the notifications and to discuss the substance of those documents in this Committee. 
7.9.  They understood from Indonesia's response  that the technical verification procedure it 
conducted included verification of import documents, company legal documents, import licensing 
documents, shipping documents, technical documents, technical information regarding imported 
goods such as quantity, type, HS code correctness, loading port, destination port and country of origin.  The similar responses were provided in G/VAL/W/256.  As described, these procedures, at 
least in part, appeared to overlap with a definition of preshipment inspection procedures in 
Article 1.3 of the Agreement of Preshipment Insp ection.  The United States requested further 
explanation from Indonesia as to why they felt that  these procedures were not PSI activities.  They 
again requested that these procedures be notified to this Committee so that Members in this 
Committee could be provided the opportunity to review these measures. 
7.10.  Further, Indonesia had indicated that the procedures provided better access for importers 
and exporters to obtain easy and vast improvement in importation services. Could Indonesia 
provide further information on the practical ways in which those procedures speeded entry into 
Indonesia? Indonesia also noted that there was a provision in its customs law that Indonesia's customs and excise authority did not conduct preshipment inspections.  The United States had  
reviewed further notifications and some documents and had  found that the notified legislation 
only included Article 15 on Customs Value and Ministry Finance Decree No. 690/KMK.05/196 on Customs Valuation of the Calculation of Import Duties.  The United States requested that 
Indonesia notify the specific section of the customs law relating to preshipment inspection.   
7.11.  The also requested further clarification on whether any restriction on conducting 
preshipment inspection was limited to Indonesia's customs and excise authority or if it applied 
more broadly to more Ministries of the Indonesian Government.  They anticipated having 
additional questions, as these questions related to  some of the responses provided by Indonesia in 
G/VAL/W/256 in response to the questions in G/VAL/W/167. 
7.12.  They understood that Indonesia had amended its customs law in Law No. 17 of 2006 and 
they requested that Indonesia notify that law for Members to review.   
7.13.  The representative of Indonesia thanked the United States delegation for its interest in the 
issue and requested the United States to submit its questions in writing so that they could be 
conveyed immediately to capital. 
7.14.  The Committee took note of the statement ma de and agreed to revert to the issue at the 
next meeting. 
8  OTHER BUSINESS 
8.1.  The next meeting of the Committee was provisionally scheduled for Tuesday 
29 September 2015.  That was a bit earlier than usual to take into account the preparations for the WTO Ministerial Conference that was taking place in Nairobi at the end of the year. 
In preparation for the next meeting, Members were reminded that any further questions or replies 
should be submitted to the Secretariat before Tu esday, 14 September 2015.  If any delegation had 
been planning to submit new legislation, it should  b e  s e nt in W ord  format b y Aug us t or at the 
latest, the beginning of September so that the Secretariat would have sufficient time to process 
the notification on time for the meeting.   G/VAL/M/60 
 
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  8.1  Elections of officers 
8.2.  The Chairperson reminded the Committee that the Chairman of the Council for Trade in 
Goods had carried out informal consultations on a slate of names for appointment of Chairpersons 
of standing bodies in accordance with the established Guidelines for Appointment of Officers.  
On the basis of his consultations, he had proposed that the Committee elect Mr. LIU Ping of China 
as Chairperson for 2015.  The Chairperson proposed that the Committee elect Mr. Liu. 
8.3.  The Committee elected Mr. Liu by acclamation. 
8.4.  The meeting was adjourned.  
_______________ 
 
 
 G/VAL/M/60 
 
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  ANNEX 
REPORT TO THE WTO COMMITTEE ON CUSTOMS VALUATION  
ON THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS VALUATION  
AND RELATED ACTIVITIES OF THE WCO SECRETARIAT 
21 May 2015 
The 40th Session of the TCCV took place from 4 to 8 May 2015.   
61 countries and four observer organisations attended.  
Specific Technical Questions 
The Technical Committee examined a number of technical questions submitted by Members.  
 Royalties and licence fees under Article 8.1 (c) of the Agreement: submitted by Dominican 
Republic.  Consensus was reached on this question at the last Session (39th) and the final 
drafting took place at the recent Session.  The Technical Committee duly finalised the text 
and is now submitting this instrument for approval (attached to this report) 
 Related party transactions under the Agreement and Transfer Pricing – case based on 
transactional net margin method and on resale price method.  The interaction between 
Customs valuation and transfer pricing is one of the key challenges in the effective implementation of the Valuation Agreement toda y.  The challenge is to determine to what 
degree commercial information, prepared primarily for transfer pricing purposes is both 
relevant and useful to Customs administrations when examining related party transactions for Customs valuation purposes.  The Technical Committee has discussed this issue for several years and is endeavouring to develop inst ruments, or guidance to assist Members, in 
the form of case studies to illustrate situatio ns where transfer pricing data has assisted 
Customs in such cases. Some good progress was made at the recent Session and examination will continue at the next Session.   
 Valuation treatment of distribution fees an d payments based on projected net profits: 
submitted by Singapore .  At the last Session, no consensus could be reached on this item so 
it was proposed that no further discussions would take place on this question.  During the 
intersession, Singapore have considered this proposal and reported back at the recent 
Session that they would agree that this questi on be removed from the agenda.  It will be 
placed in the Conspectus of technical questions (which acts as a repository for all current 
and past technical questions presented to the Committee).   
 Valuation treatment of goods in a global value chain: submitted by Uruguay.  Uruguay have 
presented a variety of scenarios, illustrating diffe rent examples of the global value chain and 
the consequent valuation implications of the movements of goods involved in each case. 
Discussions on this case continued and will continue at the next Session.  
 Treatment of the fees for unlocking a function of imported goods after importation 
(application of Articles 1, 8.1 (c) and 8.1 (d) of the Agreement):  submitted by Japan .  
This case involves an interesting situation where an imported product – in this case a 
photocopier – has certain software functions disabled at the time of importation.  The final user has the option of accessing these additi onal functions after acquiring the goods by 
payment of a fee for a password which will unlo ck those functions.  The question involves 
whether or not this fee should be considered as part of the Customs value of the imported 
goods.  Different views have been expressed and it appears that consensus will not be 
reached.  However, the Committee agreed to consider the options further and so discussions 
on this case will continue at the next Session. 
 G/VAL/M/60 
 
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  - Treatment of advertising and promotion costs: request by Uruguay.   A further 
question presented by Uruguay on advertising and promotion costs was discussed and will be carried forward to the next Session.  
- Three new questions were raised during the intersession:  
- A request to re- examine  Case Study 5.1:  submitted by Argentina: 
- Meaning of the expression "sold for export to the country of importation":  submitted 
by Uruguay 
- Sales condition, objective  and quantifiable data:  submitted by Mexico 
The Committee agreed to examine the questions submitted by Uruguay and Mexico as specific 
questions at the next Session, but not the question raised by Argentina.  
Technical Assistance/Capacity Building 
At each Technical Committee, reports are made of both Secretariat and Members activities in 
valuation-related technical assistance and capacity building, since the last Session.  At the 40
th 
Session, Canada; Japan; Thailand; and the United States reported activities conducted by their 
administrations.  
The WCO Secretariat reported on their activities, which included a further joint workshop 
conducted by WCO and OECD, on the topic of transfer pricing and Customs valuation. 
These workshops bring together officials from both Customs and tax administrations to discuss the 
issues raised and encourage closer cooperation an d sharing of information, skills and knowledge.  
The list of the WCO's and Members' technical assistance programmes has been provided to the CCV.  
For additional information, the WCO is currently providing, or planning to provide, technical 
assistance and capacity building to a number of countries in the West and Central Africa Region. Several countries in this region are terminating, or planning to terminate, inspection contracts with 
private companies which have been conducting core Customs functions, such as valuation and 
classification, for many years in some cases.  The WCO is keen to assist such countries – a current example is Democratic Republic of the Congo - in order to ensure they have the necessary 
capacity to conduct such functions without reliance on private sector assistance.  This is in line 
with Article 10.5 of the Trade Facilitation Agreem ent which states that Members shall not require 
the use of pre-shipment inspections in relation to tariff classification and Customs valuation.  
Other issues  
Revenue Package 
The Technical Committee was updated on the la test developments of the Revenue Package 
programme currently being conducted by the Secretariat.  The Revenue Package is a response to 
WCO Members' concerns of falling revenue return s.  The Secretariat has developed a number of 
new tools to assist Members in many areas relevant to revenue collection, including a diagnostic tool to improve valuation work and related infrastructure, technical guidelines on the provision of 
advance rulings for valuation, classification and origin, and a Guide to Customs valuation and 
transfer pricing.  The new tools will be launched at the WCO Council Sessions in June.  
The key message is that the objective should be to accurately identify and collect the amount of 
revenue legally due.  
Elections  
The Committee re-elected Ms. Yuliya GULIS of the United States as Chairperson and elected Vice 
Chairs from Chile and Netherlands wh o will serve for the next year.  
Date of next meeting 
The 41
st Session of the Technical Committee will be held at WCO Headquarters in Brussels from 
19–23 October 2015.  G/VAL/M/60 
 
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  ADVISORY OPINION 4.16 
ROYALTIES AND LICENCE FEES UNDER ARTICLE 8.1 (c) OF THE AGREEMENT 
1. Importer B of country of importation I enters into a licence agreement with supplier S of 
country of exportation X for use of a trademark.  As part of this arrangement the parties also 
agree that the royalty payable by B to S for the commercial use of the trademark licensed in the 
agreement will be calculated by applying a rate of five per cent (5%) of the net sale price in the country of importation of the trademarked goods. 
 
2. Subsequently, S and B enter into a contract for the international sale of product P at a price 
of 1,000 currency units.  Under the contract, product P has to be marketed bearing the aforementioned trademark, such that the corresponding royalty may be considered to be related 
to the goods.  In addition, the price does not include the royalty, which is paid as a condition of 
sale of the goods.  Accordingly, all the requiremen ts provided for in Article 8.1(c) of the Agreement 
are met. 
 
3. Given that the net sale price of product P in country I is 2,000 currency units, the licence fee 
which B owes S for use of the trademark is 100 currency units. 
 
4. In accordance with the domestic tax rules in force in country of importation I, the 100 
currency units paid by way of royalty for use of th e trademark are subject to a special tax on this 
type of income, the amount of which is derived by  applying a nominal rate of 25% of the total sum 
payable.  The importer B pays this income tax of 25 currency units on behalf of seller S under a 
requirement to withhold tax at source.  
5. However, none of the clauses in the licence agreement refers to payment by B of the tax 
prescribed in the domestic legislation of country I, on income derived from the royalty for use of the trademark. 
 
6. Accordingly, B pays out a total of 1,100 currency units:  1,000 currency units corresponding 
to the price of product P, and 100 currency units by way of royalty for use of the trademark.  However, S receives only 1,075 currency units as B transfers to him 75 currency units for the 
royalty and, in parallel, a receipt for 25 currency units to confirm payment of the income tax in 
country of importation I.  
7. The issue brought before the Technical Committee is whether the 25 c.u. paid by Importer B 
is part of the Customs value under Article 8.1(c). 
 The Technical Committee on Customs Valuation expressed the following view: 
8. In the present case, the royalty which the buyer is required to pay under the relevant 
contract provisions is 100 currency units, as this is the amount obtained by applying the rate of 5% of the net sale price of the goods in the country of importation.  
9. The licensor receives a lesser amount – 75 currency units instead of 100 currency units.  
The difference of 25 currency units does not constitute a reduction in the royalty amount, but a cost which is generated by applying income tax in the country of importation and which, as 
previously stated, is borne by the licensor.  Mo reover, it had not been agreed in the licence 
agreement that income from the royalty was to be received without deduction of a possible income tax. 
 
10. Article 8.1 (c) of the Agreement provides that, in determining the Customs value, there shall 
be added to the price actually paid or payable royalties and licence fees "that the buyer must pay, either directly or indirectly […]". 
 
11. At no point does the Agreement  refer to tailoring this adjustment to the royalties that the 
licensor will receive.  Indeed, Article 8.1 (c) pr ovides that, to the extent that the requirements 
therein are met, the royalties payable by the buyer are part of the Customs value, and does not 
specify that they are the royalties that the licensor will ultimately receive.  In this case, there is a 
difference between the royalty that the buyer pays and the royalty that the licensor receives.  
For the reasons already given, in order to comply with Article 8.1 (c) it is necessary to abide by G/VAL/M/60 
 
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  what it says and, consequently, in this case, the amount of money which the importer pays, not 
that which the licensor ultimately receives, should be added to the Customs value of the goods.  12.  Paragraph 3 (c) of the Interpretative Note to Article 1 ("Price Actually Paid or Payable") 
excludes from the Customs value the "duties and taxes of the country of importation".  This relates 
to domestic taxes which may be levied on the import of goods rather than taxes which may apply to royalty income.  The solution proposed does not involve including in the Customs value of the 
goods the amount of a tax of the type referred to in paragraph 3 (c) of the Interpretative Note to 
Article 1, applicable in the country of importation, but the amount of a royalty agreed between the licensor and the licensee.  
13. In conclusion, the 25 currency units paid by impo rter B are part of the Customs value of the 
imported goods under Article 8.1 (c).   
__________