G/VAL/W/296  
3 November  2016 
(16-6034) Page: 1/3 
Committee on Customs Valuation  Original:  Spanish  
 
  NOTIFICATION UNDER A RTICLE 22 OF THE AGR EEMENT ON  
IMPLEMENTATION OF AR TICLE VII OF THE GEN ERAL  
AGREEMENT ON TARIFFS  AND TRADE 1994  
COLOMBIA  
Replies from Colombia to q uestions posed by  Canada and Hondura s  
in document G/VAL/W/290  
The following communication , dated 31 October  2016, is being circulated at the requ est of the 
delegation of Colombia . 
 
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Colombia thanks Canada and Honduras for their notification -related questions contained in 
document G/VAL/W/290 (reference prices and data banks) a nd replies as follows:  
 
Reference Prices : 
 
Question 1  
 
Canada and Honduras are concerned about Colombia's use of reference prices to 
establish customs value.  This practice is referenced in several of Colombia's legal 
instruments, including Decision No. 571, Resolutions No. 1456 and No. 1684 (Andean 
Community Legislation) and Ministry of Finance Decree No. 111 (Colombian Legislation).  
We are concerned about the lack of transparency and potential inconsistency of 
Colombia's customs practices with the Customs Valuation Agreement (CVA).  We have 
found provisions related to reference pricing in Articles 2(k), 48.1, 48.3(b) and 55 of 
Decision No. 571 (Annex 1) of the Commission of the Andean Community.  Articles 5, 6, 
7, 9, 12, 13 and 17 of Resolution No. 1456 (Anne x 5) of the Commission of the 
Andean  Community also provide evidence that Colombian customs authorities resort to 
the use of "reference prices" to determine a customs value for "special customs 
valuation cases".  We note that the CVA does not permit the use  of minimum, arbitrary, 
or fictitious values to determine custom values.  Each WTO Member must consider its 
obligations under the CVA if it uses reference pricing, which is only permitted as a risk 
management tool.  The CVA's General Introductory Commentary states that customs 
valuation is to be a "fair, uniform and neutral system for the valuation of goods for 
customs purposes that precludes the use of arbitrary or fictitious customs values" and 
that "the basis for valuation of goods for customs purposes sho uld, to the greatest 
extent possible, be the transaction value of the goods being valued" as well as that 
"customs value should be based on simple and equitable criteria consistent with 
commercial practices and that valuation procedures should be of genera l application 
without distinction between sources of supply".  
 
(a) How does Colombia use reference prices to determine customs value?  
 
Reply : 
 
First, it should be noted that  the Colombian Gover nment notified other WTO Member countries of 
the implementation  of Andean Community Commission Decision No. 571 of 2003 and Resolutions G/VAL/W/296  
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  No. 1456 of 2012, No. 1239 of 2009, and No. 1684 of 2014, in document G/VAL/N/1/COL/3 of 
26 August  2014, thereby meeting  its obligations  under  Article 12 of the WTO Customs Valuation 
Agreement (hereinafter the Agreement)  and Article X of the GATT 1994.  
 
In accordance with  Article 17 of the Agreement and Article 17 of Andean Community Commission 
Decision No. 571, and in order to clarify any doubts that may arise concerning  the accuracy and 
truth of the declared value for imported goods, Colombia has drawn up lists of prices for identical 
or similar imported goods, which serve as a support tool for officials conducting  simultaneous 
control s. 
 
These lists are based on  information obtained from imports that have entered Colombia and/or 
price lists for exports  to the country of identical or similar goods, which the seller provides to the 
importer/buyer  and the latter to the competent customs authority . Following the respective review  
and anal ysis, they are incorporated into the Risk Management System ( SAR). 
 
In Colombia, customs value is not , however,  determined on the basis of referen ce prices . Such 
prices are merely taken as indicative during the simultaneous control  process  and do not imply  the 
rejection or replacement of the transaction value . During this control phase, the importer is given 
the opportunity not only to provide additional information or evidence to show that the declared 
value represents the total value actually paid or payable for the imported goods, but to freely and 
voluntarily correct its customs import declaration so as to align  it with the price actually 
negotiated , or, instead , to post a guarantee, after which, in any of these cases, it may withdraw 
the goods whilst  the customs authority determines the customs value of the imported goods in the 
post-inspection control phase . 
 
During  the post -inspection control phase, if all the valuation methods  have been exhausted in 
sequence and it has not been possible to determine t he customs value, even by applying in a 
flexible manner the methods established in Article 1 to 6 , as referred to Article 7 of the 
Agreement, then , as a last resort, by virtue of  reasonable means consistent with the principles and 
provisions of the Agreeme nt, the customs value may be determined on the basis of a reference 
price for goods identical or similar to those that ar e to be valued, provided that this price  is not 
contrary to Article 7.2 of the Agreement . 
 
In the latter case, it should be noted  that, in practice, customs value is not determined on the 
basis of a reference price, since it is, insofar as possible, determined  using the transaction value 
method or one of the secondary methods . 
 
Regarding  "special cases ", as referred to in Andean Resolutio n No. 1456, the option to determine  
customs value on the basis of a reference price for identical or similar goods is precisely in 
application of the "fall -back" method provided for in Article 7 of the Agreement, since in these 
special cases, there is gene rally no sale, payment or transfe r of the ownership of the goods,  in 
which case it is possible to opt for reasonable means consistent with the principles and conditions 
of the Agreement, including reference prices for goods identical or similar to those th at are to be 
valued, provided that these prices  are not contrary to Article 7.2 of the Agreement.  
 
In conclusion , the reference prices used as a risk indicator in the event of  doubt concerning  the 
value declared during the simultaneous control phase, are n ot fictitious or arbitrary values , since 
they stem from actual import transactions and/or lists of market prices for the export to Colombia 
of goods identical or simila r to those being valued, and do not replace the transaction value . The 
importer has vari ous options based on these prices for resolving  the dispute or reasonable doubt  
generated  by the customs authority during the simultaneous control phase , and may therefore 
secure  the release of its goods , while the final customs value is determined  in the post-inspection 
control phase , as provided for  in Article 13 of the Agreement . 
 
(b) Could Colombia explain how such practices are consistent with the methods of 
customs valuation established by the CVA?  
 
Reply : 
 
The valuation methods provided for in the Ag reement are always used as the basis for determining 
the customs value of imported goods . As explained  above , reference prices are only used as a  risk 
indicator or risk management tool during the simultaneous control phase ; exceptionally , as a last G/VAL/W/296  
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  resort,  they may  be useful  during the post -inspection control  phase , when all other methods have 
been exhausted, as a starting point for determining  the customs value of imported goods using  
reasonable means  consistent with the principles and provisions of the Ag reement that are not 
contrary to Article 7.2 thereof.  
 
The use of reference prices is therefore a practice consistent with risk management tools for 
generating reasonable doubt during the simultaneous control process and post -inspection control 
process, in  line with the provisions of Article 7 of the Agreement, since,  as explained in  the 
previous reply,  they are not fictitious or arbitrary values.  
 
Data Banks  
 
Question 2  
 
We understand that Colombia records its reference prices in "data banks", which are 
repositories of price information.  The World Customs Organization's Guidelines on the 
Development and use of a National Valuation Database as a Risk Assessment Tool state 
that the use of database information is permitted for risk management purposes only, 
but is not permitted to be used as a substitute for the declared value for imported goods 
or to set minimum prices for customs valuation as outlined in the CVA.  It is not also to 
be used as a substitute for other techniques, such as post importation audit, t o assess 
the truth or accuracy of a declared value.  The use of such "data banks" is referenced in 
Article 25 of Decision No. 571 of the Commission of the Andean Community, as well as in 
Articles 237 and 475 of Ministry of Finance Decree No. 111. 
 
(a) How d oes Colombia use references prices "data banks"?  
 
Reply : 
 
In accordance with WCO guidelines and Article 25 of Andean Decision No. 571, Colombia has 
begun to develop a  reference price database as part of the Directorate of Taxes and 
National  Customs (DIAN) Risk Management System (SAR) . During the  simultaneous control phase, 
the database generates alerts regarding declared values that are lower than  the reference prices 
and, on this basis , disputes or reasonable doubts are generated concerning the declared va lue of 
imported goods undergoing the customs clearance process ; doubts that are resolved in the 
manner indicated in the first reply.  
 
(b) Could Colombia explain how such practices, which involve the use of a reference 
price to determine the customs value o f imported goods, are consistent with the 
requirements of the CVA and the WCO Guidelines?  
 
Reply : 
 
As explained above, in order to determine the customs value of goods, Colombia uses valuation 
methods  that are consistent with the requirements of the Agreem ent; reference prices are only 
used as a  risk management tool or risk indicator, in accordance with WTO guidelines.  
 
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