G/VAL/W/308  
 
2 November 2017  
(17-5984) Page: 1/7 
Committee on Customs Valuation  Original: English  
 
   
NOTIFICATION UNDER ARTICLE  22 OF THE  
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF  
THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994  
KINGDOM OF BAHRAIN  
Replies from the Kingdom of Bahrain to Questions from the United States contained in  
document G/VAL/W /223 
The following submission, dated 31 October  2017, is being circulated at the request of the 
Delegation of the Kingdom of Bahrain.  
_________________  
 
In reference to the questions raised by the United States to the Kingdom of Bahrain (hereafter 
Bahrain)  in the WTO Document G/VAL/W/223 regarding G/VAL/N/1/BHR/2  and G/VAL/W/217.  
Kindly note the following answers to these questions:  
1. It appears that Article 12 of the Customs Valuation Agreement (CVA), requiring 
publication of laws, regulations, judicial deci sions, and administrative rulings of 
general application giving effect to the CVA, is not reflected in the notified 
legislation. How does the notified legislation implement Article 12?  
Answer:  
Joining the Agreement and publishing it in the official Gazette  and its application is 
considered to be a law in Bahrain. The laws, regulations and rules of implementation of the 
Agreement (CVA) had been published on the Bahrain websites making it an applicable law.  
2. A few terms are defined in both Article 2 of the Com mon Customs Law (CCL) and 
Clause II, Article I, Rules of Implementation (ROI). While many of the definitions 
in both places are the same or contain only minor differences, a few of the 
definitions, including that for "price actually paid or payable," conta in significant 
differences. How will Bahrain reconcile these differences?  
Answer:  
There are no differences in definitions . When applying the Common Customs Law (CCL) , 
Article (2) of the law is taken into consideration, and when exercising the Rules of 
Implementation (ROI) in respect of the value, we refer to the definition detailed in the 
Regulations.  
3. The definitions given in Article 2 of the CCL appear to be less complete or specific 
than those provided in the ROI. Will the ROI be the primary source of law  for 
Bahrain 's implementing the CVA?  G/VAL/W/308  
 
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  Answer:  
The provisions of the Rules of Implementation (ROI) shall be considered as a main source of 
valuation in accordance with the provisions of Article (26) of the Common Customs law 
(CCL), which states: " The customs  value shall be calculated in accordance with the 
provisions and rules of the Rules of Implementation (ROI )". 
4. We are still concerned with the use of "experts" by the valuation committee on 
appeal, as discussed in Articles 61 and 62 of the CCL.  
Answer:  
The Customs Department reserves the right to seek assistance of experts at its discretion to 
settle disputes over customs value without prejudice to the right of the importer to appeal to 
court in accordance with Article 61 of the Common Customs law (CCL).  
5. Article 62 states that the director may release goods subject to dispute "if not 
prohibited." Please clarify if the use of the term "prohibited" refers to the nature of 
the goods, or whether there is another reason a release may be prohibited. 
Additionally, t he Article allows for the release of the goods upon the payment of a 
deposit; would other forms of guarantees other than a deposit in cash be allowed 
as well, as discussed in Article 13 of the CVA?  
Answer:  
1. Article (24) of the Common Customs law (CCL) st ates the following:  
a. By virtue of the provisions of this Law or any other Law or resolution, the 
Customs Administration prohibits admission, transit or exit of the prohibited 
goods or infringing goods as well as the entry, transit or exit of any restrict ed 
goods except under approval from the competent authorities in the country.  
b. In regards of guarantees, Article 66 of the Common Customs law (CCL) 
provides that: "According to the rules and conditions prescribed by the director 
general, goods may be rel eased prior to payment of the customs duties and 
taxes and after completion of the customs procedures against bank, monetary 
or documentary guarantees, also Article 1 (General Provisions) of the Rules of 
Implementation (ROI) of the Common Customs Law conta ins the following 
guarantees: The importer may clear his goods after payment of the customs 
taxes "duties " under cash deposit, if the final determination of the value is 
prolonged.  
- Rules of Implementation  
6. Clause I.4, ROI, states that the exchange rate to  be used in the case of currency 
calculation should be the "exchange rate announced in bulletins issued by the 
competent agencies." Will Bahrain publish the agency and bulletin where this 
information can be found?  
Answer:  
The Central Bank of Bahrain is the  competent authority to determi ne currency exchange 
rates. The  lists of currency rates are published and circulated to commercial banks and 
money exchangers on a daily basis.  
7. Clause I.6, ROI states that the Article does not restrict the right of "Customs t o 
undertake whatever is necessary" to ascertain the validity or accuracy of 
information submitted to customs. What procedures does Bahrain envision will 
comprise these undertakings?  G/VAL/W/308  
 
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  Answer:  
Customs shall have the right to request the necessary documents to  verify the authenticity 
of the documents submitted, and may request documents in addition or approval from the 
competent authorities in the country of export or manufacture, as the case may be, to 
ensure that there is no tampering with these documents in accordance with Article 127 of 
the Common Customs law (CCL).  
8. Can Bahrain explain Clause I.7.A in light of Interpretive Note, Generally Accepted 
Accounting Principles 2, CVA?  
Answer:  
Bahrain shall apply generally accepted accounting principles in accordance  with paragraph 
1.7.A of the CCL, which is in line with the provisions of Article 2 of the Customs Valuation 
Agreement as it is intended to calculate the general expenses referred to in the Explanatory 
Notes for Articles 4 through 8.  
9. Clause I.7.B states th at Customs may not reject information prepared in 
accordance with the Generally Accepted Accounting Principles on the ground of the 
accounting principles used. May Customs still reject the information on other 
grounds?  
Answer:  
Customs may refuse informatio n provided by the importer if it is found to be incorrect or 
misleading and inconsistent with generally accepted accounting principles, and in accordance 
with Article 17 of the Customs Valuation Agreement.  
10. Clause II.1 defines "price actually paid or payabl e" to include payments made by 
the buyer "or under his knowledge." Could Bahrain clarify this phrase in light of 
Note to Article 1, Price Actually Paid or Payable 1, CVA?  
Answer:  
The price actually paid or agreed to be paid is the total amount paid or paya ble by the buyer 
to the seller or in his favour  against the imported goods in accordance with the explanatory 
note to Article 1 of the Customs Valuation Agreement.  
11. Clause II.4 defines "produced" to include "services, or intellectual products." 
Could Bahrai n explain this addition in light of the definition set forth in 
Article  15.1(c), CVA?  
Answer:  
Wherever the term "produced" is used in customs valuation, this includes services related to 
goods and intellectual property rights of industrial products that in clude intellectual property 
rights and services related to agricultural products provided by the producer such as 
cleaning and sanitizing crops and fruits or separating each seeds size of grains, fruits, etc.  
12. Please clarify the definition of "unit in great est aggregate quantity" as provided in 
Clause II.8 and explain its interpretation in light of the definition provided in 
Article 2, CCL.  
Answer:  
The meaning of " unit Price in greatest aggregate quantity " in accordance with the 
explanatory notes of the Cust oms Valuation Agreement is the price at which goods are sold 
in greatest aggregate quantity that is enough to determine unit price in transactions of sale 
to persons who are not related to the persons from whom they buy such goods, at the first 
commercial level after importation. In order to determine the " unit Price in greatest G/VAL/W/308  
 
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  aggregate quantity ", all transactions at a given price are taken into account, where all the 
units sold at this price are compared with transactions performed at other price and the  
largest number of units sold at one price, represents " unit in greatest aggregate quantity ". 
13. Clause IV.A.1 states that for transaction value to be applicable there may be no 
restrictions on the disposition or use of the imported goods by the buyer, "other  
than restrictions provided for in the GCC Common Customs Law." Please explain 
the limitation of this provision to customs law, given that Article 1.1(a)(i) of the 
CVA allows the use of transaction value regardless of any restrictions on 
disposition or use  imposed by the public authorities in the country of importation, 
not just restrictions required under the customs laws.  
Answer:  
Clause IV.A.1 to clarify this paragraph, it means that there are no restrictions applicable to 
the disposition or use of the im ported goods by the buyer, other than the following 
restrictions:  
- imposed or required by law or public authorities in the importing country ; 
- specifying the geographical area within which the goods may be resold ; and 
- which do not substantially affect the va lue of the goods.  
Noting that the law referred to is the Common Customs law (CCL).  
14. How does the ROI implement Article 1.2(a), CVA, which provides, "the fact that the 
buyer and seller are related within the meaning of Article 15 shall not itself be 
grounds for regarding transaction value as unacceptable"?  
Answer:  
Being related to the exporter is not a sufficient reason to reject the value, but in case of 
doubt that this correlation has affected the value, it is verified in two ways:  
(1) Examine the circumsta nces surrounding the sale process and whether it is in 
agreement with the sa le process of unrelated persons; and  
(2) Use the standard values of goods previously accepted (TEST VALUE), which is the 
most used.  
15. Clause IV.B.1 provides for additions to the pric e actually paid or payable for certain 
costs incurred by the importer . If the buyer is not the importer, how will Bahrain 
reconcile this clause with Article 8.1(a), CVA, for the addition of costs incurred by 
the buyer?  
Answer:  
There is no difference betwee n the buyer and the importer if the value of the imported 
goods and their additional costs correspond to the customs value and can be calculated and 
added to the transaction value . 
16. Clause IV.C.1.f provides an exclusion from transaction value for activities  
undertaken by the buyer on his own account. Does Bahrain interpret this exclusion 
to apply to activities undertaken by the buyer to the extent that there is not an 
adjustment to the price actually paid or payable in Article 8 of the CVA (see Note to 
Artic le 1, Price Actually Paid or Payable 2, CVA)?  
Answer:  
Clause IV.C.1 clearly identifies exceptions to the value of a commercial transaction and the 
mechanism for dealing with cases that fall under this concept, including those carried out by 
the buyer for a  private account.  It is not added in the event that they are specified in the 
invoice or can be distinguished from the price paid for the goods . G/VAL/W/308  
 
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  17. Could Bahrain further explain Clauses IV.C.2, 3, and 4, and provide further 
explanation as to Interpretive Ann ex provision IV.C.2 and how it is interpreted 
with Clause IV.C.2?  
Answer:  
Clauses IV.C. 2, 3 and 4 of Article 1 of the Rules of Implementation (ROI) clearly excluded 
these activities and did not add them to the value of the transaction, which includes:  
- Financial assets in the position of the seller for the importer ; 
- Export subsidies that have been provided by some countries for the  export of certain 
goods;  and 
- Any amounts against dumping . 
18. Under what authority are adjustments made to the transaction value of  identical or 
similar merchandise for the costs in Clause IV.B.1? Would such adjustments be 
made to the transaction value of identical or similar merchandise pursuant to 
Clause V?  
Answer:  
In the application of clause IV.B.1 of Article 1 of the (ROI) concer ning additions to the price 
actually paid or payable (adjustments), the text of paragraph V/A+B/Article I of the (ROI) is 
taken into account.  
19. Please clarify if the reference to identical or similar goods in Clause VI.1 means 
identical or similar imported g oods.  
Answer:  
The reference is made to the goods that have already been imported and are placed in a list 
of data that can be used for the purposes of the valuation when importing identical or similar 
goods.  
20. Please clarify how Clause VII.1.b is consistent with Note 4 to Article 6, CVA, which 
requires the importing country to use the producer 's actual figures, unless they are 
inconsistent with the usual amounts.  
Answer:  
The text of Clause (b) of paragraph (1) of Article (79) of the (ROI) is the same as the t ext of 
paragraph (b) of Article (6) of the Customs Valuation Agreement on the basis of calculating 
the customs value of imported goods according to the calculated value.  Accordingly notes 
on Article 6 of the CVA are taken into account in application, whic h provides for the 
introduction of actual and not the usual numbers.  
21. Please explain what is meant by the requirement of Clause VIII.a that the methods 
of valuation to be again applied sequentially, but "with reasonable flexibility". 
Does Clause VIII.a impl ement a provision of the CVA?  
Answer:  
The requirements of Article I/VIII/A of the (ROI) is based on the text of the CVA, which sets 
out the general framework for the concept of flexibility in the procedures and applications of 
valuation for customs purpose s, where "reasonable flexibility" is meant to refer to the 
application of customs valuation methods in sequence of the articles 1 -6 but flexibly , for 
example,  any waiver of some of the conditions mentioned in the methods of determining the 
customs value ba sed on Articles 1 to 6 which do not conflict with the general principles and 
provisions of the CVA , extending the period of 90 days to 180 days , or the acceptance of 
another country to product of id entical or similar goods… etc . G/VAL/W/308  
 
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  - Interpretive Annex  
22. IV.B.1 .i provides that buying commissions are not included in the customs value. 
Please clarify how this will be implemented. Would a buying commission be 
deducted if it has been included in the price actually paid or payable, or would it 
simply not be added to the price actually paid or payable?  
Answer:  
In the case of a purchase commission paid to the agent, the customs value shall not be 
added if it is possible to determine it accurately. The purchase commission is the amount 
paid by the importer to an agent an d is not normally included in the purchase invoice issued 
by the seller (exporter).  
23. IV.B.1.iv.B.2 provides that tools, dyes, moulds, and other similar items, when 
acquired from an unrelated seller, are valued at the cost to produce. Can Bahrain 
explain how  this provision is consistent with Note 2 to Article 8.1(b)(ii)?  
Answer:  
It is fully in compliance and there is no conflict between the two texts as long as the three 
conditions of addition are considered:  
- Paid by the importer ; 
- Not included in the invoice ; and 
- On an objective basis whose value can be determined.  
24. Is the explanation of reproducible works in IV.B.1.v.2 exemplary or limiting? If 
this is limiting, please explain how Bahrain sees such a limitation as consistent 
with the CVA?  
Answer:  
It is an exam ple rather than a constraint . 
25. Please clarify the intended meaning and effect of IV.C.1.d when it says "Share 
dividends must be distinguished from the proceeds since the proceeds represent a 
part of the proceeds due to the seller from any subsequent resale. " 
Answer:  
Dividends paid to shareholders in a business are not included in the customs value because 
they have nothing to do with imported goods.  
26. Please clarify how the provisions of V.A.5 and V.B.5 with respect to "same sale 
circumstances" would this be a pplied.  
Answer:  
The question is not clear.  
27. It appears that the examples from notes 2 and 3 to Article 5 of the CVA have been 
combined in VI.1.a; is this combination intentional?  
Answer:  
Yes. These examples have been added for clarification.  G/VAL/W/308  
 
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  Also, regarding  the following comment from the US with respect to document  G/VAL/W/217  
(Responses from Bahrain to the United States):  
28. It remains unclear in the answer to Question 3 if the experts consulted with are 
government officials  or independent experts. Please clar ify if non -government 
officials may be consulted by the valuation committee.  
Answer:  
The Committee may seek the assistance of those who it deems appropriate, whether 
experienced by governmental bodies or otherwise.  
__________