RESTRICTED  WORLD TRADE  
ORGANIZATION  G/VAL/M/38 
13 December 2004 
 (04-5473) 
Committee on Customs Valuation  
 
 
MINUTES OF THE MEETING OF 25 OCTOBER  2004 
 
Chairmen: Mr. Ivan Lee (Hong Kong China) and Robin Twyman (United Kingdom)  
 
 
 The agenda proposed for the meeting, circul ated in WTO/AIR/2405 and Add.1 was adopted 
as follows: 
 
I. ELECTION OF OFFICERS....................................................................................................2  
II. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON 
CUSTOMS VALUATION .......................................................................................................2  
III. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENT.................................................................................................................2
 
(i) Notification of national legislation ........................................................................................... ..2 
(ii) Notifications made by Developing Country Members ................................................................7  
IV. INFORMATION ON THE APPLICATION OF DECISIONS OF THE 
COMMITTEE ON CUSTOMS VALUATION......................................................................9  
V. TECHNICAL ASSISTANCE ..................................................................................................9  
VI. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF 
THE PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF 
CHINA .......................................................................................................................... ...........10  
VII. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN 
GOODS .......................................................................................................................... ..........11  
VIII.  INDIA - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN 
COMMUNITIES VALUATION POLICY...........................................................................12  
IX. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH AND TENTH ANNUAL REVIEWS OF THE IMPLEMENTATION AND OPERATION OF 
THE CUSTOMS VALUATION AGREEMENT.................................................................12
 
X. PRESHIPMENT INSPECTION ...........................................................................................13  
XI. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION (WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATE D ISSUES................................14
 
(i) Paragraph 8.3 of document WT/MIN/(01)/17...........................................................................14  
XII. OTHER BUSINESS................................................................................................................1 4 
(i) Date of the next meeting ....................................................................................................... ....14  G/VAL/M/38 
Page 2  
 
 I. ELECTION OF OFFICERS 
1.1. The Chairman
, Mr. Ivan Lee, recalled that the Chairman of the Council for Trade in Goods 
carried out consultations on a slate of names for appointment as Chairpersons of standing bodies for 
2004/2005 in accordance with the established guidelines  for the appointment of officers.  On the basis 
of this understanding reached, he  proposed that the Committee on  Customs Valuation (Committee) 
elect Mr. Robin Twyman, of the United Kingdom, by acclamation. 
 
1.2. The Committee so agreed  and Mr Twyman took over as Chairman for the remainder of the 
meeting. 
  
II. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS 
VALUATION 
2.1 The observer of the World Customs Organization
 reported on the activities of the Technical 
Committee and on the WCO technical assistance prog ramme on customs valuation.  This report is 
contained in Annex I.   
2.2 The Committee took note
 of the report. 
 
 III. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT 
(i) Notification of national legislation 
3.1 The Chairman
 recalled that Article 22 of the Agre ement on Customs Valuation (Agreement) 
required each Member to inform the Committee of an y changes in its laws and regulations relevant to 
the Agreement, and of any changes in the administra tion of such laws and regulations.  In addition, 
the Decision on Notification and Circulation of National Legislation, adopted by the Tokyo Round Committee, required each Member to notify its le gislation to the Committee.  He suggested that, 
under this sub-item, the Committee take up the legisl ations in sequence as listed in the agenda.  He 
further recalled that the notification of legislatio n by the Separate Custom s Territory of Taiwan, 
Penghu, Kinmen and Matsu had been presented to the Committee.  However, the examination of this 
notification remained suspended since the Comm ittee's meeting on 4-5 November 2002 pending 
resolution of the difference in view s between the parties involved on  notifications across the WTO.  
He noted his appreciation for the flexibility of the parties involved in allowing the Committee to 
proceed with the examination of other notifications.   
 
- Armenia 
 3.2 The Chairman
 recalled that at the last meeting, it was agreed to revert to Armenia's 
notification in document G/VAL/N/1/ARM/1 and G/VAL/N/2/ARM/1 at this meeting.  At the last 
meeting, the United States had stated that they were still waiting for replies to their questions to 
Armenia which were circulated in G/VAL/W/128.  Armenia had not been present at the meeting and 
the Committee agreed that the Secretariat should communicate with the delegation of Armenia.  Although the Secretariat had contacted the Armenian de legation in the intervening period, asking it to 
submit its responses and to be present in the mee ting, Armenia was not present and had not submitted 
its responses.   
 
3.3 The representative of the United States
 reiterated that they were looking forward to receiving 
responses to their questions and having an idea of when those responses would surface.     G/VAL/M/38 
 Page 3 
 
 
 3.4 The Chairman  suggested that the Secretariat may again communicate with Armenia.  
 
3.5 The Committee took note  of the statements made and agreed  to revert to this notification at its 
next meeting.  Any follow-up questions shou ld be submitted to the Secretariat before 
25 February 2005. 
 
- Burkina Faso 
 
3.6 The Chairman  recalled that at the last meeting the Committee took note of the statement made 
by the delegation of Burkina Faso about the continuation of minimum values, and, of the statements made by the United States, Canada, and European Co mmunities.  The Committee agreed to revert to  
Burkina Faso's notification, contained in document G/VAL/N/1/BFA/1, at this meeting.  Burkina Faso 
had not yet requested for a waiver concerning the co ntinuation of minimum values.  The delegation of 
Burkina Faso was not present. 
 
3.7 The representative of the United States
 stated that she would again ask Burkina Faso whether 
they intend to request a waiver for use of minimu m values, since the use of minimum values is not 
consistent with the application of the Agreement.  
 
3.8 The Committee took note  of the statements made and agreed  to revert to this notification at its 
next meeting.  Any follow-up questions shou ld be submitted to the Secretariat before 
25 February 2005.  
- China 
 
3.9 The Chairman
 recalled that the Committee agreed to revert at this meeting to the two 
outstanding Chinese notifications contained in documents G/VAL/N/1/CHN/2 and 
G/VAL/N/1/CHN/3.  China had also since notified further customs valuation regulation in document 
G/VAL/N/1CHN/4.  He also recalled that the review of China's legislation in document 
G/VAL/N/1/CHN/1 had been conclude d at the Committee's meeting in May 2003.  He then proposed, 
without prejudice to this notification’s earlier conc lusion, putting it back on the agenda of this 
meeting so that China would be able to give replies to the United States’ earlier questions.  For ease of 
reference, the United States had amalgamated all its questions in document G/VAL/W/137, which 
now contained the outstanding questions about doc ument G/VAL/N/1/CHN/1 originally submitted in 
document G/VAL/W/127, as well as outstanding questions about documents  G/VAL/N/1/CHN/2 and 
G/VAL/N/1/CHN/3, which were originally subm itted in document G/VAL/W/134.  China submitted a 
written reply to the US questions in document G/VAL/W/141. 
 
3.10 The Chairman  stated that in informal consultations, Members concerned had confirmed to 
him that cross-referencing between this item an d the Transitional Review Mechanism (TRM) was 
acceptable to them to avoid duplication of work and to avoid repeating earlier questions or answers.  
But they would wish to avoid questions on the same issues coming up under both Notification of 
National Legislation and the TRM.  He proposed therefore that for practical reasons, and without 
prejudice to members’ rights, issues dealt with un der this agenda item should not later be brought up 
in China’s TRM.  But if it became necessary the TRM could be suspended and momentarily the 
discussion reverted back  to the Notification of National Legislation agenda item.   
 
3.11 The representative of the United States  stated that document G/VAL/W/132 was a 
consolidation of the other submissions they had made , in an effort to engage with China on the TRM 
requirements.  She thanked the Chairman, and the form er Chairman, for their efforts, in working with 
their delegation and the Chinese delegation to return to the practice of dealing with notifications of 
legislation.  It was the expectation of every Member to receive written replies when submitting G/VAL/M/38 
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 written questions regarding notified laws and regulations and related practices  This practice was a 
hallmark of this Committee and had allowed constructive exchanges and greater understanding.   
 
3.12 She also stated that the United States had received written responses from China to their 
streamlined questions that morning.  They would review those responses and come back to them at 
the next meeting.  In addition, as part of their analysis of China's notification and for purposes of this 
agenda item, they had some reflections which they had not put in their original questions.  To these 
reflections China might react orally, as it was the practice of the WTO bodies and sub bodies that 
Members asked questions verbally, on the understanding that other delegations would respond 
verbally, or come back later if they were not ab le to.  She then requested China to confirm the 
following issues, hoping that China would give them quick responses, as it was a matter of 
confirmation of their reaction to some information they had received: 
 
(a) China's valuation regime does not involve th e use of reference prices, with additional 
confirmation that if such practice might arise it would be corrected.   
 (b) The United States had some reports from exporters about situations where China's customs 
was not treating software consistent with its co mmitments.  Therefore could the Chinese delegation 
confirm that the operation of China's customs valuation regime regarding software involves 
application of the decision regarding the valuation of  software and, also that China's valuation regime 
does not involve a practice of adding royalty and si milar fees to the dutiable value of software.   
 3.13 The representative of the European Communities
 stated that  the TRM was a very rewarding 
exercise to exchange views, whether it was  in the form of questions and answers or collateral 
exchanges.  Members were much better off now in terms of information available, than they would 
have been if they hadn't continued this exercise.  He appreciated the responses that they  had seen.   
 
3.14 He also stated that in document G/VAL/N/ 1/CHN/4, he had noticed that under Article 19.5 
concerning royalties and license fees, one of the co nditions in relation to payment of royalties which 
comes directly from Article 8 of the Agreement was that  the royalty payment must relate to the goods.  
That particular phrase did not seem to be, at least not  in English, reflected in the text.  In Article 18, 
paragraph 3, there is a phrase in English that says "are appropriate adjustments" whereas the 
Agreement says "unless there is appr opriate adjustment".  It would se em, to his delegation, that these 
were probably omissions in transposition of text but they had just wanted to point them out.  Further, 
Article 23 referred to the fact that the Customs va lue of import goods on lease shall be the rental 
determined by the customs.  He would assume that  any international norms on this issue, like WCO 
instruments, would be obviously recognised and fo llowed by the Chinese customs authorities.  He 
further had a comment or a question on exchange rates, but the question appeared to be already 
answered by China.  This again illustrated the u tility and benefit of having the fullest exchanges of 
information possible.  He added that one or two prov isions did not seem to be entirely consistent with 
the terms of the Agreement, but he would be re asonably confident that the Chinese authorities 
intended them to be so, and if that could be conf irmed now or later it would be fine, as far as his 
delegation was concerned. 
 
3.15 The representative of China  stated that with regard to the intervention made by the US 
delegation, his quick response was that first those Chinese notifications should be read very carefully.  
If they were not sure about the content of the En glish translation, they were advised to read the 
Chinese, to get the correct meaning in authentic form .  The Chinese legislation, their custom valuation 
and policy practice were consistent with the Agreemen t.  With regard to the verbal questions, posed 
by the US Delegate, he asked that they be submitte d in writing to China as soon as possible.  Once 
they received those questions in  written form they were going to consider what would be the 
appropriate next step to process them.  The third poi nt he wanted  to make with regard to the US 
submission was that prior to this session, his delegation had prepared some written answers on these  G/VAL/M/38 
 Page 5 
 
 
 points.  He also added that in consultation w ith the Chairman, his delegation had voiced some 
reservations about the way in which certain notifica tions were being dealt wi th, for instance, certain 
notifications had already been concluded in a previous session but again had been brought up in  this 
session.  He wondered as to what would be the impli cations of this kind of practice for the work of 
this Committee in the future. They hoped that this would not in any way affect the work of this 
Committee next year. 
   
3.16 With regard to the intervention by the EC delegation, he stated that, if the European 
Communities had some questions about the translati on of certain Chinese notifications submitted to 
this Committee, they were prepared to study those issues, but the EC was also advised to read the 
Chinese version, because only the Chinese versio n was applicable in China and that the English 
version, submitted to this Committee, was only for reference.  Regarding  other questions on 
substance, he requested the EC delegation to subm it written questions to th em, and then they would 
consider what was the next appropriate step to handle them.  
 
3.17 The representative of the United States  stated it implicitly appeared that China had made that 
confirmation on the US questions. Perhaps they  would be enlightened further by the written 
responses, with respect to the questions that they asked verbally today, by way of confirmation.  She 
also pointed out that the WTO is operating under three official languages, and that they could have 
constructive exchanges and greater understanding , if they pursued the follow-ups in English 
 3.18 The Chairman proposed
 that the Committee take note of the statements made and  revert to 
this agenda item at the next meeting.  Any follow- up questions should be submitted to the Secretariat 
before 25 February 2005. 
  
3.19 It was so agreed.  
 
- India 
 
3.20 The Chairman  recalled that it had been agreed to revert to India's notification in 
G/VAL/N/1/IND/3 which contained certain amendments to the Customs Valuation (Determination of 
Price of Imported Goods) Rules 1988, and India's re sponses to the Checklist of Issues contained in 
document G/VAL/N/2/IND/1and Corr.1.  India had replied to the oral questions from the European 
Communities and written questions from the United States in Document G/VAL/W/128 at the last 
meeting, and these responses had been circulated  in document G/VAL/W/133. The United States had 
raised further questions in document G/VAL/W/139.  
3.21 The Representative of India
 stated that they had received follow-up questions from the US 
and would respond to them in due course, as they had been forwarded to the capital and were being 
examined. 
 
3.22 The Representative of  the European Communities  thanked India for the verbal responses to 
their questions and also the written ve rsion they received after the last meeting. He stated that their 
interest in this issue remained undiminished and th ey looked forward to exploring it further, probably 
on the basis of the questions/responses from the US, and the Indian response to the US questions. 
They remained  interested in this amendment to the legislation.   
 
3.23 The Committee agreed  to revert to this legislation at the next meeting.  Any follow-up 
questions should be submitted to the Secretariat before 25 February 2005.  
 
 
 G/VAL/M/38 
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 - Mexico 
 
3.24  The Chairman
 drew Member's attenti on to Mexico's customs legislation contained in 
document G/VAL/N/1/MEX/1 and the English translation in document G/VAL/N/1/MEX/1/REV.1,  
which contained the customs laws of 15 December 1995 and 31 December 1996 and its regulations of    
6 July 1996, and also documents G/VAL/N/2/MEX/1 and G/VAL/N/2/MEX/1/Corr.1, which contained 
Mexico's responses to the check list of issues.  He further  stated that the questions asked by the United 
States at the last meeting about estimated prices and preshipment, and Mexico's replies, had been 
circulated in documents G/VAL/W/129 and G/VAL/W/132 respectively, while the subsequent 
questions of the United States were contained in document G/VAL/W/138.     3.25 The representative of Mexico
 thanked the United States for their questions and stated that 
they would be responding to them in due time as they had been  sent to the capital. 
 
3.26 The Committee agreed  to revert to this agenda item at its next meeting.  Any follow-up 
questions should be submitted to the Secretariat before 25 February 2005.  
- Paraguay 
 
3.27 The Chairman
 drew the attention of the Members to Paraguay's notification of its Customs 
Legislation in document G/VAL/N/I/PRY/1, which contains Decree No. 13721 of 3 July 2001 establishing supplementary regulations to Laws 260/93 and 444/94 and repealing Decree No. 7403/95.   
3.28 The Committee agreed
 to conclude the examination of the Paraguay legislation. 
 
- Peru 
 3.29 The Chairman
 recalled that at the last meeting the Committee agreed to revert to the Peruvian 
notification contained in document G/VAL/N/1/PER/2 at this meeting. This document contained the 
customs legislation in Supreme Decrees Nos. 203-2001-EF, 131-2000-EF, 186-99-EF, and 187-99-
EF.  
   
3.30 The Representative of the United States  stated that at the last meeting they had requested that 
this item be retained for this meeting, as they we re reviewing the notification.  She added that they 
would seek to keep the item open again, because they were seeking to review copies of laws 
mentioned within the document in order to have a full er understanding of what  had been  notified.   
 
3.31 The Committee agreed  to revert to this agenda item at its next meeting.  Any follow-up 
questions should be submitted to the Secretariat before 25 February 2005. 
 
- Philippines 
 
3.32 The Chairman  drew the attention of the Members to Philippines' responses to the Check List 
of Issues contained in document G/VAL/N/2/PHL/1.  
 
3.33 The Committee concluded  the examination of Philippine's legislation. 
 
- Tanzania   
3.34 The Chairman
  stated that Tanzania had also notified its responses to the Check List of Issues 
which were contained in document G/VAL/N/2/TZA/1.  
  G/VAL/M/38 
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 3.35 The Representative of the United States  took particular note of Tanzania's leadership in this 
area, and its commitment to the rules based trading system both in its implementation of the 
Agreement and  also in its active participation in this type of Committee work, like submission of a 
checklist.  
  
3.36 The Committee concluded  the examination of Tanzania's legislation. 
 
- Thailand 
 
3.37 The Chairman  recalled that at the last meeting, members agreed to revert at this meeting to 
Thailand's notification in document G/VAL/N/1/THA/ 1 and the responses to the Checklist of Issues 
in document G/VAL/N/2/THA/1.  He added that the Un ited States circulated questions to Thailand in 
document G/VAL/W/128, and Thailand’s replies had been circulated in document G/VAL/W/130.    
  
3.38 The representative of the United States  stated that at the last meeting, they indicated that they  
might have some follow-up questions  concerning Thailand's responses to their original questions.  She 
had submitted the follow-up questions to Thailand at the beginning of this meeting, regarding 
sufficient guarantees, in particul ar the requirements under Article 13 of the Valuation Agreement.  
The United States wanted to confirm their understanding of section 40 and section 112 of the 
Thailand Legislation that goods shall be released upon sufficient guarantee in accordance of Article 
13 of the Agreement.  She further stated that they also had some questions concerning the interpretative notes, and the checklist of issues.  Regarding the valuation of Carrier media bearing 
software for data processing equipment they  want ed to know whether Thailand applied Decision 4.1 
in its valuation practices, and, if not, did Thailand intend to adopt the decision.   
 
3.39 The Representative of Thailand
 stated that they would forward the US's follow-up question to 
their authorities in the capital and do their best to  answer them in written form in due course.   
 
3.40 The Committee took note  of the statements and agreed  to revert to the examination of this 
legislation at the next meeting.  Any follow-up questions should be submitted to the Secretariat before 
25 February 2005. 
 
3.41 In concluding this agenda item, the Chairman  urged those Members which had not yet 
notified their implementing legislation to do so as soon as possible. 
 
(ii) Notifications made by Developing Country Members 
3.42 The Chairman  drew Member's attention to document G/VAL/2/Rev.19 which contained the 
updated lists of all Members who had invoked specia l and differential treatment provisions under the 
Agreement.  In addition, he drew their attention to document G/VAL/W/76/Add.8 which contained an 
updated list of the active agreed extensions for the delay of the application of the Agreement or 
reservations to maintain a system of minimum values .  He suggested that the Committee take note of the 
information contained in these two documents. 
 
3.43 The Representative of the United States  stated that two documents, G/VAL/2Rev.19 and 
G/VALW/76/Add.8 concerned the status of the deci sions on the application of the Agreement by 
some developing country Members,  namely El Salvador, Guatemala,  Sri Lanka and Senegal, and She 
noted that with respect to these Decisions certain  requirements were to be complied with.  For 
example, Sri Lanka had to submit a work plan, whic h it had not submitted;  Senegal were to submit a 
report by 30 September on the status of its implementation of established minimum values for the 
listed products, which they had not.  Senegal was also obligated to publish information for 
determining the minimum values for the products listed by 30 June of this year and no information to G/VAL/M/38 
Page 8  
 
 that effect had been received. She further stated that El Salvador should have published information as 
required. 
 
3.44 The representative of El Salvador
 stated that in August 2004 they had submitted, the data 
relating to data sources, methodology basis, criteria and other relevant information, under the decision 
approved by the General Council on 8 July 2002 in document WT/L/476.  The information had been 
made available to the pu blic from the 17 October 2002 on the website of the General Customs 
Directive of their country. She also clarified that  the notifications submitted by El Salvador were 
contained in document WT/L/586–G/VAL/N4/SLV/2.  
 3.45 The representative of the United States
 thanked the delegation of El Salvador for submitting 
their report.  She requested that an Englis h version of the document be circulated. 
 
3.46 The Chairman  suggested that the Secretariat circul ate an English translation of the El 
Salvador notification as soon as possible, and th at the Secretariat would make contact with those 
Members concerned to update the information.    
3.47 The Committee took note
 of the statements made and accordingly agreed  to revert to these at 
the next meeting. 
 
- Extension of delay period  3.48 The Committee noted
 that under the sub-heading "extension of delay period", there was no 
request pending at the moment.  This would mean that all Members were implementing the Agreement. 
 
- Extension of Reservations under Minimum Values 
 
3.49 The Chairman  stated that since the last meeting of the Committee, there had been one new 
request from Sri Lanka for extension under Para II of Annex III which was contained in document 
G/VAL/W/140.  The committee, in its decision contained in document G/VAL/53, had allowed Sri 
Lanka to continue to use officially-established minimum values for the valuation for customs purposes, 
until  28 February 2005.  Sri Lanka had now requested  that she needed to continue with the minimum 
values for a period of 12 months from 1 March 2005.  The request had been made only recently and 
interested Members were consulting informally on this request.   
 
3.50 The Committee therefore agreed  to revert to this agenda item at a later date. 
 
- Notifications made under Committee Decisions on delay extensions and minimum values 
 
3.51 The Chairman  pointed out that under this sub-item, the Committee had to consider the 
notifications made under the Decisions concerning delay extensions and minimum value reservations.  
Guatemala (G/VAL/N/4/GTM/3)and El Salvador (WT/L/586-G/VAL/N/4/SLV/2) had made 
notifications under the decisions granting them minimum values, while the United Arab 
Emirates(G/VAL/N/4/ARE/1) had made a notification under the decision granting it a delay extension.  
   
3.52 The representative of the European Communities  thanked the UAE for the information 
submitted by them, and stated that at this stag e it was important to note that they were now 
implementing the Agreement, looking beyond the te chnical issues mentioned as reasons for further 
preparation which in many cases would anyway be resolved. While the implementation of this 
Agreement had to be done with good and timely prep aration it probably was not a great idea to posit 
implementation on the basis of certain tools which were not indispensable to apply the Agreement.  
  G/VAL/M/38 
 Page 9 
 
 
 3.53 The representative of Canada  thanked Guatemala, UAE and El Sa lvador in particular for their 
notifications and for the information they had provided.  He felt that this information on the delay 
extensions or the minimum value reservations of the Agreement was important not just for reasons of 
transparency, but also important in terms of assisting the country concerned in continuing with its 
reforms to put in conformity its legislation with the terms of the Agreement.   Even though the UAE's 
notification did not necessarily follow requirements of the decision, it was still quite useful, as it 
revealed the measures taken by the Member, and, it al so  enabled other countries to assist with a view 
to making the legislation in conformity with th e provisions of the Agreement. He supported the 
statement made by the United States (see paragr aph 3.45 above), with respect to the reporting 
requirements that should be ob served by the Members concerned , and updating of information by the 
Secretariat.   He would like to see others also providi ng such information to the Secretariat.  
 
3.54 The Chairman  asked the Secretariat to write to those Members concerned reminding them of 
their reporting responsibilities. 
 
3.55 The Committee took note  of the statements made. 
 
 IV. INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE 
ON CUSTOMS VALUATION 
4.1. The Chairman
 informed the Committee that under this agenda item, the Committee noted any 
new notifications of application of the Decisions of the Committee on Customs Valuation on the 'Treatment of Interest Charges in the Customs Value of Imported Goods' and on the 'Valuation of 
Carrier Media Bearing Software for Data Processing Equipment', both adopted by the Committee and 
contained in document G/VAL/5.  China and Turkey had notified their application of these two 
Decisions in documents G/VAL/N/3/CHN/1 and G/VAL/N/3/TUR/1 respectively.  Document 
G/VAL/W/5/Rev.15 had been updated to include these two notifications. 
 4.2  The Committee took note
 of this information. 
 
 V. TECHNICAL ASSISTANCE 
- Information on Technical Assistance 
 
5.1 The Chairman
 explained the Members that under this item the Secretariat usually informed 
Members of the technical assistance activities carried  out under the auspices of the WCO.  Document 
G/VAL/8/Add.13 contained the most recent information, reported at the 18th Session of the Technical 
Committee, on technical assistance activities carr ied out by the WCO Secret ariat or WCO Members. 
  
5.2 The Committee took note  of the information. 
 
- Article 20.3 Technical Assistance a nd Trade-Related Technical Assistance 
 
5.3 The Chairman  recalled that, under this sub-item, the Committee had adopted a Work 
Programme on Technical Assistance for Capacity Building as Regards the Implementation and 
Administration of the WTO Agreement on Cu stoms Valuation, contained in document 
G/VAL/W/82/Rev.1.  However, customs valuation technical assistance had now been incorporated in 
a new WTO wide program designed to streamline technical assistance requests into one annual 
technical assistance plan.  In this connection, Members had noted the need to avoid having two 
parallel and repetitive exercises.  The Committee on Trade and Development was in the process of 
finalizing the WTO Technical Assistance plan for 2005  contained in document WT/COMTD/W/133 G/VAL/M/38 
Page 10  
 
 and it was likely  that the plan would be approved  at its meeting  scheduled for November 16.  He 
added that due to limited resources there would be  only be 3 regional or sub-regional seminars in 
customs valuation next year.  Countries would be  entitled to submit reques ts for ad hoc national 
activities, however, due to the limited resources each  developing country could request only 2 ad hoc 
seminars and LDCs may request 3, so it would be important for Members to carefully determine their 
priorities.  
  
5.4 The Chairman
 also stated that at the last meeting of the committee, Members were 
encouraged to inform the Committee of technical as sistance and capacity building activities that they 
were providing on bilateral or other fronts.  The Committee had not received any notifications of new 
activities, but he looked forward to the Committee r eceiving them, either orally under this agenda 
item or in writing, in due course. 
   
5.5 The representative of the European Communities  emphasized that the technical assistance 
aspect of custom valuation  still remained important  for this Committee. He welcomed  all initiatives 
taken by either WTO or WCO or any other interna tional organizations which tried to keep a certain 
level of dynamism in the supply and management of technical assistance.  While there was still a need 
for basic technical assistance, many countries including those who are relatively new to applying this 
Agreement, had moved on to some extent that ther e was perhaps a need for an intermediate level of 
technical assistance that would build on the countries' actual experience. He would be interested to 
hear experiences of donors or suppliers of techni cal assistance who had established programmes and 
delivery techniques that take this into account.  Whereas we tended sometimes to see too much of the 
basic technical assistance, there was at this stage perhaps a need to move on, certainly for several 
countries that have done very well and have quite  advanced their application of the Agreement. 
 
5.6 While referring to the request for information, he stated that technical assistance on valuation 
may be part of more integrated programmes or complete customs management programmes, and 
sometimes it was difficult to differenti ate or distinguish that part of an overall package. In the future it 
was also more likely that  technical assistance on valuation would be part of larger delivery 
programmes, which were probably in the long-run a more effective means of delivering technical 
assistance in valuation.  He appreciated the fact th at this item remained on the agenda as it gave a 
chance  to see if there were new things that would ne ed to be said or done.  He also noted that, some 
countries were particularly good as donors and what they were doing was certainly appreciated. 
 
5.7 The Committee  took note of the statements. 
  
VI. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF THE 
PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
6.1  The Chairman 
recalled that in accordance with paragr aph 18 of the Protocol of Accession of 
the People's Republic of China, the Committee was to  report to the Council for Trade in Goods on the 
outcome of this Transitional Review Mechanism (TRM), which would then report to the General 
Council.  The Committee had conducted its second TRM at the last meeting in October 2003, where 
China had explained the implementation of its commitments with regard to the Agreement on 
Customs Valuation and responded to the questions raised. 
 
6.2 The Chairman  reminded Members that China was content to cross-reference between 
Notification of National Legislation and this item (T RM) so as to avoid duplication of work and to 
avoid repeating earlier questions or answers, but that China wished to avoid questions on the same 
issues coming up under both Notification of Nation al Legislation and the TRM.  He also reminded 
members that for practical reasons, it had been agreed that if it became necessary, the TRM could be 
suspended and the discussion momentarily reverted back to the Notification of National Legislation  G/VAL/M/38 
 Page 11 
 
 
 agenda item.  He also noted that China had s ubmitted information required in Annex 1A to the 
Protocol of Accession of the People's Republic of China.  
 
6.3 The representative of China  explained its implementation of the Agreement on 
implementation of Article VII of GATT 1994, and the relevant accession commitment since the last 
transitional review.  He stated that on 29 October 2003, the State Council of China amended the 
Regulations on Import and Export Tariffs of the Peop le's Republic of China, which entered into force 
on 1 Jan  2004.  The amendment of this piece of legislation led to some revisions of the structure and 
working concerning the part on customs valuation, so as to bring them into full conformity with the 
relevant provisions governing the procedure and me thodologies of valuation set forth in the Customs 
Valuation Agreement.  
6.4 He further stated that China had honoured its commitment under Paragraph 143 of the 
Working Party Report on the Accession of China.  Since 11 December 2003, China had started to 
apply the  provision of the Decision on the Treatment of Interest Charges in Customs Value of 
Imported Goods, and the Decision on the Valua tion of Carrier Media Bearing Software for Data 
Processing Equipment.  The application of the two deci sions was notified to this Committee on         
25 February 2004.  To ensure smooth implementation  of the two decisions, the customs authorities of 
China had solicited extensively the views from the importers and other stake holders of the business 
community, and had made careful preparations.  So  far the implementation of the two decisions had 
turned out to be pretty smooth.  6.5 He also added that prior to this session, China submitted to this Committee relevant 
information on valuation methods pursuant to Annex 1A of China's Accession Protocol, which 
offered a comprehensive account of their implementation efforts.  Further information on this subject 
matter was also accessible through visiting the official website of China General Customs 
Administration at www.customs.gov.cn.  He hoped that this presentation could help Members better 
understand the development of customs valuation administration in China, and that they were willing 
to continue the exchange with others on the issues of common interest.   
 
6.6 The representative of the United States
 stated that as indicated in the Chairman's opening 
remark, the Committee had to submit a report on this process under the terms of the Chinese 
Accession Protocol.  The US continued to hold the view that the TRM could be a useful exercise for 
both China and other WTO Members as the mechan ism allowed them to exchange information, 
review implementation progress and cl arify points of argument or disagreement.  She added that the 
focus in the past year had been on obtaining clarif ication on China's regulations.  The United States 
had submitted some questions under the notification for legislation and appreciated receiving 
responses from China, without prejudice to the requirement of the TRM exercise, and the views they 
might expect in future under the TRM item.   
 
6.7 The Chairman proposed  that the Secretariat prepare a short factual report, under his 
responsibility, referring to the minutes of the mee ting for further detail, to be sent to the CTG.  
 
6.8 The Committee so agreed  and the TRM was concluded . 
 
 
VII. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN GOODS 
7.1 The Chairman  drew Members' attention to document G/VAL/W/135 which contained the draft 
report of the Committee to the Council for Trade in Goods.  He asked Members for comments. 
 G/VAL/M/38 
Page 12  
 
 7.2 The representative of the United States
 stated that in addition to the separate report 
concerning the TRM, the TRM carried out in this se ssion would be reflected  in the overall report of 
the Committee. 
 
7.3 The representative of Mexico  stated that given the new situation on their notifications, the 
English version should have N/A or non-applicable written in the blank column next to Mexico's 
name. 
 
7.4 The Chairman proposed  that the Committee take note of all statements made and the 
Secretariat would revise the document to take the co mments into account, including a reference to the 
fact that the TRM had been carried out in this session.   
7.5 The Committee so agreed
. 
  
VIII.  INDIA - INFORMATION ON CERTAIN ASPECTS OF THE EUROPEAN 
COMMUNITIES VALUATION POLICY 
8.1 The Chairman  recalled that it was agreed to revert to th is item at this meeting.  The European 
Communities' replies to the questions posed by Brazil (G/VAL/W/122), had  been circulated in 
document G/VAL/W/131.   
   
8.2 The representative of Brazil  stated that the agenda item was of great interest to them and was 
still being reviewed in the capital.  He requested that th is agenda item be reverted to at the next meeting.   
 
8.3 The representative of the European Communities  stated that Brazil had received full 
responses to their questions, contained in docu ment G/VAL/M/131.  He wo ndered whether such long 
delays had to exist between the response to questi ons and reaction to the response.  Although Brazil 
had said that they had a great interest in this i ssue, it was a minor technical regulation and ten years 
old.  Members also have had a pretty good exchange of information on this matter, taking further into 
account the information provided to India.  The coverage of the issue had been comprehensive, and 
hardly much more could be said about it.  There had not been any hint of a problem with respect to 
customs valuation.  He then asked Br azil to reflect a bit further to see if this interest could really be 
sustained.    8.4 The representative of Brazil
 stated that if in the mean time they received from their capital 
any indication that they did not want to revert to the issue, they would immediately inform the 
European Communities and the Secretariat. 
 
8.5 The Committee agreed  to revert to this item at the next meeting.  Any follow-up questions 
should be submitted to the Secretariat before 25 February 2005. 
 
 IX. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH AND TENTH ANNUAL 
REVIEWS OF THE IMPLEMENTATION AND OPERATION OF THE CUSTOMS 
VALUATION AGREEMENT 
9.1 The Chairman
 recalled that at the last meeting, the Committee took note of the six documents 
containing the Fourth through Ninth Annual Reviews in documents G/VAL/W/29, G/VAL/W/43, 
G/VAL/W/77, G/VAL/W/89, G/VAL/W/109 and G/VAL/W/124.  It had been agreed that this matter 
would be referred to this meeting. The Committee also had before it today the Tenth Annual Review 
in G/VAL/W/136. 
  G/VAL/M/38 
 Page 13 
 
 
 9.2 The representative of India  informed  the Committee that her delegation was engaged in the 
examination of the issues contained in these a nnual reports, and was re viewing this matter in 
consultation with the capital, and would like to revert to it in the next meeting. 
 
9.3 The Committee took note  of the statements made and agreed  to revert to the Fourth through to 
the Tenth Annual Review at the next meeting. 
 
 
X. PRESHIPMENT INSPECTION 
10.1 The Chairman  recalled that, following adoption of th e final report of the Working Party on 
Preshipment Inspection (PSI) in document G/L/300, the General Council agreed that future 
monitoring of the Agreement on PSI should be undertaken initially by the Customs Valuation 
Committee, where PSI would be a standing agenda item.  At the last meeting, Members were 
reminded that, according to Article 6 of the Ag reement on PSI, the Ministerial Conference was 
obliged to review the provisions, implementation an d operation of this Agreement "at the end of the 
second year from the date of entry into force of the WTO Agreement on PSI and every three years 
thereafter…"  He further recalled that the first re view was carried out from 1996 through 1999, and 
asked the Committee to consider, for discussion, tw o questions:  whether it was desirable to carry out 
a second review of the Agreement on PSI, given the obligation under this Agreement and the fact that 
a second review called for every three years therea fter was overdue; and secondly if a review was 
desirable, in which body of the WTO should this review be conducted.   10.2 It was noted that the requirement for the review arose from the mandate in Article 6 of the 
Agreement on PSI and it had not in any way been af fected by the first Review nor the reports of the 
Working Party that carried our the Review.  In reply to the second question about whether this 
Committee had a mandate to carry out this Review, it was noted that one of the recommendations of the 
Working Party was that "future monitoring of the Agreement (on PSI) should be undertaken initially by 
the Customs Valuation Committee, and that PSI should be a standing agenda item.".  This recommendation had been subsequently endorsed by the General Council.  The Committee had 
therefore agreed at the last meeting that the Chairman should carry out informal consultations on the 
interpretation of the word "initially" used in the co ntext of the recommendation of the Working Party on 
Preshipment Inspection contained in its report to  the General Council in document G/L/300.   
 10.3 The Chairman 
explained to Members that, an earlier dr aft of the final report of the Working 
Party to the General Council contained in document G/PSI/WP/W/24 stated  in paragraph 23,  that 'The 
Working Party further recommends that future monitoring of the Agreement should be undertaken 
initially by the Customs Valuation Committee, and that  PSI should be a standing agenda item.  In the 
next review of the Agreement, as  foreseen under Article 6 of the Agreement, Members will decide 
whether monitoring of the Agreement should remain in this Committee or be moved to the Market 
Access Committee.'  The final report contained in do cument G/L/300 in paragraph 23, stated that `'The 
Working Party further recommends that future monitoring of the Agreement should be undertaken 
initially by the Customs Valuation Committee, and that PSI should be a standing agenda item.'  He 
noted that the last part of paragraph 23, referring to the next review and the Market Access Committee  
had been deleted  while the word `initially´ in the first part of  paragraph 23, remained in the final report. 
 
10.4 The Chairman  then encouraged Members to submit their ideas to the Secretariat for 
circulation before 25 February 2005, for di scussion at the next Committee meeting. 
  
10.5 The Committee took note
 of the statements made and agreed  to revert to this issue at the next 
meeting. 
 G/VAL/M/38 
Page 14  
 
 XI. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION 
(WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES 
(i) Paragraph 8.3 of document WT/MIN/(01)/17  
11.1 The Chairman
 recalled that our mandate, as set out in paragraph 8.3 of the Implementation 
Decision of the Doha Ministerial Declaration, was 'to identify and as sess practical means' to address 
concerns on the accuracy of declared values, including 'the exchange of information on export values and to report to the General Council by the end of 2002 at the latest.'  He also recalled, that the 
General Council at its meeting in December 2002 authorized the Committee to continue its work 
under the existing mandate and to report back to the General Council once its work had been 
completed.  The General Council Decision adopted on 1 August 2004 (WT/L/579) had instructed the 
Trade Negotiations Committee, negotiating bodies an d other WTO bodies concerned to redouble their 
efforts to find appropriate solutions as a priority. 
 
11.2 The Technical Committee on Customs Valuation had submitted Guidelines on the 
development and use of a national valuation database as a risk assessment tool, as a complement to 
its responses submitted in May 2003(G/VAL/54) to the terms of reference made to it in document G/VAL/51 regarding concerns on the accuracy of th e declared value.  These guidelines had been 
circulated in document G/VAL/54/Suppl.1.  
 
11.3 The representative of India
 recalled the discussions that had been taking place in this 
Committee, and the formal and th e informal consultations which had been held by the former 
Chairman, which had worked well and were coming to  some sort of constructive solution.  She had 
received information from her authorities that they had tried to make use of the procedure or the 
mandate which had been given to Members by Ministers, as contained in paragraph 8.3 to seek 
information from certain custom administrations. Th ey had sought information in seven cases this 
year in line with the WCO guide, but no inform ation had been forthcoming.  This had been 
communicated by her authorities as a response to a questionnaire which had been circulated by the 
WCO.  She understood that the Chairman would be continuing to undertake  informal consultations in 
the matter, and they could revert to it when he started this process.   
 
11.4 The Chairman  stated that he intended to carry out informal consultations, as proposed, among 
interested members.  11.5 The Committee took note
 of the statements made and agreed  to revert to this item at the next 
meeting. 
 
 
XII. OTHER BUSINESS 
(i) Date of the next meeting 
12.1 The Chairman  informed Members that the next meeting of the Committee was scheduled for      
5 April 2005. 
  
12.2 The meeting was adjourned.   G/VAL/M/38 
 Page 15 
 
 
 ANNEX I  
 
 
Report to the Committee on Customs valuation on the work of the Technical Committee on 
Customs Valuation and on technical assistance. 
 
(October, 2004) 
   Since the last meeting of the Committee on Customs Valuation, the Technical Committee on 
Customs Valuation (Technical Committee)  has held two sessions i.e. the 18
th (29 March – 2 April 
2004) and the 19th (18 – 21 October 2004). 
  This report pertains to the results of th ese two sessions and to the WCO Secretariat’s 
programme of technical assistance in the field of Customs valuation. 
 
 
Guidelines on the development and use of a National Valuation Database as a Risk 
Assessment Tool.  
 
 You will certainly recall that within the framewo rk of the Terms of Re ference assigned to the 
Technical Committee relating to con cerns as to the accuracy of the declared value, the Committee on 
Customs Valuation had asked the Technical Committ ee to intensify its efforts towards finalising the 
Guidelines on Databases. 
  Thus, on the basis of the Draft Guidelines on the development and use of a national valuation 
database as a risk assessment tool examined at the 17
th session, the Technical Committee accelerated 
its work and dealt with this matter as a priority item at its 18th session. The Technical Committee was 
able to overcome any remaining divergence of opinio n and reach a consensus on a certain number of 
questions. Examination of the Draft Guidelines was therefore concluded at the 18th session. 
 
 After adoption by the WCO Council at its June  2004 sessions, the text of the Guidelines on 
the development and use of a national valuation databa se as a risk assessment tool was transmitted by 
the Chairperson of the Technical Committee to the Chairman of the Committee on Customs 
Valuation, supplementing the response to the af orementioned Terms of Reference that the WCO 
Technical Committee on Customs Valuation had se nt to the WTO Committee on Customs Valuation 
in May 2003. 
 
  Technical and Administrative Matters
 
 
 At the 18th and 19th sessions, the Technical Committe e examined technical questions 
submitted by Members; i.e. a question submitted by Ug anda concerning “importations by sole agents, 
sole distributors and sole concessionaires”, a question submitted by the European Communities 
relating to the expression “sold for export” and a question submitted by Colombia relating to “the valuation treatment of price infl uenced importations fro m related parties”. In this regard, the 
Technical Committee expressed its opinion on th e question raised by Colombia and decided to 
continue examination of the questions raised by Uganda and the EC at the 20
th session. 
 
 Members of the Technical Committee also discussed the importance of the question concerning royalties and license f ees and the need to ha ve more detailed disc ussions thereon. The 
Technical Committee thus decided to pursue examination of this question at the 20
th session G/VAL/M/38 
Page 16  
 
  
 The Technical Committee also examined two administrative questions relating to the adoption 
and application of the Agreement i.e. revision of the Valuation Compendium and of the Customs 
Valuation Control Handbook. Foll owing examination of these questions the Technical Committee 
adopted the draft Topical Index which will be inco rporated in the Customs Valuation Compendium 
and decided to review the Customs Valuation Control Handbook and to continue discussion on the 
way in which to carry out this review and the scope thereof at the 20
th session. 
 
 
 Technical Assistance and Capacity Building.  
  Since our last report to the Committee on Customs Valuation, the WCO Secretariat has 
conducted a national capacity building and technica l assistance mission in Malaysia and a regional 
workshop in Indonesia. In addition four regiona l seminars intended primarily for Members in the 
Europe region were organised at  the WCO’s Regional Training Centres in Baku, Budapest and 
Moscow.  
 
 Theme Meetings
 
 
 The first two days of the Technical Committee’s 18th session were devoted to the Fourth 
Theme Meeting the subject of which was “In-depth discussion on Articles 1, 8 and 15 of the WTO Valuation Agreement”. Representa tives from developed and developing countries and the ICC gave 
presentations and participated in panel discussions on four topics i.e. “Article 1: Working with related 
party transactions”; Article 15: Sole agents, sole  distributors and sole concessionaires; Article 
8.1(b):“assists” and its applicati on; and Article 8.1(c): Royalties and license fees and its application”. 
The theme meeting led to extremely useful and c onstructive deliberations on some of the most 
complex issues relating to interpretati on and application of the Agreement. 
 
 At the 19
th session the Technical Committee examined and confirmed the programme for the 
theme meeting which will take place at the 20th session. The topics to be discussed are “Transfer 
Pricing and Valuation of Software”. 
 
 
 WCO e-learning programme  
  In addition to the traditional material used for capacity building, the WCO Secretariat has 
developed an interactive training course on Customs valuation. This course is part of the WCO e-
learning programme and contains lessons dealing with the provisions of the WTO Valuation 
Agreement and numerous multimedia products such as quizzes and interactive practical cases.  
 
 
 Elections
 
 
 At the 18th session, the Technical Committee proceeded with the election of officers. Madame 
H. Azizi (Kingdom of Morocco) was thus re-elected for a second term as Chairperson and Mr. O. 
Mbengue (Senegal) and Mr. I. Cremer (United Kingdom) were elected as Vice-Chairmen. 
 
________