RESTRICTED  WORLD TRADE  
ORGANIZATION  G/VAL/M/42 
14 December 2006 
 
 (06-5991) 
Committee on Customs Valuation  
  
 
MINUTES OF THE MEETING OF 6 OCTOBER  2006 
 
Chairman: Diana Reaich (New Zealand)
 
  
 The agenda proposed for the meeting, circ ulated in WTO/AIR/2895 was adopted as follows: 
 
I.
 REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON 
CUSTOMS VALUATION .......................................................................................................1  
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF 
THE AGREEMENT.................................................................................................................2  
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE 
COMMITTEE ON CUSTOMS  VALUATION......................................................................4  
IV. TECHNICAL ASSISTANCE ..................................................................................................5  
V. QUESTIONS TO THE DELEGATION OF COLOMBIA REGARDING 
CERTAIN CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS 
FROM PANAMA AND OTHER WTO MEMBERS ............................................................5  
VI. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF 
THE PROTOCOL OF ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA .......................................................................................................................... .............7
 
VII. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN 
GOODS .......................................................................................................................... ............9  
VIII.  FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, 
ELEVENTH AND TWELFTH ANNUAL REVIEWS OF THE IMPLEMENTATION AND OPERATION OF THE CUSTOMS VALUATION AGREEMENT ...................................................................................................................... ..10
 
IX. PRESHIPMENT INSPECTION ...........................................................................................10  
X. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION 
(WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES................................11  
A. PARAGRAPH 8.3 OF DOCUMENT WT/MIN/(01)/17 ...................................................................11  
XI. OTHER BUSINESS................................................................................................................1 2 
A. DATE OF THE NEXT MEETING ....................................................................................................12  
 
I. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS 
VALUATION 
1.1 The Chairman  informed Members that the representa tive of the World Customs Organization 
did not attend this meeting because the Technical Co mmittee had not met since the last meeting of the 
WTO Committee.  Information about the 21st and 22nd sessions of the Technical Committee was G/VAL/M/42 
Page 2  
 
  reported at the April meeting of the WTO Committee; information on the 23
rd Session will be 
provided at the next meeting in 2007.    1.2 The Committee took note
 of the information. 
 II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT 
(i) Notification of national legislation 
2.1 The Chairman
 recalled that Article 22 of the Agreem ent on Customs Valuation (hereafter, the 
Agreement) required each Member to inform th e Committee of any changes in its laws and 
regulations relevant to the Agreement, and of an y changes in the administration of such laws and 
regulations.  In addition, the Decision on Notifi cation and Circulation of National Legislation, 
adopted by the Tokyo Round Committee, required each Member to notify its legislation to the 
Committee.  She suggested that, under this sub- item, the Committee take up the legislations in 
sequence as listed in the agenda.  She further recal led that the notification of legislation by the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu had been presented to the 
Committee.  However, the examination of this no tification remained suspended since the Committee's 
meeting on 4-5 November 2002 pending resolution of  the difference in views between the parties 
involved on notifications across the WTO.  She noted  his appreciation for the flexibility of the parties 
involved in allowing the Committee to proceed with  the examination of other notifications.   
 
- Thailand  
2.2 The Chairman
 recalled that at the last meeting, Members agreed to revert to Thailand's 
notification in G/VAL/N/1/THA/1 and the responses to  the Checklist of Issues in G/VAL/N/2/THA/1.  
The United States circulated questions to Thaila nd in G/VAL/W/128, and Thailand’s replies were  
circulated in G/VAL/W/130.  Follow-up questions  from the United States were circulated in 
document G/VAL/W/143.  2.3 The representative of Thailand
 informed Members that her customs authority had provided 
answers to the US questions yesterday.  These had also  been circulated to Members at this meeting.  
Her delegation hoped that the US  would be satisfied with these answers and that they would 
adequately convince Members that Thai custom s valuation regulations and practices were in 
accordance with the WTO Customs Valuation Ag reement.  Should Members require further 
information, her delegation was ready to comply.  2.4 The representative of the United States
 thanked Thailand for the responses which her 
delegation would need to study.  She asked that the Committee revert to this matter at the next 
meeting so that her delegation could react to the responses.  2.5 The representative of the European Communities
 also looked forward to studying Thailand's 
responses.  His delegation had heard informally that , in Thailand, new draft legislation had appeared, 
which would actually update and revise at least Article 11 bis, which had come under questioning in 
the Committee.  His delegation looked forward to read ing about this legislation in the responses.   
 2.6 The representative of the Philippines
 raised the valuation of Phi lippine cigarette exports to 
Thailand under this agenda item in the interest of time and efficiency.  Her embassy in Bangkok 
reported that, in recent months, a number of articl es published in Thai newspa pers had quoted Finance 
Ministry officials as saying that "big cigarette importers" had under-declared their imports, resulting 
in a significant drop in revenue collection by its  Excise and Custom Departments.  On 11 August 
2006, Thai Customs unexpectedly ruled that an "int erim import valuation solution" would be imposed  G/VAL/M/42 
 Page 3 
 
 
  on imported cigarettes.  That solution, which resulte d in an uplift in the customs value of between 
13 and 16 per cent, did not cite a reason or basis for the uplift.  On 15 August 2006, the cigarettes were only able to clear Thai customs when the importer posted bank guarantees, under protest, which 
eventually cost the importer roughly USD 37.6 milli on per annum in incremental taxes and duties.  
While trade in cigarettes between the Philippin es and Thailand took place under the auspices of the 
Common Effective Preferential Tariff (CEPT) A SEAN Free Trade Area (AFTA), the matter of 
valuation remained clearly within the multilateral real m.  In fact, the valuation method that applied to 
Philippine cigarettes was a combination of methods 6 and 7 of the Customs Valuation Agreement.   
 2.7 From the start of its cigarette exports to Thailand a few years ago, Thai Customs had ruled 
that the transaction value was not a credible basis for valuation.  On 18 September 2006, her 
delegation had been further informed that the Dir ector-General of the Thai Excise Department had 
issued a "Notification" that required an increase in  the maximum retail price of imported cigarettes, on 
which basis 270% value-added tax was calculated.   Her delegation understood that cigarettes 
produced locally in Thailand were not covered by th e "Notification".  While this last point was a 
national treatment issue involving excise taxes and should perhaps be raised in another WTO forum, 
her delegation requested Thailand, if possible at this  meeting, to first, explain why the customs value 
of Philippine cigarette exports coul d not be determined from the transaction value;  second, clarify the 
basis for the 11 August uplift in the customs value;  and lastly, assure the Philippines that Thailand 
was properly implementing its commitments unde r the WTO Agreement on Customs Valuation, 
including those prohibiting the use of minimum and fictitious values.  Finally, her delegation reserved 
its rights to pursue this matter in this Committe e or in any other body of the WTO as appropriate. 
 2.8 The representative of the United States
 noted that the US had longstanding general concerns 
over the use of reference pricing and reiterated its continuing c oncerns about the Thai customs 
valuation regime, noting that it extended across numer ous product sectors.  Her delegation was also  
interested in Thailand's responses to the questions raised by the Philippines. 
 2.9 The representative of Switzerland
 said that his delegation also had some general and systemic 
concerns on the issue.  It listened carefully to the po ints raised by the Philippines and was interested in 
knowing more about this issue including the fo llow-up replies to be provided by Thailand. 
 
2.10 The representative of Thailand  provided an initial response based on information received 
from her customs authorities.  Thailand did not have laws or regulations that provided for the use of 
minimum values to calculate customs values.  Fo r this case, Thai customs authorities had received 
information that the declared value of the imported product (the cigarettes) was inaccurate and that the 
relationship between the buyer and seller influen ced the transaction value because it was a transaction 
between sister companies.  According to th e WTO Customs Valuation Agreement, customs 
authorities had the right to verify the accuracy of  statements and declarations presented for customs 
valuation purposes.  Authorities also had the right to  examine customs values that may be influenced 
by related persons, in light of information provided  to authorities.  Thai customs authorities initiated 
an examination of this matter and, as required by  the CVA, provided the importer in question with 
every opportunity to submit information to clarify th e issue and to verify the transaction value of its 
imports.  Nevertheless, the importer had not provi ded information as required, thereby delaying the 
final customs value determination.  In the interi m, the importer had elected to instead provide a 
guarantee to withdraw its goods from customs, as pr ovided for in Article 13 of the Agreement.  
Because the customs authorities had not yet been able to verify the accuracy of  the declared value in 
question, the interim value applied for guarant ee purposes was that of identical goods.  She 
emphasised that this interim value was temporar y and applied for guarantee purposes only until the 
accurate customs value could be determined.  In th is regard, her delegation urged the Philippines and 
any interested Members to provide information th at would help Thai Customs to determine the 
accurate customs value.  G/VAL/M/42 
Page 4  
 
  2.11 The representative of the Philippines
 asked for a written version of the Thailand's comments.    
 2.12 The Chairman
 proposed that the Committee take note of the statements made and that it revert 
to this matter at its next meeting.  She also proposed  that if there were any further questions or issues 
in relation to this matter, that they be submitted to the Secretariat by 15 April 2007.  
 
2.13 The Committee so agreed . 
 2.14 The Chairman
, in concluding this agenda item, ur ged those Members which had not yet 
notified their implementing legislation to do so as s oon as possible.  She noted for information that the 
Committee had not received any new notifications in th e past year.  In fact, the last one was received 
in October 2005 and there are still 51 Members which had not yet notified their implementing 
legislation.  Given the lull in the negotiations, pe rhaps this was an opportune moment to take care of 
matters such as notifications.  She, therefore, hoped to see some new notifications of legislation at the  next meeting of the Committee in May 2007. 
 
2.15 The representative of the European Communities
 strongly supported the Chair's last 
comment.  It was a bit staggering that countries had no t yet notified their legislation.  The small effort 
necessary to notify would be greatly appreciated.  If there were countries who had difficulty in 
drafting their notifications, there was available expertise and technical assistance that would allow them to complete this work.  He informed Member s that the EC was actually looking at proposals to 
modernise its customs legislation in general which w ould imply a revision of the valuation legislation.  
This would likely happen within the next two year s, at which time his delegation would notify such 
changes to its legislation.  He hoped that this could encourage others to also notify their legislation.   
 
(ii) Notifications made by De veloping Country Members 
2.16 The Chairman
 drew Member's attention to document  G/VAL/2/Rev.23 which contained the 
updated lists of all Members who had invoked special and differentia l treatment provisions under the 
Agreement.  There had been no changes in Member s' situations regarding special and differential 
treatment provisions since the previous version of this document.    2.17 The Chairman
 proposed that the Committee take note of the information contained in this 
document. 
 2.18 The Committee so agreed
. 
 
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE 
ON CUSTOMS VALUATION 
3.1 The Chairman  informed the Committee that, under this agenda item, the Committee noted new 
notifications of application of the Decisions of the Committee on Customs Valuation on the Treatment 
of Interest Charges in the Customs Value of Im ported 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.  For the past two meetings, there had been no new notificatio ns and, therefore, the 
document had not been updated.  She once again urge d Members to notify the Committee, as necessary, 
on their practices regarding these two Decisions.  She proposed that the Committee take note of this 
information.  
 3.2  The Committee so agreed
.   
  G/VAL/M/42 
 Page 5 
 
 
  IV. TECHNICAL ASSISTANCE 
 - Information on Technical Assistance 
 
4.1 The Chairman  explained that under this item the Secretariat informed Members of the technical 
assistance activ ities carried out under the auspic es of the WCO.  Since the 23rd session of the Technical 
Committee will take place during the week of 23 October,  this information is not yet available.  As soon 
as the information becomes available, the Secretariat would prepare the necessary documentation to keep Members up-to-date on these activities.  4.2 The Committee took note
 of the information. 
 
 - Article 20.3 Technical Assistance and Trade-Related Technical Assistance 
 
4.3. The Chairman  informed Members that the Commi ttee’s Work Programme on Technical 
Assistance for Capacity Building as Regards the Implementation and Administration of the WTO 
Agreement on Customs Valuation was contained in  document G/VAL/W/82/Rev.1.   The Committee 
noted previously that customs valuation technical assistance was now incorporated in the WTO-wide 
technical assistance program and that this avoided having two parallel and repetitive exercises.  The 
2007 Plan was still under preparation.  WTO Divisions had provided their inputs to the overall Plan.  In this context, it was worth noting that the Fina l Report of the Strategic Review of the WTO Trade-
Related Technical Assistance (TRTA) Activities was circulated to Members on 19 September.  While 
there were no specific recommendations for technical  assistance on Customs Valuation, there were a 
number of general recommendations  and conclusions which would no doubt be examined in the 
context of the preparation of the 2007 Plan.  Si nce the last meeting of the Committee, a technical 
assistance activity on customs valuation was carried out in the Gambia from 12-14 September.  Requests for technical assistance on customs valua tion could be made at any time by individual 
Members and would be met by a national activity desi gned to meet the needs of the recipient.  She 
concluded that Members were encouraged to inform the Committee of technical assistance and 
capacity building activities that they had provided on bilateral or other fronts.  4.4 The representative of the United States
 informed Members that, in November 2005, her 
delegation had made a 216-page  submission to the Trade Facilitation Negotiating Group (document 
TF/TF/W/71) that outlined, on a country-by-country and project-by-project basis, the trade 
facilitation-related assistance it had been providing.   During fiscal year 2005, the trade facilitation-
related assistance came to USD 368 million and included projects related to valuation.  Historically, the US had been very responsive to specific requ ests for assistance related to customs valuation, 
reflecting the high importance attached to pr oper implementation of the Customs Valuation 
Agreement. 
 4.5 The Chairman
 proposed that the Committee take note of the statements made. 
 4.6 The Committee so agreed
. 
 V. QUESTIONS TO THE DELEGATION OF COLOMBIA REGARDING CERTAIN 
CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS FROM PANAMA AND OTHER WTO MEMBERS  
5.1 The Chairman
 informed Members that the delegation of Panama had requested that this item be 
inscribed on the Committee's agenda for this meeting.  Accompanying documentation had been 
circulated in document G/VAL/W/154.   In addition, the delegation of Canada provided three oral 
questions at this meeting.  As Panama also raised this matter in the Council for Trade in Goods, 
Colombia provided its responses to Panama's ques tions in the Council, in document G/C/W/554. G/VAL/M/42 
Page 6  
 
  5.2 The delegation of Panama
 informed Members of the latest developments since the meeting 
held on 25 April 2006.  As indicated on that occa sion, the customs measure s imposed by Colombia 
fell into three categories:  (a)  the setting of estim ated and/or indicative reference prices for certain 
products originating in or coming from Panama, and from other WTO Members;  (b)  restrictions on 
the use of ports, through authorization of certain points of entry into Colombia for goods classified 
under HS 50 to 64 (footwear and textiles) origin ating in or coming from Panama and the People's 
Republic of China (which meant in practice th at those goods could enter only by air through 
El Dorado Airport and by sea through Barranquilla);  and (c)  additional requirements to be included 
in the commercial invoice covering goods coming from a free zone located in Panama.  The statement 
by Panama and the questions put to Colombia on that occasion were in documents G/VAL/W/154 and 
G/VAL/M/41.  Subsequently, at the meeting of the Council for Trade in Goods on 9 May 2006, 
Panama posed similar questions regard ing its concerns in document G/C/W/548.1 Colombia's 
responses were circulated in document G/C/W/554.  5.3 After great efforts and a number of meetings held in Panama City and Bogotá which failed to 
resolve the situation, on 20 July 2006, Panama re quested consultations with Colombia, pursuant to 
Article 4 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes, 
Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ("GATT 1994") and 
Articles 19.1 and 19.2 of the Agreement on Im plementation of Article VII of the GATT 1994 
("Agreement on Customs Valuation").  Panama's  request for consultations was in document 
WT/DS348/1, of 25 July 2006.  The first consulta tion between Panama and Colombia was held on 
15 September 2006.  It was attended by representa tives of the Permanent Missions of Panama and 
Colombia and by senior officials of the Government  of Panama and representatives of the Missions of 
Chinese Taipei;  Pakistan;  Hong Kong, China;  the Philippines;  Thailand;  Guatemala;  and China, participating as associate Members.  
5.4 At that meeting, an exchange of views t ook place, during which Panama's questions regarding 
the legislation and procedures covering Colombia's application of these measures to goods originating 
in or coming from Panama and other WTO Members we re addressed.  That exchange confirmed his 
Government's concerns on this matter.  Written r esponses were still outstanding to  questions posed 
by Panama, Thailand and Pakistan.  Since that da te, no agreement had been reached between the two 
countries. Panama reiterated its readiness to use the mechanisms of the WTO Understanding on Rules 
and Procedures Governing the Settlement of Disput es with a view to asserting its rights and would 
notify the Committee on Customs Valuati on of measures taken to that end. 
 5.5 The representative of the United States
 asked Panama if it intended to continue to pursue the 
matter in the Customs Valuation Co mmittee, or simply to inform the Committee of the status of the 
dispute case.  Her delegation was intere sted in the dispute as well as in some of the replies that had been 
provided by Colombia in the documents mentioned.  She had some further questions that she would 
share depending on how the process would be ha ndled in the various bodies involved.   
 5.6 The representative of Panama
 said that his delegation believed that it was important to maintain 
the WTO Membership abreast of the matter and its de velopments because it was possible that it could 
lead to appeals or requests under other Bodies.  Since the heart of the matter dealt with customs 
valuation, his delegation believed  that the Committee on Customs Valuation was the correct place to 
inform Members of developments.  Some Member s had already associated themselves to these 
consultations, thus proving its importance to them.  Of course, if there were any othe r countries having a 
systemic or trade interest in the matter, they shoul d also be informed of wh at was happening and request 
the relevant measures.  He  left it to the discretion of the United States as to whether it deemed it 
necessary and relevant to pose ques tions to Colombia at this stage.  Nevertheless, the opportunity to do 
so was there. 
                                                      
1 Modifying slightly the earlier document distributed with the symbol G/VAL/W/154.  G/VAL/M/42 
 Page 7 
 
 
   
5.7 The representative of the United States,  after consulting with her ca pital and in light of her 
delegation's interest in this matter, posed the followi ng questions to Colombia.  Colombia stated that the 
indicative prices were established in keeping with  the right conferred by WTO provisions, including 
the Agreement on Customs Valuation.  Could Colombia  point to the provisions in this Agreement that 
conferred this right?  Could Colombia explain in detail what indicative prices were, how they were 
determined, and exactly how they were applied?  Could Colombia provide a copy of the legislation 
authorizing the use of indicative prices along with any regulations, guidelines or internal directives 
pertaining to their use?  Could Colombia explain what happened when the declared value was below 
the indicative price?  Was the declared value rej ected?  Was the indicative price substituted for the 
declared value?  Finally, could Colombia provide examples of cases where it had accepted the 
declared value even though it w as below the indicative price? 
 5.8 The Chairman
 agreed that it was useful for the Commit tee to be informed of developments on 
this matter.  She proposed that the Committee take note  of the statements made and revert to this item at 
its next meeting.   
 5.9 The Committee so agreed
. 
 
VI. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF THE 
PROTOCOL OF ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
6.1 The Chairman  informed Members that in accordance with paragraph 18 of the Protocol of 
Accession of the People's Republic of China, the Co mmittee was to report to the Council for Trade in 
Goods on the outcome of this Review.  The CTG w ould then report to the General Council.  The 
Committee conducted its fourth Transitional Re view in 2005, where China explained the 
implementation of its commitments with regard  to the Agreement on Customs Valuation and 
responded to the questions raised.  China had r ecently submitted an informational document which 
was circulated in document G/VAL/W/157.  6.2 The representative of China
 said that, since its accession into  the WTO, China had been 
making progress in bringing its customs valuation sy stem in line with the Agreement.  This was 
obvious to all.  China submitted to the Committee the relevant information on valuation methods 
pursuant to Annex 1A of its Accession Protocol.  This document offered a comprehensive account of 
China's implementation efforts and was available in G/VAL/W/157.  She noted that the customs 
valuation legislation and the rules of the custom s of the People's Republic of China regarding the 
determination of customs valua tion of imported and exported goods , which entered into force on 
1 June 2006, was in full conformity with th e provisions governing the procedure and the 
methodologies of customs valuation.  For Members in terested in this legislation, information on 
customs valuation could also be obtained by vis iting the official website of the Chinese General 
Administration of Customs at www.customs.gov.cn .  She reiterated that the door for mutual 
information exchange on issues of common interest was always open.    6.3 The representative of the European Communities
 said that the Chinese paper provided a clear 
picture of the use of valuation methods other than the stated transaction value.  It gave some details of 
the customs legislation.  Obviously access to legi slation was extremely important and his delegation 
would remain informed of this legislation.  As re gards implementation, he noted with interest that 
China had provided statistics that few countries were able to provide quickly, that showed that over 
95% of all imports were valued using the principle valuation method.  That was the key barometer of 
successful implementation.  It was generally seen as an indicator that there were few cases in dispute 
or in doubt.  This figure which had been recognised  by the World Customs Organization, was what all 
administrations needed to achieve in terms of e fficiency in valuation.  He had not studied the G/VAL/M/42 
Page 8  
 
  28 March legislation in detail, but it was good to know that it was accessible and that, as China said, 
there was an open door on issues of common interest.  6.4 The representative of the United States
 noted that this was the Customs Valuation 
Committee's fifth annual Transitional Review of Chinese efforts to implement the commitments that it 
made in its Protocol of Accession to the WTO.  The United States continued to believe that the 
Transitional Review remained an important and usef ul mechanism serving both the interests of China 
and of other WTO Members.  It provided Memb ers with the opportunity to seek clarification 
regarding China's policies and practices while also  allowing Members to convey their expectations 
regarding China's efforts to implement its commitments .  China, in turn, had the opportunity to clarify 
its policies and practices with the potential to prev ent misunderstandings that could lead to trade 
frictions.  The United States did not submit any writte n questions for China as part of this year's 
Transitional Review.  However, it wished to ma ke a statement regarding China's implementation 
efforts from the perspective of its own experience.  
6.5 The United States continued to be concerned a bout the inconsistent im plementation of China's 
regulatory measures in the area of customs valuatio n, including the rules regarding determination of 
customs valuation of imported and exported goods, that were found in G/VAL/N/1/CHN/1 issued by 
the General Administration of Customs in December 2001, and the Regulations Regarding 
Determination of Customs Valuation of Royalties a nd License Fees Related to Imported Goods, found 
in G/VAL/N/1/CHN/3 issued by the General Administ ration of Customs in May 2003.  For example, 
some of China's customs officials were reportedly assessing duties on digital products based on the 
imputed value of contents, such as the data record ed on a CD-ROM, rather than on the basis of the 
value of the underlying carrier medium, the CD-ROM itself, as China's own regulations required.  In addition, some Chinese customs officials were reportedly not applying the regulatory provisions on 
conditions of sale as they related to software.  These officials were still following China's pre-WTO 
accession practice of automatically adding royalties and software fees to the dutiable value, even 
though China's new regulations directed them to add those fees only if they were paid to the exporter 
as a condition of the particular sale in question.  6.6 Another concern for the United States involved imports of high-value electronic media that were intended to be used after importation to pr oduce multiple copies of products, such as DVDs, for 
wide distribution and sale.  China's customs offici als had been assessing duties based on the estimated 
value of the yet to be produced copies.  The Unite d States urged China to follow the same principle 
that applied to carrier media-bearing software a nd, instead, assess duties based on the value of the 
underlying carrier medium.  These problems were not new.  Her delegation had raised them prior to 
this Committee and urged China to continue to  work to establish more uniformity in the 
administration of its customs valuation regime a nd in adherence to WTO customs valuation rules. 
 6.7 The representative of China
 agreed that the remarks raised by  the United States were not new.  
She reiterated that China's practices and its cust oms valuation regimes were  consistent with the 
principles and the procedures set forth in the Agr eement, and were applied consistently across the 
country.  She suggested two channels to solve th e United States' concerns.  The United States could 
raise very specific cases indicating how the US believed there was an in consistency.  General 
concerns were irrelevant because China believed th at it was applying the provisions of the Agreement 
consistently across the country.  A second option woul d be for the United States exporter or operator 
which disagreed with a particular valuation de termination to appeal to the Chinese customs 
administration, for an administrative review of the decision.  She believed that these would be 
practical ways to deal with the United States' concerns. 
 6.8 The representative of the United States
 clarified that her delegati on had made a statement and 
did not necessarily intend to engage in a debate in the Committee on this.  However, given that China  G/VAL/M/42 
 Page 9 
 
 
  had proposed that her delegation share some specif ic cases, she would check with her authorities to 
determine whether she could provide this information.    6.9 The representative of China
 did not wish to raise any debate.  She was merely pointing out 
that it might be more practical to try to solve this problem because the United States raised its 
concerns in previous meetings.  So, her sugges tion was to discuss, through bilateral channels, 
specifics of the problems.  This could be done at so me other time as well.  The point was to solve the 
concerns.  6.10 The representative of the United States,
 while noting the importance of bilateral contacts, did 
not want to affect its rights and the ability to ha ve an effective Transitional Review Mechanism.  
While she considered that her statement was sp ecific, she would, nevertheless, relay China's 
comments to her capital.  She would also seek to rai se these concerns at the next review and consider 
the suggestion from China to include specific cases in  addition to the general concerns raised.   She 
did not wish to prejudge the approach her de legation would take in the Customs Valuation 
Committee, i.e. whether it would present a statement or  questions at the next Review.  Nevertheless, 
she would consult with her capital to determine wh ether to supplement her statement with specifics 
now or during the next Review.    6.11 The representative of the European Communities
 was interested to follow any systemic issues 
which might arise from specific, concrete valuation cases.  There was an obvious link between 
specific cases and systemic issues.  Therefore, his delegation would be interested to be informed of 
any additional information that the United States might bring to the Review.    6.12 The Chairman
 proposed that the Committee take note of the statements made and that the 
Secretariat prepare a short, factual report that sh e would submit, on behalf of the Committee, to the 
Council for Trade in Goods.  The report would refer to the minutes from today's meeting and if there 
were any further comments that needed to be circulat ed to Members, they should be  received within 
ten days.    6.13 The Committee
 so agreed. 
 VII. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN GOODS 
7.1 The Chairman
 drew Members' attention to document  G/VAL/W/155 which contained the draft 
report of the Committee to the C ouncil for Trade in Goods.  She noted two corrections and proposed 
two editing changes in the Annex of  the draft document which would be made to the final report.  The 
first correction was that Chile's notification of it s legislation, namely doc ument G/VAL/N/1/CHL/1, 
should be listed in the third co lumn.  The second correction was th at Indonesia's notification under 
column 4 on the checklist of issues should be blan k.  Secondly, turning to the editing changes, she 
proposed that the heading of the first column of the table in the Annex be changed to read "WTO 
Agreement" rather than "WTO Committee".  Finally, she proposed that the second footnote on page 6 be 
changed to read as follows:  "This total number  includes Members which have notified that their 
legislation remains valid under the WTO Agreement (i.e. those in the second column of the table) and 
those which have notified their le gislation pursuant to Article 22 of the WTO Agreement and the 
Decision on Notifications (G/VAL/5)."  She believed that the editing changes would enhance the clarity 
and accuracy of the document.  She asked if any Members had any comments on any aspect of the draft report.  
7.2 In the absence of comments, she proposed that  the Secretariat revise the document to include 
the corrections and editing changes proposed.  She wo uld then fax the revised report to Members for any 
comments within five days.  The final version woul d be submitted to the Council for Trade in Goods.   
 G/VAL/M/42 
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  7.3 The Committee so agreed
. 
 
VIII.  FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, ELEVENTH AND 
TWELFTH ANNUAL REVIEWS OF THE IMPLEMENTATION AND OPERATION 
OF THE CUSTOMS VALUATION AGREEMENT 
8.1 The Chairman  recalled that at the last  meeting, the Committee took note of the eight documents 
containing the Fourth through Eleventh Annual Re views in documents G/ VAL/W/29, G/VAL/W/43, 
G/VAL/W/77, G/VAL/W/89, G/ VAL/W/109, G/VAL/W/124, G/VA L/W/136 and G/VAL/W/150.  
Today, the twelfth annual review, in G/VAL/W/156, was circulated  for consideration.  At the last 
meeting, India had stated that it w ould likely be able to conclude this matter by this meeting.  She asked 
India to update the Committee on this issue. 
 8.2 The representative of India
 stated that his delegation was examining the question of the 
reservation on the use of minimum values and recons idering whether it needed to continue with this 
reservation.  This had involved extensive discussion s within different agencies  in the capital and had 
taken longer than expected.  He hoped that by the next  meeting, he could indicate something more.  But 
at present, there was no change.  8.3 The representative of the European Communities
 recalled the Chairman's plea to delegations to 
pay some attention to housekeeping issues in this period.  He hoped that this might provide more 
motivation to clear the slate and bring matters up-to-da te on this issue.  His delegation would like to see 
this issue become a non-issue.  Hi s delegation urged and/or  requested India to move actively on this 
matter and hoped for positive news fr om India at the next meeting.   
 8.4 The representative of India
 noted the EC's suggestion whic h he would communicate to his 
capital. 
 
8.5 The Chairman  proposed that the Committee take note of th e statements made and revert to this 
matter at the next meeting.  8.6 The Committee so agreed
. 
 IX. PRESHIPMENT INSPECTION 
9.1 The Chairman
 recalled that at the last meeting, the Committee agreed to carry out the Second 
Review of the Agreement on Preshipment Inspection.  Members were advised that if they wished to 
contribute to the Review, they shoul d communicate their submissions to  the Secretariat for circulation 
by 26 September 2006.  No such submi ssions were received.  It was also suggested that in the event that 
there were no submissions, the Committee could agree to conclude the Review.   
 9.2 The representative of the United States
 expressed her delegation's appreciation for the report 
provided by the Secretariat in document G/VAL/ W/63/Rev.8.  Her delegation also thanked the 
International Federation of Inspection Agencies for providing the information contained therein.  Her 
delegation continued to watch the PS I situation closely and took note, as the document observed, of the 
recent shift in direction in terms of PSI services.  Her delegation hoped that this marked the beginning of 
a positive trend.  Information like the report mentio ned was very helpful in monitoring the situation. 
 9.3 The representative of the European Communities
 agreed that the note was useful.  He asked  
whether some of the terms presented in the docume nt referring to the type s of PSI programmes for 
customs purposes, such as "Revenue protection" "Customs support services ", including destination 
inspection and/or selective PSI, coul d be clarified.  Without going into a detailed analysis of the 
coverage of PSI activities, he noted that the PS I Agreement focused on pre-shipment activities and  G/VAL/M/42 
 Page 11 
 
 
  indeed, the development in the industry seemed to be towards something which was post-shipment, in 
other words, destination inspection and/or selective PSI.  His dele gation wondered whether that meant 
that it also included pre-shipment activities selectiv ely, or combined with destination inspection, and 
how these were separated;  were  they a duplicative or complement ary activity.  In general, his 
delegation was interested in how the shifts in PSI activities towards destination inspection tied in with 
previous types of activities, or indeed if they repl aced these previous activities.  Would the term "pre-
shipment" need to be replaced at a certain point in  time to more accurately reflect the quality of the 
activities being carried out?  His dele gation echoed the view of the US in  that it would be necessary to 
monitor PSI activities, while of cour se not looking at any specific operat ors.  While his statement did not 
constitute a review, he also wondered what the lack  of contributions to the review signified.   
 
9.4 The Secretariat  took the floor to clarify that the information presented in 
document G/VAL/W/63/Rev.8 had been provided by IF IA, including the categori es and categorisation 
of the programmes.  In the context of the trade fa cilitation negotiations, Swit zerland had circulated a 
non-paper on the evolution of the PSI industry which might provide further clarification of the terms 
used in the categorisation of the different programmes.   
 9.5 The Chairman
 proposed that, in the absence of any act ual submissions, the Committee agree to 
conclude the review.  She proposed that the Secretariat pr epare a short factual re port on the Review that 
would refer to the minutes of this meeting.    
9.6 The Committee so agreed
. 
 9.7 The representative of the United States
 reiterated her delegation's interest in continuing to 
monitor the situation and that the Committee on Customs Valuation be the place to carry out such monitoring and review.   
 
9.8 The Chairman
 stated that the Secretariat would contin ue to update the relevant information for 
the Committee.   
X. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION 
(WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES 
A. P
ARAGRAPH 8.3 OF DOCUMENT WT/MIN/(01)/17   
10.1 The Chairman  recalled that the General Council, at its  meeting in December 2002, authorized 
the Committee to continue its work under the exis ting mandate in paragra ph 8.3 of the Decision on 
Implementation-Related Issues and C oncerns, and to report back to the General Council once its work 
had been completed.  It was agreed at the last m eeting to revert to this matter at this meeting.  
Through informal contacts with some Member s, she understood that there had not been any 
movements towards resolving this matter.    10.2 In the absence of comments, she proposed that the Committee reve rt to this item at the next 
meeting of the Committee.  
10.3 The Committee so agreed
. 
   G/VAL/M/42 
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  XI. OTHER BUSINESS 
A. D
ATE OF THE NEXT MEETING  
11.1 The Chairman  informed Members that the Committ ee's next meeting was scheduled for 
8 May 2007.  
11.2 The meeting was adjourned. 
 
__________