WORLD TRADE  
ORGANIZATION  G/VAL/W/159 
26 January 2007 
 
 (07-0374) 
Committee on Customs Valuation Original:   French 
  
 
STATUS REPORT ON THE IMPLEMENTATION OF OFFICIALLY-ESTABLISHED 
MINIMUM VALUES 
 
Decision Pursuant to Article IX of the WTO Agreement (WT/L/571 ) 
 
SENEGAL 
 
 
 The following communication, dated 29 December 2006, is being circulated at the request of 
the delegation of Senegal.  
_______________ 
 
  Pursuant to paragraph 2 of Decision G/ C/W/551 and its Corrigendum 1, dated 4 and 
15 May 2006, the Government of the Republic of Senegal hereby submits its status report on the 
implementation of officially-established minimum va lues for the products listed in the annex of the 
above-mentioned decision. G/VAL/W/159 
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  Report on the implementation of the officially- established minimum values applied by Senegal
 
  The purpose of this report is to follow up on and assess progress in the implementation of the 
officially-established minimum values that Senegal was authorized to maintain by the WTO General 
Council, at the proposal of the Council for Trade in Goods, following a request for an extension of the 
waiver referred to in document WT/L/571 of 7 J une 2004 which Senegal enjoys under Article IX of 
the Marrakesh Agreement.  
 In submitting this report, Senegal is complyi ng fully with the principles and modalities set 
forth in the extension decision, point  2 of which provides that Senegal  will report to the Committee on 
Customs Valuation by 30 September 2006 on the stat us of its implementation of officially-established 
minimum values.  
 
 In meeting that  formal requirement, Senegal is fulfilli ng an international commitment and is 
aware that observance of such a commitment is a performance factor likely to bring it closer to 
indicators on best practices in respect of customs valuation. 
  Although the decision granting the extension me rely established the principle of submitting a 
report without providing reporting guidelines, the customs administration has adopted a participatory approach by holding extensive consultations with  other authorities and actors involved in the 
implementation of the minimum values. 
 
 Following a brief reminder of the context, which will help readers to better situate the report, 
the body of the text is split into two main part s, highlighting, on the one hand, the methods of 
administering and managing minimum values in relation to the standards set forth in the decision, and 
on the other, the impact of these values on th e Senegalese economy, the post-implementation 
physiognomy of which will enable future prospects to be envisaged. 
 Preliminary chapter:  Context
 
  Senegal is party to a regional trade agre ement known as the West African Economic and 
Monetary Union (WAEMU), characterized by a common external tariff (CET) that has very low rates, 
ranging from 0% to 20%. 
  Senegal is also a contracting party to the WTO Agreement on Implementation of Article VII 
of the General Agreement on Tariffs and Trade 1994, otherwise known as the Customs Valuation 
Agreement. 
 
 By virtue of its LDC status, however, Senegal officially invoked and was granted the benefit 
of more favourable transitional provisions under th e special and differential treatment afforded by 
Article 20 and Annex III of the Agreement, althoug h these did not take effect until 1 July 2001. 
  On 5 June 2002, Senegal s ubmitted a request to the WTO under Article IX of the WTO 
Agreement for authorization to apply minimum valu es to a restricted list of goods identified using 
criteria based on objective and quantifiable data  and information taken from trade statistics. 
 
 On 17 May 2004, the General Council agreed to this request and waived the obligations set 
forth in the Agreement for a period of three years,  with retroactive effect from the date when the 
request was made, namely 2 June 2002.  The fi rst official note, No. 1035/DGD/DEL/DRCI/BOV of 
2 June 2004, giving effect to the minimum values,  is apposite evidence that Senegal was able to 
benefit from the minimum values for only one year , significantly less than the three-year period 
anticipated. 
  G/VAL/W/159 
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   The effects hoped for were of course circumscrib ed by so short an application period, and the 
decision was accordingly taken at the end of the sche duled period to apply not for a new waiver but 
for a waiver extension for a further two years to  make up the entire three-year period originally 
granted to Senegal.  
 A lengthy process ensued – the details of wh ich are not reported here – and was concluded 
satisfactorily by Draft Decision G/C/W/551 of 4 May 2006 granting the requested extension until 
30 June 2007, this being the date when the extens ion for the use of minimum values will officially 
come to an end.  
 After this brief background history, in the pa ragraphs below the status report proper addresses 
firstly the main aspects of the institutional and admi nistrative management of the waiver within the 
general framework of the Customs Valuation Agreement and secondly, the economic impact. 
 
Chapter I:  Institutional and administrative management of the waiver 
  During the implementation of the waiver, the cu stoms administration has worked consistently 
to establish collective and collegiate administration ch aracterized by broad consultation of the private 
sector (industrial operators and businessmen) and the au thorities directly involved in providing follow 
up (departments of finance, trade and industry).  
 To this end, an institutional framework was set up for the holding of consultations on major 
decisions concerning minimum values.  Within this  framework, the Subcommittee on Trade in Goods, 
coordinated by the Director of Customs Studies and Legislation and subs idiary to the National 
Committee on International Trade Negotiations, meet s regularly with the actors involved to discuss 
important issues concerning the application of mini mum values.  Thanks to consultation, the few 
modifications made in respect of the values main tained for certain products were introduced by 
consensus – in some cases hard come by owing to the often very wide divergence in positions.  In 
such a context arbitration by customs is b ased on objective and quantifiable data, hence the 
importance of the methodology used to determine minimum values.   This methodology, officially notified to the WTO and published in accordance with the 
requirements of the decision granting the initial waiver , is based partly on the world prices of the 
inputs used in the composition of products, wher e they are guaranteed or easily identified, and partly 
on the real production costs of imported products as compared to those of the various sectors that 
remain vulnerable.  
 The first of the above elements enables the harmful  effects of price manipulation to be offset, 
and the second enables recognized or disguised support to be curbed.  Since these elements also 
fluctuate, the principle of regularly reviewing them  on the basis of modalities established by common 
agreement has been maintained. 
 
 With regard to valuation issues in general,  Senegal has introduced legal instruments which 
enable the Agreement to be implemented on the basi s of relevant standards and best practices.  For 
instance, the laws and regulations on valuation which are currently in effect provide for both internal 
(administrative review and appeal) and external (arb itration or judicial review ) remedies.  As regards 
controls, a risk targeting and analysis system is in  operation and in parallel a database is being built up 
progressively; these tools aid decision-making w ithout constituting a mechanism to replace 
transaction value as the principle method for determining customs value. 
  As far as product coverage is concerned, Senegal is in full compliance with the requirement 
set forth in point 3 of the decision, which prohibits the application of minimum values to any goods not explicitly mentioned in the annex.  In this re gard, it should also be noted that there are some G/VAL/W/159 
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  omissions in relation to the first list, in that  products such as those under tariff headings 360500 
(matches), 2203 to 2206, and 2208 (alcoholic beverag es) no longer appear in the annex to the most 
recent extension decision.  This is due to the ta rdy reaction of industrial operators from the above 
sectors during the preparation of an interim customs administration report, which had been requested by WTO bodies, providing justification for the maintaining of minimum values. 
 
 Nevertheless, the omission of tariff head ing 63056 corresponding to woven sacks and sheaths 
of polypropylene is less easily explained.  The answ er is to be sought in the first waiver, where, 
following a material error in the tariff code, the anne x to the decision mistakenly quoted tariff heading 
630710 corresponding to floor-cloths instead of the h eading requested by Senegal, which was tariff 
heading 6305 of the Harmonized System nomencla ture.  Indeed, it may seem paradoxical, and even 
absurd, for Senegal to request the application of a minimum value to a product in which no industrial 
operator had expressed an interest, at least officially .  It is worth recalling that during consultations 
with the group " Amis de la valeur " the sacks and sheaths in question were in no way affected by the 
objections that led to Senegal w ithdrawing products such as milk, vegetable oils, T-shirts, tomato 
concentrate and frozen poultry and cuts, etc. from its original list. 
  Consequently, the only plausible explanation is that of error and the inversion of two tariff 
headings especially since the company benefiting fro m the value in question is one of those most 
seriously affected by anti-competitive and unfair practices, at least judging by the volume of 
complaints and recriminati ons from industrial circles. 
 
 Although the foregoing is not an exhaustive analysis, it can legitimately and reasonably be 
concluded that, as far as standards and recommended pr actices are concerned, Senegal comes close to 
best standards in the area of valuation.  Suffice it to recall that Senegal not only complies with the 
WTO decision set forth in G/VAL/5, notably the prov isions of paragraph 2 on the valuation of carrier 
media bearing software for data processing equipm ent, but is working to phase out external pre-
shipment inspection with a view to incorporating this service gradually in the computerized risk 
analysis system, which, despite its uncertain beginnings, is becoming increasingly automated. 
  Following on from the above overview of the institutional and administrative system, the analysis of the impact of the application of mi nimum values on the economy and trade is of an 
entirely different level of importance. 
 
Chapter II:  The economic and fiscal impact  of the application of minimum values 
 
 While the temporal and statistical analysis in  the first part of the report may not appear 
decisive in that it covers elements which are relativ ely constant and static, the same cannot be said for 
the impact analysis, which is based on statistical and trade variables, both endogenous and exogenous. 
  As far as the impact on the production system is concerned, certain sectors may initially see 
the measure as a panacea for illegal practices linked to price manipulation (fraud, false declarations, 
under-invoicing).  But this is not true of other sect ors, which, despite the application of minimum 
values, consider their activities threat ened by the emergence of practices that appear to be immune to 
the introduction of minimum values on their own.  Th ese practices, which are ge nerally related to the 
existence of dumping or a subsidy, really need to be  tackled with other specific instruments, such as 
anti-dumping, countervailing and even safeguard measures.  
 The above observations can be illustrated by cases  that are dealt with on a recurrent basis by 
the customs administration at the request of companies benefiting from minimum values that see themselves as the victims of action that distorts the free operation of healthy and fair competition.  
Three sample products taken from the list of mini mum values will be used to support the analysis:  G/VAL/W/159 
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  tobacco under tariff heading 240220, exercise books under heading 482020 and polypropylene sacks 
under heading 630533.   As far as tobacco is concerned, the local indus try has, at our request, provided statistics taken 
from information supplied by the "Centre for Intern ational Documentation on Tobacco".  A study of 
these statistics reveals the following: 
  1. Tobacco, as a raw material, represents 60 per cent of the cost price of a packet of 
cigarettes, and benefits, in all the European countries and in the United States, from agricultural subsidies; 
 
 2.  the enormous difference in the size of domestic markets allows much larger 
economies of scale in these same countries; 
  3. the costs of the factors of production are too high, pushing up charges and leading to 
a continuous decline in the competitiveness of the local industry. 
  As regards exercise books, the local industry has also provided the customs administration 
with documentation highlighting practices used to circumvent the minimum value.  For instance, although reference values are set on 17x22 format ex ercise books, it has been noted that exercise 
books of an A4 21x29.7 format, which are not subject to minimum values, are being imported into the 
market.  Moreover, exercise books other than the st andard, established type have also appeared on the 
market.   Lastly, the example provided by the polypro pylene sack manufacturing industry clearly 
reveals that practices do exist whereby support is pr ovided to the production of finished products from 
Asian countries for which a c.i.f. price has been record ed that is lower than the total price of all the 
raw materials imported by the local manufacturer.  Reliable and verifiable data backed up by 
documentary evidence indicate that the cumulative cost of imported materials comprising granulate, multibase, colouring and anti-ultrav iolet additive is 928 CFA francs.  There is clearly a problem 
where a finished product is imported at a c.i.f. pri ce lower than or equal to that of the raw material. 
 
 Similar examples abound judging by the volume of requests for either the establishment of a 
minimum value for a product or the upward adjustme nt of the minimum value applicable to eligible 
products.   The upshot is that, without wanting to con ceal the structural weaknesses of the local 
production sector which require internal adjustment  and upgrading, it is becoming more and more 
necessary to envisage capacity-building and technical  assistance for the authorities responsible for 
implementing trade defence measures.   With regard to the impact on trade, sin ce Senegal, like the other WAEMU countries, has 
delegated its fiscal competency to the community bodies that manage such matters through the 
common external tariff (CET), renowned for its low applied rates, control over tax-base components, 
in particular customs value, takes on an especially important dimension.   For consistency's sake, the analysis of the tr ade impact of the minimum values will focus on 
the same range of products used to illust rate the impact on the industrial fabric. 
 
 The statistical data taken from the customs au thorities' computer system cover import trends 
over two periods, the first from 30 Septembe r 2005 to 31 March 2006, and the second from 
1 April 2006 to 20 September 2006 (the date of th is report).  The data thus compiled on an annual G/VAL/W/159 
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  basis will be the subject of a comparative study of the trends observed in respect of the products in 
question.   As regards cigarettes under heading 240220, impor ts in the first period amounted to a total 
value of two hundred and twenty-three million, nine  hundred and forty-eight thousand, six hundred 
and ninety-eight (223,948,698) CFA francs.  In the second period, this value rose to eight hundred and 
eighty-one million, two hundred and eighty-eight t housand, four hundred and five (881,288,405) CFA 
francs.   As regards exercise books under heading 482020,  imports in the first reference period 
amounted to a value of two hundred and sixty-nine million, five hundred and fifty-five thousand, and 
ninety-seven (269,555,097) CFA francs, while in the second period the figure rose to two hundred and 
ninety-three million, six hundred and forty thousand,  five hundred and forty-eight (293,640,548) CFA 
francs.  
 Lastly, sacks under heading 630533 reached a va lue of one billion, nine hundred and forty-
five million, three hundred and thirty-two thousan d, nine hundred and fifty-three (1,945,332,953) 
CFA francs in the first period, while during the sec ond period the figure crossed the two billion mark, 
standing at two billion, ninety-eight million, six hun dred and sixty-four thousand, seven hundred and 
seventy-five (2,098,6 64,775) CFA francs. 
 
 The first observation to be made from these statis tics is that imports of the three products in 
question posted an increase despite th e establishment of a minimum value. 
  Secondly the overall statistics on imports of pr oducts subject to minimum values show that 
these three products register the most significant in creases, which in turn explains why it is the 
industrial operators in these same sectors that complain  most of an erosion of their turnover as a result 
of losses in local market share, a situation fraught with threats, particularly to jobs.   Without a doubt, the main beneficiaries of the minimum values are the Senegalese consumer, who has access to higher quality products that present no risk to public safety, and the State, which 
has more control over the tax-base. 
 
 The purpose of quoting the above figures is not to justify a lack of competitiveness – an argument often used by companies to support thei r repeated requests for maintaining or increasing 
minimum values which without proper heed could lead  to overprotection – but rather to demonstrate 
that the situation in which the companies find themselves tallies with the realities of trade. 
 
 Overall, the analysis thus reveals that co mpanies in sectors in which minimum values are 
applied are still vulnerable to increasingly aggressi ve imports resulting from unfair, anti-competitive 
and illegal practices.   This has not prevented the customs administ ration from launching an awareness-raising and 
information campaign to alert industrial operators to the urgent need – bearing in mind the 
30 June 2007 deadline – to upgrade and apply intern al adjustment and restructuring measures, which 
they undertook to implement for the most part thro ugh investment plans, co mpliance with standards, 
etc.  
 The customs administration also for its part  is pursuing its modernization and capacity-
building plan thanks to the improvement of the com puterized risk analysis system, the expansion of 
its database which serves as an information system  on the value of goods that can be drawn on for 
decision-making in the area of valuation but wh ich does not replace transactional value as the 
principle method of determining the customs value of imported goods.  G/VAL/W/159 
 Page 7 
 
 
   
 In conclusion, technical assistance for capac ity-building with a view to setting up trade 
defence arrangements (anti-dumpi ng, countervailing and safeguard) in keeping with WTO rules and 
disciplines, is indispensable before envisaging the lif ting of the waiver authorizing the application of 
minimum values. 
 
Documents attached : 
  - Copy of the most recent official note re lating to the application of  the decision; 
 
 - copy of the last issue of the methodology; 
  - copy of statistical record.   G/VAL/W/159 
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  METHODOLOGY FOR DETERMINING MINIMUM VALUES 
  
 The choice of products that are to be subject  to minimum values and the determination of 
such values is the result of collaboration between the Administration (Ministries of Finance, Trade 
and Industry) and the private sector as represented by the leading employers' organizations. 
  A special effort has been made to be rigorous in the selection of these products and to fix price levels allowing the objectives set to be atta ined without producing undue distortion or raising 
barriers that impede trade. 
 
 The choice of products is directly linked to the reasons for the request to apply minimum 
values:  essentially, threats to certain activities related to unfair trade practices that have been 
observed (price manipulation, undervaluation, etc.), and actions that do not appear to be in keeping with sound business practices. 
 
 Cases have been noted, for example, of finish ed products being declared at values that are 
lower than, equal to or only slightly higher than the overall value of the inputs used.  Clearly, this 
poses a problem.   Other sectors are highly vulnerable to imports  of competing products that benefit from 
significant support, reflected in the prices at which they are exported to Senegal.   
  By studying the applications submitted by th e requesting companies in the different sectors 
and analysing the international trade data provided by import statistics, it was possible to determine 
the requests that were acceptable because they we re motivated by a genuine problem stemming from 
the above-mentioned realities, namely: 
  - Unfair trade practices;   - price manipulation;  or  
 - serious threats to a vital sector or industry. 
  By studying the offending procedures and practices together with the figures supplied, it was also possible to determine whether minimum valu es afforded a solution to the problem at hand 
(indeed, it is not a matter of substituting minimum values for structural difficulties or problems of 
efficiency in companies or administrations). 
  In determining the minimum values proposed, the following elements were accordingly taken 
into account:   - World prices of inputs entering the compos ition of products when they are guaranteed 
  can easily be identified; 
  - the real cost of production of the imported products in comparison to those of the 
various sectors that are still vulnerable. 
 
The first of the above elements enabled the adve rse effects of price manipulation to be offset, 
while the second was very useful with respect to s upport, whether recognized or – as was more often 
the case – disguised. 
  G/VAL/W/159 
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   By taking account of these two elements, it was possible to fix the requested minimum value 
levels, which were determined in close cooperation with the domestic private sector. 
  Since these minimum values are based on elements  that fluctuate, the principle was laid down 
that for the duration of their application they woul d be reviewed periodically according to the same 
modalities.  For reasons of harmonization within the WAEMU area, it was decided that the review 
would be conducted every six months. G/VAL/W/159 
Page 10  
 
  IMPORTS TO SENEGAL 
 
 Products: 1704**, 1902**, 2402**, 4820**, 6305**, 8712** Period : 30 September 2005 – 31 March 2006 
 
 
Product Value Duties and taxes 
 
170410 793 191 384 190 489 217 
170490 1 483 260 569 661 141 818 
190211 1 111 129 509 003 
190219 312 897 506 127 192 775 
190220 6 905 158 3 090 420 
190230 63 037 905 28 859 727 
190240 237 093 521 105 730 480 
240210 1 446 773 2 082 182 
240220 881 288 405 600 279 461 
240290 457 864 615 510  
482010 110 692 344 48 477 196 
482020 293 640 548 127 938 388 
482030 84 764 474 35 884 354 
482040 24 039 860 10 734 238 
482050 26 205 591 12 604 208 
482090 80 920 585 33 611 817 
630510 85 318 587 38 489 998 
630520 123 650 61 071 
630532 10 563 146 4 698 735 
630533 2 098 664 775 800 004 565 
630539 3 509 059 1 610 970 
630590 144 567 913 62 713 590 
871200 87 013 631 41 135 774 
  G/VAL/W/159 
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  Products: 1704**, 1902**, 2402**, 4820**, 6305**, 8712** 
Period:  1 April – 20 September 2006  
Product Value Duties et taxes 
 
170410 891 145 909 194 889 896 
170490 1 790 084 725 797 921 974 
190211 5 262 385 2 357 365 
190219 493 708 357 218 055 656 
190220 3 309 840 1 353 190 
190230 142 334 177 64 652 089 
190240 322 963 385 143 634 595 
240210 2 816 372 4 064 065 
240220 223 948 698 191 388 485 
240290 484 500 651 321 
482010 330 687 201 146 882 094 
482020 269 555 097 123 877 727 
482030 114 840 124 50 237 836 
482040 20 777 558 9 290 439 
482050 22 687 226 10 979 597 
482090 40 760 721 13 458 509 
630510 151 804 048 67 580 433 
630520 348 947 165 909 
630532 31 974 946 14 231 277 
630533 1 945 332 953 757 000 265 
630539 14 607 974 9 788 285 
630590 105 562 174 38 753 014 
871200 230 833 580 98 696 148 
 
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