RESTRICTED  WORLD TRADE  
ORGANIZATION  G/VAL/M/44 
8 November 2007 
 
 (07-4855) 
Committee on Customs Valuation  
  
 
MINUTES OF THE MEETING OF 18 OCTOBER  2007 
 
Chairman: Joe McClintock (United Kingdom)
 
  
 The agenda proposed for the meeting, circ ulated in WTO/AIR/3084 was adopted as follows: 
 
I.
 REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON 
CUSTOMS VALUATION .......................................................................................................2  
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF 
THE AGREEMENT.................................................................................................................2  
A. NOTIFICATION OF NATIONAL LEGISLATION ................................................................................2  
B. NOTIFICATIONS MADE BY DE VELOPING COUNTRY MEMBERS ....................................................7  
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE 
COMMITTEE ON CUSTOMS  VALUATION......................................................................7  
IV. TECHNICAL ASSISTANCE ..................................................................................................8  
A. INFORMATION ON TECHNICAL ASSISTANCE ...............................................................................8  
B. ARTICLE 20.3  TECHNICAL ASSISTANCE AND TRADE -RELATED TECHNICAL 
ASSISTANCE ............................................................................................................................... .8 
V. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF 
THE PROTOCOL OF ACCESSION OF THE PEOPLE'S REPUBLIC OF 
CHINA .......................................................................................................................... .............8  
VI. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN 
GOODS .......................................................................................................................... ..........10  
VII. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, 
ELEVENTH AND TWELFTH ANNUAL REVIEWS OF THE IMPLEMENTATION AND OPERATION OF THE CUSTOMS VALUATION 
AGREEMENT ...................................................................................................................... ..10
 
VIII.  PRESHIPMENT INSPECTION ...........................................................................................10  
IX. 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  
X. OTHER BUSINESS................................................................................................................1 3 
(i) Indonesia...................................................................................................................... .............13  
(ii) Nigeria Reference Price Regimes .............................................................................................14  
(iii) Date of the n ext meeting ....................................................................................................... ....14  G/VAL/M/44 
Page 2  
 
   
 
I. REPORT OF THE WORK OF THE TECHNICAL COMMITTEE ON CUSTOMS 
VALUATION 
1.1 The observer of the World Customs Organization
 reported on the activities of the Technical 
Committee during the interim between the 24th and 25th Sessions.  This report is contained in Annex I.  
 1.2 The Committee took note
 of the report. 
 
II. INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT 
A. 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.  He suggested that, under this sub- item, the Committee take up the legislations in 
sequence as listed in the agenda.  He further reca lled 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.    
- Egypt 
 2.2 The Chairman
 drew Members' attention to the Egyptian notification of its legislation relevant 
to customs valuation in WTO document G/VAL/N/1/EGY/1.  This contained the relevant customs valuation text of  Articles 22 and 23 of Egypt's law no. 95 of 2005, amending Articles 22 and 23 of 
the Customs Law no. 66 of 1963, and Articles 14-35 of the Ministerial Decree no. 10 of 2006.  He noted that Egypt had also notified the res ponses to the Checklist of Issues in document 
G/VAL/N/2/EGY/1.  It had been agreed to revert to this matter at this meeting. 
 
2.3 The representative of the European Communities
 said that his delegation did not have any 
problems with the Egyptian legislation.  He, ne vertheless, wished to point out to the Egyptian 
delegation that Article 15 of the Egyp tian legislation appeared to be more restrictive than necessary.  
The text of the legislation actually built in extra conditions which were not actually required by the 
WTO Agreement. He suggested that the Egyptian dele gation might wish to reflect on this point.   
 2.4 The representative of the United States
 posed some questions and comments to which she 
hoped the Egyptian delegation could r espond at the next meeting.  The first concerned the definitions 
of identical and similar goods.  She asked if the de finitions contained in Article 15 of the Agreement 
were to be found in the Egyptian legislation.  A lthough Article 14 of the Ministerial Decree provided 
for the adjustments of Article 8 of  the Agreement, there was no reference to apportioning the value of 
these adjustments.  Were these provisions provided elsewhere?  Concerning the right of appeal without penalty, her delegation asked if an importe r or other person liable for the payment of the duty 
could appeal under a judicial authority and, if so, where was this provided in the Egyptian laws?  Her 
delegation had a few additional qu estions concerning publication and transparency, the release of 
goods upon sufficient guarantee and questions, as we ll as some concerning the interpretative notes 
and used cars.  Her delegation w ould provide these questions in writi ng to the Egyptian delegation.   G/VAL/M/44 
 Page 3 
 
 
  She hoped that these questions would be reflected on the record and there could be further interaction 
at the next mtg.   2.5 The representative of Canada
 also asked if, under Article 11.2 of the Egyptian legislation, 
importers had the right to appeal to the judiciar y.  The Agreement stated that each Member shall 
provide for the right of appeal without penalty to the judicial authority. Article 32 of the Egyptian 
legislation made reference to an internal administ rative appeal before restoring to arbitration. Her 
delegation sought clarification from Egypt on what was understood by arbitration. 
 
2.6 The representative of Egypt  said that her delegation looked forward to receiving the written 
questions in order to be able to answer them correctly and appropriately .  Her delegation would 
discuss these matters on a bilateral basis and revert to the at the next meeting. 
 
2.7 The Chairman  proposed that the Committee take note of the statements made and revert to 
this notification at its next meeting.  2.8 It was so agreed
. 
  - Saudi Arabia 
 
2.9 The Chairman
 drew Members' attention to the notif ication from Saudi Arabia consisting of 
the Common Customs Law of the Gulf Cooperation Council (GCC), its Rules of Implementation and 
Explanatory Notes, as well as the Ministerial Decision No. 1207 dated 24 June 2004 by the Ministry 
of Finance of the Kingdom of Saudi Arabia, on Value Determination of Customs Purposes.  These 
were contained in document G/VAL/N/1/SAU/1.  Saudi  Arabia had also notified its responses to the 
Checklist of Issues in document G/VAL/N/2/SAU/1.  It ha d been agreed to revert to this matter at this 
meeting.  2.10 The representative of  the European Communities
 noted a trend among Members in providing 
not just the valuation portion of the customs legisl ation but the supporting legislation as well.  This 
was useful but the Committee was not meant to comment on the supporting legislation.  In the Saudi case, there was the Common Customs Law presented with a Ministerial Decision on Valuation Determination.  However, the latter appeared more to be rules of im plementation. The last such rule 
of implementation stated that an "importer may clear his goods after payment of the customs taxes 
"duties" under cash deposit, if the final determinati on of the value is prolonged".  However, page 65 
of the Law, stated that "The importer has the right to withdraw his goods upon submitting sufficient 
guarantee in the form of a bank or cash deposit, ba nk guarantee..."  In other words, the guarantee did 
not have to be cash which was what the Agreemen t specified.  The problem was that there were 
actually two different provisions for the release of goods in case of difficulty in determining the 
customs value.   The Common Customs Law  was al so very brief when it spoke of the transaction 
value.  However, in the latter part of the text, th e full definition of the transaction value was provided.  
This showed that it was important to read the en tire instrument.  In its totality, as presented, his 
delegation concluded that all of the important provis ions were indeed properly reflected in the text.  
 2.11 As the delegation of Saudi Arabia was not presen t at the meeting, and in light of the statement 
made, the Chairman
 proposed that the Committee take note of the statement and revert to this matter 
at its next meeting.  2.12 It was so agreed
. 
  - Tanzania 
 G/VAL/M/44 
Page 4  
 
  2.13 The Chairman
 drew Members' attention to Tanzania's notification of its legislation 
implementing the Agreement which had been circ ulated in G/VAL/N/1/TZA/1.  This document 
contained the Fourth Schedule of the East African  Customs and Transfer Tax Management Act of 
2001.  Tanzania had also notified its respon ses to the Checklist of Issues in document 
G/VAL/N/2/TZA/1.   It had been agreed to revert to this matter at this meeting. 
 
2.14 The representative of the United States  noted that her delegation had received many 
complaints about the Tanzanian customs valuati on methodology for used clothing.  Her delegation 
had been in contact with the Tanzanian delegation and understood that it was going to provide some 
reactions to these concerns.  Her delegation had asked Tanzania to clarify how it determined the value 
of used clothing and how such valuation conformed with the Agreement.  Her delegation continued to 
be willing to work informally with Tanzania on th is matter especially given their LDC's status.  
 2.15 As the delegation of Tanzania was not present at the meeting, and in light of the statement made, the Chairman
 proposed that the Committee take note of the statement and revert to this matter 
at its next meeting. 
 2.16 It was so agreed
. 
 
 - Thailand  
2.17 The Chairman
 recalled that, at the last meeting, it had been agreed to revert to Thailand's 
notification in G/VAL/N/1/THA/1 and to the responses to the Checklist of Issues in 
G/VAL/N/2/THA/1.  The United States had circulat ed questions to Thailand in G/VAL/W/128, and 
Thailand’s replies were circulat ed in G/VAL/W/130.  Follow-up questions from the United States 
were circulated in document G/VAL/W/143 of November 2004 and Thailand's responses were 
circulated in document G/VAL/W/158.  Following the last meeting, the European Communities and 
the United States had circulated additional questio ns regarding Thailand's valuation of alcoholic 
beverages imports.  These were contained in document G/VAL/W/160.   2.18 The representative of the United States
 had several issues to raise.  She had some detailed 
follow-up questions regarding Thailand's responses  in G/VAL/W/158.  She would provide these to 
Thailand and hoped to received responses by the next  meeting.  Despite Thailand's explanation and 
confirmation that it applied Article 13 of the Agreem ent related to the release of goods with sufficient 
guarantee, her delegation continued to  have questions with Thailand's a pplication of this provision.   
Furthermore, although Thailand stated that its regul ations were fully committed to implementing the 
interpretative notes to Article 14, th e fact remained that many provis ions of the interpretative notes 
were not included in the regulations such as the de finition of price actually paid or payable. Her 
delegation wished to recall that the interpretative notes were integral to the proper implementation of 
the Agreement and, her delegation believed that a st atement in the regulations that the interpretative 
notes shall be read and applied in conjunction with  the determination of customs values would help 
transparency. It would be preferable for Thaila nd to more formally incorporate or adopt the 
interpretative notes of the Agreement into  its customs laws and regulations.  
 2.19 Her delegation also believed th at it was important that Section 11- bis of the Thai Customs Act 
No. 2469 be repealed.  It understood that the Royal Thai Customs had introduced such legislation and 
that these changes had been approved  by the Cabinet and Council of State. Her delegation encouraged 
the Thai Parliament to pass legislation that woul d repeal reference pricing from the Thai Customs 
Laws and Regulations. Regarding the Committee D ecision on the Treatment of Interest Charges 
Under Financing Arrangements, her delegation would be grateful if Thailand could provide a copy of 
customs regulation No. 48, BE2547.  With respect to  the responses provided by Thailand in document 
G/VAL/W/158, her delegation asked whether Thailand could provide an explanation of its approach  G/VAL/M/44 
 Page 5 
 
 
  to customs valuation with respect to carrier medi a bearing software for data processing equipment. 
Her delegation hoped to have some reactions from Th ailand by the next meeting.  She would provide 
these questions in writing to the Comm ittee as well as to Thailand.   
 2.20 She added that her delega tion had additional concerns rela ted to alcoholic beverages or 
distilled spirits.  However, first she wished to hear  from Thailand whether it intended to respond to the 
questions that her delegation and the EC had circ ulated in document G/VAL/W/160.  She would then 
wished to take the floor again.    2.21 The representative of the European Communities
 also asked Thailand if it was prepared to 
respond to the questions circulated in G/VAL/W/ 160.  These responses would help understanding of 
the actual application of the Thai legislation.  These were not academic concerns but were important 
to importers and exporters.  The questions were aimed at understandi ng how exactly the Thai customs 
was applying its legislation and whether this application was in line with the WTO rules.  There 
seemed to be trade between related parties wh ich appeared to cause application of secondary 
valuation methods.  Without going into a detailed explanation of the deductive method, his delegation 
had a keen interest in making sure that it was a pplied the way it was meant.   His delegation would 
appreciate receiving the additional information it had re quested in order to be confident that the rules 
were being applied in a way that they were m eant to work.  When importers and exporters had 
difficulties and the customs value could not be i mmediately determined, an administrative process 
would be initiated and the Agreement was very clear  that trade must not be disrupted and that goods 
be cleared, subject to the necessary guarantee being provided.  The Agreement was also clear that the 
guarantee did not have to be in cash.  His delega tion did not add questions at present, but urged 
Thailand to respond to the questions previously posed.  2.22 The representative of Thailand
 confirmed that her delega tion had not received detailed 
responses from the authorities concerned in Bangkok.   She hoped that the responses would come and 
that her delegation could circulate them before the next meeting.  She also hoped that the US would 
provide its follow-up questions in writing so that she could pass these on to her capital for responses 
for the next meeting.  2.23 The representative of the United States
 explained that her delegation, with the EC, had 
submitted the questions in document G/VAL/W/ 160 so that Members could better understand 
Thailand's customs approach which,  to her delegation, appeared to  be an aggressive use of the 
deductive value methodology.  Her delegation had exp ected responses at this meeting especially since 
it would be meeting to bilaterally try to resolve the disagreement.  She emphasized the seriousness of 
her delegation's concerns and its disappointment th at responses had not been forthcoming. Such 
responses could have provided helpful informati on on the valuation of imported spirits;  it was 
unfortunate that the US and other Members had been  unable to obtain this information. This delay 
reflects a troubling trend.  She recalled that it had pr eviously taken Thailand nearly 2 years to respond 
to the last series of questions from the US.  This  undermined the work of the Committee and the US 
and other interested Members rightly expected more timely responses to Members' questions. The 
United States Trade Representative, Ambassador Schwab, was concerned about the consistency of 
Thailand's customs valuation of spirits, and perhap s other products, with its WTO obligations. In 
connection with these concerns, and in an effort to fully understand Thailand's customs valuation 
practices, the US urged Thailand to respond without further delay to the questions in G/VAL/W/160. 
Her delegation was also seeking responses to additio nal questions it had provided to Thailand.   
 
2.24 The representative of the Philippines  shared the concerns faced by exporters of alcoholic 
beverages into Thailand.  Philippine  exporters had also raised the same serious problems with Thai 
customs concerning the use of the deductive value methodology. They considered this method in breach of Thailand's obligations under the Agreement.  The questions would bring to light important 
systemic issues related to the deductive value method that applied, not only to alcoholic beverages, G/VAL/M/44 
Page 6  
 
  but also to potentially all imports into Thailand including cigarettes.  The absence of a response by 
Thailand to the written questions circulated by the US and the EC was indeed troubling.  Document 
G/VAL/W/160 was circulated on 11 June 2007.  Hi s delegation believed th at Thailand had had 
adequate time to respond to the 21 written questio ns.  These responses could have provided helpful 
information towards resolving the issues, and his de legation urged Thailand to reply to the questions 
in G/VAL/W/160 without further delay and preferably in writing.  
 2.25 With respect to cigarettes, he informed the Committee that his delegation had submitted four 
written questions to Thailand on the  valuation of cigarettes. These questions essentially codified the 
points his delegation had made at the Committee's m eeting in May 2007 which were reflected in the 
minutes of that meeting (G/VAL/M/43).  A copy of these questions were also provided to the EC, US, 
Japan and Switzerland for information.  The Philippines did not at that time request the circulation of 
the questions as a WTO document.  He asked, throug h the Chairman, whether Thailand had replies to 
these questions at this meeting.   
2.26 The representative of Switzerland
 supported the concern raised by the Philippines. The issue 
of the valuation of cigarettes by Thailand was not  new as it dated to 2006 according to the minutes of 
this meeting.  At the May meeting, Switzerland e xpressed its systemic concerns regarding Thailand's 
valuation practices on cigarettes wh ich it considered not to be in line with the provisions of the 
Agreement.  It was unfortunate that Thailand did not respond to the questions from the delegation of 
the Philippines.  The use of the transaction value to determine the customs value was the primary 
method to be used according to the Agreement.  It was difficult to understand why Thailand suddenly 
ceased to accept the transaction value as the basis for determining the customs value of imported 
cigarettes. In particular, her delegation was inter ested to hear why Thailand still did not accept the 
transaction value, even though the values had been test ed by the importer.  In addition, it seemed that 
a new law would affect the retail price of cigarett es and that the new regulation could affect foreign 
brands differently from domestic  ones. This would, in her dele gation's view, be problematic as it 
would infringe GATT Article III by discriminating against imported products.  In summary, her 
delegation considered the matter unresolved, reitera ted its systemic concerns, and would welcome  
early responses from the Thai delegation.   2.27 The representative of the United States
 shared the concerns mentioned by the Philippines and 
supported by Switzerland.  The problems menti oned by the Philippines, combined with her 
delegation's concerns on the valuati on of spirits, pointed to the possibility of systemic problems with 
Thailand's customs valuation practices even goi ng beyond these specific products.  The United States 
urged the Thai Government to promptly respond to  the questions from the Philippines and the US and 
the EC and requested that this matter be on the ag enda for the next meeting of the Committee.  She 
also requested that and response from Thailand to the Philippines be made available to the Committee 
as well.    2.28 The representative of Thailand
 had received information from Bangkok that Thai customs had 
not announced the value of imported Philippine ci garettes since March 2007.  Since then, Thai 
customs had not exercised any currency values to the cigarettes in question.  With such progress, her 
delegation considered that it would be difficult to  answer the questions from the Philippines.  The 
matter was now under appeal.  Her delegation would, however, try to follow-up with customs to reply 
to the questions in due course. However, her dele gation could assure the Philippines, with regard to 
the last question regarding the domestic taxation in  Thailand, that her Government did not apply 
domestic taxation in a way to discriminate against either domestic or imported cigarettes. Therefore 
she confirmed that domestic taxation applied uniform ly to cigarettes and did not discriminate against 
imported cigarettes.  2.29 The representative of the Philippines
 would reflect on Thailand's reply to its last question and 
reserved the right to come back to it if necessary.   His delegation was, however, dismayed that  G/VAL/M/44 
 Page 7 
 
 
  Thailand had chosen not to reply to the other three va luation-related questions, despite the fact that the 
questions were provided in writing to Thailand one month earlier than the US-EC questions on 
alcoholic beverages.  His delegation was also extrem ely disappointed that this  matter had remained 
on the agenda of the Committee for over a year.  Hi s delegation would now transmit to the Secretariat 
the questions related to cigarette valuation that had been submitted bilaterally to Thailand last May 
and request that they be circulated immediatel y as an official WTO document.  His delegation 
expected the Thai representative to convey to the Thai Customs Authorities the significance of 
replying without further delay to questions raised in the Committee.   2.30 The representative of Switzerland
 did not consider that the Thai response to the guarantee 
values responded to the concerns it had raised in its earlier intervention.  This was especially so since 
this appeal was still not settled and it seemed that th ere was even further dela y in dealing with this 
appeal.  Her delegation maintained its concerns.  2.31 The representative of Canada
 supported those delegations in  the Committee which raised 
concerns about the lack of timely responses to  questions posed.  Thailand had before it now 
outstanding questions related to 2 areas.  This was a concern and her dele gation encouraged Thailand 
to come to the next meeting with full responses.   2.32 The Chairman
 proposed that the Committee take note of the statements made and revert to 
this item at its next meeting. 
 
2.33 It was so agreed . 
 B. N
OTIFICATIONS MADE BY DE VELOPING COUNTRY MEMBERS  
2.34 The Chairman  recalled that under this agenda item, the Committee reviewed the special and 
differential treatment provisions maintained by Members th rough the document series G/VAL/2 and 
Rev.1 through 24.  Since the last meeting, there had been no changes to this situation and, therefore, no 
revision to the document series had been produced.  He  proposed that the Committee take note of this 
information and agree that the Se cretariat update this document only  when and if it received a new 
notification or the situation with respect to the invocation of the special and differential treatment 
provisions changed. 
   
2.35 The Committee so agreed . 
 
III. INFORMATION ON THE APPLICATION OF DECISIONS OF THE COMMITTEE 
ON CUSTOMS VALUATION 
3.1 The Chairman  recalled that under this agenda item, the Committee noted any new notifications 
of application of the Decisions of the Committee on  Customs Valuation on, first,  the "Treatment of 
Interest Charges in the Customs Value of Imported Goods” and, second, the “Valuation of Carrier 
Media Bearing Software for Da ta Processing Equipment", both adopted by the Committee and 
contained in document G/VAL/5.  Si nce the last meeting, there had been no such notifications and, 
therefore, the document had not been updated.  He urged Members to not ify the Committee, as 
necessary, on their practices regardi ng these two Decisions.   He pro posed that the Committee take note 
of this information. 
 
3.2 It was so agreed . 
 G/VAL/M/44 
Page 8  
 
  IV. TECHNICAL ASSISTANCE 
A. I
NFORMATION ON TECHNICAL ASSISTANCE  
4.1 The Chairman  recalled that, under this item, the Secret ariat informed Member s of the technical 
assistance activ ities carried out under the auspices of the WCO.  Document G/VAL/8/Add.18 contained 
the most recent information, whic h was to be reported to the 25th Session of the Technical Committee on 
Customs Valuation, on technical as sistance activities carried out by the WCO Secretariat and WCO 
Members.   
 
B. ARTICLE 20.3  TECHNICAL ASSISTANCE AND TRADE -RELATED TECHNICAL ASSISTANCE  
4.2 The Chairman  recalled that the Committee’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.     4.3. The Committee noted previously that cu stoms valuation technical assistance was now 
incorporated in the WTO-wide technical assi stance program. The 2007 Plan contained one sub-
regional activity on customs valuation which was he ld in the Maldives in September 2007.  Requests 
for technical assistance on customs valuation could be made at any time by individual Members and 
would be met by a national activity designed to meet the needs of the recipient.   This year, one such 
national activity was carried out in Belize.  At pr esent, work was underway on the biennial 2008-2009 
Technical Assistance Plan.  Members were enco uraged to inform the Committee of technical 
assistance and capacity building activities that had provided on bilateral or other fronts. 
 
4.4 The representative of the European Communities
 believed that, increasingly, technical 
assistance was being packaged in larger programs which rendered it difficult to separate out technical assistance on valuation, per se .  However, technical assistance was still quite important for valuation 
because not insubstantial number of customs administ rations had demonstrated that they had some 
way to go in fully applying the Agreement.  Wh ile there was certainly good will and resources 
available for technical assistance in general, the provision of technical assistance could benefit from a more proactive approach in recipient countries fo rmulating and requesting demands to identify their 
needs.  Document G/VAL/W/82/Rev.1 showed that  Japan had providing a number of courses on 
valuation and post-clearance.  He thanked Japan, not  only for provided technical assistance, (lots of 
other countries did as well) but by identifying the sp ecial skill of valuation audit.  It was now accepted 
by the wider community of customs administrations that audits were important to fully apply the 
Agreement.  It was the way to assure customs admi nistrations against fraud.  His delegation hoped to 
see more of this type of targeted technical assist ance delivered in the future, which of course, should 
always be carried out in partnership with the recipient country.    
4.5 The Chairman
 proposed that the Committee take note of the statements made.   
 4.6 It was so agreed
. 
 
V. TRANSITIONAL REVIEW IN ACCORDANCE WITH PARAGRAPH 18 OF THE 
PROTOCOL OF ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
5.1 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 fifth Transitional Re view in 2006, where China explained the 
implementation of its commitments with regard  to the Agreement on Customs Valuation and  G/VAL/M/44 
 Page 9 
 
 
  responded to the questions raised.  China had r ecently submitted an informational document which 
was circulated in document G/VAL/W/163.  5.2 The representative of China
 introduced his delegation's submission.  It provided information 
that was required under Annex I.A of China's Protoc ol of Accession for the purpose of the sixth TRM 
in this Committee.  It provided a comprehensive ove rview of China's implementation efforts.  Further 
information on customs valuation could be obtained from the Official website of the Chinese General 
Custom Administration at www.customs.gov.cn. The ch annels for mutual information exchange with 
Members on issues of common interest was always open.    
5.3 The representative of the United States
 had not yet seen the Chinese document so did not 
have any reactions to it.   She provided her dele gation's statement, rather than pose questions, under 
this TRM.  This was the Committee's sixth annual tr ansitional review of China's efforts to implement 
the commitments that it had made in is Protocol  of Accession to the WTO. The US continued to 
believe that the transitional review remained an  important and useful mechanism, serving both the 
interests of China and the interest of other WTO Members. It provided Members with the opportunity 
to seek clarifications regarding China's laws and regulations, while also allowing Members to convey 
their views of China's implementation of its commi tments. China, in turn had the opportunity to 
clarify its laws and regulations, with the potential to prevent misunderstandings that could lead to 
trade frictions.  The US did not submit any written questions for China as part of this year's transitional review. However, the US wished to make a statement regarding China's implementation 
of its WTO obligations. 
 5.4 The United States continued to be concerned about the inconsistent application of China's 
regulatory measures in the area of customs valuation, including the Rules regarding determination on 
Customs Valuation of Imported and Exported Goods (G/VAL/N/1/CHN/1), issued by the General 
Administration of Customs in December 2001, and the Regulations regarding Determination on 
Customs Value of Royalties and License Fees related to Imported Goods (G/VAL/N/1/CHN/3), issued 
by the General Administration of Customs in May 2003.  China had still not uniformly implemented 
these measures.  US and other exporters continued to report that they were encountering valuation 
problems at many of Chinese ports.  For example,  even though China's measures provided that 
imported goods normally should be valued on the basis of their transaction price, meaning the price 
the importer actually paid, many Chinese customs officials were still improperly using "reference 
pricing", which usually resulted in a higher dutiabl e value.  Wood products provided one example of 
imports that were often subjected to reference prici ng.  In addition, some of  China's customs officials 
were reportedly not applying the regulatory provision on conditions of sale as it related to software.  
These officials were still following China's pre-WT O accession approach to automatically adding 
royalty 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 exporte r as a condition of the particular sale in question.  
A separate concern for the US involved imports of high-value electronic media that were intended to 
be used after importation to produce multiple copies of products such as DVDs for wide distribution 
and sale. China's customs officials had been assessi ng duties based on the estimated value of the yet-
to-be-produced copies. The US urged China to follow the same principle that applied to carrier media 
bearing software and instead as sess duties based on the value of the underlying carrier medium.  
These problems were not new.  Her delegation had rai sed them in the past in this Committee.  Her 
delegation urged China to continue to work to est ablish more uniformity in the administration of its 
customs valuation regime and in its adhe rence to WTO customs valuation rules. 
 
5.5 The representative of China
 said that his delegation had not received the statement of the 
United States in advance either.  He understood that under the TRM, the US had no obligation to 
provide anything in written form in advance.  His delegation appreciated the message put forward at 
this meeting and he would try to clarify after the meeting the na ture of each and every concern noted 
by the United States so as to communicate them to  his capital for further discussion of these issues. G/VAL/M/44 
Page 10  
 
   
5.6 The Chairman
 proposed that the Committee take note of the statements made and that the 
Secretariat prepare a short, factual report that he would submit, on behalf of the Committee, to the Council for Trade in Goods.  The report woul d refer to the minutes from today's meeting 
 
5.7 The Committee
 so agreed. 
 
VI. REPORT OF THE COMMITTEE TO THE COUNCIL FOR TRADE IN GOODS 
6.1 The Chairman  drew Members' attention to docum ent G/VAL/W/161/Rev.1 which contained 
the draft report of the Committee to the Council for Trade in Goods.  He asked if any Members had any 
comments on any aspect of the draft report. 
 6.2 In the absence of comments, he proposed that the Secretariat update the document to include the 
present meeting.  She would then fax the revised repo rt to Members for any comments within five days.  
The final version would be submitted to  the Council for Trade in Goods.   
 
6.3 The Committee so agreed
. 
 
VII. FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, ELEVENTH AND 
TWELFTH ANNUAL REVIEWS OF THE IMPLEMENTATION AND OPERATION 
OF THE CUSTOMS VALUATION AGREEMENT 
7.1 The Chairman  recalled that at the last meeting, th e Committee took note of the nine documents 
containing the Fourth through Twelfth 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/VAL/W/136, G/VAL/W/150, 
G/AL/W/156 and Corr.1.  Today, the thirteenth annu al review, circulated in  G/VAL/W/162, should be 
added to this list.  He asked India to update the Committee on an y developments to this matter.   
 
7.2 The representative of India  stated that his delegation was continuing its review of its 
reservation which had taken longer than expected.  He  hoped to revert to the Committee shortly on the 
matter.  7.3 The Chairman
 proposed that the Committee take note of the statement made and revert to this 
matter at the next meeting. 
 7.4 The Committee so agreed
. 
 
VIII.  PRESHIPMENT INSPECTION 
8.1 The Chairman  asked if any Member wished to take th e floor on this item, which was a standing 
item on the Committee's agenda.   8.2 The representative of the United States
 expressed her delegation's appreciation for the report 
G/VAL/W/63/Rev.9. She informed Members that her delegation continued to watch the PSI situation 
closely and took note of the recent shift in direction terms of PSI services.  Her delegation hoped that 
this would be the beginning of a positive trend a nd it would continue to monitor the situation.  
 8.3 The Chairman
 proposed that the Committee take note of the statement made.     
 8.4 The Committee so agreed
. 
  G/VAL/M/44 
 Page 11 
 
 
  IX. PARAGRAPH 12 OF THE DOHA MINISTERIAL DECLARATION 
(WT/MIN(01)/DEC/1):  IMPLEMENTATION-RELATED ISSUES 
A. PARAGRAPH 8.3 OF DOCUMENT WT/MIN/(01)/17   
9.1 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 paragraph 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 meeti ng to revert to this matter at this meeting.  It was 
also agreed that he would hold informal consultati ons on this matter in the in terim, which he had done 
with some interested Members on 24 September 2007. At this consultation, India explained that it 
would be putting forward a new submission on the matter before this meeting.  Other Members 
expressed their willingness to examine this new submission. 
 
9.2 India's paper had been received and was circ ulated in Job(07)/153.  He noted two small 
corrections which India had requested that he read out.   The first was to be made  in the last line of the 
second paragraph of the second bullet point – the word s "information and" should  be added before the 
word "documents."  Also, in the third line of the third bullet point, the word  "provided" should be 
added after the word "documents."  He understood that Members would need more time to study the 
recently circulated Indian submission.  However,  Members could present initial comments or general 
statements if they wished.   9.3 The representative of India
 recalled that his delegation had made a proposal to this Committee 
(G/VAL/W/102) to operationalize the mandate cont ained in Paragraph 8.3 of the implementation 
issues in the Doha Ministerial Declaration. The objective was to provide for a mechanism for the 
exchange of information regarding customs value. As  had been indicated in paragraph 8.3 itself, the 
intention of this paragraph was to strengthen cooperation between the Customs administrations of 
Members in order to prevent fraud. These concerns remained even with the unilateral reductions of 
applied tariffs since made by Members, particularly developing countries. 
 9.4 This proposal had been variously discussed in this Committee. Some of the suggestions made 
by Members were that the Committee could explore b ilateral agreements to fa cilitate such exchanges 
or that the exchange mechanism should, at least to  start with, be non-binding. It was also suggested 
that this should not be a substitute for Member s improving their own Customs Administrations. His 
delegation's experience with the voluntary exchange of  information or with us ing bilateral agreements 
to facilitate such exchange was not particularly enco uraging.  It also believed that there was nothing in 
Paragraph 8.3 which suggested that the mechanism should be voluntary.  However, as an attempt to 
address the issues raised, his delegation suggested some measures which would have the effect of circumscribing any request. These were not partic ularly novel and some Members might have seen 
them elsewhere.  The proposals made were intended to ensure that any such  request for information 
should not be made in a routine manner and should follow after appropriate internal verification.  
Members could also be assured that they would only be expected to provide information to the extent 
available within the Customs Administration, and that they would not be expected to make any 
enquiries. Such a mechanism would also not require  Members to modify their existing procedures or 
documentation.  In addition, an upper limit to the num ber of requests that coul d be made in a calendar 
year was provided as was an outer time limit beyond  which no requests would be made regarding any 
transaction.  Having said that, his delegation re mained open to discussion and suggestions from 
Members. His delegation proposed to continue such  discussion in order to arrive at language that 
suitably addressed Members' concerns and achie ved the intended objective of the mandate.  
 
9.5 The representative of Canada
 said that her delegation would need to review the document  
further, but she would present some preliminary reacti ons.  Canada had noted that the points raised in 
India's document largely mirrored the revised pr oposal in the trade facilitation negotiating group, G/VAL/M/44 
Page 12  
 
  document TN/TF/W/123/Rev.1. It was slightly conf using that the matter was being addressed in two 
fora and there was a lot of similarity.  Decision 8.3 clearly stated that where information exchange was sought, the exporting member "shall offer coope ration and assistance consistent with its domestic 
laws and procedures". This suggested that some Members would have difficulties in assisting other 
Members and suggested that paragraph 8.3 was not binding. For Canada, this aspect must be taken 
into account as different Members had different domestic requirements. Therefore, any solution 
would have to provide a mechanism for the requ ested Member to decline such a request, should 
concerns about use of information, confidentiality or consistency with thei r domestic laws remain.  
Her delegation did not consider that the proposal, as currently drafted, provided for this.  Her 
delegation was open to discuss suggestions with I ndia.  Her delegation also pointed out on-going, 
related work elsewhere.  At the last session of the Technical Committee on Customs Valuation in May 
2007, an update to the Customs Control Handbook was co mpleted.  This provided further guidance to  
administrations in dealing with situations where they doubted the truth or accuracy of the values 
declared.  Her delegation would like this  information to be taken into account. 
 
9.6 The representative of the European Communities
 also noted the similarity between the new 
Indian submission and the one presented in the trad e facilitation negotiations.  His delegation did not 
see how parallel discussions could be ca rried out in the two bodies.  He  noted that a lot of good work 
had been carried out in the past leading to vari ous proposals by Members in the Committee.  It was 
still the case that no single proposal found full agreemen t.  His delegation would read the paper, but  
bearing in mind that there was an active dialogue on the matter going on elsewhere.  
 
9.7 The representative of Japan  would study the proposal and come back to it with comments.  
Noting the similarity with work going on elsewhere, he asked India to clarify the relationship between 
this latest submission and the proposal submitted in the other body.    
9.8 The representative of Brazil
 said that his delegation considered that the new version presented 
by India included elements to solve the concerns raised by Members on the previous version. Brazil 
could support the new proposal.  She added that it didn't matter wher e the issue was being discussed.  
The important idea was that this i ssue must be discussed and solved. 
 9.9 The representative of Hong Kong, China
 also noted the similarity between this submission 
and the work in the negotiating group on trade fac ilitation.  His delegation w ould continue to engage 
with India and other interested Members on this issue.  9.10 The representative of the United States
 said that her delegation only just received the paper 
and needed more time to study it as well as the question of whether this Committee was the best 
venue to discuss this proposal.  She noted that the paper was similar to one presented in another WTO 
body.  Her delegation's position had not changed on the interpretation of the mandate in paragraph 
8.3, and it did not share India's views on what th e Committee was to do pursuant to the mandate in 
paragraph 8.3.  Her delegation un derstood that India had an interest in pursuing a binding set of 
disciplines on this subject.  However, her delegation did not believe that the  mandate required the 
Committee to pursue something binding on the matter.    
 
9.11 The representative of Singapore  also would need time to study the paper.  As a preliminary 
statement, her delegation did not see the current  mandate as providing for any binding mechanism. 
Her delegation was prepared to discuss the matter fu rther and would be willing to engage in further 
consultations if necessary. 
 
9.12 The representative of Switzerland  noted the similar discussions going on in other fora and 
asked India how they intended  to proceed with this matter in different committees. 
  G/VAL/M/44 
 Page 13 
 
 
  9.13 The representative of Thailand  said that his delegation would st udy the paper in its capital and 
would be ready to engage in any discussions with India and others interested and concerned Members 
on this issue.  9.14 The representative of Chinese Taipei
 agreed that the exchange of information on customs 
valuation could be useful in certain cases.  Howe ver, the value declared on the export declarations 
may not be reliable because there could many motiva tions for the exporter to manipulate the value.  
His delegation believed that careful study was necessar y and would come back to this question later.  
 9.15 The representative of Australia
 said that her delegation also needed more time to study the 
proposal.  She recalled that the matters under di scussion had an extensive background which should 
be noted.  Her delegation was willing to engage  in any further discussions on this matter. 
 9.16 The representative of India
 said that his delegation considered that what happened in other 
bodies of the WTO should not be of concern to th is Committee which was charged with the mandate 
of Paragraph 8.3.  It would have to find a way to  operationalize that mandate.  While there could be 
different interpretations to this  mandate, and his delegation was w illing to discuss this with other 
Members, this Committee should not be distracted by the work of other WTO bodies.  Secondly, his delegation believed that the point raised by Chinese Taipei about the reliability of the value in export 
declarations needed to be addressed in someway.   His delegation would discuss this with Chinese 
Taipei and other delegations inte rested in building in language that addressed this concern. His 
delegation hoped to continue this discussion with other interested Members and looked forward to 
receiving more detailed responses so that it could further develop the language which would address 
Members' concerns and be c onsistent with the mandate. 
 9.17 The Chairman
 proposed that the Committee take note of the statements made and revert to 
this matter at its next meeting.  In the meantime, he would be available for informal consultations, if 
necessary.  9.18 The Committee so agreed
. 
 
X. OTHER BUSINESS 
(i) Indonesia 
10.1 The Chairman  invited the United States to make its statement under the first item it requested, 
namely, Indonesia.  
 10.2 The representative of the United States
 understood that Indonesia was currently determining 
the duties on imported goods on the basis of a price database that incorporated, among other things, an 
established risk criterion for importers.  She asked if Indonesia could provide further clarification on its current valuation methods.  Specifically, i) how w as the risk level of an importer determined;  ii) 
Were importers considered "high risk" alerted of th eir status;  iii) once an importer had been labeled 
with a particular risk level, how were the corr esponding prices assessed;  a nd iv)  was the check-price 
database publicly available?  She al so asked Indonesia to clarify how the use of importer risk levels 
and reference pricing in determining the customs value of impor ted goods was consistent with Article 
7.2 of the GATT and Article 1.1 of the Customs Valuation Agreement?  10.2 Her delegation had learned that Indonesia ma y be revising its customs valuation laws and 
regulations to more closely follow the hierarchy of  valuation methodologies set forth in the Customs 
Valuation Agreement. This would be a welcome deve lopment.  In this rega rd, her delegation hoped 
that any revisions to Indonesia's customs laws a nd regulations would include the elimination of any 
type of reference pricing or pricing based on risk.  While Indonesia was concerned with under-G/VAL/M/44 
Page 14  
 
  invoicing practices, her delegation urged Indonesia to  adopt a valuation system that was consistent 
with the Customs Valuation Agreement, which w ould lead to more transparent and less trade-
distorting methods of valuation.  
(ii) Nigeria Reference Price Regimes 
10.3 The Chairman
 requested the United States to make its statement under the second item it had 
requested under Other Business, namely  Nigeria Reference Price Regimes. 
 10.4 The representative of the United States
 said that her delegation remained concerned over 
Nigeria's use of reference prices to assess duties on im ports of rice instead of using the actual import 
value.  This practice, on its face, raised seri ous doubts as to its consistency with Nigeria's WTO 
commitments under GATT Article 7.2 and Article 1. 1 of the Customs Valuation Agreement.  She 
asked Nigeria to explain its reference price regime.  Specifically, i) how were import tariffs on rice currently determined;  ii) how were reference pric es calculated;  What triggered revisions and how 
often did these take place;  iii)  once determined or  revised, were reference prices published and made 
available to the public;  if so, how;  if not, what  was the justification for not making the prices 
available to the public?  She added that under the WTO Customs Valuation Agreement, import values 
shall be based on the actual "transaction value" of the good.  Nigeria was obligated to comply with the 
Agreement.  Could Nigeria explain how its use of reference pricing was compatible with the 
Agreement?  Finally, her delega tion had learned that Nigeria had agreed to discuss the issue 
bilaterally and it looked forward to working with constructively with Nigeria in addressing this issue. 
 
10.5 The Chairman
 proposed that the Committee take note of the statements made. 
 10.6 The Committee so agreed
. 
 (iii) Date of the next meeting 
10.7 The Chairman
 informed Members that the next mee ting of the Committee was scheduled for 
6 May 2008.      10.8 The meeting was adjourned.  
 
    
 
     
 
    
 
   G/VAL/M/44 
 Page 15 
 
 
  Annex I  
 
Report to the Committee on Customs Valuatio n on the work of the Technical Committee on 
Customs Valuation and on technical assistance. 
 
(October, 2007) 
 
 
  Since the last meeting of the Committee on Customs Valuation, the Technical Committee on 
Customs Valuation (Technical Committee) did not hold any meeting. It will hold its 25
th Session from 
22 to 25th October at the WCO Headquarters in Brussels. 
  The report of its 24
th Session and WCO Secretariat’s programme of technical assistance in the 
field of Customs valuation has already b een presented to the Committee in May 2007. 
 
Administrative Matters Related to the Application of the Agreement  
  The Council at its 109/110
th Sessions  in June 2007 adopted the revised Valuation Control 
Handbook which had been approved by the Technical Committee at its 24th Session and the same is 
under publication.  The Council also adopted th e Commentary 22.1 on “Sold for export” which had 
been approved by the Technical Committee at its 24th Session. 
 Second Joint WCO-OECD Conference on Transfer Pricing
 
  The Second Joint WCO-OECD Conference on Transfer Pricing was held at the WCO on the 
22
nd and 23rd May 2007.  It was attended by over 270 delegates from the WTO, WCO, OECD, 
Customs and Tax Administrations and the Private Sector.  The said Conference dealt with issues 
relating to differences and similarities of Valuati on rules of Transfer Pricing, Customs and VAT and 
the desirability and feasibility of convergence.  It also discussed specific issu es of valuing intangibles 
and exchange of information.  The Conference  recommended encouraging dialogue and cooperation 
between the Customs administrations, Tax author ities and the business community and suggested 
setting up of a Focus Group as a way forward. 
 Technical Assistance and Capacity Building.
 
  Since our last report to the Committee on Cu stoms Valuation, the WCO Secretariat conducted 
one regional seminar on implementation of the WTO Agreement for the countries of the Asia/Pacific 
region in Shanghai from 4
th to 8th June 2007. 
  The WCO is organizing the 46
th Fellowship Programme for English-speaking officers of 
Customs from 13 countries from the 1st to 26th October at the WCO Headquarters. 
 
25th Session of the Technical Committee  
  At its 25
th Session, the Technical Committee will continue to consider the technical questions of 
Royalties and License Fees submitted by Br azil, Canada, Colombia and Japan. 
 
 The Technical Committee will also di scuss the following technical issues: 
 
• Customs Valuation of imported electricity (Brazil) 
 G/VAL/M/44 
Page 16  
 
  • Customs Valuation treatment of busin ess design documentation (Kazakhstan) 
 
• The issue of “Group under invoicing” (Pakistan) 
 
• Valuation of perfume testers (Mauritius) 
 
• Valuation of cinematographic films (Mauritius) 
 
Besides the technical issues, it w ill also deliberate upon the preparations for the Theme Meeting in 
spring 2008 and the Focus Group on Transfer Pricing meeting scheduled for 26
th October. 
 Focus Group on Transfer Pricing
 
 
 As a sequel to the recommendation of the Second Joint WCO-OECD Conference on Transfer 
Pricing in May 2007, a Focus Group on Transfer Pr icing has been set up with representatives of the 
WTO, WCO, OECD, Customs, Tax Administrations and th e Private Sector.  It is scheduled to have its 
first meeting on 26th October 2007 in Brussels.  It will delib erate on issues of convergence between 
Transfer Pricing and Customs valuation, In tangibles and greater certainty for business. 
 
Private Sector Seminar on Transfer Pricing  
 The WCO will hold a Seminar for the private sector on 13
th-14th November 2007 on Customs 
Valuation and Transfer Pricing at the WCO Headquarters.  
 
 
__________