WORLD TRADE  
ORGANIZATION   
G/VAL/W/212 
8 November 2011 
 (11-5723) 
Committee on Customs Valuation Original: English 
  
 
NOTIFICATIONS UNDER ARTICLE 22 OF THE CUSTOMS  
VALUATION AGREEMENT 
 
Answers to the request of the United States on the Ukrainian legislation 
 
 
 The following communication, dated 4 November 2011, is circulated at the request of the 
delegation of Ukraine.  
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With regard to the U.S. request (G/VAL /W/207 of 19 October 2011) for additional 
information as to the customs valuation legislati on, Ukraine would like to provide the following 
explanation.   
 
Question 1 
 
Article 266 of the Customs Code states the cu stoms value shall be determined in accordance 
with the price of the contract.  We have been a dvised by Ukrainian Customs Officials that it views 
direct contracts differently than indirect cont racts.  Would Ukraine please explain the difference 
between a direct contract and an indirect contract?  Can an indirect contract price form the basis of the 
customs value under this article?  
Answer to Question 1  
 
According to the commitments undertaken by Ukraine at accession to  the WTO, Ukraine's 
legislation on customs valuation was brought  in conformity with the GATT/WTO.  
 
The procedure and methods of determining cu stoms value of goods crossing the customs 
border of Ukraine are stipulated by the Section XI of the Customs Code of Ukraine and are based on 
the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 
1994, being the same for all goods crossing the cust oms border of Ukraine.  Customs value of goods 
and method of its determination are declared by the declarant when moving goods across the customs 
border of Ukraine.  According to the legislation of  Ukraine in force, the method of determining the 
customs value of the contract at a price of imported goods (the cost of operations) should be 
considered as principle one, irrespective of the type  of contract (direct or indirect) under which goods 
are imported.  
 
According to Article 267 of the Customs Code of  Ukraine (paragraph 1 of the Article 1 of the 
Agreement) the custom value of the imported goods shall be the transaction value, that is the price 
actually paid or payable for the goods when sold fo r export to the country of importation adjusted in 
accordance with the provisions of Article 267 (Article 8 of the Agreement), provided: G/VAL/W/212 
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  1. That there are no restrictions as to the use of the goods by the buyer except those which:  
 
(a) settled by the law or established by th e governmental authorities in Ukraine;  
(b) limit the geographical area in which the goods may be resold (alienate subsequently);  
(c) do not substantially affect the value of the goods. 
 
2. That with respect to the goods being valued the sale or price is not subject to some condition 
or consideration for which a value cannot be determined; 
 
3. That no part of the proceeds of any subseque nt resale, disposal or use of the goods by the 
buyer will accrue directly or indirectly to th e seller, unless an appropriate adjustment can be 
made in accordance with the provisions of the part II of the mentioned Article; 
 4. That the buyer and the seller are not related,  or where the buyer and the seller are related, 
these relations will not influence the value of  goods.  If there is a reasonable ground for 
considering that the relationship influenced the price of the valued goods, the customs 
administration shall communicate its grounds to the importer and the im porter shall be given 
an opportunity to respond and prove that the re lationship between the buyer and the seller did 
not influence the value of the goods that was actua lly paid or should be paid for valued goods. 
If the importer so requests, the communicati on of the grounds shall be in writing.  
 
The following example (data) will prove the fact that the cost of operation is irrespective of 
the type of a contract (direct or indirect ) under which goods are imported into Ukraine: 
 During 9 months of 2011 to the custom territory  of Ukraine, there were imported 2 217, 06 
thousand tons of U.S. origin goods.  The quantity of imports was the following:  2% - 
imported under direct contract (the seller of  the goods was the producer) and 98% - imported 
under indirect contract (the goods were sold by resellers).  At this, 95, 1% of the volume (by 
weight) of the mentioned goods imported into Ukraine were arranged according to method 1. 
 
Question 2 
Please explain why the term "price of the contr act" is used in Article 266 and how this is 
consistent with the CVA. 
Answer to Question 2  
 
Article 266 of the Customs Code of Ukraine cont ains the methods of definition of the customs 
value of imported goods and specifies the order of  their application.  The names of all the three 
methods contain the term "according to the price of the contract":  
 
1. Method of defining of the customs value of imported goods according to the price of the 
contract (the cost of operations),  
2. Method of defining of the customs value of imported goods according to the price of the 
contract as to identical goods,  
3. Method of defining of the customs value of imported goods according to the price of the 
contract as to similar goods. 
 
The term "according to the price of the contract " is used in the names of the above mentioned 
methods for the reason that the price for goods (the  cost of operations), that are moved across the 
customs border of Ukraine under such a contract, is defined by this contract.  The mentioned names 
are used entirely for making reference for a certa in method and do not influence the principle of 
defining of the customs value under this or that method.  G/VAL/W/212 
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  It should be noted that the order of defining of the customs value under the mentioned 
methods is regulated by Articles 267, 268 and 269 of the Customs Code of Ukraine.  Pursuant to the 
provisions of the mentioned Articles the custom value is a value of operation with evaluated, identical 
or similar goods that may be accordingly corrected, if necessary. 
 
Taking into consideration the above mentioned, Ukraine holds a view that the provisions of 
the Customs Code of Ukraine are in conformity w ith the relevant provisions of the Agreement.   
 
Question 3 
 
How often is the transaction value rejected?  What is the percentage of importations 
determined under Articles 1-7, respectively?  
Answer to Question 3 
 
The statistics of evaluation as to the goods imported into Ukraine during 9 months of 2011 is 
the following:  
 Method 1 - 90, 6%,  
 Method 2 - 2, 18%,  
 Method 3 - 1, 31%,  
 Method 4 - 0, 0011%,  
 Method 5 - 0, 06%,  
 Method 6 - 5, 82%. 
 
Question 4 
 
The United States has also received numerous complaints about Ukraine's use of minimum 
reference prices as found in the customs valuation data base, which form the basi s of customs values.  
Does the reference database include a range of va lues?  How do Customs Officials determine which 
value to apply?  
Answer to Question 4 
 
The customs value of goods and the methods of its defining are declared to the Customs 
authority by the declarant when moving goods across the customs border of Ukraine.  The declared by 
the declarant customs value and the documents as to its defining should be based on the objective and 
documented data, which is a subject of calculation.   
 
Customs authorities control the accuracy of customs value of goods according to the 
requirements of the Customs Code of Ukraine.  Where the customs value cannot be determined under 
the method 1 according to Article 267 of the Customs Code of Ukraine, there should be carried out 
the consultations between the customs authority and the declarant with the aim of choosing the 
grounds for customs value of goods according to th e provisions of Articles 268 and 269 of the Code 
(Article 2 and Article 3 of the Agreement).  In  the process of such consultations the customs 
administration and the declarant may, at the cond ition of confidentiality, exchange the information 
which each of them possesses (Article 266 of the Code (paragraph 2 of the General Introductory 
Commentary of the Agreement)). G/VAL/W/212 
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  In such a case there may be used the inform ation which the customs administration possesses 
about the customs value of identical or similar already imported goods and information on which is 
accumulated in the data base - the Integrated Informat ion System of  the Customs Service of Ukraine.  
The mentioned data base is created on the informa tion which is automatically got from the electronic 
copies of customs freight declarations after th e customs clearance of goods is finished.   
 
At this, the following factors should be consid ered:  the sale on the same commercial level 
and almost in the same amount as the goods that ar e valued, the moment of export of evaluated goods 
into Ukraine, physical characteristics, quality a nd commercial reputation, e xporting county, producer, 
etc.  If, in the result of the application of the men tioned articles, there appears more than one value of 
identical or similar goods, the lowest custom s value is applied for imported goods.   
 If the custom value of the imported goods cannot be determined under the provisions of 
Article 268 and Article 269 of the Customs Code of  Ukraine, as the basis for the value determining 
may be taken the price of sale of the identical or  similar goods in Ukraine, which is not connected 
with the sale of goods by the seller to the buyer according to the provisions of Article 271 of the 
Customs Code of Ukraine (Article 5 of the Agreem ent), or may be determined under the provisions of 
Article 272 of the Customs Code of Ukraine (Artic le 6 of the Agreement) as computed value. 
 At this, every following method is used onl y if the customs value of goods cannot be 
determined by the use of the previous method.  The methods which based on the computed value may 
be used in any sequence at the discretion of a d eclarant.  If none of the mentioned methods can be 
used the customs value of the imported goods is de termined under the provisions of Article 273 of the 
Customs Code of Ukraine (Article 7 of the Agreement). 
 
In accordance with foregoing, determining of the customs value of goods moving across the 
customs border of Ukraine, on the basis of minimum, free or simulated prices, including indicating or 
reference prices, is not foreseen by the Ukrainia n legislation and is not used in practice.   
 
Question 5 
 
Do Customs officials have discretion which valu e to apply?  Is guidance published regarding 
the use of the reference price database? 
 
Answer to Question 5 
 
At defining the customs value of goods, that moving across the customs border of Ukraine, 
the customs officials should strictly adhere to the legislation, particularly to the Customs Code of 
Ukraine and the Agreement.  It is foreseen by the provisions of the Article 7 of the Customs Code of 
Ukraine that if the international treaty, concluded officially by Ukraine, prescribes the rules different 
from those foreseen by the provisions of the Customs Code of Ukraine, the rules of the international 
treaty are applied. 
 
Question 6 
 
When the customs value is based on a reference price listed in the database, is the specific 
reference to the line in the database provided to the importer where an explanation is requested? 
 
Answer to Question 6 
 
As explained in the above answers the customs va lue of goods is not based on a reference price.  
If the customs value of goods is defined as the cost  of operations of identical goods (Article 268 of the 
Customs Code of Ukraine (Article 2 of the Agreem ent)) or as the cost of operations of similar goods  G/VAL/W/212 
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  (Article 269 of the Customs Code of Ukraine (Artic le 3 of the Agreement)) the importer is provided a 
specific reference to the operation which was used for customs value determining. 
 
Question 7 
 
Please explain how the reference prices are liste d in the database.  For example, are they 
importer specific or commodity specific? 
 
Answer to Question 7 
The source for creating the database - the Inte grated Information System of the Customs 
Service of Ukraine - is the information which is  automatically got from the electronic copies of 
customs freight declarations after the customs clearance of goods is finished.   
 
 
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