WORLD TRADE  
ORGANIZATION  G/VAL/N/2/SAU/1 
8 January 2007 
 (07-0060) 
Committee on Customs Valuation Original:   English 
  
 
INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE 
AGREEMENT ON CUSTOMS VALUATION 
 
Checklist of issues
 
 
SAUDI ARABIA 
 
  The following communication, dated 3 October 2006, is being circulated at the request of the delegation of Saudi Arabia. 
 
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 In accordance with the paragraph 164 of the WP Report on Saudi Arabia's Accession to the 
WTO, a Ministerial Decree No. 1207 dated 09/05/1425 AH corresponding to 26/06/2004 AG was issued on the Principles of Value Determinati on for Customs Purposes based on the WTO Customs 
Valuation Agreement (CVA).  The Decree was pub lished on the Official Gazette, and all Customs 
ports were duly authorized to apply it in determina tion of the Customs value of imports effective the 
date of Saudi Arabia's accession to the WTO.  
1. Questions concerning Article 1: 
 
(a)  Sales between related persons:  
(i) Are sales between related persons subject to special provisions? 
 
In case doubts exist that price of the imported goods has been influenced by relationship 
between the importer and seller, then such case is dealt according to the Clauses II.5 and 
IV.A.4 of the Ministerial Decree No. 1207 da ted 09/05/1425 AH corresponding to 26/06/2004 
AG. 
 
(ii) Is the fact of intercompany prices prim a facie considered as grounds for regarding the 
respective prices as being influenced? 
 
"Prices of the goods of the international firms" are not considered influenced by relationship 
except in case of application of Article 1.2 to  them, and that the price is duly found to be 
influenced by relationship. 
 
(iii) What is the provision for giving the communication of the afore-mentioned grounds in 
writing if the importer so requests? (Article 1.2(a)) 
 
In case an importer requests the Customs in writing to be advised of the grounds for regarding 
the respective prices as being influenced by relationship, then he is notified in writing of the 
grounds reached during scrutiny of the informa tion furnished by him in connection with the 
circumstances surrounding the sale. G/VAL/N/2/SAU/1 
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  (iv) How has Article 1.2(b) been implemented? 
 
The transaction value in a sale between rela ted persons is accepted and the value is 
determined according to the Clause II.A.4  of the Ministerial Decree No. 1207 dated 
09/05/1425 AH corresponding to 26/06/2004 AG which is based on Customs Valuation 
Agreement (CVA) if the importer demonstrates th at such value of the imported goods closely 
approximates, at or about the same time, to one of the values noted below:  1. the transaction value of identical or similar goods in sales to unrelated buyers for 
export to the same country of importation; 
2. the customs value of identical or similar goods as determined under the Clause IV: 
Deductive Value; 
3. a customs value of identical or similar goods as determined under the Clause VII of 
the Ministerial Decree, based on Artic le 6 of the CVA (Computed Value). 
 
In applying the foregoing tests, due account sha ll be taken of demonstrated differences in 
commercial levels, quantity levels , and elements enumerated in the Clause IV.B of the same 
Article and costs incurred by the seller in sal es in which the seller and the buyer are not 
related that are not incurred by the seller in sal es in which the seller and the buyer are related. 
 Article 1.2(b) is implemented upon request by the importer and for comparison purposes only.  
It may not be adopted as alternative values in accordance with that Article. 
 
(b) If the importer accepts the damaged goods, the value is determined as  following: 
   1. If all goods in the shipment are damage d, the transaction value is not applicable 
because the price actually paid or payable do not cover the goods in damaged state. 
  2. If the shipment is exposed to partial da mage, then the transaction value can be used 
for the part not damaged.  As far as the damaged part is concerned, its value is 
assessed according to its condition at the date of registering the Customs Declaration in accordance with the GCC Common Customs Law Article 18. 
 
Regarding the lost goods, the transaction value is not applied because such goods basically 
did not arrive.  Provisions concerning the valuation of damage d goods:  their value is determined according 
to their condition at the time of registering the Customs Declaration. 
 
2. How has the provision of Article 4 to allo w the importer an option to reverse the order 
of application of Articles 5 and 6 been implemented? 
 
 The Computed Value (Article 5) is app lied before the Deductive Value automatically 
(Article 4) if the importer so requests the Customs in writing while lodging the Customs 
Declaration, in accordance to Clause III.B of th e Ministerial Decree.  If the value cannot be 
determined using the computed value method,  the goods will be valued using the deductive 
value method.  If it is found impossible, the value will be determined according to Clause 
VIII of the Ministerial Decree. 
 
3. How has Article 5.2 been implemented? 
 
 According to Clause VI.3 of the Ministeria l Decree mentioned above, and the notes in the 
Interpretative Annex (VI.3.1 and 2), the Super Deductive Value provided for in Article 5.2 of  G/VAL/N/2/SAU/1 
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  the CVA is applied if neither the imported goods  nor identical nor similar goods are sold in 
Saudi Arabia in the condition as imported.  If the importer so requests, the customs value 
shall be based on the unit price at which the imported goods, after further processing, are sold in the greatest aggregate quantity to persons w ho are not related, due allowance being made 
for the value added by such processing and the deductions provided for in  paragraph 1(a) of 
the CVA. 
 
4. How has Article 6.2 been implemented? 
 
 According to the Clause VII.2 of the Minister ial Decree mentioned a bove, Article 6.2 of the 
CVA is implemented in accordance to the following text: 
   Any person resident outside the GCC States shall not be required to produce for 
examination, or to allow access to, any account or other record for the purposes of determining a computed value.  However, the customs administration may verify the 
information supplied by the producer of imported goods for the purposes of 
determining the customs value under the provisi ons of this Article in another country, 
with agreement of the producer, provided a sufficient advance notice is given to the government of the country where the investigation is to take place, and the government does not object to it. 
 5. Questions concerning Article 7:  
(a) What provisions have been made for making value determinations pursuant to Article 7? 
 
In order to achieve consistency in the Custom s valuation procedures in Saudi Arabia with 
Article 7 of the CVA, all provisions thereof are incorporated in the Clause VIII and relevant 
notes in the Interpretative Annex (VIII.A) of the Ministerial Decree. 
 
(b) What is the provision for informing the im porter of the customs value determined under 
Article 7? 
 
The importer is informed of the Customs va lue determined under Article 7 of the CVA 
according to the provisions of the Clau se VIII.C of the Ministerial Decree. 
 (c) Are the prohibitions found in Article 7.2 delineated? 
 
The prohibitions in determina tion of the Customs value in accordance with Article 7.2 are 
duly delineated in the Clause VIII.B of the Ministerial Decree. 
 
6. How have the options found in Article 8.2 been handled? In the case of f.o.b. application, 
are ex-factory prices also accepted? 
 
 The Customs value of imported goods is determined on the basis of the CIF price wherein the 
adjustments mentioned in Article 1. 1 and 1.2 are taken into account. 
 
7. Where is the rate of exchange pub lished, as required by Article 9.1? 
 
The foreign currency exchange rates are publishe d in the bulletins issued regularly by the 
competent authorities in Saudi Arabia (i.e., Saudi Arabian Monetary Agency (SAMA)). 
 G/VAL/N/2/SAU/1 
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  8. What steps have been taken to ensure confidentiality, as required by Article 10? 
 
In connection with confidentiality of information,  the Clause I.3 of the Ministerial Decree as 
well as Article 51 of the GCC Common Custom s Law provide that the information, 
confidential or furnished on a confidential basi s for purposes of customs valuation, shall be 
treated as strictly confidential, and may not be disclosed except to the extent required to be 
disclosed in the context of judicial proceedings. 
 
9. Questions concerning Article 11: 
 
(a) What rights of appeal are open to the importer or any other person? 
 
The rights of appeal open to the importer or whoever is liable for payment of the Customs duty are mentioned in the Clause 1.2 which thus  provides: "The importer or any person liable 
for payment of the customs duties can object and appeal against the assessment of customs 
value, without penalty, as following: 
 a. at the administration level:  i. Director, customs port,   ii. Valuation adjudication committee  
b. an independent judiciary body (Board of Grievances)." 
 
(b) How is he to be informed of his right to further appeal? 
 
The importer can be aware of his right to furthe r appeal through referring to Article I.2 of the 
Ministerial Decree already published in the Official Gazette Umm al-Qura issue 4072 dated 
23.10.1426 AH corresponding to 25.11.2005 AG, as well as by accessing the Saudi Customs website www.customs.gov.sa.  The Article 51 of the GCC Common Customs Law provides 
for this right. 
 
10. Provide information on the publication, as required by Article 12, of: 
 (a) Regarding publication of the laws, regulations and judicial decisions, the GCC Common 
Customs Law is duly published in the Offi cial Gazette Umm al-Qura issue 3930 dated 
27.12.1423 AH corresponding to 28.02.2003 AG. The Saudi Customs website mentioned above contains also the regulations and directives issued by the Customs. 
 
 So far as the judicial decisions are concer ned, they are published in accordance with 
Article 47 of the Board of Grievances Law taki ng into due account not to breach Article 10 of 
the CVA which provides that the information wh ich is by nature confidential or which is 
provided on confidential basis shall not be di sclosed except to the extent that it may be 
required to be disclosed in the context of judicial proceedings. 
 
(b)  Is the publication of further rules anticipated? Which topics would they cover? 
  In accordance with the provisions of Article 71 of the Basic Rule of Governance, any new 
regulations or rules of implementation shall be  published in the Official Gazette, and shall 
come into effect on the date of publication unless otherwise provided for.  In addition, 
publication of any new rules is not currently anticipated. 
  G/VAL/N/2/SAU/1 
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  11. Questions concerning Article 13: 
 
 In connection with provision of Article 13 of the CVA which requires that the Customs 
legislation shall contain circumstances and cond itions of right of the importer to clear his 
goods, if it becomes necessary to delay the final determination of such customs value, please 
note that the Clause I.A properly explains this aspect. 
 
12. Questions concerning Article 16:  
 Article 1.I.2 of the GCC Common Customs Law Rules of Implementation duly provides for 
the right of importer to obtain a written clarifi cation of the method used in determining the 
customs value of his goods.  The Clause VIII.C of the Ministerial Decree also provides for 
such right. 
 
13.  How have the Interpretative Not es of the Agreement been included? 
 
The Interpretative Notes to the CVA are duly inco rporated into the Interpretative Annex to 
the Ministerial Decree 
 
14.  How have the provisions of the Decision on the Treatment of Interest Charges in the 
Customs Value of Imported Goods been implemented? 
 
According to Clause IV.C.1.e of the Ministeria l Decree and Interpretativ e Annex thereof, the 
Decision 3.1 of the Committee on Customs Valuation on Treatment of Interest Charges is duly implemented, and the interest charg es are not included in the customs value. 
 15.  For those countries applying paragraph 2 of  the Decision on the Valuation of Carrier 
Media Bearing Software for Data Processing E quipment, how have the provisions of this 
paragraph been implemented? 
 
Regarding determination of the customs value of information carrier media, the Clause I.8 of 
the Ministerial Decree provides that the customs value of the information carrier media such 
as the magnetic tapes or the like, containing data or computer software recorded thereon, shall 
be assessed on the basis of value of such me dia only according to the paragraph 2 of the 
Decision No. 4.1 adopted by the WTO Committee on Customs Valuation. 
 
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