WORLD TRADE  
ORGANIZATION  G/VAL/N/1/TZA/1 
14 November 2006  
 (06-5506) 
Committee on Customs Valuation Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 22 OF THE AGREEMENT ON  
IMPLEMENTATION OF ARTICLE VII OF THE GENERAL 
AGREEMENT ON TARIFFS AND TRADE 1994 
 
TANZANIA 
 
  The following communication, dated 23 October 2006, is being circulated at the request of the delegation of Tanzania.  
_______________ 
 
 
 As required of all Members of the WTO,  we would like to submit notification
1 of our 
country's national legislation concerning the im plementation of Article VII of the GATT 1994, and 
response to the Organization's Checklist of Issues.   As you may recall, our Customs and Excise 
Department began applying the WTO Agreement on Customs Valuation (ACV) on 1 January 2001.  
In this connection, therefore, kindly find the fo llowing four documents we are bringing to you under 
this cover:  (i) Notification of Article 22 of the Agreemen t on Implementation of Article VII of the GATT 
(ii) Information on Implementation and Administ ration of the Agreement on Customs Valuation 
(iii) Notification under the Decisions A.3 and A.4 concerning the Interpretation of the Agreement 
on Implementation of Article VII of the GATT 1994 
(iv) Notification under paragraph 2 of Annex III of the Agreement on Implementation of 
Article VII of the GATT 1994 
 
_______________ 
 
 
                                                     
 
1 In English only. G/VAL/N/1/TZA/1 
Page 2  
 
  PART IV 
 
THE AMENDMENT OF THE EAST AFRICAN CUSTOMS AND TRANSFER 
TAX MANAGEMENT ACT, E.A. CAP. 27 
 
Construction and 
commencement E.A. Cap. 27 9. This Part shall be read as one with the East African Customs and Transfer 
Tax Management Act, and shall come into operation on the First day of January, 2001 
 Repeal and 
replacement of 
section 108  
10.  The principal Act is amended by repealing section 108 and replacing it with 
the following new section: 
"Determination of 
value of goods liable to ad 
valorem  import 
duty "122.(1)  Where imported goods are liable to import duty  ad valorem , then the 
value of such goods shall be determined  in accordance with the Fourth Schedule 
and import duty shall be paid on that value. 
 
(2)  Upon written request, the importer shall be entitled to an explanation in writing 
from the proper officer as to how the customs value of the importer's goods was determined. 
  
(3)  Where, in the course of determining the customs value of imported goods, it 
becomes necessary for the customs to delay the final determination of such 
customs value, the delivery of the goods shall, at the request of the importer, be made:    Provided that before granting such  permission the proper officer may 
require the importer to provide sufficient guarantee in the form of a surety, 
a deposit or some other appropriate security as the proper officer may 
determine, to secure the ultimate payment of customs duties for which the goods may be liable. 
 (4)  Nothing in the Fourth Schedule shall be construed as restricting or calling into 
question the rights of the proper officer to satisfy himself or herself as to the truth 
or accuracy of any statement, document or declaration presented for customs valuation purposes."  (5)  The Council shall publish in the Gazette  judicial decisions and administrative 
rulings of general application giving effect to the Fourth Schedule. 
 
(6)  In applying or interpreting this section and the provisions of the Fourth Schedule due regard shall be taken of the decisions, rulings, opinions, guidelines, 
and interpretations given by the Directorate, the World Trade Organization or the Customs Cooperation Council. 
 
(7)  The rate of exchange to be used fo r determining the equivalent of a Partner 
State currency of any foreign currency shall be the selling rate last notified by the 
Central Bank of the respective Partner St ate when an entry is presented to and 
accepted by the proper officer. 
  G/VAL/N/1/TZA/1 
 Page 3 
 
 
  "FOURTH SCHEDULE 
 
PART I 
 
Value of imported goods liable to ad valorem  import duty 
 
1. (1)  In this Schedule: 
  "customs value of imported goods" means th e value of goods for the purposes of levying ad 
valorem  duties of customs on imported goods; 
 
 "identical goods" means goods which are same in all respects, including physical characteristics, quality and reputation.  Minor di fferences in appearance shall not preclude goods 
otherwise conforming to the definition from being regarded as identical;  
 "similar goods" means goods which, although not alike in all respects, have like 
characteristics and like component materials which enab le them to perform the same functions and to 
be commercially interchangeable.  The quality of the goods, their reputation and the existence of a 
trademark are among the factors to be consider ed in determining whether goods are similar. 
  "identical goods" and "similar goods" do not include, as the case may be, goods which 
incorporate or reflect engineering, development,  art-work, design work, and plans and sketches for 
which no adjustment has been made under sub-pa ragraph (1)(b)(iv) or paragraph 9 because such 
elements were undertaken in the Partner States;   "produced" includes grown, manufactured and mined; 
 
(2)  For the purposes of this Schedule:  (a)   Goods shall not be regarded as "iden tical goods" or "similar goods" unless they were 
produced in the same country as the goods being valued. 
 
(b)   Goods produced by different persons sha ll be taken into account only when there are no 
identical goods or similar goods, as the case may be, produced by the same person as the goods being valued. 
 (3)   For the purposes of this Schedule, pers ons shall be deemed to be related only if: 
 
(a)  they are officers or directors of one another's businesses; (b)   they are legally recognized partners in business; (c)   they have an employer and employee relationship; (d)   any person directly or indirectly owns, c ontrols or holds five percent or more of the 
outstanding voting stock or shares of both of them; 
(e)   one of them directly or indirectly controls the other; 
(f)   both of them are directly or indirectly controlled by a third person; (g)   together they directly control a third person;  or (h)   they are members of the same family.  
(4)   A person who associates with another person in business, such that one is the sole agent, 
distributor or sole concessionaire, however described , of the other shall be deemed to be related for 
the purposes of this Schedule if they fall  within the criteria of sub-paragraph 3. 
 G/VAL/N/1/TZA/1 
Page 4  
 
  TRANSACTION VALUE 
 2.(1)   The customs value of imported goods sha ll be the transaction value, which is the price 
actually paid or payable for the goods when sold for export to the Partner State adjusted in accordance 
with the provisions of paragraph 9, but where: 
 
(a)   there are no restrictions as to the dispos ition or use of the goods by the buyer other than 
restrictions which: 
 (i)   are imposed or required by law or by the public authorities in the Partner State;  (ii)   limit the geographical area in which the goods may be resold;  or 
 (iii)   do not substantially affect the value of the goods; 
 (b)   the sale or price is not subject to some c ondition or consideration for which a value cannot be 
determined with respect to the goods being valued; 
 
(c)   no part of the proceeds of any subsequent r esale, disposal or use of the goods by the buyer 
will accrue directly or indirectly to the seller,  unless an appropriate adjustment can be made in 
accordance with the provisions  of paragraph 9;  and 
 (d)   the buyer and seller are not related, or where the buyer and seller are related, that the 
transaction value is acceptable for customs purpo ses under the provisions of subparagraph (2). 
 
 (2)(a)   In determining whether the transa ction value is acceptable for the purposes of 
subparagraph (1), the fact that the buyer and the seller are related within the meaning of 
paragraph (1) shall not in itself be a ground for regarding the transaction value as 
unacceptable.  In such case th e circumstances surrounding the sale shall be examined and the 
transaction value shall be accepted provided that the relationship did not influence the price.  
If, in the light of information provided by th e importer or otherwise, the proper officer has 
grounds for considering that the relationship in fluenced the price, he shall communicate his 
grounds to the importer and such importer sha ll be given a reasonable opportunity to respond 
and where the importer so requests, the communication of the grounds shall be in writing; 
 
(b)   In the sale between related persons, the transaction value shall be accepted and the goods 
valued in accordance with the provisions of subparagraph (1) whenever the importer 
demonstrates that such value closely approxi mates to one of the following accruing at or 
about the same time: 
 
 (i)  the transaction value in sales to unrelat ed buyers of identical or similar goods for 
export to the Partner State; 
 (ii)  the customs value of identical or si milar goods as determined under the provisions of 
paragraph 6; 
 (iii)  the customs value of identical or si milar goods as determined under the provisions of 
paragraph 7. 
  Provided that, in applying the provisions under subparagraph (2)(a) and (b) of this paragraph, 
due account shall be taken of demonstrated diffe rences in commercial levels, quantity levels, the 
elements enumerated in paragraph 9 and costs incu rred by the seller in sales in which the seller and 
the buyer are not related that are not incurred by th e seller in sales in which the seller and the buyer 
are related.   G/VAL/N/1/TZA/1 
 Page 5 
 
 
   The tests set forth in subparagraph (2)(b) are to  be used at the initiative of the importer and 
only for comparison purposes.  Substitute values ma y not be established under the provisions of 
subparagraph (2)(b).  TRANSACTION VALUE OF IDENTICAL GOODS 
 
3. (1)(a) Where the customs value of the imported goods  cannot be determined under the provisions of 
paragraph 2, the customs value shall be the transaction value of identical goods sold for 
export to the Partner State and exported at or a bout the same time as the goods being valued;  
 
(b)   In applying the provisions of this paragraph, the transaction value of identical goods in a sale 
at the same commercial level and in substantia lly the same quantity as the goods being valued 
shall be used to determine the customs value and where no such sale is found, the transaction 
value of identical goods sold at a different commercial level or in different quantities, 
adjusted to take account of differences attributable  to commercial level or to quantity, shall be 
used, provided that such adjustments can be made on the basis of demonstrated evidence 
which clearly establishes the reasonableness a nd accuracy of the adjustment, whether the 
adjustment leads to an incr ease or decrease in the value; 
 (2)   Where the costs and charges referred to in  paragraph 9(2) are included in the transaction 
value, an adjustment shall be made to take account of significant differences in such costs and charges 
between the imported goods and the identical goods in  question arising from differences in distances 
and modes of transport.  (3)   Where in applying the provisions of this  paragraph, more than one transaction value of 
identical goods is found, the lowest such value shal l be used to determine the customs value of the 
imported goods. 
 TRANSACTION VALUE OF SIMILAR GOODS  4.(1)(a)  Where the customs value of the imported goods  cannot be determined under the provisions of 
paragraphs 2 and 3, the customs value shall be the transaction value of similar goods sold for 
export to the Partner State and exported at or about the same time as the goods being valued; 
 (b)   In applying this paragraph, the transacti on value of similar goods in a sale at the same 
commercial level and in substantially the same  quantity as the goods being valued shall be 
used to determine the customs value.  Where no such sale is found, the transaction value of 
similar goods sold at a different commercial leve l and/or in different quantities, adjusted to 
take account of differences attributable to comme rcial level and/or to qua ntity, shall be used, 
provided that such adjustments can be made on the basis of demonstrated evidence which 
clearly establishes the reasonableness and accuracy of the adjustment, whether the adjustment 
leads to an increase or a decrease in the value. 
 
(2)   Where the costs and charges referred to in subparagraph (2) of paragr aph 9 are included in the 
transaction value, an adjustment shall be made to take account of significant differences in such costs 
and charges between the imported goods and the sim ilar goods in question arising from differences in 
distances and modes of transport.  
(3)   Where, in applying the provisions this para graph, more than one transaction value of similar 
goods is found, the lowest such value shall be u sed to determine the customs value of the imported 
goods.   G/VAL/N/1/TZA/1 
Page 6  
 
  REVERSAL OF ORDER OF APPLICATION OF DEDUCTIVE VALUE AND COMPUTED 
VALUES  5.   Where the customs value of the imported goods  cannot be determined under the provisions of 
paragraphs 2, 3 and 4, the customs value shall be  determined under the provisions of paragraph 6 or, 
when the customs value cannot be determined under that paragraph, under the provisions of paragraph 
7 save that, at the request of the importer the orde r of application of para graphs 6 and 7 shall be 
reversed.  DEDUCTIVE VALUE 
 
6.(1)(a)  Where the imported goods or identical or sim ilar imported goods are sold in the Partner State 
in the condition as imported, the customs value of the imported goods under the provisions of this paragraph shall be based on the unit price at which the imported goods or identical or 
similar imported goods are so sold in the greates t aggregate quantity, at or about the time of 
the importation of the goods being valued, to pe rsons who are not related to the persons from 
whom they buy such goods, subject to deductions for the following: 
  (i)   either the commissions usually paid or  agreed to be paid or the additions usually 
made for profit and general expenses in conn ection with the sales in such country of 
imported goods of the same class or kind; 
 (ii)   the usual costs of transport and in surance and associated co sts incurred within the 
Partner State; 
 (iii)   where appropriate, the costs and ch arges referred to in pa ragraph 9(2) ;  and 
 (iv)   the customs duties and other national ta xes payable in the Partner State by reason of 
importation or sale of the goods; 
 
(b)   Where neither the imported goods nor identical nor similar imported goods are sold at or 
about the time of importation of the goods being valued, the customs value shall, subject to 
the provisions of subparagraph (1)(a), be based  on the unit price at which the imported goods 
or identical or similar imported goods are sold  in the Partner State in the condition as 
imported at the earliest date after the importati on of the goods being valued but before the 
expiration of 90 days after such importation. 
 (2)   Where neither the imported goods nor identi cal nor similar imported goods are sold in the 
Partner State in the condition as imported, then, if th e 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 in the Partner State who are not related to the persons from whom they 
buy such goods, due allowance being made for th e value added by such processing and the deductions 
provided for in subparagraph (1)(a).  COMPUTED VALUE  
7.(1)   The customs value of imported goods under the provisions of this paragraph shall be based on 
a computed value which shall consist of the sum of:  (a)  the cost or value of materials and fabrication or other processing employed in producing the 
imported goods; 
(b)  an amount for profit and general expenses equal to that usually reflected in sales of goods of 
the same class or kind as the goods being valued which are made by producers in the country 
of exportation for export to the Partner State; 
(c)   the cost or value of all other expen ses necessary to reflect the costs added under 
paragraph 9(2).  G/VAL/N/1/TZA/1 
 Page 7 
 
 
  (2)   A person who is not resident in the Partner State may be required to or compelled to produce 
for examination, or to allow access to, any account or other record for the purposes of determining a 
computed value.  However, information supplied by  the producer of the goods for the purposes of 
determining the customs value under the provisions of  this paragraph may be  verified in another 
country by a proper officer with the agreement of  the producer and provided sufficient advance notice 
is given to the government of the country in question and the latter does not object to the 
investigation.  FALL BACK VALUE  
8.(1)   Where the customs value of the imported goods cannot be determined under the provisions of 
paragraphs 2, 3, 4, 5, 6, and 7, inclusive, th e customs value shall be de termined using reasonable 
means consistent with the principles and general prov isions of this Schedule and on the basis of data 
available in the Partner State.  
(2)   Customs value shall not be determined under the provisions of this paragraph on the basis of: 
 (a)  the selling price in the Partner State of goods produced in the Partner State; (b) a system which provides for the acceptan ce for customs purposes of the higher of two 
alternative values; 
(c)  the price of goods on the domestic market of the country of exportation; 
(d)  the cost of production other than computed values which have been determined for identical 
or similar goods in accordance with the provisions of paragraph 7; 
(e)  the price of the goods for export to a country other than the Partner State; (f)  minimum customs values;  or (g)  arbitrary or fictitious values. 
 
(3)   Where the importer so requests, he or she shall be informed in writing of the customs value 
determined under the provisions of this paragraph and the method u sed to determine such value. 
 ADJUSTMENTS TO VALUE  
9.(1)   In determining the customs value under the pr ovisions of paragraph 2, there shall be added to 
the price actually paid or payable for the imported goods as follows:  (a)  to the extent that they are incurred by the buyer but are not included in the price actually paid 
or payable for the goods: 
 
  (i) the commissions and brokerage, except buying commissions;  (ii) the cost of containers which are treated as being one for customs purposes with the 
goods in question; 
 (iii) the cost of packing whether for labour or materials;  
(b)  the value, apportioned as appropriate, of th e goods and services where supplied directly or 
indirectly by the buyer free of charge or at reduced  cost for use in connection with the production and 
sale for export of the imported goods, to the extent th at such value has not been included in the price 
actually paid or payable as follows:  
 (i) materials, components, parts and simila r items incorporated in the imported goods; 
 (ii) tools, dies, moulds and similar items used in the production of the imported goods; 
 (iii) materials consumed in the production of the imported goods; G/VAL/N/1/TZA/1 
Page 8  
 
   (iv) engineering, development, artwork, design work, and plans and sketches undertaken 
elsewhere than in the Partner State and necessary for the production of the imported 
goods; 
 (c)   royalties and licence fees related to the goods being valued that the buyer must pay, either 
directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties 
and fees are not included in the price actually paid or payable;  (d)  the value of any part of the proceeds of any subsequent resale, disposal or use of the imported 
goods that accrues directly or indirectly to the seller. 
 
(2)   In determining the value for duty purposes of  any imported goods there shall be added to the 
price actually paid or payable for the goods:  (a)  the cost of transport of the imported goods to  the port or place of importation into the Partner 
State;  provided that in case of imports by air no freight costs shall be added to the price  paid 
or payable; 
 (b)  loading, unloading and handling charges associ ated with the transport of the imported goods 
to the port or place of importation into the Partner State;  and  
 
(c) the cost of insurance. 
 (3)   Additions to the price actually paid or pa yable shall be made under this paragraph only on the 
basis of objective and quantifiable data.  
(4)   Additions shall not be made to the price act ually paid or payable in determining the customs 
value except as provided in this paragraph.  
  G/VAL/N/1/TZA/1 
 Page 9 
 
 
  PART II 
 
INTERPRETATIVE NOTES 
 
General Notes 
 
Sequential Application of Valuation Methods 
 
1. Paragraphs 2, 3, 4, 5, 6, 7 and 8 define how the customs value of imported goods is to be 
determined under the provisions of this Schedule.  The methods of va luation are set out in a sequential 
order of application.  The primary method for cu stoms valuation is defi ned in paragraph 2 and 
imported goods are to be valued in accordance with  the provisions of this paragraph whenever the 
conditions prescribed therein are fulfilled.  2. Where the customs value cannot be determined under the provisions of paragraph 2, it is to be 
determined by proceeding sequentially through the su cceeding paragraphs to the first such paragraph 
under which the customs value can be determined.  Except as provided in paragraph 5, it is only when 
the customs value cannot be determined under the provisions of a particular paragraph that the 
provisions of the next paragraph in the sequence can be used.  3. Where the importer does not request that the order of paragraphs 6 and 7 be reversed, the 
normal order of the sequence is to be followed, a nd if the importer does so request but it then proves 
impossible to determine the customs value under th e provisions of paragraph 7, the customs value 
shall be determined under the provisions of paragraph 6, if it can be so determined. 
 4. Where the customs value cannot be determined under the provisions of paragraphs 2, 3, 4, 5, 
6 and 7 it is to be determined unde r the provisions of paragraph 8. 
 
Use of Generally Accepted Accounting Principles 
 
1. "Generally accepted accounting principles" refe rs to the recognized consensus or substantial 
authoritative support within the Partner State at a pa rticular time as to wh ich economic resources and 
obligations should be recorded as assets and liab ilities, which changes in assets and liabilities should 
be recorded, how the assets and liabilities and changes in them should be measured, what information 
should be disclosed and how it should be disclo sed, and which financial statements should be 
prepared.  These standards may be broad guideli nes of general application as well as detailed 
practices and procedures.  
 
2. For the purposes of this Schedule, the proper officer shall utilize information prepared in a 
manner consistent with generally accepted accounti ng principles in the Partner State which is 
appropriate for the paragraph in question.  For exam ple, the determination of  usual profit and general 
expenses under the provisions of paragraph 6 would be  carried out utilizing information prepared in a 
manner consistent with generally accepted accounting principles of the Partner State.  On the other 
hand, the determination of usua l profit and general expenses unde r the provisions of paragraph 7 
would be carried out utilizing information prepared  in a manner consistent with generally accepted 
accounting principles of the country of production.  As a further example, the determination of an 
element provided for in paragraph 9(1)(b)(ii) undert aken in the Partner State would be carried out 
utilizing information in a manner consistent with the generally accepted accounting principles of the 
Partner State. 
 G/VAL/N/1/TZA/1 
Page 10  
 
  Note to Paragraph 1 
 
Sub-paragraph 3(e) 
 
 For the purposes of this Schedule, one person sh all be deemed to control another when the 
former is legally or operationall y in a position to exercise restraint or direction over the latter. 
 
Sub-paragraph 4 
 
 For the purpose of paragraph 1, the term "per son" includes a legal person, where appropriate. 
 
Note to Paragraph 2 
 
Price Actually Paid or Payable 
 1. The price actually paid or payable is the total payment made or to be made by the buyer to or 
for the benefit of the seller for the imported goods .  The payment need not necessarily take the form 
of a transfer of money.  Payment may be made by way of letters of credit or negotiable instruments.  
Payment may be made directly or indirectly.  An example of an indirect payment would be the settlement by the buyer, whether in whole or in part, of a debt owed by the seller.  
2. Activities undertaken by the buyer on the buye r's own account, other than those for which an 
adjustment is provided in paragraph 9, are not consid ered to be an indirect payment to the seller costs 
of such activities shall not, therefore, be added to th e price actually paid or payable in determining the 
customs value.  
3. The customs value shall not in clude the following charges or costs, provided that they are 
distinguished from the price actually paid or payable for the imported goods:  (a) charges for construction, erection, assembly, maintenance or technical assistance, undertaken 
after importation on imported goods such as i ndustrial plant, machinery or equipment; 
(b) the cost of transport after importation; 
(c) duties and taxes of the Partner State; 
 4. The price actually paid or payable refers to th e price for the imported goods.  Thus the flow of 
dividends or other payments from the buyer to the seller that do not relate to the imported goods are 
not part of the customs value. 
 
Sub-paragraph (1)(a)(iii) 
 
 Among restrictions which would not render a pr ice actually paid or payable unacceptable are 
restrictions which do not substantially affect the valu e of the goods.  An example of such restrictions 
would be the case where a seller requires a buyer of automobiles not to sell or exhibit them. 
 
Sub-paragraph (1)(b) 
 
1. If the sale or price is subject to some cond ition or consideration for which a value cannot be 
determined with respect to the goods being valu ed, the transaction value shall not be acceptable for 
customs purposes.  Some examples of this include: 
 (a) the seller establishes the price of the importe d goods on condition that the buyer will also buy 
other goods in specified quantities;  G/VAL/N/1/TZA/1 
 Page 11 
 
 
  (b) the price of the imported goods is dependent upon the price or prices at which the buyer of the 
imported goods sells other goods to the seller of the imported goods; 
(c) the price is established on the basis of a fo rm of payment extraneous to the imported goods, 
such as where the imported goods are semi-finish ed goods which have been provided by the 
seller on condition that the seller will receive a specified quantity of the finished goods. 
 
2. However, conditions or consid erations relating to the productio n or marketing of the imported 
goods shall not result in rejection of the transacti on value.  For example, the fact that the buyer 
furnishes the seller with engineering and plans unde rtaken in the Partner State shall not result in 
rejection of the transaction value for the purposes of paragraph 2.   
 
 Likewise, if the buyer undertakes on the buyer's own account, even though by agreement with the seller, activities relating to the marketing of the imported goods, the value of these activities is not part of the customs value nor shall such activiti es result in rejection of the transaction value. 
 Sub-paragraph (2) 
 
1. Sub-paragraphs (2)(a) and (2)(b ) provide different means of establishing the acceptability of a 
transaction value.  2. Sub-paragraph 2(a) provides that where the bu yer and the seller are related, the circumstances 
surrounding the sale shall be examined and the tran saction value shall be accepted as the customs 
value provided that the relationship did not influence th e price.  It is not intended that there should be 
an examination of the circumstances in all cases wh ere the buyer and the seller are related.  Such 
examination will only be required where there are doubt s about the acceptability of the price.  Where 
the proper officer has no doubts about the acceptabilit y of the price, it should be accepted without 
requesting further information from the owner.  For example, the proper officer may have previously 
examined the relationship, or it may already have  detailed information concerning the buyer and the 
seller, and may already be satisfied from such examin ation or information that  the relationship did not 
influence the price.  3. Where the proper officer is unable to accept the transaction value without further inquiry, it 
should give the owner an opportunity to supply such  further detailed information as may be necessary 
to enable it to examine the circumstances surrounding the sale.  In this context, the proper officer 
should be prepared to examine relevant aspects of the transaction, including the way in which the 
buyer and seller organize their commercial relations and the way in which the price in question was 
arrived at, in order to determine whether the relati onship influenced the price.  Where it can be shown 
that the buyer and seller, although related under the provisions of paragraph 1, buy from and sell to 
each other as if they were not related, this would demonstrate that the price had not been influenced 
by the relationship.  As an example of this, if th e price had been settled in a manner consistent with 
the normal pricing practices of the industry in qu estion or with the way the seller settles prices for 
sales to buyers who are not related to the seller, this would demonstrate that the price had not been influenced by the relationship.  As a further exampl e, where it is shown that the price is adequate to 
ensure recovery of all costs plus a profit which is  representative of the firm's overall profit realized 
over a representative period of time e.g. on an annual b asis in sales of goods of the same class or kind, 
this would demonstrate that the price had not been influenced.  4. Sub-paragraph (2)(b) provides an opportunity for the importer to demonstrate that the 
transaction value closely approximates to a "test" value previously accepted by the proper officer and 
is therefore acceptable under the provisions of paragr aph (2).  Where a test under sub-paragraph (2)(b) 
is met, it is not necessary to examine the question of  influence under paragraph (2)(a).  If the proper 
officer has already sufficien t information to be satisfied, without further detailed inquiries, that one of 
the tests provided in sub-paragr aph (2)(b) has been met, there is no reason for it to require the G/VAL/N/1/TZA/1 
Page 12  
 
  importer to demonstrate that the test can be met.  In sub-paragraph (2)(b) the term "unrelated buyers" 
means buyers who are not related to the seller in any particular case.  
Sub-paragraph (2)(b) 
  A number of factors must be taken into c onsideration in determin ing whether one value 
"closely approximates" to another value.  These fact ors include the nature of the imported goods, the 
nature of the industry itself, the season in which the goods are imported, and, whether the difference 
in values is commercially significant.  Since these factors may vary from case to case, it would be 
impossible to apply a uniform standard such as a fi xed percentage, in each case.  For example, a small 
difference in value in a case involving one type  of goods could be unacceptable while a large 
difference in a case involving another type of goods might be acceptable in determining whether the 
transaction value closely approximates to the "test " values set forth in sub-paragraph (2)(b) of 
paragraph 2.  Note to Paragraph 3 
 
1. In applying paragraph 3, the proper officer sh all, wherever possible, use a sale of identical 
goods at the same commercial level and in s ubstantially the same quantities as the goods being 
valued.  Where no such sale is found, a sale of id entical goods that takes place under any one of the 
following three conditions may be used: 
 
(a) a sale at the same commercial level but in different quantities; (b) a sale at a different commercial level but in substantially the same quantities;  or 
(c) a sale at a different commercial level and in different quantities.  
2. Having found a sale under any one of these three conditions adjustments will then be made, as 
the case may be, for:  (a) quantity factors only; (b) commercial level factors only;  or (c) both commercial level and quantity factors. 
 
3. The expression "and/or" allows the flexib ility to use the sales and make the necessary 
adjustments in any one of the three conditions described above.  4. For the purposes of paragraph 3, the transac tion value of identical imported goods means a 
customs value, adjusted as provided for in sub-pa ragraphs (1)(b) and (2), which has already been 
accepted under paragraph 2.    5. A condition for adjustment because of different commercial level or different quantities is that 
such adjustment, whether it leads to  an increase or a decrease in the value, be made only on the basis 
of demonstrated evidence that clearly establishes th e reasonableness and accuracy of the adjustments, 
e.g. valid price lists containing prices referring to different levels or different quantities.  As an 
example of this, if the imported goods being valued  consist of a shipment of 10 units and the only 
identical imported goods for which a transaction valu e exists involved a sale of 500 units, and it is 
recognized that the seller grants quantity discounts,  the required adjustment may be accomplished by 
resorting to the seller's price list and using that pri ce applicable to a sale of 10 units.  This does not 
require that a sale had to have been made in quantities of 10 as long as the price list has been 
established as being bona fide through sales at other quantities.  In the absence of such an objective 
measure, however, the determination of a customs value under the provisions of paragraph 3 is not 
appropriate.   G/VAL/N/1/TZA/1 
 Page 13 
 
 
  Note to Paragraph 4 
 
1. In applying paragraph 4, the proper officer shall, wherever possible, use a sale of similar 
goods at the same commercial level and in s ubstantially the same quantities as the goods being 
valued.  Where no such sale is found, a sale of similar goods that takes place under any one of the 
following three conditions may be used: 
 
(a) a sale at the same commercial level but in different quantities; 
(b) a sale at a different commercial level but in substantially the same quantities;  or 
(c) a sale at a different commercial level and in different quantities.  2. Having found sale under any one of these three conditions adjustments will then be made, as 
the case may be, for: 
 
(a) quantity factors only; 
(b) commercial level factors only;  or (c) both commercial level and quantity factors.  
3. The expression "and/or" allows the flexib ility to use the sales and make the necessary 
adjustments in any one of the three conditions described above.  4. For the purpose of paragraph 4, the tran saction value of similar imported goods means a 
customs value, adjusted as provided for in sub-pa ragraphs (1)(b) and (2), which has already been 
accepted under paragraph 2. 
 
5. A condition for adjustment because of different quantities is that such adjustment, whether it 
leads to an increase or a decrease in the value, be made only on th e basis of demonstrated evidence 
that clearly establishes the reasonableness and accur acy of the adjustment, e.g. valid price lists 
containing prices referring to different levels or di fferent quantities.  As an example of this, if the 
imported goods being valued consis t of a shipment of 10 units and the only similar imported goods for 
which a transaction value exists involved a sale of 500 units, and it is recognized that the seller grants 
quantity discounts, the required adjustment may be a ccomplished by resorting to the seller's price list 
and using that price applicable to a sale of 10 units .  This does not require that a sale had to been 
established as being bona fide through sales at other quantities.  In the absence of such an objective 
measure, however, the determination of a customs value under the provisions of paragraph 4 is not 
appropriate. 
 
Note to Paragraph 6 
 
1. The term "unit price at which goods are sold  in the greatest aggregate quantity" means the 
price at which the greatest number of units is sold  in sales to persons who are not related to the 
persons from whom they buy such goods at the firs t commercial level after importation at which such 
sales take place.  2. As an example of this, goods are sold from a price list which grants favourable unit prices for 
purchases made in larger quantities. 
 
Sale Quantity Unit Price Number of Sales Total Quantity 
Sold at each Price 
1-10 units 100 10 sales of 5 units 65 
    5 sales of 3 units  11-25 units  95   5 sales of 11 units 55 Over 25 units  90   1 sale of 30 units 80 
    1 sale of 50 units  G/VAL/N/1/TZA/1 
Page 14  
 
   The greatest number of units sold at a price is  80;  therefore, the unit price in the greatest 
aggregate quantity is 90.  3. As another example of this, two sales occur.  In the first sale 500 units are sold at a price of 95 currency units each.  In the second sale 400 units are sold  at a price of 90 currency units each.  In this 
example, the greatest number of units sold at a par ticular price is 500; therefore, the unit price in the 
greatest aggregate quantity is 95.  4. A third example would be the following situa tion where various quantities are sold at various 
prices. 
 
 (a) Sales    Sale Quantity  Unit Price   40 units   100 
  30 units     90 
  15 units   100   50 units     95   25 units   105   35 units     90    5 units   100 
 
 (b)  Totals    Total Quantity Sold Unit Price   65     90 
  50     95 
  60   100   25   105   In this example, the greatest number of units sold  at a particular price is 65;  therefore, the 
unit price in the greatest aggregate quantity is 90. 
 
5. Any sale in the partner state, as described in  sub-paragraph 1 above, to a person who supplies 
directly or indirectly free of charge or at reduced  cost for use in connection with the production and 
sale for export of the imported goods any of the el ements specified in sub-paragraph 1(b) of 
paragraph 9, should not be taken into account in establishing the unit price for the purposes of 
paragraph 6. 
 6. It should be noted that "profit and general expenses" referred to in  sub-paragraph (1) of 
paragraph 6 should be taken as a whole.  The figu re for the purposes of this deduction should be 
determined on the basis of information supplied by  or on behalf of the importer unless the importer's 
figures are inconsistent with those obtained in sales in the Partner State of imported goods of the same 
class or kind.  Where the importer's figures are inc onsistent with such figures the amount for profit 
and general expenses may be based upo n relevant information other than that supplied by or on behalf 
of the owner.  7. The "general expenses" include the direct and indirect costs of marketing the goods in 
question. 
 8. Local taxes payable by reason of the sale of the goods for which a deduction is not made under the provisions of paragraph 6(1)(a)(iv)  shall be deducted under the provisions of 
paragraph (6)(1)(a)(i).  G/VAL/N/1/TZA/1 
 Page 15 
 
 
   
9. In determining either the commissions or the usual profits and ge neral expenses under the 
provisions of paragraph 6(1) the question whether certain goods are "of the same class or kind" as 
other goods must be determined on a case-by-case basi s by reference to the circumstances involved.  
Sales in the Partner State of the narrowest group or range of imported goods of the same class or kind, 
which includes the goods being valued, for which th e necessary information can be provided, should 
be examined.  For the purposes of paragraph 6, "g oods of the same class or kind" includes goods 
imported from the same country as the goods bein g valued as well as goods imported from other 
countries.  
10. For the purposes of paragraph 6(1)(b), the "ear liest date" shall be the date by which sales of 
the imported goods or of identical or similar imported goods are made in sufficient quantity to establish the unit price.  11. Where the method in paragraph 6(2) is used, deductions made for the value added by further 
processing shall be based on objective and quantifiabl e data relating to the cost of such work.  
Accepted industry practices would fo rm the basis of the calculations. 
 12. It is recognized that the method of valuati on provided for in paragraph 6(2) would normally 
not be applicable when, as a result of the furthe r processing, the imported goods lose their identity.  
However, there can be instances where, although th e identity of the imported goods is lost, the value 
added by the processing can be determined accurately  without unreasonable difficulty.  On the other 
hand, there can also be instances where the importe d goods maintain their identity but form such a 
minor element in the goods sold in the Partner Stat e that the use of this valuation method would be 
unjustified.  In view of the above, each situation of  this type must be considered on a case-by-case 
basis. 
 
Note to paragraph 7 
 
1. As a general rule, customs va lue is determined under this schedule on the basis of information 
readily available in the Partner State.  In order to determine a computed value, however, it may be 
necessary to examine the costs of producing the goods  being valued and other information which has 
to be obtained from outside the Partner State.  Furthermore, in most cases the producer of the goods 
will be outside the jurisdiction of the authorities of the Partner State.  The use of the computed value 
method will generally be limited to those cases wher e the buyer and seller are related and the producer 
is prepared to supply to the authorities of the Partner State the necessary costing and to provide facilities for any subsequent verification which may be necessary.   
 
2. The "cost or value" referred to in paragra ph 7(1)(a) is to be determined on the basis of 
information relating to the production of the goods  being valued supplied by or on behalf the 
producer.  It is to be based upon the commercial ac counts of the producer, provided that such accounts 
are consistent with the generally accepted accounti ng principles applied in the country where the 
goods are produced. 
 
3. The "cost of value" shall include the cost of  elements specified in subparagraphs 9(1)(a)(ii) 
and (iii).  It shall also include the value, a pportioned as appropriate under the provisions of the 
relevant note to paragraph 9, of any element speci fied in paragraph 9 (1)(b) which has been supplied 
directly or indirectly by the buyer for use in connection with the production of the imported goods.  
The value of the elements specified in paragraph 9( 1)(b)(iv) which are undertaken in the Partner State 
shall be included only to the exte nt that such elements are charge d to the producer.  It is to be 
understood that no cost or value of the elements referr ed to in this paragraph shall be counted twice in 
determining the computed value.   G/VAL/N/1/TZA/1 
Page 16  
 
  4. The "amount for profit and general expenses" referred to in paragraph 7(1)(b) is to be 
determined on the basis of information supplied by  or on behalf of the producer unless the producer's 
figures are inconsistent with those usually reflected  in sales of goods of the same class or kind as the 
goods being valued which are made by producers in the country of exportations for export to the Partner State. 
 
5. It should be noted in this context that the "a mount for profit and general expenses" has to be 
taken as a whole.  It follows that if, in any partic ular case, the producer's profit figure is low and the 
producer's general expenses are high, the producer's  profit and general expens es taken together may 
nevertheless be consistent with that usually reflect ed in sales of goods of the same class or kind.  Such 
a situation might occur, for example, if a product were being launched in the Partner State and the 
producer accepted a nil or low profit to offset hi gh general expenses associated with the launch.  
Where the producer can demonstrate a low profit on sales of the imported goods because of particular 
commercial circumstances, the producer's actual pr ofit figures should be taken into account provided 
that the producer has valid commercial reasons to justify them and the producer's  pricing policy 
reflects usual pricing policies in the branch of indus try concerned.  Such a situation might occur, for 
example, where producers have been forced to lo wer prices temporarily because of an unforeseeable 
drop in demand, or where they sell goods to comp lement a range of goods being produced in the 
Partner State and accept a low profit to maintain competitiveness.  Where the producer's own figures 
for profit and general expenses are not consistent w ith those usually reflected in sales of goods of the 
same class or kind as the goods being valued which are made by producers in the country of 
exportation for export to a Partner State, the am ount for profit and general expenses may be based 
upon relevant information other than that supplied by or on behalf of the producer of the goods. 
 6. Where information other than that supplied by or on behalf of the producer is used for the 
purposes of determining a computed value, the proper o fficer shall inform the importer, if the latter so 
requests, of the source of such information, the data used and the calculations based upon such data. 
 7. The "general expenses" referred to in paragraph 7(1)(b) covers the direct and indirect costs of 
producing and selling the goods for export which are not included under paragraph 7(1)(a). 
 8. Whether certain goods are "of the same class or kind" as other goods must be determined on a 
case-by-case basis with reference to the circumstances involved.  In determining the usual profits and 
general expenses under the provisions of paragraph 7, sales for export to the Partner State of the 
narrowest group or range of goods, which includ es the goods being valued, for which the necessary 
information can be provided, should be examined.  For the purposes of paragraph 7, "goods of the 
same class or kind" must be from the same country as the goods being valued.    
 
Note to Paragraph 8 
 
1. Customs values determined under the provisions of paragraph 8 should, to the greatest extent 
possible, be based on previously determined customs values.  
2. The methods of valuation to be employed u nder paragraph 8 should be  those laid down in 
paragraphs 2, 3, 4, 5, 6 and 7 but a reasonable flex ibility in the application of such methods would be 
in conformity with the aims and provisions of paragraph 8. 
 Some examples of reasonable flexibility are as follows: 
 
(a) Identical goods – the requirement that the id entical goods should be exported at or about the 
same time as the goods being valued could be fl exibly interpreted:  identical imported goods 
produced in a country other than the country of  exportation of the goods being valued could  G/VAL/N/1/TZA/1 
 Page 17 
 
 
  be the basis for customs valuation; custom s values of identical imported goods already 
determined under the provisions of pa ragraphs 6 and 7 could be used. 
(b) Similar goods – the requirement that the si milar goods should be exported at or about the 
same time as the goods being valued could be flexibly interpreted;  similar imported goods 
produced in a country other than the country of  exportation of the goods being valued could 
be the basis for customs valuation;  cust oms values of similar imported goods already 
determined under the provisions of pa ragraphs 6 and 7 could be used. 
 (c) Deductive methods – the requirement that the goods shall have been sold in the "condition as 
imported" in paragraph 6(1)(a) c ould be flexibly interpreted;  the "90 days" requirement could 
be administered flexibly. 
 
Note to Paragraph 9 
 
Sub-paragraph (1)(a)(i) 
 
 The term "buying commissions" means fees paid by importer to the importer's agent for the service of representing the importer abroad in  the purchase of the goods being valued. 
 
Sub-paragraph (1)(b)(ii) 
 1. There are two factors involved in the apportionment of the elements specified in 
paragraph 9(1)(b)(ii) to the imported goods – the valu e of the element itself and the way in which that 
value is to be apportioned to the imported goods .  The apportionment of these elements should be 
made in a reasonable manner appropriate to the circumstances and in accordance with generally 
accepted accounting principles. 
 
2. Concerning the value of the element, if th e importer acquires the element from a seller not 
related to the importer at a given cost, the value of the element is that cost.  If the element was 
produced by the importer or by a person related to the importer, its  value would be the cost of 
producing it.  If the element had been previously us ed by the importer, regardless of whether it had 
been acquired or produced by such importer, the or iginal cost of acquisition or production would have 
to be adjusted downward to reflect its use in order to arrive at the value of the element. 
 3. Once a value has been determined for the elemen t, it is necessary to apportion that value to 
the imported goods.  Various possibilities exist.  For example, the value might be apportioned to the 
first shipment if the importer wishes to pay duty on the entire value at one time.  As another example, 
the importer may request that the value be appor tioned over the number of units produced up to the 
time of the first shipment.  As a further exampl e, the importer may request that the value be 
apportioned over the entire anticipated production wher e contracts or firm commitments exist for that 
production.  The method of apportionment used wi ll depend upon the documentation provided by the 
importer.  
4. As an illustration of the above, an importer provides the producer with a mould to be used in 
the production of the imported goods and contracts with the producer to buy 10,000 units.  By the 
time of arrival of the first shipment of 1,000 units, the producer has already produced 4,000 units.  The importer may request the proper officer to apportion the value of the mould, over 1,000 units, 4,000 units or 10,000 units. 
 
Sub-paragraph (1)(b)(iv) 
 
1. Additions for the elements specified in pa ragraph 9(1)(b)(iv) should be based on objective 
and quantifiable data.  In order to minimize the burden for both the importer and proper officer in G/VAL/N/1/TZA/1 
Page 18  
 
  determining the values to be added, data readily available in the buyer's commercial record system 
should be used in so far as possible.  2. For those elements supplied by the buyer wh ich were purchased or leased by the buyer, the 
addition would be the cost of the purchase or the leas e.  No addition shall be made for those elements 
available in the public domain, other than the cost of obtaining copies of them.  
 3. The ease with which it may be possible to calcu late the values to be added will depend on a 
particular firm's structure and management  practice, as well as its accounting methods. 
 
4. It is possible for example, that a firm which imports a variety of products from several 
countries maintains the records of its design centre ou tside the Partner State in such a way as to show 
accurately the costs attributable to a given prod uct.  In such cases, a direct adjustment may 
appropriately be made under th e provisions of paragraph 9. 
 
5. In another case, a firm may carry the cost of  the design centre outside the Partner State as a 
general overhead expense without a llocation to specific products.  In this instance, an appropriate 
adjustment could be made under the provisions of paragraph 9 with respect to the imported goods by 
apportioning total design centre costs over total production benefiting from the design centre and 
adding such apportioned cost on a unit basis to imports.  
6. Variations in the above circumstances will,  of course, require different factors to be 
considered in determining th e proper method of allocation. 
 7. In cases where the production of the element in question involves a number of countries and 
over a period of time, the adjustment should be lim ited to the value actually added to that element 
outside the Partner State. 
 
Sub-paragraph (1)(c) 
 
1. The royalties and licence fees referred to  in paragraph 9(1)(c) may include, among other 
things, payments in respect to patents, trademarks and copyrights.  However, the charges for the right 
to reproduce the imported goods in the Partner State sh all not be added to the price actually paid or 
payable for the imported goods in determining the customs value.  2. Payments made by the buyer for the right to  distribute or resell the imported goods shall not 
be added to the price actually paid or payable for the imported goods if such payments are not a 
condition of the sale for export to the Partner State of the imported goods. 
 
Sub-paragraph 3 
 
 Where objective and quantifiable data do not exist with regard to the additions required to be 
made under the provisions of paragraph 9, the transaction value cannot be determined under the 
provisions of paragraph 2.  As an illustration of this, a royalty is paid on the basis of the price in a sale 
in the importing country of a litre of a particular product that was imported by the kilogram and made up into a solution after importation.  If the royalt y is based partially on the imported goods and 
partially on other factors which have nothing to do with the imported goods such as when the 
imported goods are mixed with domestic ingredients and are no longer separately identifiable or when 
the royalty cannot be distinguished from special financial arrangements between the buyer and the 
seller, it would be inappropriate to attempt to ma ke an addition for the royalty.  However, if the 
amount of this royalty is based only on the importe d goods and can be readily quantified, an addition 
to the price actually paid or payable can be made. 
__________