WORLD TRADE  
ORGANIZATION   
G/VAL/N/1/RWA/1 
29 February 2012 
 (12-1170) 
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 
 
  The following communication, dated 28 December 2011, is being circulated at the request of 
the Delegation of the Republic of Rwanda.  
_______________ 
 
 
"As required of all Members of the WTO, we  would like to submit notification 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.   Also we would like to inform you that our 
Customs Department began applying the WT O Agreement on Customs Valuation (ACV) in 
January 2004." 
 
_______________ G/VAL/N/1/RWA/1 
Page 2  
 
  ANNEX 
 
NOTIFICATION OF ARTICLE 22 OF THE AGREEMENT ON IMPLEMENTATION OF 
ARTICLE VII OF THE GATT 1994 
 
RWANDA 
 
Law No. 72/2008 of 31 January 2008 determinin g the entry into force of the East African 
Community Customs Management Act of 1 January  2008.  Provisions of this Act apply to all 
EAC Countries 
 
THE EAST AFRICAN CUSTOMS MANAGEMENT ACT 2004 
(Rev 2009) 
 
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 determ ining 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 paym ent 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 d eclaration presented for customs valuation 
purposes."  
 (5)   The Council shall publish in the G azette 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 th e 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 for determining the equi valent 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/RWA/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 "identi cal goods" or "similar goods" unless they were 
produced in the same country as the goods being valued. 
(b) Goods produced by different persons shall 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, person s 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, controls  or holds 5 per cent 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/RWA/1 
Page 4  
 
  TRANSACTION VALUE 
2.(1) The customs value of imported goods shall 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 dispositi on 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 cond ition 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 resal e, 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 wh ere 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 transac tion 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 tr ansaction value shall be accepted and the goods 
value 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 unrelated  buyers of identical or similar goods for 
export to the Partner State; 
(ii) the customs value of identical or sim ilar goods as determined under the provisions of 
paragraph 6; 
(iii) the customs value of identical or sim ilar 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 incurred by the se ller in sales in which the seller and the buyer are 
related.  G/VAL/N/1/RWA/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 about 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 transaction 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 co mmercial level and/or quantity, 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 s ubparagraph (2) of paragraph 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 paragr aph, 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/RWA/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 importe r the order of applicati on of paragraphs 6 and 7 
shall be reversed. 
DEDUCTIVE VALUE 
6.(1)(a) Where the imported goods or identical or simi lar 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 ag reed 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 insura nce and associated costs incurred within the 
Partner State; 
(iii) where appropriate, the costs and char ges referred to in paragraph 9(2); and 
(iv) the customs duties and other national tax es 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 identical  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 pr ovisions 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 expenses necessary to reflect the costs added under 
paragraph 9(2).  G/VAL/N/1/RWA/1 
 Page 7 
 
 
  (2) A person who is not resident in the Partner St ate 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, the 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 th e 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 va lues 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 sh all 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 provi sions 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 buy er 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 whet her 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 that such value has not been included in the price actua lly 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 th e production of the imported goods; G/VAL/N/1/RWA/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 be ing valued that the buyer must pay, either 
directly or indirectly, as a condition of sale of th e goods being valued, to the extent that such 
royalties and fees are not included in th e price actually paid or payable; 
(d) the value of any part of the proceeds of any s ubsequent 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 paya ble shall be made under th is paragraph only on the 
basis of objective and quantifiable data. 
(4) Additions shall not be made to the price actua lly paid or payable in determining the customs 
value except as provided in this paragraph.  G/VAL/N/1/RWA/1 
 Page 9 
 
 
  PART II 
INTERPRETATIVE NOTES 
General Notes Sequential Application of Valuation Methods 
1. Paragraphs 2, 3, 4, 4, 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 th erein 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 unde r the provision 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/RWA/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 residents 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 of 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/RWA/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/RWA/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/RWA/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 have 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 
1 sale of 50 units 80 G/VAL/N/1/RWA/1 
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   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/RWA/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 of 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 spec ified 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. 
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