WORLD TRADE  
ORGANIZATION  G/C/W/582/Add.1 
25 February 2008 
 
 (08-0835) 
Council for Trade in Goods Original:   French 
  
 
APPLICATION FOR EXTENSION OF THE PERIOD 
OF USE OF MINIMUM VALUES 
 
Communication from Senegal
 
 
Addendum  
   The following communication, dated 21 February 2008, is being circulated at the request of 
the delegation of Senegal. 
 
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  Further to the application for an extension of the waiver granted to Se negal under Article IX 
of the Agreement (WT/L/571;  WT/L/655;  G/C/W/ 581) for the use of minimum values, and at the 
request of the Group of "Friends of Customs Valu ation", the Senegalese Customs Administration has 
drawn up a supplementary report providing info rmation in response to questions asked. G/C/W/582/Add.1 
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  Supplementary Report Providing Information in Response to Questions
 
Asked by the Group of "Friends of Customs Valuation " 
   As a supplement to the report on the implem entation of decision G/C/W/551 of 4 May 2006 
extending the authorization granted to Senegal to use minimum values for a transitional period, the 
Senegalese Customs Administration provides below a dditional information in response to questions 
raised by certain Member countries.   As part of the single undertaking, Senega l has applied the GATT Agreement on Customs 
Valuation ever since the developing countries started to implement it in spite of real difficulties they 
encounter being more accustomed to applying th e Brussels Definition of Value, established by the 
World Customs Organization (WCO).   Implementation being relatively recent (2001), the Senegalese Customs Administration has 
not as yet fully mastered the ad valorem  basis of transaction value because of a business environment 
marked by the strong presence of an informal sect or that is insufficiently acquainted with the 
GATT valuation rules, and also because of the commercial fraud, undervaluation and price 
manipulation that continue to be practised in that sector.   Thus, the limited list of goods to which Senegal applies minimum values on importation 
refers to common consumer goods  imported for the most part by informal operators whose 
transactions are altogether lacking in transparen cy, reliability and traceability, which creates serious 
obstacles to proper implementation of post-clearance control procedures.   A characteristic of the informal sector is that it has no reliable and rules-based accounting 
records, or indeed any kind of commercial records at all that co uld be of use as a basis for post-
clearance control.  What is more, the countries of  origin and provenance of the products concerned 
(emerging countries in Asia, in particular) are lik ewise marked by a strong informal sector presence, 
which makes the Customs Administration's task of combating fraud more difficult.  The fleeting nature of transactions in the informal sector accord ingly requires effective prior control as regards the 
basis of value in order to minimize fraud. 
 
 It should be noted that customs revenue acc ounts for the lion's share of Senegal's ordinary 
budgetary receipts (approximately 40 per cent of the State budget), as is the case for most developing 
countries, for which customs duties serve not only to protect the economy but also play an important role as a source of fiscal income, unlike in developed countries.  It must also be pointed out that 
Senegal was the Member country mo st affected by the tariff reducti on that followed the entry into 
force of the WAEMU's common external tariff (the overall drop was from 65 per cent to 21 per cent).  
Given this context and the fact that application of  transactional value began at virtually the same time, 
Senegal had no alternative but to master  rapidly the basis for import duties – ad valorem  in this case – 
particularly for goods liable to under-invoicing or li kely to be the target of currents of commercial 
fraud. 
 
 Accordingly, and in order to make its cust oms revenue secure given its great importance to 
the country's social and economic balance, as a saf eguard Senegal is seeking, by applying minimum 
values to a limited number of sensitive goods, to  contain tax evasion and commercial fraud. 
 
 This waiver from the GATT Agreement on Custom s Valuation is to be purely transitory, with 
no discrimination or any restriction of market access in the form of disguised non-tariff barriers:  it aims solely to safeguard customs revenue by a pplying reference values determined according to 
criteria that are within what would be the "normal" value.   G/C/W/582/Add.1 
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   The Senegalese Customs Administration acknowledg es fully and in keeping with the intent of 
the Agreement, that customs valuation requires the utmost objectivity and tran sparency and that the 
value must accurately reflect the terms of the comme rcial transaction.  This is why the Senegalese 
Customs Administration, in determining the level of minimum value to be applied, uses a method 
close to the "identical or similar goods" method,  allowed formally by the GATT Agreement on 
Customs Valuation. 
  Pending finalization of the reforms in the Cu stoms Administration, Senegal has opted for 
temporary use of minimum values for a limited list of sensitive produc ts;  all other goods of course 
remain covered by the provisions of  the Agreement on Customs Valuation. 
 
 It should be noted that a plan for modernization and capacity-building, particularly for the automated risk analysis system, through expansio n of the database that serves as a system of 
information on the value of goods, is currently bei ng implemented in the Customs Administration.   
 
 The measures taken with a view to abandoning use of minimum values include: 
  1. Deployment of a new Automated Risk Analysis System (SIAR) as from 
1 January 2008.  In terms of procedur es, this new mechanism will mean better 
coordination between pre-import controls, controls upon clearance and post-clearance 
controls; 
 
 2. construction of a customs value databa se using the standards and guidelines of the 
World Customs Organization (WCO); 
  3. implementation of a continuous training  programme on transaction value for customs 
officials and forwarders. 
  The timetable for these various measures is to  cover three years, the target date for 
completion being 2010.   Senegal is thus gradually coming close to b est practices in valuation.  It applies the 
WTO decision on the valuation of carrier media-b earing software for data-processing equipment, and 
is also moving towards domiciliation of pre-shipme nt inspection and gradual integration of the 
automated risk analysis system (SIAR).   Regarding the conditions of application of the WTO waiver author izing use of minimum 
values, Senegal has met all its commitments, incl uding those on management, scope of application, 
notification, publication of the methodology for de termining minimum values, and submission of a 
semi-annual status report on implementation.  The last status report was sent on 27 March 2007. 
  In the light of the arguments set forth above, Senegal requests an extension for three years of the General Council Decision authorizing it to cont inue to apply minimum values, so that it may 
finalize its internal reforms while respecting its  commitments under the multilateral trading system. 
 
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