WORLD TRADE  
ORGANIZATION  G/VAL/58 
12 April 2005 
 
 (05-1517) 
Committee on Customs Valuation  
  
 
SRI LANKA –  DECISION CONCERNING PARAGRAPH 2 OF  
ANNEX III OF THE AGREEMENT ON IMPLEMENTATION  
OF ARTICLE VII OF THE GENERAL AGREEMENT  
ON TARIFFS AND TRADE 1994 
 
 Decision 
 
 
 TAKING into account Sri Lanka's request1 for a further delay in its full application of the 
provisions of the Agreement on Implementation of Article VII of the General Agreement on Tariffs 
and Trade 1994 (Customs Valuation Agreement) and,  more specifically, for an extension of the 
reservation granted by the Committee2 pursuant to paragraph 2 of Annex III of the Customs Valuation 
Agreement;   NOTING the recent submission
3 by Sri Lanka of a plan for the phase-out of minimum values 
applied under the terms of th e above-mentioned reservation; 
 
 NOTING that Sri Lanka became a contracting party to the Customs Valuation Agreement as 
of 1 January 1995 and invoked para graph 1, Article 20 of that Agreement, and was therefore 
scheduled originally to apply the provisions of the Agreement on 1 January 2000;  
NOTING that Sri Lanka was granted a one-year de lay in its application of the provisions of 
the Customs Valuation Agreement from 1 January 2000 to 1 January 2001
4, and, due to unforeseen 
developments, was granted furthe r delays until 31 October 20015, 30 April 20026, 31 October 20027 
and 28 February 20038; 
 
NOTING that, in all other regards, Sri Lanka  implemented fully the Customs Valuation 
Agreement and Paragraph 2 of the Decision on the Va luation of Carrier Media Bearing Software for 
Data Processing Equipment9 as of 28 February 2003; 
 
 NOTING Sri Lanka's long-standing commitment a nd considerable efforts in reforming and 
modernizing its customs administration and in ensuring the effective implementation and administration of the WTO Agreement on Customs Valuation; 
 
NOTING that the Government of Sri Lanka does not use or plan to use preshipment 
inspection services in customs administration and valuation; 
                                                     
 
1 G/VAL/W/140. 
2 G/VAL/53. 
3 G/VAL/W/144/Add.1 
4 G/VAL/23.  
5 G/VAL/41.  
6 G/VAL/42.  
7 G/VAL/46. 
8 G/VAL/52. 
9 G/VAL/5. G/VAL/58 
Page 2  
 
 
 NOTING Sri Lanka's intention to ensure that this extended reservation will apply on a strictly 
limited and transitional basis;    NOTING that this extended reservation to ma intain minimum values will apply only to the 
following goods: 
          Description
            HS Tariff Code  
   Used tractors      ex 87.01 
  Used motor vehicles for transport of 10 or more  ex 87.02 
  persons   Used motor cars and other used motor vehicles   ex 87.03   principally designed for transport of persons    (other than those of tariff heading 87.02) including  
  used station wagons and used racing cars 
  Used motor vehicles for the transport of goods  ex 87.04 
 Used motor cycles     ex 87.11 
     NOTING that these minimum values will be used primarily for the purpose of addressing 
under-valuation problems; 
 
 NOTING that Sri Lanka will not submit a futu re request to maintain minimum values for 
other goods; and   NOTING the very exceptional character of Sri Lanka’s request; 
 
 The Committee DECIDES, pursuant to paragr aph 2 of Annex III of the Agreement and 
paragraph 1 of the Ministerial Decision on Texts Relating to Minimum Values and Imports by Sole 
Agents, Sole Distributors and Sole Concessionaires,  adopted by the Committee in May 1995, that 
Sri Lanka may continue to use officially-establis hed minimum values for the valuation for customs 
purposes until 28 February 2006 for the above me ntioned used motor vehicles and motor cycles 
classified under HS ex 87.01-87.04 and ex 87.11,  according to the following terms and conditions: 
 1. Sri Lanka will implement the attached work plan for the phase-out of  the above-mentioned 
minimum values by no later than 28 February 2006;  
2. Sri Lanka will submit a report on the progr ess in implementing the above-mentioned work 
plan to the Committee by no later than 29 August 2005;  3. Sri Lanka will not apply minimum values to any other products than those specified in this 
decision;  
4. Sri Lanka will notify the Committee on Customs Valuation of any amendments or changes to 
the above-mentioned data sources, methodologies, basi s, criteria and other relevant information 60 
days before implementing such changes, and will not  apply such changes to importations entering its 
customs territory prior to the completion of this 60-day notification period;  
5. This Decision shall not prejudice the rights and obligations of Sri Lanka under the WTO 
Agreements, in particular those rights and oblig ations under the Customs Valuation Agreement. 
  
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  G/VAL/58 
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ANNEX – WORK PLAN  
 
 
 Objectives Activity Description  Targets 
1. REGULATORY 
FRAMEWORK 
(a)  Regulations and 
Instructions SL Customs  is:  
- Harmonizing internal implementation and 
administrative regulations and forms in all 
customs entry and transit points in Sri Lanka in 
order to reach harmonized procedures and norms of customs valuation and clearance, as well as  
to deal with custom fraud. 
 Reorganising the available customs data and 
information in order to enhance transparency in declaration procedures an d methods of valuation 
in pursuance of the Custom Valuation 
Agreement.   It is expected to complete 
this activity by 30th July 
2005. 
  
2. INSTITUTIONAL 
FRAMEWORK: 
(a) Administration of  
customs valuation  Setting up information bases and references necessary for customs valua tion to serve clients and 
respond to questions posed by officials in the Customs department.  
-    The main task of this section is to interact with 
clients in order to respond to their various 
queries. This section is also entrusted with training the other staff members on valuation 
methods. It is expected to complete 
this activity by 30th September 2005. 
 
 (b) Institutions/  Divisions  - Setting up a Division in charge of risk 
management in order for the custom valuation staff to capture products with higher risks, and 
an import prices database of these products for 
use in risk analysis applying customs valuation methods.  
- The Division in charge of risk management and 
its function procedures is planned in the strategy 
of the reform & modernization program 
(2005-2006) It is expected to complete 
this activity by 28
th February 2006. 
 G/VAL/58 
Page 4  
 
 
Objectives Activity Description  Targets 
  (c) Database The Customs Department needs to update the 
computer system applied in implementing the customs valuation measures, including: 
- Determining necessary information to set up 
database allowing computerized custom 
valuation system; 
- Determining information resources and 
references and its updating methods. 
The information resource is determined from the 
transactions cleared at the customs points, and updated within 90 days as stated in the WTO Customs Valuation Agreement. 
Improving computer system on the basis of work 
experience available in advanced countries. The database is expected 
to be established and fully operational by the end of 
2005. 
  
  
 (d) Strengthening the 
enforcement machineries 
in three units/branch  
 Human Resource Development to combat Valuation 
Fraud, at Senior Management Middle Management 
and Operational Levels 
 
- Need to develop their skills and attitudes; 
 
- As the current cadre is not adequate to deal with 
the increasing number of valuation fraud, a new 
batch of officers needs to be trained and 
deployed. 
 
- Need to have training facilities for the new 
officers. 
- Setting up a program to train customs staff to 
support the implementation of the Custom 
Valuation Agreement During the period of 
extension and beyond 
(e) Technical Assistance Assessing technical assistan ce needs of the customs 
administration in Sri Lanka and requesting assistance from the WTO, WCO and their Member States.  During the extension 
period and beyond 
3. DEVELOPMENT OF INFRASTRUCTURE 
FACILITIES Increasing the existing facilities such as 
communication equipment, tr ansport facilities etc., 
provided to the units/branch to carry out their duties 
expeditiously. During the extension 
period and beyond 
 
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