WORLD TRADE
ORGANIZATIONG/VAL/N/4/NIC/1
20 September 2000
(00-3729)
Committee on Customs Valuation Original:  Spanish
NOTIFICATION PURSUANT TO ANNE X III, PARAGRAPH 2 OF THE
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
 OF THE GENERAL AGREEMENT ON
TARIFFS AND TRADE 1994
NICARAGUA
The following communication, dated 1 September 2000, has been received from the
Permanent Mission of Nicaragua.
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Pursuant to Article X of the General Agreement on Tariffs and Trade 1994, I hereby transmit
to you the "Bases and Criteria for Determin ing Minimum Prices" for the following products:
• Used vehicles classified under Chapter 87 of the Harmonized Commodity
Description and Coding System (HS);
• retreaded or used pneumatic tyres classified under HS heading 40.12;
• worn clothing, rags and other worn-out arti cles of textile materials, classified under
HS headings 63.09 and 63.10;
• sugar classified under HS heading 17.01.G/VAL/N/4/NIC/1
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Pursuant to Article 41 of the Regulations to the Central American Legislation on the Customs
Value of Goods, and with a view to improving the valuation of imported goods, the supplementary
national provisions are:
1. Costs
The transport and insurance costs referred to in the final paragraph of Article 3 of the
Legislation on Value and Article 10 of the Regulations thereto shall be estimated in accordance with
periodic orders issued by the Directorate-General of Customs for that purpose.
The costs indicated in Article 3 of the Legislation on Value shall not be added to the value of
used goods under the passenger and parcel regime.
2. Currency conversion
The currency conversion referred to in Article 5 of the Legislation on Value and Article 20 of
the Convention on the Central American Tarriff and Customs Regime shall be carried out accordingto the current rate of exchange appearing in  the listing issued by the CENTRAL BANK OF
NICARAGUA, and reprinted on a regular basis by the Directorate-General of Customs.
Where the commercial invoice declares the valu e in a foreign currency with its US Dollar
equivalent and that value coincides with the result obtained by applying the exchange rate of theforeign currency published by the Central Bank of Nicaragua, the invoiced value shall be accepted for
the purposes of establishing the normal price.
3. Goods sold on deferred terms
Where goods are sold on deferred terms over a period exceeding that established in Article 3
of the Regulations to the Legislation, which sets a limit of 180 days for accepting the value declared
in an invoice as a basis for establishing the normal  price, without taking into consideration the normal
behaviour of the price of the goods on the market, the Directorate-General of Customs may retain the
declared price of those goods provided there is a fixed delivery period exceeding 180 days, or subject
to force majeure  or unforeseen circumstances duly proven by the importer.
4. Place
The port or place of introduction of goods into the national territory referred to in Article 6.3
of the Legislation on Value is defined as the first port or place of arrival of the goods in the national
territory.
5. Spaced shipments
Spaced shipments exceeding the period of 360 calendar days from the invoice date of the first
shipment established in Article 4 of the Regulations to the Legislation on Value require expressauthorization from the Directorate-General of Customs.
6. Imports of free samples
The value of goods imported as free samples  is determined in accordance with Article 14(c)
of the Regulations, according to which discounts or price rebates are not permitted.  The samples are
therefore valued according to the current customs value on the date of acceptance of the import
declaration.G/VAL/N/4/NIC/1
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7. New defective goods
The customs value of new goods that are defective upon presentation for clearance is
determined in accordance with Article 15 of the Legislation on Value, and Articles 28 and 29 of the
Regulations, taking account of the following elements and procedures:
(a) If the interested party presents a certificate from the insurance company with an
assessment of the damage caused to the goods, that value is deducted from the value
of the goods as new and in good condition.
(b) If the interested party cannot provide an insurance certificate, a percentage not
exceeding 25 per cent of the value of the goods as new and in good condition isapplied.
8. Used goods
To determine the price of the used goods referred to in Article 15 of the Legislation on Value,
and Articles 31 and 32 of the Regulations thereto, the following procedure must be followed:
For worn clothing classified under tariff headings 63.09 and 63.10, the determination of
customs value is made on the basis of an f.o.b. value of two US Dollars net per kilogram.
For used machines or equipment and parts thereof classified under HS heading 84.71 and
subheading 8473.30.00.00, the value is determined on the basis of the record values of the goods as
new and in good condition at the time they were made, minus 40 per cent for depreciation.
For machinery and equipment classified under tariff headings 84.26 to 84.30, 85.01 and
85.02, the value is determined on the basis of the record values of the goods as new and in good
condition at the time they were made, applying the following depreciation schedule:
Years old Percentage Reduction
One or part of a year  5
Between one and two years 10
Between two and three years 15
Between three and four years 20
Between four and five years 25
Between five and six years 30
Between six and seven years 35
Between seven and eight years 40
Between eight and nine years 45
More than nine years 50
When the year of manufacture of the good being valued cannot be identified, a reduction of
only 25 per cent is applied.
For used goods not covered by subparagraphs (b) and (c) above and classified under
Chapters 84 and 85 of the Central American Tariff System (SAC), the value of the good as new and in
good condition is determined on the basis of the record values from the data bank and then reduced by10 per cent per year up to a maximum of 50 per cent to account for depreciation, and to calculate the
age of the goods, the date of manufacture of the good is used whenever this is possible to ascertain.G/VAL/N/4/NIC/1
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When the date of manufacture of the good being valued cannot be ascertained, a reduction of
only 25 per cent is applied.
To determine the value of used motor vehicles classified under Chapter 87 of the
Central American Tariff System (SAC), the procedur e established in Technical Circular No. 095/99 of
13 September 1999 is applied.
For used goods not covered by subparagraphs (a), (b), (c), (d) and (e) above, the value of the
good as new and in good condition is determined on the basis of the record values from the data bank
minus 50 per cent for depreciation.
When the price paid or payable reflected in the commercial invoice is greater than the
valuation made on the basis of the provisions of subparagraphs (a), (b), (c), (d), (e) and (f) above, the
price appearing in the commercial invoice submitted by the interested party is taken as a basis for
valuation.
When, exceptionally, the good is over ten years old and its value therefore difficult to
determine, it is valued on the basis of the va lue of IDENTICAL or SIMILAR goods, or the value
which the importer might be expected to declare, after having consulted the Directorate-General of
Customs.
9. Repaired or rebuilt goods, new or used
The value of repaired or rebuilt goods except for clothing, accessories thereof and other
made-up textile articles classified under Chapters 61, 62 and 63 (excluding headings 63.09 and 63.10)
of the Central American Tariff System (SAC) is determined by reference to Article 16 of theRegulations to the Legislation on Value, according to their origin.
10. Reimported goods, processed or repaired abroad
Pursuant to Article 34 of the Regulations, the normal price of reimported goods, processed or
repaired abroad, is determined taking into consideration:
(a) The value of the part(s);
(b) the labour costs of the processing or repairs;(c) commissions paid or payable to middlemen.
11. Goods processed in free zones
For goods processed or submitted for processing in a free zone, the normal price referred to in
Article 37 of the Regulations is determined taking into consideration:
(a) Labour costs of processing;(b) the cost of the part added, where applicable;
(c) commissions paid or payable to firms acting as middlemen.G/VAL/N/4/NIC/1
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12. Goods in bonded warehouses
According to the Legislation on Value and Regulations thereto, the valuation of such goods is
made according to the price applicable at the time the customs declaration was accepted and not at the
time the goods were put into storage.
13. Internationally-priced goods
For internationally-priced goods classified under Chapter 72 and headings 73.01 to 73.08
inclusive, the value is estimated on the basis of the value applicable on the date of the contract or
order confirmation, subject to Articles 3 and 4 of the Regulations to the Central American Legislation
on the Customs Value of Goods.
14. Documents required
(a) Exceptions are made to the customs value declaration requirement referred to in Article 38 of
the Regulations only for imports of a non-commercial nature, such as samples with nocommercial value, imports under the passenger, private parcel and postal regime and the
imports listed in paragraph 1.5 of Technical Circular 009/99.
(b) The period allowed for the presentation of the documents or additional information referred to
in Article 17 of the Legislation and Article 40 of the Regulations runs from the date on whichthey are requested.  If the documents are not submitted within such period, the value is
determined in accordance with the provisions of the Legislation on Value.
15. Valuation of goods for which a standard value is applied (such as parcels, post and
excess baggage)
Determination of the customs value of goods not being imported for commercial reasons,
such as imports under the passenger, private parcel and postal regime and other similar imports where
the concept of "normal price" is not applicable, is made according to the price-lists specially issued by
the Directorate-General of Customs pursuant to Article 41(b) of the Regulations or, where
appropriate, the normal competition price is applied pursuant to Articles 13 and 14.2 of the
Legislation and Articles 15, 16 and 17 of the Regulations.
16. Limitation period
The period referred to in Article 20 of the Legislation on Value is four years, running from
the date on which the documentation was accepted, pursuant to Article 20 of Law No. 257, the Lawon Fair Tax and Trade, published in Official Journal "La Gaceta" No. 106 of 6 June 1997.
17. Penalties with regard to declaration of value
Any misrepresentations in the declarations of customs value, referred to in Article 22 of the
Legislation on Value, are subject to penalties as stipulated in Law No. 42, the Law on Customs Fraud
and Smuggling, amended by Law No. 257, the Law on Fair Taxation and Trade, published in Official
Journal "La Gaceta" No. 106 of 6 June 1997.G/VAL/N/4/NIC/1
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Ministry of Finance and Public Credit
Directorate-General of Customs Services
Technical Directorate
MINIMUM PRICES
I. USED VEHICLES CLASSIFIED UNDER HS CHAPTER 87
Pursuant to Article 22 of Law No. 303, amendi ng Law No. 257, the Law on Fair Taxation and
Trade, published in Official Journal "La Gaceta" No. 67 of 13 April 1999, the Honourable National
Assembly of the Republic has established that:
"For the determination of the f.o.b.. value of used motor vehicles, the value at used retail sales
level shall be used, as established in the Wholesale-Clean column, of the most recent edition
of the Black Book, from the United States.  Bills of Lading shall be used to determine the
value of insurance and freight.
This regime shall be applied in accordance with Nicaragua's commitments under the
World Trade Organization.
For used vehicles from other countries with models being sold in the United States, the prices
used shall be those appearing on the invoices of distributors of new vehicles from the data
bank of the Directorate-General of Customs, minus 15 per cent per year elapsed sincemanufacture to a maximum of five years for depreciation."
VALUATION PROCEDURE FOR USED MOTOR VEHICLES FROM THE UNITED
STATES
1. The declarant must note the retail sales value according to the WHOLESALE-
CLEAN column of the most recent edition of the Black Book, and add the value of
insurance, freight, consular fees and other costs (where applicable) according to the
shipping documents:
Example:
Retail sales value according to the Wholesale-Clean column US$
plus Freight (Bill of Lading) US$
plus Insurance (Bill of Lading) US$
plus Consular fees (CT/114/95) US$
Other costs (where applicable)US$                    
Total used CIF US$
VALUATION PROCEDURE FOR USED MOTOR VEHICLES FROM COUNTRIES
OTHER THAN THE UNITED STATES
1. The price applied shall be that of the new model of the vehicle being valued from the
most recent register of record values from the data bank of the Directorate-General of
Customs.  The new f.o.b. value shall then be reduced by 15 per cent per year elapsed
since manufacture up to a maximum of five years for depreciation.  The years elapsedshall be calculated from the year of the model of the vehicle being valued, not
including the year in which the valuation is made.G/VAL/N/4/NIC/1
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Example:  Deduct the percentage of depreciation according to the vehicle's age.
New f.o.b. value US$ __________ According to the Data Bank of the Directorate-General of Customs
Reduction for 1 year elapsed, 15%
Reduction for 2 years elapsed, 30%Reduction for 3 years elapsed, 45%
Reduction for 4 years elapsed, 60%
Reduction for 5 years elapsed, 75%
NO REDUCTIONS OTHER THAN THOSE ALREADY ESTABLISHED MAY BE
GRANTED
2. When the price of an identical model to the vehicle being valued does not appear in
the records of the data bank of the Directorate-General of Customs, the value shall be
determined according to the valuation met hods provided for in the Central American
Legislation on the Customs Value of Goods and the Regulations thereto.  Once the
value of the vehicle has been determined, reductions shall be made for depreciation inaccordance with paragraph 1 above.
3. Freight, insurance and other costs (where applicable) taken from the shipment
documents and consular fees pursuant to Technical Circular No. 114/95, are then
added to the used f.o.b. value determined according to any of the valuation methodsreferred to above.
VALUATION PROCEDURE FOR USED MOTOR VEHICLES OF THE FOLLOWING
TYPES:  ROAD TRACTORS (TRACTOR TRUCKS), MICROBUSES, BUSES, TRUCKS
WITH A LOAD EXCEEDING TWO TONNES, TRAILERS (PICK-UPS) AND SEMI-TRAILERS, FROM ANY COUNTRY
The price applied shall be that of the new model of the vehicle being valued.  If the price is
determined by the valuation method using identical or similar models, the price shall be taken from
the registers of record values from the data bank of the Directorate-General of Customs, and the new
f.o.b. value shall then be reduced by 15 per cent per year elapsed since manufacture up to a maximum
of five years for depreciation.  The years elapsed shall be calculated from the year of the model of thevehicle being valued, not including the year in which the valuation is made.
This valuation procedure shall take place in customs administrations and offices provided
they have an updated data bank for the prices of new vehicles.  Failing this, customs agents or their
legal representatives shall request in writing an ev aluation from the Technical Directorate, attaching
the original documents of the vehicle that were included in the Declaration (the documents to be
presented are listed in Technical Circular No. 09/1999).
II. RETREADED OR USED PNEUMATIC TYRES CLASSIFIED UNDER
HS HEADING  40.12
The valuation procedure for retreaded or used  pneumatic tyres is established in Technical
Circular No. 23-2000, dated 22 March 2000, which stipulates the following:
"For used pneumatic tyres, the customs value shall be the value of the new pneumatic tyre
according to the price list, minus only 25 per cent for depreciation.  In assessing this value,
account shall be taken of the type of vehicle for which the tyre was made (tourist vehicles,
cargo vehicles, passenger vehicles, etc.) as well as the diameter of the tyre, number of layers
and other technical information".G/VAL/N/4/NIC/1
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The price-list based on information provided by importers of new tyres, which is periodically
updated.
III. WORN CLOTHING, RAGS AND OTHER WORN-OUT ARTICLES, ARTICLES OF
TEXTILE MATERIALS CLASSIFIED UNDER HS HEADINGS  63.09 AND 63.10
Paragraph 8 of Technical Circular No. 097-1999, dated 21 September 1999, stipulates that:
"To determine the price of the used goods referred to in Article 15 of the Legislation on Value
and Articles 31 and 32 of the Regulations thereto, the following procedure shall be used:
For worn clothing classified under tariff headings 63.09 and 63.10, the determination of
customs value shall be made on the basis of the f.o.b.. value of US$2.00 per kilogram".
IV. SUGAR CLASSIFIED UNDER HS HEADING 17.01
Pursuant to Article 15(e) of Law No. 3 03, amending Law No. 257 on Fair Taxation and
Trade, published in Official Journal "La Gaceta" No. 106 of 5 June 1997, the Honourable National
Assembly of the Republic established that:
"For cane or beet sugar and chemically pure sucrose, in solid form, an import tariff of
55 per cent shall be applied, pursuant to the treaties signed by the Government of Nicaraguaand the Central American countries in the framework of the World Trade Organization.
The tariff shall be applied on the declared c.i.f.  value or on the price of sugar quoted in the
Futures Contract on Sugar No. 14, published on the New York Coffee, Sugar and Cocoa
Exchange, depending on which is higher, in accordance with the WTO provisions on customsvaluation …".
In conformity with the Regulations to the Law on Fair Taxation and Trade, the Ministry of
Development, Industry and Trade continually monitors sugar prices on the New York Stock Exchange
and keeps the Directorate-General of Customs Services  permanently informed to ensure that it applies
the minimum values reflected in the corresponding report.
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