RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/W/60/Add.1
26 January 2001
(01-0414)
Committee on Customs Valuation Original:  English
COMMUNICATION FROM JAMAICA CONCERNING PARAGRAPH 2
OF ANNEX III OF TH E AGREEMENT ON IMPLEMENTATION
OF ARTICLE VII OF THE GENERAL AGREEMENT
ON TARIFFS AND TRADE 1994
Addendum
The following communication, dated 16 January 2001, has been received from the Permanent
Mission of Jamaica.
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Further to document G/VAL/24 in which Jamai ca was granted an extension of its transition
period until 9 March 2001 and further to paragraph 2 of Annex III of the Customs Valuation
Agreement, Jamaica wishes to make a reservation under this paragraph to continue use of minimum
values, for a limited period 24 months with effect from 10 March 2001, on the items indicated in the
attached request and for the reasons elaborated therein.
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REQUEST FOR CONTINUATION OF THE USE OF MINIMUM VALUES/REFERENCE
PRICES ON SPECIFIED COMMODITIES IN JAMAICA
Jamaica wishes to make a reservation under Annex III, Paragraph 2 of the Valuation
Agreement to continue the use of minimum values/reference prices on the items listed below, for aperiod of 24 months with effect from 10 March 2001.
Commodities Tariff Codes
Used Motor Vehicles ex 8701-8705
Used Chassis and Bodies ex 8706-8707
Used Motor Cycles ex 8711
Used Equipment ex 8426, 8427, 8429 and 8430
Background
As indicated in the request for an extension of its transitional period for implementation of the
Valuation Agreement, Jamaica has b een involved in undertaking substantial reform of its entire tax
administration, and specifically its Customs Depa rtment, where a World Bank funded Modernization
Project has just commenced.
Although these measures are expected to improve the efficiency of the agencies involved, the
benefits are still to be realized.  In the interim, the skilled human resources are being tightly stretched
as they try to respond to the numerous demands resulting from the changes being undertaken.  In
addition, the country continues to suffer from severe budgetary constraints and faces tremendous
difficulties as the government struggles to balance demands for financing competing priorities.G/VAL/W/60/Add.1
Page 2
Despite all of the above, Jamaica has been ma king every effort to implement the Valuation
Agreement and has undertaken considerable expense on this exercise.  This is so, although there is a
deep-seated fear that there might be substantial loss of revenue and that under-valuation might
weaken if not destroy domestic industries.
It is with these concerns in mind that Jamaica wishes to seek to continue the use of minimum
values/reference prices for used motor vehicles and equipment for 24 months following
implementation of the Valuation Agreement.
REASONS FOR THE USE OF MINIMUM VALUES/REFERENCE
PRICES FOR MOTOR VEHICLES
In 1991 Jamaica introduced the use of minimum values/reference prices as the country sought
to grapple with the influx of used motor vehicles.
Unlike the situation when new cars are imported, mainly by well-established distributors
where there is the ability to audit accounts, the importation of used vehicles often by individuals or
itinerant operators creates numerous challenges for the Customs Department and the country in
general.
• There is loss of revenue since the purchase of cheaper used vehicles not only cuts into
the potential market for new vehicles, but these vehicles are usually under-valuedthrough the use of fraudulent invoices.
• More vehicles are on the roads since more persons can afford to purchase cars
creating traffic jams and a resulting loss of productivity.
• These vehicles are also a potential cause of health problems due to pollution,
especially since some of these vehicles are almost being thrown out of the countriesfrom which they are being imported because they do not satisfy newly established
standards.
• The influx of these vehicles also results in greater wear and tear on the roads of the
country thus adding to the cost of maintenance for the Government.
It is very difficult to verify the cost structure of these vehicles as they relate to transfer  costs,
registration, inland transportation etc.  which should be added to the price payable.
Jamaica is therefore requesting to be given time to benefit from the efficiencies which it is
expected will result from modernisation through improved skills in conducting risk analysis and
investigative work.  This is needed in order to co mbat the very high level of under-valuation resulting
from the lack of invoices and/or the prevalence of fraudulent invoices.  Approval is hereby sought for
the use of minimum values/reference prices to continue for a period of 24 months with effect from
10 March 2001.
The procedures followed in applying these Minimum Values/Reference Prices are shown in
Appendix I  attached.G/VAL/W/60/Add.1
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PROCEDURES FOR APPLYING MINIMUM VALUES/REFERENCE PRICES
Used Motor vehicles
F.O.B. Values are determined by referral to monthly guides for this purpose.
• GLASS GUIDES – used for vehicles imported from Europe.  The GC trade prices are
used for the computation of values – less 20%.
• NADA GUIDE – used for vehicles imported from the Untied States and Canada.  the
retail prices are used.
• JAPANESE AUTOMOBILE APPRAISAL INSTITIURE (JAA I) GUIDE – used for
vehicles imported from Japan.  The retail prices are used and the lowest price shown
in trade catalogues.
• BIG TRUCK TRADER – used for valuation of industrial equipment.
Used Car Dealers are granted a 5% volume discountVehicles are deemed to be "used" if they satisfy one or more of the following criteria:
1. Odometer reader shows more than 3,000 miles;2. Vehicles owned by a third party;3. Vehicles more than six months old.
Used Chassis and Bodies
A similar method is applied to the valuation of these commodities as is applied to used motor
vehicles, with adjustments made for age and part of the vehicle.
Used Motor Cycles
The NADA Motor Cycle Guide published by the United States is used to determine the value
of used items falling in this category.  Adjustments are made for the condition of the equipment and
the prices are treated as FOB values.
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