WORLD TRADE
ORGANIZATIONG/VAL/W/128
8 October 2003
(03-5314)
Committee on Customs Valuation Original:  English
NOTIFICATIONS UNDER ARTICLE 22 OF THE CUSTOMS
VALUATION AGREEMENT
Questions from the United States to Armenia, India, and Thailand
The following communication, dated 7 October 2003, has been received from the delegation
of the United States
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Questions from the United States of America regarding Armenia’s notification
(G/VAL/N/1/ARM/1)
- We seek clarification from Armenia on the application of the provisions for related parties.
We note that Article 87.2(e) does not contain the “circumstances of the sale” test that is foundin Article 1.2 of the Valuation Agreement and its respective notes.  However, paragraphs 3.8,
3.9 and 3.10 of Armenia’s interpretative notes contain the requisite provisions.  We would
like to confirm that an importer will have the option to prove that the relationship did not
influence the price by either the “circumstances of the sale method” or the “test value”
method.
- Article 87.2(f) provides “the declared Customs value is not significantly lower or higher than,
accordingly, the lowest and the highest Customs value, determined through transaction price
method, of similar or identical goods accepted by RA Customs Authorities within the same or
nearly the same period of time.”  What provis ion of the Valuation Agreement is this intended
to implement?
- In Article 78(g) Armenia defines parties as being related when “they are legally recognized as
persons who have interest in the same business…”   We request clarification that this
provision is meant to cover the “partners” provision found in Article 15.4(b) of the Valuation
Agreement.
- Under Article 79, Armenia defines “the same or nearly the same period of time to be a ninety-
day period preceding the time observed.”  We note that Articles 2 and 3 of the Valuation
Agreement do not contain a definite time frame.  Please explain this language in the
Armenian law.
Questions from the United States of America fo r India concerning “Certain amendments to the
Customs Valuation (Determination of Price of Imported Goods) Rules” (G/VAL/N/1/IND/3)
- What was the objective for the amendments issued in the Gazette Notification of 7
September 2001?
- Do the amendments change the Government of  India’ s application of transaction value?G/VAL/W/128
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- The General Introductory Commentary  to the WTO Customs Valuation Agreement states
“the basis for the valuation of goods for customs purposes should, to the greatest extent
possible, be the transaction value of the goods being valued.”  How do the amendments to
India’s law promote this principle, and do they do so, to a greater degree, than the previouslegislation?
- Article 1 to the WTO Valuation Agreement contains criteria for acceptance of a transaction
value.  Are the amendments to India’s legislation contained in Article 1 as criteria for
acceptance of a transaction value?
- Please confirm that, prior to the 2001 amendment, Rule 3 stated:  “for the purpose of these
rules, the value of imported goods shall be the transaction value;” and that subsequent to the
amendment Rule 3 now states “Subject to Rule s 9 and 10A, the value of imported goods shall
be the transaction value.”
- Please explain the operational effect of the change to Rule 3.- Please confirm that the effect of the insertion of Rule 4 is to add the following criteria for
acceptance of a transaction value:
• the sale is in the ordinary course of trade under fully competitive conditions
• the sale does not involve any abnormal discount or reduction from the ordinary
competitive price;
• the sale does not involve special discounts limited to exclusive agents
• objective and quantifiable data exist with regard to the adjustments required to be made,
under the provisions of rule 9, to the transaction value
- What is the basis for these criteria, and what is  their objective in the application of Article 1
of the Agreement on Customs Valuation?
- Who determines “fully competitive conditions,” and how is this accomplished?  What are the
criteria?
- Who determines “abnormal discount or reduction” from the ordinary competitive price?
What are the criteria?  What types of prices are used for comparison as an “ordinarycompetitive price”?  Is there a difference from “normal” discount or reduction?
- Please explain the difference in the overall operation of India’s customs valuation regime
before the amendment versus how the operation of India’s customs valuation regime after the
2001 amendment.
Questions from the United States of America Regarding Thailand’s Notification
(G/VAL/N/1/THA/1)
Regarding Section 5. Section 11 bis of the Customs Act B.E. 2469
- This section appears to provide the RTG with the authority to arbitrarily uplift the declared
value.  Section 11 bis. states:  “If the declared value is clearly low or does not reflect the true
value of the goods and if the customs value is determined under the rules, procedures and
conditions in accordance with the customs value or value in (2) (a) (b) (c) (d) and (e) of the
definitions of ‘customs value’ or ‘value’ in Section 2, the price is still clearly low or does notG/VAL/W/128
Page 3
reflect the true value of such goods, the Direct or-General shall have the power to determine
the customs value.”  This measure appears to give the Director General the authority to
determine the customs value when the price is found to be “clearly low or does not reflect the
true value of the goods,” even though the declared value was determined accordance to the
methods set forth in the WTO Valuation Agreement.  How is this measure consistent withThailand’s obligations under the WTO Agreement?
Regarding Sufficient Guarantee- The legislation as submitted does not include a provision regarding the release of the
imported goods upon the provision of sufficient guarantee such as a surety as set forth in
Article 13 of the Agreement.  We request additional information from Thailand on how itintends to implement this provision.
Regarding The Treatment of Confidential Information- The legislation as submitted does not provisions regarding the treatment of confidential
information as provided in Article 10 of the Agreement.  We request additional information
from Thailand on how it intends to implement this provision.
Regarding Currency Conversion
- The legislation as submitted does not include a provision regarding currency conversion as
provided in Article 9 of the Agreement.  We request additional information from Thailand on
how it intends to implement this provision.
Regarding Notice- The legislation as submitted does not include a provision requiring that notice of the decision
on appeal and the reasons for such decision shall be provided in writing as required by Article
11.3 of the Agreement.  Also, the legislation as submitted does not include a provision
regarding the publication of laws, regulations, judicial decisions and administrative rulings of
general application as provided in Article 12.  Finally, the submitted legislation does not
contain a provision requiring a written explanation as to how the customs value wasdetermined as required by Article 16.  We request additional information from Thailand on
how it intends to implement these provisions.
Regarding Royalties
- The legislation and regulations as submitted do not fully implement Article 8.1(c) of the
Agreement which requires an addition to the price actually paid or payable for “royalties and
license fees related to the goods being valued that the buyer must pay, either directly or
indirectly, as a condition of sale of the goods being valued...” The relevant provision of the
Thai Regulations (Article 9.1) does not contain the condition of sale requirement.   How doesThailand intend to address this matter?
Regarding the Interpretative Notes
− Many of the interpretative notes of the WTO Agreement are not incorporated in the notified
legislation and regulations as required by Article 14 of the Agreement.  (For example, the
requirement in the General Note that the customs administration shall utilize information prepared
in a manner consistent with generally accepted accounting principles in the country which is
appropriate for the Article in question; the definition of price actually paid or payable in the NoteG/VAL/W/128
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to Article 1, the explanations regarding the circ umstances of sale test set forth in the Note to
Article 1, paragraph 2.3; and the methods of determining the profit and general expenses set forth
in the Notes to Articles 5 and 6).  How does Thailand intend to address this matter?
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