When to Avoid the Transaction Value? No sale – no method 1, or transaction value is not acceptable (e.g. price has been affected by certain conditions)

OTHER VALUATION METHODS

When to Avoid the Transaction Value?No sale – no method 1, or transaction value is not acceptable (e.g.

price has been affected by certain conditions)The Hierarchy must be kept1. Article 1 – Transaction value2. Article 2 – Value of identical goods3. Article 3 – Value of similar goods4. Article 4 – Deducted Value5. Article 5 – Computed value6. Article 6 – Fall back (reasonable means)

Identical Goods Produced in the same countryIdentical to the goods actually valuated

(physical characteristic, quality)There must be identical goods that were

valuated by the transaction value as the basement for valuation of identical goods in relevant time

Time – 30 days before or after the valuation If there are more than one case of identical

goods - the lowest value

Identical goods should be sold to the same country

Identical goods value of a sale at the same commercial level

Identical goods imported at the same quantity

Allowed adjustments:Considering the commercial level Considering quantityConsidering the cost of transportation

Similar GoodsBased on the similar goods produced in the same country- Similar characteristics and materials- Same functionality - Same function- Commercially switchableThere must be similar goods that were

valuated by the transaction value as the basement for valuation of identical goods in relevant time

Time – 30 days before or after the valuation

If there are more than one case of similar goods - the lowest value

Deductive Value based on the unit price of imported goods or

identical or similar imported goods in the greatest aggregate quantity -  based on the selling price of the goods in the country of importation.

Persons involved in the exportation – importation are not in connection

Relevant time of importation of goods valuated by transaction or identical or similar methods (max 90 days after importation).

Formula: Selling price – commissions (or) additions for profit and general expenses – cost of transportation in the country of importation – duties = Customs Value

  if the goods are not sold in the country of importation in the condition as imported

- customs value base on the price at which the goods are sold after processing

Not possible if :- Goods lost their identity and it is not possible to accurately deduct the value added by the processing, or- keep their identity but it is only a minor part

of the goods soldNo sales to unrelated persons in the country

of importation - go for method 5

Computed Value (unusual)Based on sum of: Costs/value incurring in producing of imported goods- Materials- Manufacturing - Processing - Containers and packing - Value of assist Reasonable amount of profit and general expenses- Profit- Distribution expenses- Any other general expenses not included in the costs of

production- Transportation, insurance, handling charges

Can be used only if :Information on above mentioned costs is easily

available in the country of importationThe producer is willing to deliver necessary

information in the country of importationThe producer agrees to possible verification by

customs in the country of exportationCustoms authorities of the country of exportation

willing to verify cost of production in the exporter premises (international agreement on customs cooperation in place)

Neither customs of the country of importation nor customs of the exportation country can force producer to provide info/records for determination of the customs value

‘Fall-back' Method (reasonable means)Based on “reasonable means” and on the

basis of available data”.According to the principles and general

provisions of the Article VII GATT/WTOAccording to the general provisions and other

legislation of the country of importation

The customs value cannot be based on:— the selling price of goods in the country of

importation e.g. the sale price of goods manufactured in the country of importation

— a system which provides for the acceptance for customs purposes of the higher of two alternative values; just use the lowest one

— the price of goods on the domestic market of the country of exportation

— the cost of production other than computed values which have been determined for identical or similar goods

— the price of goods for export to a third— minimum customs value ; exception for developing country allows for use of minimum values

— arbitrary or fictitious values

Questions?