AGREEMENT ON CUSTOMS VALUATION Meaning and
Definition
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Agreement on Customs Valuation refers to an international treaty that sets out principles and rules for determining the customs value of imported goods. It is a multilateral agreement concluded under the auspices of the World Trade Organization (WTO) and entered into force on 1 January 1981.
The Agreement on Customs Valuation provides a transparent and uniform method for customs authorities to determine the customs value of imported goods for the purpose of levying customs duties and other charges. It establishes that the customs value should be based on the transaction value, which is the price actually paid or payable for the goods when sold for export to the country of importation. The transaction value is adjusted to include certain costs, such as packing, commissions, and royalties, that are directly related to the imported goods.
The agreement also provides alternative methods of valuation, such as the value of identical or similar goods, deductive value, and computed value, which can be used when the transaction value cannot be determined or is not acceptable.
The main objective of the Agreement on Customs Valuation is to ensure a fair and neutral system for the valuation of imported goods, promoting predictability and consistency in customs valuation practices among WTO member countries. By establishing clear rules and procedures, this agreement helps to prevent arbitrary valuations and customs fraud, thereby facilitating international trade and reducing trade barriers.
