TECHNICAL ASSISTANCE ON

CUSTOMS VALUATION

PRESENTED BY JAMAICA CUSTOMS

CHALLENGES ON IMPLEMENTING

THE WTO AGREEMENT ON

CUSTOMS VALUATION

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INTRODUCTIONJamaica Customs was the recipient of technical assistance:

WTO Mission assessed our implementation activities,WCO Technical Committee on Valuation,UK Customs, Canada & US Customs.

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Implementation Issues

Limited provisions of technical assistance for:

Training of operative level personnelModernization of methods of customs clearanceDevelopment of computer systems to provide effective price referencesImproving management techniques

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Implementation Issues

Inadequacy of the transitional period

The continued use of minimum values for high risk items

Phased implementations vs

Implementation “Cold Turkey”

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Implementation Issues

WTO Mission to Jamaica (1999) recommended the following:

A project team with set milestonesNational Administrative PolicyPenalty provisionAutomation of proceduresTraining & Public Education

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Capacity Building

Trained Operative Personnel

Informed External Stakeholders

Resident Valuation Experts

Valuation Post Audit

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Requirements for Capacity Planning

Training Programmes:Customs PersonnelExternal Stakeholders

Extensive training for valuation personnelQualified TrainersFunding

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Technical Assistance

APEC Train-the-Trainer Programme

WCO Valuation CommitteeSenior Management Training

UK CustomsProcedures and manuals

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Result of Technical Assistance

350 Operative Officers Trained

130 Customs Brokers trained

Forums with various interest

groupsPublication of

Valuation Guide

Procedure Manual

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Post Implementation

Challenges

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Challenges in Interpreting the Code

The term “paid as a condition of sale”

Royalty AgreementsLicence

Related Party TransactionsTransfer PricingProving Family Relationship

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Challenges in Interpreting the Code

Buying Commission when the agent is in the business of sourcing goods for any buyer.

Special Discounts given to sole distributors and agents.

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The Complexities of Transfer Pricing

Inherent Price Influence.Technical and Complex transfer pricing policies.The interpretation of the term “as a condition of sale” and the opportunity it presents to certain categories of importers.

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Royalties and Licence Fees

The interpretation of the term “paid as a condition of the sale”

Companies are rewriting contracts to categorically state that payment for royalties is not made as a condition of the sale of the goods.

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Valuation Control

The difficulties of exercising valuation control in the absence of minimum values.

The absence of reliable historical customs values to assist in the verification of values.

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Valuation Control

Real Burden of ProofCash PaymentsNo paper trailThe obligation to give an explanation for rejecting the declared value

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Burden of Proof and Post Clearance

Verification

No support for post clearance verification (approximately 40% of imports)

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Risk Management System

Computerized risk management system

Price referencing moduleIntelligence ModuleRisk Management ModuleTo be commissioned March 2003

Consultation required

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ConclusionThe implementation of the Agreement on Customs Valuation is challenging

Technical Assistance was limited

Developing nations need continued assistance and support for successful implementation.