WORLD TRADE ORGANIZATION (WTO)
COUNTRIES ACCORDING TO BRUSSELS DEFINITION OF VALUE
- INTERGOVERNMENTAL ORGANIZATION CONCERN WITH
REGULATION OF INTERNATIONAL TRADE BETWEEN NATIONS.
- OFFICIALLY COMMENCED ON
1 JANUARY 1995 UNDER THE
MARRAKESH AGREEMENT, SIGNED
BY 123 NATIONS ON 15 APRIL 1994,
REPLACING THE GATT,
WHAT IS GENERAL AGREEMENT ON TARIFF AND TRADE
(GATT)?
GENERAL AGREEMENT ON TARIFF AND TRADE (GATT)
- legal agreement between many countries, whose overall
purpose was to promote international trade by reducing or
eliminating trade barriers such as tariffs or quotas.
- SIGNED BY 23 NATIONS IN GENEVA ON
30 OCTOBER 1947, AND TOOK EFFECT
ON 1 JANUARY 1948. IT REMAINED IN
EFFECT UNTIL THE SIGNATURE BY 123
NATIONS IN MARRAKESH ON
14 APRIL 1994.
TRANSACTION VALUE (TV)
RA 8181 - AN ACT CHANGING THE BASIS OF DUTIABLE VALUE
OF IMPORTED ARTICLES SUBJECT TO AN AD VALOREM RATE
OF DUTY
SIGNED ON MARCH 28, 1996.
WHAT IS CUSTOMS VALUATION?
CUSTOMS VALUATION IS A CUSTOMS PROCEDURE APPLIED
TO DETERMINE THE CUSTOMS VALUE OF IMPORTED GOODS.
IF THE RATE OF DUTY IS AD VALOREM, THE CUSTOMS VALUE
IS ESSENTIAL TO DETERMINE THE DUTY TO BE PAID ON AN
IMPORTED GOOD.
SHORT HISTORICAL OVERVIEW
(ARTICLE VII GATT)
– ARTICLE VII OF GATT LAID DOWN THE GENERAL PRINCIPLES
FOR INTERNATIONAL SYSTEM OF VALUATION.
BASED ON THE ACTUAL VALUE OF THE IMPORTED
MERCHANDISE.
ARTICLE VII ALSO CONTAINS A DEFINITION OF “ACTUAL
VALUE”
IN 1950, CUSTOMS DUTIES WERE ASSESSED BY MANY
(BVD).
IN NORMAL MARKET PRICE, “PRICE THAT GOOD WOULD
FETCH IN AN OPEN MARKET BETWEEN BUYER AND SELLER”.
TOKYO ROUND VALUATION CODE, CONCLUDED IN 1979,
ESTABLISHED A POSITIVE SYSTEM OF CUSTOMS VALUATION
“BASED ON THE PRICE ACTUALLY PAID OR PAYABLE FOR THE
IMPORTED GOODS”.
BASED ON THE “TRANSACTION VALUE”,
IT WAS INTENDED TO PROVIDE A FAIR,
UNIFORM AND NEUTRAL SYSTEM FOR
THE VALUATION OF GOODS FOR
CUSTOMS PURPOSES.
TOKYO ROUND VALUATION CODE WAS
SIGNED BY MORE THAN 40
CONTRACTING PARTIES.
NEW AGREEMENT
TOKYO ROUND CODE WAS REPLACED BY THE WTO
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE
GATT 1994 FOLLOWING CONCLUSION OF THE URUGUAY
ROUND.
THIS AGREEMENT IS ESSENTIALLY THE SAME AS THE TOKYO
ROUND VALUATION CODE AND APPLIES ONLY TO THE
VALUATION OF
IMPORTED GOODS FOR THE PURPOSE OF LEVYING AD
VALOREM DUTIES.
BASIC PRINCIPLE: TRANSACTION VALUE
BASED ON THE ACTUAL PRICE OF THE GOODS TO BE VALUED,
WHICH IS GENERALLY SHOWN ON THE INVOICE.
PRICE, PLUS ADJUSTMENTS
FOR CERTAIN ELEMENTS
LISTED, EQUALS THE
TRANSACTION VALUE.
THE SIX (6) METHODS OF TRANSACTION VALUE
FOR CASES IN WHICH THERE IS NO TRANSACTION VALUE
(METHOD 1), OR WHERE THE TRANSACTION VALUE IS NOT
ACCEPTABLE AS THE CUSTOMS VALUE.

THE AGREEMENT LAYS DOWN FIVE (5) OTHER METHODS OF
CUSTOMS VALUATION (METHOD 2-6), TO BE APPLIED IN THE
PRESCRIBED HIERARCHICAL ORDER. OVERALL
METHOD 1 — TRANSACTION VALUE
TRANSACTION VALUE (METHOD 1)
THE PRICE ACTUALLY PAID OR PAYABLE IS THE TOTAL
PAYMENT MADE OR TO BE MADE.
WHAT ARE THE CONDITIONS TO BE FULFILLED IN CUSTOMS
VALUE UNDER TRANSACTION VALUE?
1. EVIDENCE OF SALE
2. THERE MUST BE EVIDENCE OF A SALE FOR EXPORT TO THE
COUNTRY OF IMPORTATION.
3. NO RESTRICTION ON THE DISPOSITION OR USE BY SELLER.
4. NO RESTRICTION ON THE DISPOSITION OR USE OF THE
GOODS BY THE BUYER, OTHER THAN RESTRICTIONS WHICH:
— ARE IMPOSED OR REQUIRED BY LAW IN
THE COUNTRY OF IMPORTATION;
— ARE LIMITED TO THE GEOGRAPHIC AREA
IN WHICH THE GOODS MAY BE RESOLD;
— DO NOT SUBSTANTIALLY AFFECT THE
VALUE OF THE GOODS.
5. NOT SUBJECT TO ADDITIONAL CONDITIONS
6. THE SALE OR PRICE MUST NOT BE SUBJECT TO CONDITIONS
OR CONSIDERATIONS.
SOME EXAMPLES ARE PROVIDED IN ANNEX I, NOTE TO
ARTICLE 1:1(B):
— SELLER ESTABLISHES THE PRICE ON CONDITION, BUYER
WILL ALSO BUY OTHER GOODS IN SPECIFIED QUANTITIES;
— PRICE OF IMPORTED GOODS IS DEPENDENT UPON THE
PRICE AT WHICH THE BUYER SELLS TO OTHERS;
— PRICE IS ESTABLISHED IN A FORM OF EXTRANEOUS
(INAPPROPRIATE) TO THE IMPORTED GOODS.
SUFFICIENT INFORMATION IS AVAILABLE TO SPECIFIC
ADJUSTMENTS TO THE PRICE PAID OR PAYABLE;
TO BE KNOWN AS:
ASSIST
— COMMISSIONS AND BROKERAGE, EXCEPT BUYING
COMMISSIONS.
— PACKING AND CONTAINER COSTS AND CHARGES.
— ASSISTS (MOLDING MATERIALS, ADDITIONAL MANPOWER,
CONTRACTUAL MATERIAL)
— ROYALTIES AND LICENSE FEES (ENGINEERING OR
ARCHITECT DESIGN WORKS)
— SUBSEQUENT PROCEEDS (PAYMENT OR FEES FOR
SUBSEQUENT RESALE, DISPOSAL OR USE OF GOODS) OR
AGENT FEE
— COST OF TRANSPORT, INSURANCE AND RELATED CHARGES
UP TO THE PLACE OF IMPORTATION (CIF).
WHAT ARE NOT INCLUDED?
— COSTS INCURRED AFTER IMPORTATION (DUTIES,
TRANSPORT, CONSTRUCTION OR ASSEMBLY, ETC).
EXPORT VALUE - IS THE SELLING PRICE OF THE GOODS IN THE
EXPORTING COUNTRY.
TRANSACTION VALUE - IS THE PRICE ACTUALLY PAID OR
PAYABLES PLUS ADJUSTMENT.
WHEN THE RELATIONSHIP OF BUYER AND SELLER IS NOT THE GOODS MUST ALSO BE
ACCEPTABLE IN TRANSACTION VALUE? AT OR ABOUT THE SAME TIME
BUYER AND SELLER ARE NOT RELATED. AS THE GOODS BEING VALUED.

BUT EVEN, THE USE OF TRANSACTION VALUE IS ACCEPTABLE

IF THE IMPORTER DEMONSTRATES THAT: EXCEPTIONS: SOME EXCEPTIONS ARE ACCEPTED, IN
PARTICULAR:
— RELATIONSHIP DID NOT INFLUENCE THE PRICE, OR

— TRANSACTION VALUE CLOSELY APPROXIMATES A TEST — IF NO IDENTICAL GOODS PRODUCED BY THE SAME PERSON
VALUE. IN THE COUNTRY OF PRODUCTION OF THE GOODS BEING
VALUED; PRODUCED BY A DIFFERENT PERSON IN THE SAME
RELATED PERSONS IS FOUND IN ARTICLE 15 OF GATT, WHICH COUNTRY.
STATES PERSONS ARE DEEMED TO BE RELATED, IF:
RELATED PARTIES — MINOR DIFFERENCES IN
— OFFICERS OR DIRECTORS OF ONE ANOTHER'S BUSINESSES; APPEARANCE WOULD NOT
— LEGALLY RECOGNIZED PRECLUDE GOODS WHICH
PARTNERS IN BUSINESS; OTHERWISE CONFORM TO
— EMPLOYER AND THE DEFINITIONS FROM
EMPLOYEE; BEING REGARDED AS
IDENTICAL.
RELATED PARTIES

— DIRECTLY OR INDIRECTLY OWNS, CONTROLS OR HOLDS 5%
OR MORE OF VOTING STOCK OR SHARES;
— DIRECTLY OR INDIRECTLY CONTROLS THE OTHER;
RELATED PARTIES
— DIRECTLY OR INDIRECTLY CONTROLLED BY A THIRD
PERSON; OR
— MEMBERS OF THE SAME FAMILY.
METHOD 2 — TRANSACTION VALUE OF IDENTICAL GOODS
(ARTICLE 2)
METHOD 3 — TRANSACTION VALUE OF SIMILAR GOODS
(ARTICLE 3)
THE TRANSACTION VALUE IS CALCULATED IN THE SAME
MANNER ON SIMILAR GOODS IF:
— GOODS CLOSELY RESEMBLING, IN TERMS OF COMPONENT
MATERIALS AND CHARACTERISTICS.
— PERFORMING THE SAME FUNCTIONS AND COMMERCIALLY
INTERCHANGEABLE.
— PRODUCED IN THE SAME COUNTRY BY THE PRODUCER,

TRANSACTION VALUE IS CALCULATED IN IDENTICAL GOODS, IF
THE GOODS ARE:
— SAME IN ALL RESPECTS INCLUDING PHYSICAL
CHARACTERISTICS, QUALITY, AND REPUTATION;
— PRODUCED IN SAME COUNTRY AS GOODS BEING VALUED;
— PRODUCED BY PRODUCER
OF THE GOODS BEING
VALUED.
GOODS MUST BE SOLD FOR EXPORT TO THE SAME COUNTRY
OF IMPORTATION AS THE GOODS BEING VALUED.
- SOLD TO THE SAME COUNTRY OF IMPORTATION,
- EXPORTED AT OR ABOUT THE SAME TIME.
METHOD 4 — DEDUCTIVE VALUE
DEDUCTION OF VALUE FROM THE PRICE OF THE GREATEST
AGGREGATE (CLUSTER) QUANTITY SOLD.
WHEN CUSTOMS VALUE CANNOT BE DETERMINED ON THE
BASIS OF THE TRANSACTION VALUE (IDENTICAL OR SIMILAR)
BE DETERMINED ON THE BASIS OF THE UNIT PRICE
(IMPORTED GOODS OR IDENTICAL OR SIMILAR GOODS ARE
SOLD TO AN UNRELATED BUYER)
BUYER AND THE SELLER IN THE IMPORTING COUNTRY MUST
NOT BE RELATED AND
SALE MUST TAKE PLACE AT OR ABOUT THE TIME OF
IMPORTATION.
IF NO SALE TOOK PLACE AT OR ABOUT THE TIME OF
IMPORTATION?
IT IS PERMITTED TO USE SALES UP TO NINETY (90) DAYS
AFTER IMPORTATION OF THE GOODS BEING VALUED.
UNIT PRICE, THE GOODS ARE SOLD IN THE GREATEST
AGGREGATE QUANTITY IS A BASIS FOR CUSTOMS VALUE.
MEANS GREATEST NUMBER OF UNITS IS SOLD TO UNRELATED
PERSONS AT THE FIRST COMMERCIAL LEVEL, AFTER
IMPORTATION AT WHICH SUCH SALES TAKE PLACE.
WHAT ARE DEDUCTIONS FROM THE PRICE AT THE GREATEST
AGGREGATE QUANTITY?
VARIOUS DEDUCTIONS ARE NECESSARY TO REDUCE THAT
PRICE TO THE RELEVANT CUSTOMS VALUE:
— BUYING COMMISSIONS
— PROFITS AND GENERAL EXPENSES
— TRANSPORT COSTS AND INSURANCE
METHOD 5 — COMPUTED VALUE
DEFINITION: PRODUCTION COST AND PROFITS AND EXPENSES
THE MOST DIFFICULT AND RARELY USED METHOD,
- DETERMINES ON THE BASIS OF THE COST OF PRODUCTION,
- PLUS AMOUNT FOR PROFIT AND GENERAL EXPENSES
(REFLECTED FROM COUNTRY OF EXPORTATION TO COUNTRY
OF IMPORTATION OF THE SAME CLASS OR KIND)
COST OR VALUE OF MATERIALS AND FABRICATION OR OTHER
PROCESSING EMPLOYED IN PRODUCING THE IMPORTED
GOODS.
EXAMPLE:
- RAW MATERIALS (LUMBER, STEEL, LEAD, CLAY TEXTILES);
- COSTS TO GET THE RAW MATERIALS;
- SUBASSEMBLIES, SUCH AS INTEGRATED CIRCUITS; AND
- PREFABRICATED COMPONENTS WHICH BE ASSEMBLED.
- FABRICATION: COSTS FOR LABOR, COSTS FOR ASSEMBLY,
- INDIRECT COSTS: FACTORY SUPERVISION, PLANT
MAINTENANCE, OVERTIME, ETC.
- COST OR VALUE: PRODUCTION, SUPPLIED BY OR ON BEHALF
OF THE PRODUCER.
IF NOT INCLUDED ABOVE, PACKING COSTS AND CHARGES,
ASSISTS, ENGINEERING WORK, ARTWORK, ETC. THAT
UNDERTAKEN IN THE COUNTRY OF IMPORTATION WOULD BE
ADDED.
PROFIT AND GENERAL EXPENSES USUALLY REFLECTED IN
EXPORT SALES TO THE COUNTRY OF IMPORTATION, OF THE
SAME CLASS OR KIND.
GENERAL EXPENSES COULD INCLUDE RENT, ELECTRICITY,
WATER, LEGAL FEES, ETC.
OTHER EXPENSES TO BE ADDED
FINALLY, OTHER EXPENSES SHOULD BE ADDED TO THE PRICE
SUCH AS:
- COST OF TRANSPORT AND COST OF INSURANCE.
METHOD 6 — FALL-BACK METHOD
WHAT IF THE CUSTOMS VALUE CANNOT BE DETERMINED
UNDER ANY OF THE PREVIOUS METHODS?
BE DETERMINE USING REASONABLE MEANS CONSISTENT
WITH PRINCIPLES AND GENERAL PROVISIONS OF THE
AGREEMENT AND (ARTICLE VII OF GATT),
AND ON THE BASIS OF DATA AVAILABLE IN THE COUNTRY OF
IMPORTATION.
BASED ON PREVIOUSLY
DETERMINED VALUES
WITH A REASONABLE
DEGREE OF FLEXIBILITY.
UNDER THE FALL-BACK METHOD, THE CUSTOMS VALUE MUST
NOT BE BASED ON:
— THE SELLING PRICE OF GOODS IN THE COUNTRY OF
IMPORTATION;
— A SYSTEM PROVIDES HIGHER OF TWO (2) ALTERNATIVE
CUSTOMS VALUES (THE LOWEST SHOULD BE USED);
— PRICE OF GOODS ON THE DOMESTIC MARKET OF THE
COUNTRY OF EXPORTATION (VALUATION PROCEDURES
SHOULD NOT BE USED TO COMBAT DUMPING)
— COST OF PRODUCTION OTHER THAN COMPUTED VALUES
WHICH HAVE BEEN DETERMINED FOR IDENTICAL OR SIMILAR
GOODS (VALUATION MUST BE ARRIVED AT ON THE BASIS OF
DATA AVAILABLE IN THE COUNTRY OF IMPORTATION);
— PRICE OF GOODS FOR EXPORT TO A THIRD COUNTRY
(TWO EXPORT MARKETS AND THE PRICE TO ONE SHOULD
NOT CONTROL THE CUSTOMS VALUE IN THE OTHER);
— MINIMUM CUSTOMS VALUE (UNLESS A DEVELOPING
COUNTRY HAS TAKEN ON EXCEPTION ALLOWS FOR USE OF
MINIMUM VALUES);
— ARBITRARY OR FICTITIOUS VALUES (THESE PROHIBITIONS
DO NOT BASE ON WHAT HAPPENS IN FACT IN THE
MARKETPLACE),
THE VALUE IS REFLECTED IN ACTUAL PRICES, IN ACTUAL
SALES, AND IN ACTUAL COSTS,
REASON OF THE IMPORTATION OR SALE OF THE GOODS ARE
ALSO TO BE DEDUCTED;
OTHER PROVISIONS
THE SEQUENCE OF METHODS 4 AND 5 CAN BE SWITCHED AT
THE REQUEST OF THE IMPORTER.
AGREEMENT CONTAINS SPECIAL AND DIFFERENTIAL
TREATMENT OF DEVELOPING COUNTRIES.
ALL WTO MEMBERS ARE MEMBERS OF
THE CUSTOMS VALUATION AGREEMENT.
ARTICLE 20.1 ALLOWS DEVELOPING COUNTRY MEMBERS,
NOT PARTY TO THE TOKYO ROUND CODE, TO DELAY
APPLICATION OF PROVISIONS OF THE AGREEMENT FOR A
PERIOD OF FIVE (5) YEARS FROM THE DATE OF ENTRY INTO
FORCE OF THE WTO AGREEMENT FOR THE MEMBER
CONCERNED.
DELAY OF APPLICATION OF THE
COMPUTED VALUE METHOD FOR
THREE (3) YEARS FOLLOWING
THE APPLICATION OF ALL.
ARTICLE 20.2 ALLOWS DEVELOPING COUNTRY MEMBERS,
NOT PARTY TO THE TOKYO ROUND CODES TO DELAY
APPLICATION OF THE COMPUTED VALUE METHOD FOR A
PERIOD NOT EXCEEDING THREE (3) YEARS FOLLOWING THEIR
APPLICATION OF ALL OTHER PROVISIONS OF THE
AGREEMENT.
DEVELOPING COUNTRY MEMBERS, NOT
PARTY TO THE TOKYO ROUND CODE,
CAN DELAY THE COMPUTED VALUE
METHOD A TOTAL OF EIGHT (8) YEARS.
RESERVATIONS TO RETAIN ESTABLISHED MINIMUM VALUES
PARAGRAPH 2 OF ANNEX III PROVIDES THAT DEVELOPING
COUNTRY MEMBERS MAY MAKE A RESERVATION TO RETAIN METHOD 1 — TRANSACTION VALUE
AN ALREADY-EXISTING SYSTEM OF OFFICIALLY ESTABLISHED
MINIMUM VALUES

(EVEN THOUGH MINIMUM PRICES ARE PROHIBITED UNDER TRANSACTION VALUE (METHOD 1)
THE AGREEMENT).
THE PRICE ACTUALLY PAID OR PAYABLE IS THE TOTAL
PAYMENT MADE OR TO BE MADE.
PARAGRAPH 4 OF ANNEX III ALLOWS DEVELOPING COUNTRY
MEMBERS THE RIGHT TO VALUE THE GOODS UNDER THE
DEDUCTIVE METHOD WHAT ARE THE CONDITIONS TO BE FULFILLED IN CUSTOMS
VALUE UNDER TRANSACTION VALUE?
EVEN IF THE GOODS HAVE UNDERGONE FURTHER
PROCESSING IN THE COUNTRY OF
IMPORTATION. 1. EVIDENCE OF SALE

TECHNICAL ASSISTANCE

UNDER ARTICLE 20.3 DEVELOPED COUNTRY MEMBERS SHALL
FURNISH, ON MUTUALLY AGREED TERMS, TECHNICAL
ASSISTANCE TO DEVELOPING COUNTRY MEMBERS THAT SO
REQUEST.
2. THERE MUST BE EVIDENCE OF A SALE FOR EXPORT TO THE
COUNTRY OF IMPORTATION.
3. NO RESTRICTION ON THE DISPOSITION OR USE BY SELLER.

INSTITUTIONS: COMMITTEE ON CUSTOMS VALUATION 4. NO RESTRICTION ON THE DISPOSITION OR USE OF THE

GOODS BY THE BUYER, OTHER THAN RESTRICTIONS WHICH:
THE AGREEMENT ESTABLISHES A COMMITTEE ON CUSTOMS
VALUATION COMPOSED OF REPRESENTATIVES FROM EACH OF — ARE IMPOSED OR REQUIRED BY LAW IN
THE MEMBERS. THE COUNTRY OF IMPORTATION;

— ARE LIMITED TO THE GEOGRAPHIC AREA

TECHNICAL COMMITTEE ON CUSTOMS VALUATION IN WHICH THE GOODS MAY BE RESOLD;

A VIEW TO ENSURING, AT THE TECHNICAL LEVEL, — DO NOT SUBSTANTIALLY AFFECT THE

UNIFORMITY IN INTERPRETATION AND APPLICATION OF THE VALUE OF THE GOODS.
AGREEMENT.

INCLUDE ADVISING ON
SPECIFIC TECHNICAL
MATTERS AS REQUESTED 5. NOT SUBJECT TO ADDITIONAL CONDITIONS
BY MEMBERS OR BY
A PANEL IN A DISPUTE.
6. THE SALE OR PRICE MUST NOT BE SUBJECT TO CONDITIONS
THE FOLLOWING SIX METHODS ARE CONSIDERED IN THE OR CONSIDERATIONS.
AGREEMENT:
 AGENT FEE

SOME EXAMPLES ARE PROVIDED IN ANNEX I, NOTE TO — COST OF TRANSPORT, INSURANCE AND RELATED CHARGES
ARTICLE 1:1(B): UP TO THE PLACE OF IMPORTATION (CIF).

— SELLER ESTABLISHES THE PRICE ON CONDITION, BUYER WHAT ARE NOT INCLUDED?
WILL ALSO BUY OTHER GOODS IN SPECIFIED QUANTITIES;
— COSTS INCURRED AFTER IMPORTATION (DUTIES,
TRANSPORT, CONSTRUCTION OR ASSEMBLY, ETC).
— PRICE OF IMPORTED GOODS IS DEPENDENT UPON THE
PRICE AT WHICH THE BUYER SELLS TO OTHERS; EXPORT VALUE

VS
— PRICE IS ESTABLISHED IN A FORM OF EXTRANEOUS
(INAPPROPRIATE) TO THE IMPORTED GOODS. TRANSACTION VALUE

EXPORT VALUE - IS THE SELLING PRICE OF THE GOODS IN THE

SUFFICIENT INFORMATION IS AVAILABLE TO SPECIFIC EXPORTING COUNTRY.
ADJUSTMENTS TO THE PRICE PAID OR PAYABLE;
TRANSACTION VALUE - IS THE PRICE ACTUALLY PAID OR
TO BE KNOWN AS: PAYABLES PLUS ADJUSTMENT.

WHEN THE RELATIONSHIP OF BUYER AND SELLER IS NOT

ASSIST ACCEPTABLE IN TRANSACTION VALUE?

BUYER AND SELLER ARE NOT RELATED.

— COMMISSIONS AND BROKERAGE, EXCEPT BUYING
COMMISSIONS. BUT EVEN, THE USE OF TRANSACTION VALUE IS ACCEPTABLE
IF THE IMPORTER DEMONSTRATES THAT:

— PACKING AND CONTAINER COSTS AND CHARGES. — RELATIONSHIP DID NOT INFLUENCE THE PRICE, OR

— TRANSACTION VALUE CLOSELY APPROXIMATES A TEST

— ASSISTS (MOLDING MATERIALS, ADDITIONAL MANPOWER, VALUE.
CONTRACTUAL MATERIAL)

RELATED PERSONS IS FOUND IN ARTICLE 15 OF GATT, WHICH

— ROYALTIES AND LICENSE FEES (ENGINEERING OR STATES PERSONS ARE DEEMED TO BE RELATED, IF:
ARCHITECT DESIGN WORKS)

RELATED PARTIES

— OFFICERS OR DIRECTORS OF ONE ANOTHER'S BUSINESSES;

— SUBSEQUENT PROCEEDS (PAYMENT OR FEES FOR — LEGALLY RECOGNIZED

SUBSEQUENT RESALE, DISPOSAL OR USE OF GOODS) OR PARTNERS IN BUSINESS;
— EMPLOYER AND EXCEPTIONS: SOME EXCEPTIONS ARE ACCEPTED, IN
EMPLOYEE; PARTICULAR:

RELATED PARTIES — IF NO IDENTICAL GOODS PRODUCED BY THE SAME PERSON

IN THE COUNTRY OF PRODUCTION OF THE GOODS BEING
— DIRECTLY OR INDIRECTLY OWNS, CONTROLS OR HOLDS 5% VALUED; PRODUCED BY A DIFFERENT PERSON IN THE SAME
OR MORE OF VOTING STOCK OR SHARES; COUNTRY.

— DIRECTLY OR INDIRECTLY CONTROLS THE OTHER; — MINOR DIFFERENCES IN

APPEARANCE WOULD NOT
PRECLUDE GOODS WHICH
OTHERWISE CONFORM TO
RELATED PARTIES THE DEFINITIONS FROM
BEING REGARDED AS
— DIRECTLY OR INDIRECTLY CONTROLLED BY A THIRD IDENTICAL.
PERSON; OR

— MEMBERS OF THE SAME FAMILY. METHOD 3 — TRANSACTION VALUE OF SIMILAR GOODS

(ARTICLE 3)

METHOD 2 — TRANSACTION VALUE OF IDENTICAL GOODS

(ARTICLE 2) THE TRANSACTION VALUE IS CALCULATED IN THE SAME
MANNER ON SIMILAR GOODS IF:

TRANSACTION VALUE IS CALCULATED IN IDENTICAL GOODS, IF

THE GOODS ARE:
— SAME IN ALL RESPECTS INCLUDING PHYSICAL
CHARACTERISTICS, QUALITY, AND REPUTATION;
— PRODUCED IN SAME COUNTRY AS GOODS BEING VALUED;
— GOODS CLOSELY RESEMBLING, IN TERMS OF COMPONENT
MATERIALS AND CHARACTERISTICS.
— PERFORMING THE SAME FUNCTIONS AND COMMERCIALLY
INTERCHANGEABLE.

— PRODUCED BY PRODUCER
OF THE GOODS BEING — PRODUCED IN THE SAME COUNTRY BY THE PRODUCER,
VALUED.
- SOLD TO THE SAME COUNTRY OF IMPORTATION,

- EXPORTED AT OR ABOUT THE SAME TIME.

GOODS MUST BE SOLD FOR EXPORT TO THE SAME COUNTRY
OF IMPORTATION AS THE GOODS BEING VALUED.
METHOD 4 — DEDUCTIVE VALUE
THE GOODS MUST ALSO BE
AT OR ABOUT THE SAME TIME
AS THE GOODS BEING VALUED. DEDUCTION OF VALUE FROM THE PRICE OF THE GREATEST
AGGREGATE (CLUSTER) QUANTITY SOLD.
 — VALUE ADDED BY ASSEMBLY OR FURTHER PROCESSING
WHEN CUSTOMS VALUE CANNOT BE DETERMINED ON THE
BASIS OF THE TRANSACTION VALUE (IDENTICAL OR SIMILAR)

BE DETERMINED ON THE BASIS OF THE UNIT PRICE

(IMPORTED GOODS OR IDENTICAL OR SIMILAR GOODS ARE

SOLD TO AN UNRELATED BUYER)

BUYER AND THE SELLER IN THE IMPORTING COUNTRY MUST

NOT BE RELATED AND

SALE MUST TAKE PLACE AT OR ABOUT THE TIME OF

IMPORTATION.

IF NO SALE TOOK PLACE AT OR ABOUT THE TIME OF

IMPORTATION?

IT IS PERMITTED TO USE SALES UP TO NINETY (90) DAYS

AFTER IMPORTATION OF THE GOODS BEING VALUED.

UNIT PRICE, THE GOODS ARE SOLD IN THE GREATEST

AGGREGATE QUANTITY IS A BASIS FOR CUSTOMS VALUE.

MEANS GREATEST NUMBER OF UNITS IS SOLD TO UNRELATED

PERSONS AT THE FIRST COMMERCIAL LEVEL, AFTER
IMPORTATION AT WHICH SUCH SALES TAKE PLACE.

WHAT ARE DEDUCTIONS FROM THE PRICE AT THE GREATEST

AGGREGATE QUANTITY?

VARIOUS DEDUCTIONS ARE NECESSARY TO REDUCE THAT

PRICE TO THE RELEVANT CUSTOMS VALUE:

— BUYING COMMISSIONS

— PROFITS AND GENERAL EXPENSES

— TRANSPORT COSTS AND INSURANCE

— CUSTOMS DUTIES AND OTHER NATIONAL TAXES PAYABLE