Wto Gatt Valuation Agreement

The WTO GATT Valuation Agreement: An Overview for Businesses

The World Trade Organization (WTO) GATT Valuation Agreement, also known as the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, sets out the rules for determining the customs value of imported goods. As a professional, it`s essential to understand the importance of this agreement for businesses dealing with international trade.

When goods are imported into a country, customs duties and taxes are levied based on the customs value of the goods. The customs value is the value of the imported goods for which the duties and taxes are calculated. The WTO GATT Valuation Agreement establishes the methods for determining the customs value of imported goods, ensuring that customs duties and taxes are levied consistently across all countries.

The Agreement also aims to eliminate arbitrary or discriminatory customs valuation practices and ensure a fair, uniform, and neutral system of customs valuation. It provides guidance on the determination of the customs value of goods in situations where the transaction value of the goods is not known or cannot be established.

To determine the customs value of imported goods, the transaction value method is used as the primary method. The transaction value is the price paid or payable for the goods when sold for export to the country of importation. If the transaction value method cannot be applied, other methods, such as the deductive value method, computed value method, or the fallback method, can be used.

The GATT Valuation Agreement has been in force since 1980 and was last updated in 1994 as part of the Uruguay Round negotiations. It currently has 163 member countries and covers more than 98 percent of world trade. Membership in the Agreement is mandatory for WTO members.

For businesses dealing with international trade, compliance with the WTO GATT Valuation Agreement is critical. Failure to comply with the Agreement`s rules can result in customs duties and taxes being under or overestimates and, consequently, lead to additional costs and delays in the importation process.

In conclusion, the WTO GATT Valuation Agreement sets out the rules for determining the customs value of imported goods, ensuring a fair, uniform, and neutral system of customs valuation. For businesses dealing with international trade, compliance with the Agreement is critical to avoid additional costs and delays in the importation process. As a professional, understanding the importance of this agreement and its impact on businesses is essential.