Study Guide

1. Introduction

Customs Valuation is one of the most important functions for Customs administrations worldwide. The Agreement on Customs Valuation of the World Trade Organization (WTO) promotes full cooperation between Customs and the trade and business community.

The Agreement on the Implementation of Article VII (Customs Valuation) was developed during the Tokyo Round of GATT (General Agreement on Tariffs and Trade) negotiations (1973-1979) after Customs valuation was identified as a non-tariff barrier (NTB) to trade. When the WTO was established on 1 January 1995, implementation of the Valuation Agreement became compulsory for all WTO members, along with all individual GATT trade agreements that form the overall WTO Agreement 1994.

The Customs Valuation Agreement establishes a fair, uniform, and neutral system for valuing goods for Customs purposes. It prohibits arbitrary or fictitious Customs values and requires that, to the greatest extent possible, the transaction value of the goods be used. This approach is consistent with commercial reality.

Accurate valuation is essential for Customs because it underpins the efficient and effective collection of duties and taxes, ensures a level playing field for traders, and protects government revenue. It also plays a critical role in compliance management: undervaluation, misclassification, and misuse of exemptions are among the most common forms of non‑compliance which can often involve deliberate error or fraudulent intent. A robust valuation system therefore supports both trade facilitation and enforcement by enabling Customs to identify, analyse, and address irregularities that may signal revenue loss or illicit trade.

This study guide covers the theoretical and practical aspects of Customs Valuation in two parts:

·         General administration of Customs Valuation.

·         Technical requirements - methods for determining Customs value.