Study Guide

The following key principles apply:

·         Customs value should be based on simple and equitable criteria consistent with commercial practices.

·         Commercial reality is best represented by the transaction between the buyer and seller.

·         In determining the price actually paid or payable, reference prices, market values, or any external standards are irrelevant.

·         Provided the price actually paid or payable is set between buyer and seller under conditions satisfying Article 1, and the adjustments allowed by Article 8 can be made, that price is acceptable for determining Customs value.

·         Prices below normal market values are acceptable (WCO Advisory Opinion 2.1), provided they fulfill the conditions applicable to the transaction value method.

·         Subsidized and dumping prices are acceptable bases for valuation under the above conditions. The Agreement is not to be used to combat subsidies or dumping (Commentaries 2.1 and 3.1).

Key point: The price actually paid or payable and the transaction value method account for approximately ninety-five percent of all value determinations under the WTO Agreement.