Study Guide

Deductive value (Method IV) and computed value (Method V) reach the Customs value from opposite directions. Deductive value starts from the price at which the goods are resold inside the importing country and works backwards, stripping out importing-country costs to bring the price back to the point of importation.

The starting base is the unit price at which the imported goods (or identical or similar imported goods) are resold. The Interpretative Notes to the Agreement give worked numerical examples. That unit price is the one at which the goods are:

• ·         sold in the greatest aggregate quantity.
• ·         at or about the time of the importation of the goods being valued.
• ·         to persons not related to the persons from whom they buy such goods.

Once the unit price is established, the Customs value is determined by making the following deductions:

✘ Deduct from the unit price

·         Either the commission usually paid, or the usual profit and general expenses on sales in the importing country of goods of the same class or kind ·         The usual transport, insurance and associated costs incurred within the importing country ·         Where appropriate, the costs and charges referred to in Article 8.2 ·         The customs duties and other national taxes payable in the importing country

If there is no sale at or about the time of importation of the goods being valued, the Agreement allows the Customs value to be determined based on the price at which the imported goods, or identical or similar goods, are resold in the condition as imported, at the earliest date after importation but before the expiration of 90 days. The following conditions must be met:

Condition	Requirement
Domestic sale	There must have been a domestic sale of the imported goods, or of identical or similar goods, in the country of importation.
Same condition	The goods must be sold in the same condition as when first imported.
Unrelated buyer	The resale must be to an unrelated buyer at the first commercial level after importation.
Greatest quantity	The unit price is the price at which the greatest number of units have been sold.
Timing	The goods must be resold at or about the date of importation of the goods being valued.
No assist sales	Any sale to a person who supplied an assist under Article 8.1 (b) may not be used.
90-day fallback	If no qualifying sale exists at or about the date of importation, a sale at the earliest date after importation but before the expiration of 90 days may be used.

In short, the method seeks to establish a unit price for the imported goods sold when they are sold on the domestic market of the importer and then to make appropriate deductions for expenses and profit in the country of importation to bring the price back to the point of importation.