Study Guide

What Customs must publish

Customs authorities are required to set out in their national legislation and official publications:

01 Timing of assessment When during the import process duties and taxes are calculated, for example on lodgment, on acceptance, or on release.

02 Basis and conditions Which factors drive the assessment and the conditions under which they apply.

03 Applicable rates The actual duty and tax rates that apply to the goods.

What the assessment is based on

The assessment of duties and taxes is generally based on the following criteria:

01 Tariff classification Identify the goods against the Customs Tariff to find the applicable duty rate.

02 Value or quantity Apply an ad valorem rate, a specific rate, or both, depending on how the duty is structured.

03 Origin Establish the country of origin or consignment when liability depends on it.

These rules are examined in detail later in the program.

How duty rates are expressed

For most commodities, the duty is expressed as an ad valorem rate (a percentage of the value). For others, the rate is specific. Sometimes the rate is a combination of ad valorem and specific rates.

01 Ad valorem A percentage of the value of the goods. Used for most commodities.

02 Specific A fixed amount per unit, for example a certain amount per liter of product.

03 Combination Both an ad valorem rate and a specific rate applied together.

When the rate is fixed

The rate charged can be based on different points in time, for example:

01 On arrival When the goods arrive in the customs territory.	02 On lodgment When the customs declaration is lodged.	03 On acceptance When the declaration is accepted by Customs. Most common choice.
04 On payment When the duties and taxes are paid.	05 On release When the goods are released.

Whichever point is chosen, Customs will state it in their national legislation. For currency conversion, there should also be a published list of exchange rates to the domestic currency on the determined date, so importers and brokers can establish the actual rate that applies to each import transaction.

Who pays, and when no duty is collected

Customs legislation also specifies who is responsible for paying the duties and taxes, for example the importer, agent, broker, or carrier. In some cases, two or more persons may be held jointly liable.

Some jurisdictions specify minimum values (known as de minimis values) and/or minimum amounts of duties and taxes below which no duties and taxes will be collected. This facility is often available to express carriers and postal freight services. This issue is discussed in more detail later in the program.