Examples of Flexible Approaches
The methods of valuation to be employed under Article 7, according to the Interpretative Notes to that Article, should be those laid down in Article 1 through 6, but a reasonable flexibility in the application of those methods would be in conformity with the aims and provisions of Article 7.
- Some examples of reasonable flexibility are as follows:
Identical or similar goods
- In the case of identical or similar goods, the requirement that the goods must be exported at or about the same time as the goods being valued could be flexibly interpreted. Country of Belgium Could also use goods from Netherlands or Luxembourg
- In the case of identical or similar goods, the requirement that the country of production be the same as the goods being valued could be waived.
- Deductive method
- The requirement that the goods must have been sold in the condition as imported in Article 5.1 (a) could be flexibly interpreted.
- The 90-day rule in Article 5.1 (b) could be flexibly administered.
- In regards to the above examples, it would also be possible to flexibly interpret Article 1 in conjunction with Article 8. The following would be such an example of a flexible interpretation of Article 1.
Example
- Company X in country I imports a machine tool after having it sent abroad for repair. When exported, the value of the machine tool was 9,000 c.u. Upon importation, company X pays only for the cost of repairs, 1,000 c.u. to exporter E.
- Determine the customs value of the imported machine tools
Answer
- Under Article 7, we could flexibly interpret the price actually paid or payable under Article 1 to be the cost of the repairs. To that cost, you would add the machine tool itself as an assist under the provisions of Article 8.
- Therefore, use 9,000 c.u. plus 1,000 c.u. as the value under Article 7 through a flexible interpretation of Article 1 and 8. (There may be a distinction between dutiable values and appraised value; i.e. some administrations may not collect duty on goods of domestic origin). Therefore, the answer is 10,000 c.u.