Evolution of Customs Valuation
Various engagements led to Customs Valuation including:
- United Nations Conference on Trade and Employment (UNCTE)
- The European Customs Union Study Group (ECUSG)
- Tokyo Round
- Uruguay Round
United Nations Conference on Trade and Employment (UNCTE)
This conference was held between November 21, 1947 and March 24, 1948 in Havana Cuba also known as the Havana Charter and probably one of the many attempts in the modern era to harmonize Customs valuation systems.
- During this conference a consensus was reached and signed by fifty-three countries.
- The Customs valuation principle adopted by the conference was that Customs Valuation should be based on transaction value to the greatest extent possible and should not be based on the value of merchandise of national origin or on arbitrary or fictitious values.
- When the actual value is not ascertainable in accordance with the aforementioned, the value for customs purposes should be based on the nearest ascertainable equivalent of such value.
- The Havana charter which had sought to create an International Trade Organization however failed to come into force.
The European Customs Union Study Group (ECUSG)
- This study group commenced their work in 1947 and completed it in 1950 and the declaration signed by thirteen countries namely Austria, Belgium, Denmark, France, Greece, Ireland, Iceland, Italy, Luxemburg, Netherlands, Portugal, Turkey and the United Kingdom, accordingly decided to create a Study Group for the purpose of examining the problems involved and the steps to be taken in the formation of a customs union or customs unions between any or all of the participating governments.
- The Customs Committee came to the following conclusions:
- dutiable value should be based on uniform,
- commercial and simple principles.
- The system of valuation should enable importers to estimate, with a reasonable degree of certainty, the value for customs purposes; it should also protect the honest importer from any illegal competition resulting from any under-valuation, whether fraudulent or other’.
- The ECUSG agreed as follows that for the purpose of levying duties, the value of imported goods shall be taken to be the normal price, that is to say the price which they would be deemed to fetch when the duty becomes payable on a sale in the open market between buyer and seller independent of each other for delivery of the goods at the place of entry into the importing territory.
- The Committee adopted a definition of an open market transaction and recalled that value for customs purposes included all costs, charges and expenses incidental to sale and delivery at the place considered for the determination of such value.
- A convention was held in Brussels in 1950 that saw the establishment of the Customs Cooperation Council and text from the European Custom Union Study Group was incorporated and came into force in 1953 where the Brussels Definition of Value (BDV) was officially adopted.