twenty-SECOND ANNUAL REVIEW OF THE IMPLEMENTATION AND

OPERATION OF THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VII

OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994^[1]

Article 23 of the Agreement provides that "the Committee shall review annually the implementation and operation of this Agreement taking into account the objectives thereof". The main objectives of the Agreement are those listed in the General Introductory Commentary. The annual review of the Committee should cover the implementation and operation of the Agreement in the light of its objectives and specific obligations.

At its meeting of 31 October 2016, the Committee on Customs Valuation conducted and adopted the 22^nd annual review of the implementation and operation of the Agreement.

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The contents of this document are as follows:

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I.         MEMBERS' DELAYED APPLICATIONS, RESERVATIONS AND OBSERVER STATUS. 2

(a)       Delayed Application and Reservations. 2

(i)        Article 20.1 (delayed application of the provisions of the Agreement) 2

(ii)       Article 20.2 (delayed application of the computed value method) 3

(iii)      Annex III, paragraph 1 (extension of the five-year delay period) 3

(iv)      Annex III, paragraph 2 (reservation concerning minimum values) 3

(v)       Annex III, paragraph 3 (reservation concerning reversal of sequential order of Articles 5 and 6) (53) 3

(vi)      Annex III, paragraph 4 (reservation to apply Article 5.2 whether or not the importer so requests) (51) 3

(b)       Observer Governments (20) 4

(c)       Observer International Organizations (6) 4

II.       oFFICERS OF THE WTO COMMITTEE ON CUSTOMS VALUATION.. 4

III.    MEETINGS OF THE COMMITTEE. 4

IV.      NATIONAL LEGISLATION and other notifications PRESENTED.. 4

(a)       Texts of national legislation. 4

(b)       Checklist of issues. 4

(c)       Information on the application of the Committee Decisions. 5

(d)       Examination of national legislation. 5

V.        DECISIONS TAKEN BY THE COMMITTEE. 5

VI.      TECHNICAL ASSISTANCE. 5

VII.    Issues Related to Implementation of the Agreement. 6

VIII. United States - Armenia's Reference Price System in connection with the Valuation of Goods. 6

IX.      Ukraine Resolution No. 724. 6

X.        Pakistan's Determination of Customs Values of Paper. 6

XI.      Preshipment Inspection.. 6

XII.    REPORTS BY THE TECHNICAL COMMITTEE ON CUSTOMS VALUATION.. 6

XIII. CONSULTATION AND DISPUTE SETTLEMENT. 6

XIV.   ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS. 6

I.       MEMBERS' DELAYED APPLICATIONS, RESERVATIONS AND OBSERVER STATUS

(a)     Delayed Application and Reservations

This section reflects the situation with respect to special and differential treatment provisions available for developing country Members as of 5 October 2016. These provisions have been invoked as follows:

(i)         Article 20.1 (delayed application of the provisions of the Agreement)

No Member maintains this special and differential treatment provision.

(ii)        Article 20.2 (delayed application of the computed value method)

No Member maintains this special and differential treatment provision.

(iii)       Annex III, paragraph 1 (extension of the five-year delay period)

As a result of its Accession to the WTO, Yemen will start fully implementing the Agreement by 31 December 2016.^[2] No other Member maintains this special and differential treatment provision.

(iv)      Annex III, paragraph 2 (reservation concerning minimum values)

No Member maintains this special and differential treatment provision.

(v)       Annex III, paragraph 3 (reservation concerning reversal of sequential order of Articles 5 and 6) (53)

(vi)      Annex III, paragraph 4 (reservation to apply Article 5.2 whether or not the importer so requests) (51)

(b)     Observer Governments (20)

(c)     Observer International Organizations (6)^[5]

II.     oFFICERS OF THE WTO COMMITTEE ON CUSTOMS VALUATION

Vice Chairperson (elected in October 2015)          Mrs. Joanna Cheung (Hong Kong, China)

Chairperson (elected in July 2016)                        Dr Yasser Korani (Egypt)

III.   MEETINGS OF THE COMMITTEE

During the reporting period, the Committee held two formal meetings.  The first meeting was held on 25 April 2016 (G/VAL/M/62) and was chaired by Mrs. Joanna Cheung (Hong Kong, China), in her capacity as Vice Chair. The second meeting was held on 31 October 2016 (G/VAL/M/63)^[6], and was chaired by Dr Yasser Korani (Egypt).

IV.    NATIONAL LEGISLATION and other notifications PRESENTED

(a)           Texts of national legislation

Article 22 of the Agreement requires each Member to inform the Committee of any changes in its laws and regulations relevant to the Agreement, and in the administration of such laws and regulations. At its first meeting, on 12 May 1995, the Committee agreed on procedures for the notification of national legislation (G/VAL/M/1, paragraphs 29-35, 71 and 72). Paragraph i) of the "Decision on Notification and circulation of national legislation in accordance with Article 22 of the Agreement"^[7] requires Members to submit the complete texts of their national legislation (laws, regulations, etc.) on customs valuation in one of the three official WTO languages.

The status of these notifications is contained in document G/VAL/W/232/Rev.5. During the reporting period, new notifications were submitted by the Russian Federation (G/VAL/N/1/RUS/1/Add.1) and the Solomon Islands (G/VAL/N/1/SLB/1).

(b)     Checklist of issues

At its first meeting, on 12 May 1995, the Committee agreed on procedures for the submission of replies to a checklist of issues (G/VAL/M/1, paragraphs 36-39). The checklist of issues is contained in G/VAL/5.

The status of these notifications is also contained in document G/VAL/W/232/Rev.5. During the reporting period, one communication was received from Kazakhstan (G/VAL/N/2/KAZ/1).

(c)     Information on the application of the Committee Decisions

Notifications on the application of the Decision on the Treatment of Interest Charges in the Customs Value of Imported Goods and of paragraph 2 of the Decision on the Valuation of Carrier Media Bearing Software for Data Processing Equipment (G/VAL/5) were summarized by the Secretariat in document G/VAL/W/5/Rev.26. During the reporting period, the Committee received new notifications from Kazakhstan (G/VAL/N/3/KAZ/1 and G/VAL/N/3/KAZ/2).

(d)     Examination of national legislation

At its meeting of 25 April, the Committee continued the examination of various national legislations.  In this regard, it agreed to revert at the next meeting to the examination of the legislations of the Kingdom of Bahrain; Belize; Cabo Verde; Colombia; Ecuador; The Gambia; Guinea; Honduras; Montenegro; Nepal; Nicaragua; Nigeria; Russian Federation; Rwanda; Sri Lanka, and Ukraine. In addition, the Committee concluded the review of the national legislation of Mali, Moldova and South Africa.

At its meeting of 31 October, the Committee continued the examination of various national legislations. In this regard, it agreed to revert at the next meeting to the examination of the legislations of the Kingdom of Bahrain; Belize; Cabo Verde; Colombia; The Gambia; Guinea; Honduras; Montenegro; Nepal; Nicaragua; Nigeria; Russian Federation; Rwanda and, Sri Lanka.  It took note of a new notification from the Solomon Islands, circulated prior to the meeting.  In addition, the Committee concluded the review of the national legislations of Ecuador and Ukraine.

V.       DECISIONS TAKEN BY THE COMMITTEE

At its first meeting on 12 May 1995, the Committee adopted Decisions which had been previously adopted by the Tokyo Round Committee. These Decisions are reproduced in document G/VAL/5. The Committee also adopted Decisions that were referred by the Ministers at Marrakesh to the Committee. The texts of the decisions are contained in document G/VAL/1.

The Committee has also been having ongoing discussions on a proposal by Uruguay (G/VAL/W/241/Rev.1) to update the Decision on the Valuation of Carrier Media Bearing Software for Data Processing Equipment, as well as a related proposal by Switzerland (G/VAL/W/254). At the request of the Committee, the Secretariat had prepared a report with statistics on imports of those products, which was circulated in G/VAL/W/249. Uruguay had also provided responses to questions raised by one delegation which were circulated in document G/VAL/W/264.

There were no decisions adopted during the reporting period.

VI.    TECHNICAL ASSISTANCE

The Committee took note that technical assistance in the area of customs valuation was now incorporated into the WTO-wide technical assistance programme, and that 2016-2017 biennial technical assistance plan was currently being implemented.

During the reporting period, training on customs valuation was included in the WTO Regional Trade Policy Courses for English-speaking Africa; French-speaking Africa; Asia; the Caribbean; and, Latin America, as well as in three Advanced Trade Policy Courses held at the WTO.

Members also have the possibility to request at any time technical assistance on customs valuation, which would be met by a national activity designed to meet the needs of the recipient. In July 2016, a national activity was carried out for Honduras in cooperation with the WCO.

VII.  Issues Related to Implementation of the Agreement

At the meetings of 25 April and 31 October, the Committee took note of statements made regarding the work in relation to the Committee's mandate in paragraph 8.3 of the Ministerial Decision on Implementation-Related Issues and Concerns.

VIII.          United States - Armenia's Reference Price System in connection with the Valuation of Goods

At the meetings of 25 April and 31 October, the Committee discussed the alleged used by Armenia of a reference price system in connection with the valuation of goods.

IX.    Ukraine Resolution No. 724

At the meeting of 25 April, the Committee took note of the statements made under the agenda item "Ukraine Resolution No. 724", included at the request of the United States.  At the meeting of 31 October, the Committee took note of the statements made under the agenda item "Abolition of the Resolution of the Cabinet of Ministers of Ukraine "on the Use of Benchmarks for Customs Valuation of Goods in the System of Risk Management" No. 724 dated 16 September 2015", included at the request of Ukraine. The Committee was informed that Resolution No. 724 had been abolished on 6 October 2016. 

X.       Pakistan's Determination of Customs Values of Paper

At the 31 October meeting, the Committee took note of statements made under the agenda item "Pakistan's Determination of Customs Values of Paper", included at the request of Thailand.

XI.    Preshipment Inspection

The Secretariat prepared a report consolidating all the notifications which had been received on preshipment inspection (G/PSI/N/1/Rev.2/Add.3). During the reporting period, new notifications were submitted by Kazakhstan and Vanuatu.

With regard to the report by the International Federation of Inspection Agencies (IFIA) concerning countries that use preshipment inspection services, new information was provided in November 2015 which was circulated in documents G/VAL/W/63/Rev.18 and G/VAL/W/63/Rev.18/Add.1. Information was provided at the beginning of May 2016 which was circulated in document G/VAL/W/63/Rev.19.

XII.  REPORTS BY THE TECHNICAL COMMITTEE ON CUSTOMS VALUATION

At the 25 April meeting, the representative of the WCO presented a report on the 42nd session of the Technical Committee on Customs Valuation (TCCV), which was held from 18 to 22 April 2016.

At the 31 October meeting, the representative of the WCO presented a report on the 43rd session of the Technical Committee on Customs Valuation (TCCV), which was held from 17 to 20 October 2016.

XIII.          CONSULTATION AND DISPUTE SETTLEMENT

During the reporting period, there were no requests for consultations involving either the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Agreement on Customs Valuation) or the Agreement on Preshipment Inspection.

XIV. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS

The Committee adopted its annual report to the Council for Trade in Goods in accordance with the requirements of Article 23 of the Agreement (G/L/1160).

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