information on IMPLEMENTATION and administration

of the agreement on customs valuation

Check-list of Issues

Papua New Guinea

The following communication, dated 8 November 2024, is being circulated at the request of the delegation of Papua New Guinea.

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1._           Questions concerning Article 1:

(a)_         Sales between related persons:

(i)_          Are sales between related persons subject to special provisions?

Yes, the sales between related persons is subject to the provision per section 5(1)d et seq. of the Customs (Ad valorem Duties) Regulations (our Valuation Regulation).

(ii)_         Is the fact of intercompany prices prima facie considered as grounds for regarding the respective prices as being influenced?

No, section 5(1)(d) et seq. also contains additional requirements.

(iii)_       What is the provision for giving the communication of the afore-mentioned grounds in writing if the importer so requests? (Article 1.2(a))

The relevant provision is in section 5.2(a-d) where the importer is given the opportunity to respond in writing as requested by Customs.

(iv)_        How has Article 1.2(b) been implemented?

Article 1.2 (b) has been implemented through section 5(1)(d) et seq. when there is rejection of the transaction value in trying to determine whether the price was influenced by a related party transaction.

(b)_         Price of lost or damaged goods:

            Are there any special provisions or practical arrangements concerning the valuation of lost or damaged goods?

There are no provisions in the Valuation Regulation regarding valuation of lost or damaged goods but practically if the damaged goods are imported as it is in the damaged condition and the value declared is less with confirmation of documents verifying the reduced value, it is accepted by Customs.

2._           How has the provision of Article 4 to allow the importer an opinion to reverse the order of application of Articles 5 and 6 been implemented?

Article 4 is reflected in Division 1, section 3 (5) of our Valuation regulation.

3._           How has Article 5.2 been implemented?

Article 5.2 is reflected in Division 5, sections 12 & 13 of our Valuation Regulation.

4._           How has Article 6.2 been implemented?

Article 6.2 is reflected in Division 6, sections 16,17 & 18 of our Valuation Regulation.

5._           Questions concerning Article 7:

(a)_         What provisions have been made for making value determinations pursuant to Article 7?

The provision in relation to the fall-back method is Section 19 of the Valuation Regulation.

(b)_         What is the provision for informing the importer of the customs value determined under Article 7?

Article 7.3 of CVA is reflected in Division 2, section 5(2)(a-d) of the Valuation regulation.

(c)   Are the prohibitions found in Article 7.2 delineated?

They are not currently contained in the Valuation Regulation. Discussions are going on to update the regulation.

6._           How have the options found in Article 8.2 been handled? In the case of f.o.b. application, are ex-factory prices also accepted?

PNG is a CIF country, so all options are included and in FOB the ex-factory costs are included. This relates to the transportation costs from the country of export per section 6(1)(a)(vi-vii) of the Valuation Regulation.

7._           Where is the rate of exchange published, as required by Article 9.1?

The rate of exchange in PNG currency is PNG Kina published by the Central Bank of PNG as per section 24 of the Valuation Regulation.

8._           What steps have been taken to ensure confidentiality, as required by Article 10?

Per section 23 of the Valuation Regulation, all information communicated to Customs is kept confidential.

9._           Questions Concerning Article 11:

(a)_         What rights of appeal are open to the importer or any other person?

The right to appeal against decision made by Customs for final determination of value per section 25 of the Valuation Regulation.

(b)_         How is he to be informed of his right to further appeal?

Pursuant to section 25, the importer is informed of his right to appeal in writing.

10._         Provide information on the publication, as required by Article 12, of:

(a)      

(i)_          The relevant national laws;

The Customs Act 1951 (Chapter 101).

(ii)_         The regulations concerning the application of the Agreement;

The Customs (Ad Valorem Duties) Regulation 1987.

(iii)_       The judicial decision and administrative rulings of general application relating to the Agreement;

There is no Judicial decision so far as no cases in relation to Customs Valuation was brought before the court. There is only one Administrative Ruling given on Insurance in 2004 and is still in force.

(iv)_        General or specific laws being referred to in the rules of implementation or application.

There are none.

(b)_         Is the publication of further rules anticipated? Which topics would they cover?

Yes it will be addressed through valuation Advices issued and done administratively.

11._         Questions concerning Article 13:

(a)_         How is the obligation of Article 13 (last sentence) being dealt with in the respective legislation?

Yes, Section 20 in the Valuation Regulation relates to Article 13.

(b)_         Have additional explanations been laid down?

No additional explanations.

12._         Questions concerning Article 16:

(a)_         Does the respective national legislation contain a provision requiring customs authorities to give an explanation in writing as to how the customs value was determined?

Yes, section 23 of the Valuation Regulation.

(b)_         Are there any further regulations concerning an above-mentioned request?

No there are no further regulations.

13._         How have the Interpretative Notes of the Agreement been included?

They have been included as part of the sequential methods of valuation as divisions in the Valuation Regulation.

14._         How have the provisions of the Decision on the Treatment of Interest Charges in the Customs Value of Imported Goods been implemented?

The provision of interest charges is reflected in Section 1, Subsections 4 and 5.

15._         For those countries applying paragraph 2 of the Decision on the Valuation of Carrier Media Bearing Software for Data Processing Equipment, how have the provisions of this paragraph been implemented?

There are no provisions in our Valuation Regulation but practically duty was collected only on the carrier media bearing the software. The value of the software was included in the carrier media hence considered as total value of the Carrier media. It is not implemented now because the carrier media is no longer in use anymore as software is purchased online and installed directly on the Data processing Equipment.

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