Committee on Customs Valuation - Notification under article 22 of Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 - Responses from Israel to questions posed by the United States regarding document G/VAL/N/2/ISR/1 - Israel

Notification under Article 22 of AGREEMENT ON IMPLEMENTATION

responses from israel to Questions posed by the United States
regarding document G/VAL/N/2/ISR/1


The following communication, dated 13 April 2022, is being circulated at the request of the delegation of Israel.





Question 1: Regarding the response to Checklist Question 1(a)(i), would Israel please identify the provision of law that implements the "circumstances of the sale" analysis provided in the Interpretative Note to Paragraph 2 of Article 1 of the Customs Valuation Agreement ("CVA" or "Agreement")?


Answer: Customs examines the circumstances of the sale where a special relationship exists between the seller and the buyer, only in case suspicion arises that the relationship affected the transaction value. This procedure is stated in Customs Evaluation Instruction Article 2.2.2 C.


1) As stated in section 132 of the Customs Ordinance, the transaction value is the price actually paid or payable. In case of a transaction between two parties with a special relationship, the importer must provide proof, as stated in section 132 (b) (4) (b), that the value of the transaction was not affected by the relationship.


2) In case the customs Director speculates that the special relationship did affect the transaction value, the Director will notify the importer and will enable them to file a claim.


Question 2: In its response to Checklist Question 2, Israel cites to Article 130(6), which provides that, in order to reverse the order of application of the deductive value method and the computed value method, the importer must submit an application and receive approval from the Collector of Customs. We note that Article 4 of the CVA provides that "at the request of the importer, the order of application of Articles 5 and 6 shall be reversed." Would Israel please explain what information the importer must submit and what criteria the Collector of Customs applies when assessing whether to grant permission to reverse the order of application of the deductive and computed value methods?


Answer: There are no specific instructions for this kind of application, and there are almost no applications as the one described. In such applications, the importer should explain their request that the evaluation will be made according to the method in Article 6 rather than that of Article 5, and specify the information available from the supplier/manufacturer in the exporting country. In principle, according to the method of Article 4, Customs can examine and verify the information originating in the importing country. It is either difficult or impossible to verify information from other countries. The Customs Collector examines the necessity of the request and the degree of reliability of the data sent from the supplier/manufacturer.