Customs and the World Trade Organization (WTO)

Course summary (Customs and the World Trade Organization (WTO)):

Import Licensing Procedures. Rules for the valuation of goods at customs. Preshipment Inspection. Rules of Origin Agreement

Import licensing can be defined as administrative procedures requiring the submission of an application or other documentation (other than those required for customs purposes) to the relevant administrative body as a prior condition for importation of goods. The Agreement on Import Licensing Procedures says import licensing should be simple, transparent and predictable.

Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem, the customs value is essential to determine the duty to be paid on an imported good. For importers, the process of estimating the value of a product at customs presents problems that can be just as serious as the actual duty rate charged. The World Trade Organization (WTO) agreement on customs valuation aims for a fair, uniform and neutral system for the valuation of goods for customs purposes — a system that conforms to commercial realities, and which outlaws the use of arbitrary or fictitious customs values.

The Agreement stipulates that customs valuation shall, except in specified circumstances, be based on the actual price of the goods to be valued, which is generally shown on the invoice. The following six methods are considered in the Agreement:
- Transaction value
- Transaction value of identical goods
- Transaction value of similar goods
- Deductive method
- Computed method
- Fall-back method

Example of the course (Customs and the World Trade Organization (WTO)):

World Customs Organization (WCO)

Transaction value, is the price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods, and includes all payments made as a condition of sale of the imported goods by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller.

Preshipment inspection is the practice of employing specialized private companies (or “independent entities”) to check shipment details — essentially price, quantity and quality — of goods ordered overseas. The Preshipment Inspection Agreement recognizes that GATT principles and obligations apply to the activities of preshipment inspection agencies mandated by governments.

“Rules of origin” are the criteria used to define where a product was made. They are an essential part of trade rules because a number of policies discriminate between exporting countries: quotas, preferential tariffs, anti-dumping actions, countervailing duty (charged to counter export subsidies), and more.

Rules of origin are also used to compile trade statistics, and for “made in ...” labels that are attached to products. This is complicated by globalization and the way a product can be processed in several countries before it is ready for the market.

The Agreement on Rules of Origin aims at harmonization of non-preferential rules of origin, and to ensure that such rules do not themselves create unnecessary obstacles to trade.

(Source: WTO)

Customs, World Trade Organization, WTO, Import, Licensing, Procedures, Rules, valuation of goods, Preshipment, Inspection, Origin Agreement