Customs and the World Trade Organisation

The objectives of the subject “Customs and the World Trade Organisation” are to understand the:

1. Role of the World Trade Organisation in the Customs Procedures
2. WTO Agreements
3. Fundamental concepts related to customs: non-tariff barriers, customs valuation, transaction value, pre-shipment inspection, rules of origin, and import licences
4. Customs Valuation Methods

Description (Customs and the World Trade Organisation):

Import licensing

In International Trade, import licensing are the administrative procedures that need the compliance of documentation to the administrative organisation as a previous condition for the importation of products.

The Agreement on Import Licensing Procedures of the World Trade Organisation refers to “import licensing should be simple, transparent and predictable.”

Customs valuation.

Customs valuation is a procedure applied by the Customs to find out the “Customs value of the imported products.”

In the case that the rate of duty is “ad valorem,” the customs value is necessary to find out the duty to be paid on an imported product.

For importers, the process of estimating the value of a product at customs can present some troubles.

The World Trade Organisation Agreement on Customs Valuation aims for a fair, uniform and neutral system for the Customs Valuation.

The World Trade Organisation Agreement on Customs Valuation defines that customs valuation should (excluding in specified circumstances) be based on the actual price of the products (usually marked on the invoice).

The following six methods are considered in the WTO Agreement on Customs:

1. Transaction value
2. Transaction value of identical products
3. Transaction value of similar products
4. Deductive method
5. Computed method
6. Fall-back method

Transaction value is the price paid by the importer to the benefit of the exporter for the imported products.

Pre-shipment inspection

When the exporter or the importer outsource to specialised private companies to control the shipment details (price, quantity, and quality) of the products.

The Pre-shipment Inspection Agreement recognises that the General Agreement on Tariffs and Trade (GATT) principles and obligations apply to these pre-shipment activities.

Rules of Origin

The “Rules of origin” define where a product was produced. The concept of rules and certificate of origin is a fundamental pillar of the international trade rules (quotas, preferential tariffs, anti-dumping, or counter export subsidies)

Related subjects:

1. Non-tariff Measures
2. Sanitary and Phytosanitary Measures (SPS)
   1. WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS)
3. Technical Barriers to Trade (TBT)
   1. WTO Agreement on Technical Barriers to Trade (TBT)
4. Anti-dumping Measures and Safeguards
   1. WTO Agreement on Safeguards (SG)
5. Import Licensing and Quotas
6. Pre-shipment Inspection
   1. WTO Agreement on Preshipment Inspection (PSI
7. Convention Relating to Temporary Admission (Istanbul Convention)

(Source: World Trade Organisation).

The World Trade Organisation member states: Albania, Angola, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Bahrain, Bangladesh, Barbados, Belgium, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Canada, Cape Verde, Central African Republic, Chad, Chile, China, Colombia, Costa Rica Croatia, Cuba, Cyprus, Czech Republic, Democratic Republic of the Congo, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Eswatini (Swaziland), European Union, Fiji, Finland, France, Gabon, Gambia, Georgia, Germany, Ghana, Greece, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kuwait, Kyrgyz Republic, Laos, Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Luxembourg, Macau, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Republic of the Congo, Russian Federation, Romania, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Seychelles, Senegal, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, South Africa, South Korea, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Taiwan, Tanzania, Tajikistan, Thailand, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Vanuatu, Venezuela, Vietnam, Zambia, Zimbabwe

1. Countries in process of accession to the World Trade Organization: Afghanistan, Algeria, Andorra, Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia and Herzegovina, Comoros, Curacao, Ethiopia, Equatorial Guinea, Holy See, Iran, Iraq, Lebanon, Libya, Uzbekistan, Syria, São Tomé and Príncipe, Serbia, Somalia, Sudan, South Sudan, East Timor, Yemen
2. Government with observer status: Turkmenistan
3. Non-member country: North Korea