ICC releases statement on Misuse of Customs Valuation Databases

While acknowledging that Customs valuation databases can provide a useful tool for risk assessment, ICC is concerned about the increasing number of countries that use these databases in violation of the World Trade Organization (WTO) regulations by setting reference or minimum prices for import declarations. Contributing to the deliberations in the biannual meeting of the World Customs Organization’s (WCO) Technical Committee on Customs Valuation taking place in Brussels this week,  the ICC statement highlights that the misuse of databases is increasingly leading to delays, uncertainty and higher trade costs for businesses trading internationally. Adherence to international rules and regulations – by both governments and businesses alike – is vital for an environment that fosters cross-border trade and investment, particularly for SMEs which are often disproportionately impacted by higher trade costs. The ICC policy statement cites several country examples in which WTO members were using valuation databases to set reference and minimum prices – a practice prohibited by Article 7 of the WTO Customs Valuation Agreement.

Legitimate traders have as much at stake as customs authorities in ensuring that imported goods are properly valued. We encourage increased customs-business collaboration and “green lanes” for legitimate and trusted traders that can provide the required evidence.

The statement also emphasizes that that there are common business reasons – such as marketing and discount practices – for traders to submit a lower declared value than Customs might expect based on the information of customs valuation databases. Earlier this year the WCO already highlighted ICC’s observations in the 2015 WCO Revenue Package that provides practical guidance to Customs officials around the globe. The Vice-Chair of the ICC Commission on Customs and Trade Facilitation, Jean-Marie Salva, informed the government delegates at the World Customs Organization that the ICC statement provides eight recommendations for a way forward and he appealed to the WTO, WCO and their member states to take them into due consideration. Recommendations include a call for greater use of advance rulings and post-entry audits, and a request for further studies on the issue by an intergovernmental organization. ICC already highlighted its concerns at a WTO workshop in October 2014 and fully acknowledged that detecting customs fraud is of vital importance – especially in developing countries where there is a large informal-trade sector and customs revenue is an important source of national income. ICC’s Head for Customs and Trade Facilitation Policy, Donia Hammami, said: “Legitimate traders have as much at stake as customs authorities in ensuring that imported goods are properly valued. We encourage increased customs-business collaboration and “green lanes” for legitimate and trusted traders that can provide the required evidence.” She added: “The business community very much welcomes the WTO’s Trade Facilitation Agreement that offers technical assistance and capacity-building to increase the national competitiveness of developing countries by making their border processes smoother.” ICC’s concerns on the improper use of Customs valuation databases have been echoed by several countries and the setting of reference pricing has already been the subject of several WTO Dispute Settlement cases. ICC will continue to engage with the WTO, WCO, other intergovernmental organizations as well as with individual governments to raise awareness on this important issue. Please click to download Policy Statement “Misuse of Customs Valuation Databases“. See also: ICC raises concerns at WTO about the misuse of customs valuation databases Learn more about the ICC Commission on Customs and Trade Facilitation Follow Donia Hammami of the ICC Commission on Customs and Trade Facilitation on Twitter @Donia_Hammami Follow ICC on LinkedIn International Chamber of Commerce.