WTO Members Ask Updation of Customs Valuation Software

The Committee on Customs Valuation, on 12 May 2014, discussed a proposal by Uruguay to update a 30-year-old decision that has allowed members to value, for customs purposes, software and data on the basis of the cost of the carrier media (such as magnetic tapes, CDs and DVDs in which they are transported from one country to the other).

Uruguay proposed updating the 1984 Decision on the “Valuation of Carrier Media Bearing Software for Data Processing Equipment”, which allowed members, for customs purposes, to value software according to the cost of its carrier media (e.g. CD-ROM or magnetic tapes). Uruguay said that under the current decision, customs may value software in a CD-ROM at $5, while the same software imported using a USB key could be valued at $1,000. It said the decision must be extended to USB keys or flash drives because of their growing popularity as carrier media for software.

Argentina and Mexico supported Uruguay’s proposal. The United States, Canada, the European Union, Japan and the Philippines said they are open to the proposal and are reviewing the issue. China said it has no objection to the proposal but noted that the Decision excludes songs and movies from this kind of valuation. It also asked for data on the trade volumes involved.

The chair, Mr Pierre-Emmanuel Brusselmans (Belgium), noted the positive attitude of delegations to the proposal and that there is a need for further discussions. He requested the WTO Secretariat to prepare a study on the trade volumes involved, as requested by China.

Uruguay also proposed the rectification of the Spanish and English versions of Article 8:(1)(b)(iv) of the Agreement on Customs Valuation, which it said has a different meaning than the French version. The issue had already been discussed last year by the WCO’s Technical Committee on Customs Valuation. The Committee agreed on the existence of the linguistic divergence and that it could be corrected as proposed by Uruguay. After giving delegations a month to consult capitals, the Director-General will be requested to issue the proposal for rectification to members.

The Committee reviewed notifications of national legislation on customs valuation from the following members: Bahrain, Belize, Cabo Verde, China, Chile, Costa Rica, Ecuador, The Gambia, Japan, Laos, Lesotho, Macao China, Mali, Moldova, Nicaragua, Nigeria, Russian Federation, Rwanda, Saint Vincent and the Grenadines, Tunisia, Uruguay and Ukraine. It agreed to conclude the review of China; Japan; Macao, China; and Lao PDR.

The Committee discussed a proposal by Australia, Canada, Chinese Taipei, EU and the US to hold in October an informal seminar on the possible misuse of databases to set reference or minimum prices. A number of members supported the proposal but also made suggestions on the format and content of the seminar. Because some delegations required more time to consult with their capital, a formal meeting will be exceptionally held next June on this issue.

India requested that the item on implementation-related issues concerning customs cooperation remain on the agenda of the Committee. It was supported by Argentina and Ecuador. The US, EU, Canada, Australia and the Philippines supported the removal of this item as they said the matter had been successfully dealt with in Bali with the agreement on trade facilitation.

At the end of the meeting, the Committee elected by acclamation Ms. Joanna K.Y. Cheung (Hong Kong, China) as the new chair.