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Customs valuation explained

Customs value is the value of goods for the application of the common customs tariff.

Its purpose is to determine the economic value of goods declared for import. Along with origin and classification, the customs value forms the basis for determining the customs debt, which is normally calculated as a percentage of the customs value (ad valorem).

Disclaimer: this document is a summary for informational purposes. Only the Union Customs Code is deemed authentic.
  • How is the customs value determined?

    Having rules in place to determine the value of goods fairly, uniformly and neutrally is essential. This will allow a correct collection of import duties (tax-related aspect) but it will also protect the loyal importer from unfair competition (socio-economic aspect).

    There are 6 valuation methods:

    1. The transaction value of the goods
    2. The transaction value of identical goods
    3. The transaction value of similar goods
    4. The deduction method
    5. The computed value method
    6. The fall-back method

    The primary basis for calculating the customs value of goods is the transaction value of the imported goods (Article 70 UCC). This is the amount actually paid or payable upon sale for export to the customs territory of the Union.

    If the customs value cannot be determined on the basis of the transaction value, one of the five additional customs valuation methods will be used (Article 74(1) UCC). The methods will always be applied in the above-mentioned order until the value can be determined. Declarants have the right to apply the computed value method instead of the deduction method if they so request and make the necessary information available.

    In box 43 of the Single Administrative Document, declarants should indicate the Union code for the valuation method used. Codes can be found in this table.

  • What is undervaluation?

    Undervaluation is the declaration by a declarant of a value of imported goods that is lower than the true value.

  • How does customs proceed with controls on undervaluation?

    Where the GAC&E has legitimate doubts whether the declared customs value corresponds to the total amount paid or payable, the declarant may be asked for additional information (Article 140 of the Implementing Regulation). The customs authorities may also have legitimate doubts about the accuracy of the declared value even if they have neither rejected nor otherwise questioned the authenticity of the invoice nor the proof of payments made (to prove the price actually paid for the imported goods). This may for instance be the case where the declared customs value does not reflect the economic value of the imported goods (judgement of the Court dd. 16.06.2016 - case C291/15)

    • If they are still in doubt, customs authorities may decide that the value of the goods should be determined by another valuation method.
  • How does customs proceed with presumption of undervaluation?

    If following documentary and/or physical verification, there is a refutable presumption that the declared value is lower than the actual value, it is up to the declarant to prove that this declared value is correct by presenting documents.

    • Either document showing that the declared transaction value is nevertheless correct (with the exception of for instance the invoice and proof of payment already submitted).
    • Or any other document that can prove the other customs valuation methods (identical goods, similar goods, deduction value, computed value, reasonable means).

    There are three possible scenarios.

    • The declarant submits additional documentary evidence to refute the presumption of undervaluation and the verification is closed as compliant. No sanctioning procedure will be initiated.
    • The declarant does not submit documentary evidence as a result of which the presumption of undervaluation is not refuted, and the verification cannot be closed as compliant. A sanctioning procedure will be initiated.
    • The declarant submits additional evidence that is insufficient to invalidate the presumption of undervaluation and the verification is then closed as non-compliant. A sanctioning procedure will be initiated.
  • What additional documentary evidence can operators provide?

    Operators can provide any type of documentary evidence that invalidates doubts about the declared customs value, for example:

    • a document showing that the goods declared are of lower quality, and that they are therefore declared at a value corresponding to such a level of quality.
    • (An export declaration in the country of export from which the imported goods originate, showing the value declared there at the time of export).
    • The most conclusive documents are those from a party that is not part of the contract relationship, but which nevertheless confirm the value.
    • Documentary evidence for other methods: any other document that can prove the other customs valuation methods. The declarant can provide information to compare the declared value with the value calculated using an additional valuation method (identical goods, similar goods, deduction method, computed value or fall-back method (Art. 74 UCC).
      • Details (e.g. declaration, invoices, proofs of payment, etc.) of a sale to the Union of identical or similar goods previously found compliant or between other parties (see Article 74 §2 a and b UCC).
      • Proof of the price of resale within the Union with additional proof for the deductions of Article 142 §5 IA:
        • (a) either commissions or the usual mark-ups and overheads;
        • (b) the usual transport, insurance and related costs incurred in the customs territory of the Union;
        • (c) import duties and other taxes payable in the customs territory of the Union by reason of the importation or sale of the goods.
      • Accounting documents showing what the computed value of the goods is according to Article 74 §2 d of the UCC:
        • (i) the cost or value of materials and manufacturing or other work or processing involved in the production of the imported goods;
        • (ii) an amount for profit and operating charges equal to the amount normally taken into account when manufacturers in the country of export sell goods of the same nature or type as those whose value is to be determined for export to the Union;
        • (iii) the cost or value of the elements referred to in Article 71(1)(e).
      • Other independent data proving, within the fall-back method (Article 74 §3 UCC), that the declared customs value of the goods does correspond to the economic value of the goods.
  • What are the options when dealing with sanctioning procedures?

     A sanctioning procedure is initiated when the presumption of undervaluation is not refuted. This is the case when the declarant has not submitted documentary evidence or, documentary evidence that is insufficient to invalidate the presumption of undervaluation. The specified transaction value will not be accepted and the verification will not be closed as compliant. Consequently, an additional valuation method will have to be used by customs to determine the value. The GAC&E will examine the methods in legal order to check whether all information is available to be applied.

    Based on this customs value, an exemption from fines 614 (hereinafter referred to as 614), a Report 359 or an official report will be drawn up.

    In case of a 614, there are 2 possibilities:

    • The declarant accepts the 614 and pays. Please note that the goods may not be released until payment has been made. In this scenario, a guarantee cannot be used to release the goods pending payment.
    • The declarant does not accept the 614. A Report 359 is drawn up and the goods are seized. The GAC&E may grant the declarant the favour of releasing the goods subject to the provision of a guarantee, the amount of which should consist of the value of the goods determined applying the average import value A2M/kg + any import duties payable.
      • If no guarantee is provided, the goods continue to be seized. Release under condition of guarantee always remains a favour that may or may not be granted by the GAC&E.