Content
 Transportation Charges
 Airway transport costs
 Insurance
 Loading/handling charges
 Loading/handling charges not to be included
 Duties and taxes applicable outside the country of
importation
 Other expenses not to be included
Transport Charges
 The cost of transportation of the goods to the place of
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introduction to the customs territory of the country of
importation should be included in the customs value.
If the transport is free of charges or provided by the buyer
to the place of introduction, transport cost should be
calculated; the freight rates normally applied for the same
modes of transport serve as the base.
If the costs outside and inside the country are not clearly
divided the cost of transport should be calculated:
by deducting from the price paid , the cost of transport
within the customs territory of the Country of
importation, determined on the basis of the rates
normally applied,
or
by determining the cost of transport to the place of
introduction of the goods into the customs territory
directly on the basis of the rates normally applied.
 The goods may have been carried using several
different means of transport.
 Airway transport cost
Where goods are transported by air on the same means of transport to a point
beyond the place of introduction, transport costs are to be assessed in
proportion to the distance covered outside and inside the customs territory of
the Country of importation
The European Union practice - Air transport costs to be included in the customs
value are set periodically by the Commission Regulation.
Express Mail Services (EMS) considered as “goods transported by air”.
 In the case of goods imported by post, all postal charges imposed up to the place of
destination, with the exception of postal charges imposed in the country of
importation, are part of the customs value.
 Private persons, non-commercial consignments imported by post postal charges
not included in the customs value
 In case of doubts (non-commercial or commercial goods?) ask for more details and
proves!
Insurance
 The cost of all insurance effected in relation to the transport
and handling of the goods outside of country of importation
must always be included in the value for customs
purposes.
 In the case of global insurance a proportionate amount of the
premium should be included in the customs value
 Costs of insurance to cover risks, other than risks in transport
to the port or place of introduction, should not be included.
 How to divide the Insurance to outside and inside the
country of importation? (e.g. CIP)
 If no any reasonable proves – whole insurance to be
included in the customs value
Loading and Handling Charges
 foreign port charges,
 loading charges
 demurrage charges at foreign ports,
 If the cost of unloading at the place of introduction can be
distinguished on the relevant documentation it does not
form part of the customs value and may be omitted.
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Loading/Handling
Charges Not to be included
 Any weighing costs borne by the importer at destination,
not forming part of the price paid or payable for the
goods, are not to be included.
 Expenses incurred in connection with the handling or
delivery of goods after their arrival at the place of
introduction, such as port dues or landing charges, are
not to be included.
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Duties and Taxes Applicable
outside the Country of Importation
 Where the imported goods are subject to duties and taxes
applicable outside the Community such duties and taxes are
to be included in the customs value.
 The cost of these duties and taxes are paid by the seller and
therefore they are part of the price paid or payable for the
goods.
 Any claim for a reduction in the customs value on the basis
that the goods have been or will be relieved from such
duty/taxes can be allowed. Satisfactory evidence should be
presented!
Other Expenses not to be included
 charges for construction, erection, assembly, maintenance or
technical assistance, undertaken after importation of
imported goods such as industrial plant, machinery or
equipment;
 customs duties and other taxes payable in the Country of
importation
 a charge for the right to reproduce the imported goods in the
Country of importation
 buying commissions (fees paid by an importer to an agent for
the service of representing him/her in the purchase of the
goods being imported);
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Other Expenses not to be included
 transport charges after importation into the customs
territory of the Country of importation
 charges for interest under a financing arrangement
entered into by the buyer and relating to the purchase of
imported goods provided that:
- the financing arrangement has been made in writing; and
- where required, the buyer can demonstrate that:
 such goods are actually sold at the price declared as the
price actually paid or payable;
and
 the claimed rate of interest does not exceed the usual rates
in the Country of importation
Questions?
Content
 General information
 Combined purchasing
 Lost or damaged goods
 Private importation
 Hire purchasing
 Rental agreement
 Second hand or used
articles
 Successive sale
 Sale on consignment
 Sale on auction
 Place of introduction
 Invoices and payment in
foreign currencies
 Rate of exchange
 Fixed Rates
General info
 The majority of consignments will be be valued by the transaction
value method
Price paid
Sale
Sale for export
Price actually
paid or payable
No exclusions
+
Commissions, cost of containers, packaging, assists, royalties &
licenses, processed of resale ,transpiration, insurance, “outside”
duties, loading, handling…
- Transportation after importation, assembly after importation ,
buying commission, “in-land” duties
Combined Purchasing
 Combined purchasing occurs where a large
consignment of goods is purchased in a single
transaction.
 If a quantity of that consignment is then declared for
free circulation into the Country of importation, the
value for that quantity by the ratio to the proportion of
the total price and quantity purchased.

Lost or Damaged Goods
 If a part of consignment was lost or damaged, the
apportionment of the price actually paid or payable is
permitted if:
 Goods were lost/damaged before their release into free
circulation
 It must be irretrievable loss of goods -they can not be
used by anyone , therefore no stolen goods , which
may continue to be used
 The price was reduced based on commitment in the
purchase agreement prior to the release of goods for free
circulation (for example , exposing a new invoice or credit
note)
 Damages are not already reflected in the relevant contract
of sale ( e.g. imported fresh fruit includes in the certain
percentage that can be damaged/spoiled during transport)
 the price adjustment made later than 12 months from the
date of release of the goods into free circulation is not
acceptable. This point in time must be established in an
appropriate form ( e.g. by a corresponding agreement
between buyer and seller ). The credit note document is ,
however, insufficient as the proof ( can be supported e.g. by
bank statement , proof of payment ).
 In case that goods are insured against damages, the
customs office may take into account a discount from
the seller or price of damaged goods designated by
insurance company or other authorized body.
 the customs value of the goods that came with
shortcomings or defects, or which does not correspond
to the order or agreement (other goods, design, color,
size,) can be reduced on the basis of discounts
provided by the seller (a new invoice or credit note
with a reduced price), which can become the basis for
the calculation or recalculation of the customs value.
Example
 Importer ordered trousers of certain sizes. At the time
of importation (or after – at the time of unpacking) it
was found that trousers have been delivered only in
extra large numbers, which are difficult to sold. The
buyer received 50% discount; seller issued credit note
that may be used as a basis for reduced customs value
(Credit not to be accompanied by a bank statement
and proof of payment).
Private Importations
 In the case of goods imported for the private use of the
importer and not for sale, whether imported in
accompanied baggage or otherwise, the customs value
is established using the normal customs valuation
methods
Hire Purchase
 hire purchase contracts, ownership of the goods passes
automatically to the hirer once all the payments specified in the
contract have been met.
 When goods are sold on certain hire purchase contracts,
ownership of the goods passes automatically to the hirer once all the
payments specified in the contract have been met.
 This should be treated as a contract of sale. Where the interest is
clearly marked it should be excluded from the customs value
 Certain hire or leasing contracts include an option to purchase the
goods. When such an option is exercised before the material time for
customs purposes the price actually paid or payable under the option
may be used to determine the customs value.
 Otherwise, the customs value is to be determined by proceeding
sequentially through the alternative valuation methods.
Rental Agreements
 The alternative methods of valuation to the
transaction value method are to be applied to goods
imported under a rental agreement.
Second-Hand or Used Articles
 Where second-hand or used articles are the subject of a
sale, and the conditions for transaction value are satisfied,
that method of valuation is to be applied whether the
goods are imported as commercial or for private use.
 In circumstances where no sale price exists, the transaction
valuation method cannot be used
 Also, where the article is imported by a person in whose
possession and use it has been for an appreciable period
prior to importation, the transaction valuation method
cannot be used. The value is to be determined by
proceeding sequentially through the alternative valuation
methods.
Successive Sales
 This applies where goods have been the subject of a
number of sales prior to importation. In such cases, the
last sale occurring in the commercial chain prior to the
introduction of the goods into the customs territory of the
Country of importation is to be considered as the sales
price for customs valuation purposes
 Alternatively, a sale taking place in the customs territory
of the Community before entry for free circulation of the
goods can be considered the sales price for customs
valuation purposes.
 However, where the valuation declared is based on an
earlier sale, that may be accepted as the basis for valuation
only if it can be demonstrated that the transaction in
question involved the sale of goods for export to the
Country of importation
 Proves that may demonstrate that the goods were sold for
export to the Country of importation:
 the goods are manufactured according to Community
specifications or are identified, according to the marks they
bear, as having no other use or destination; or
 the goods were manufactured or produced specifically for a
buyer in the Country of importation, or
 specific goods are ordered from an intermediary but
are shipped directly to the Country of importation from
the manufacturer.
Goods Imported for Sale on
Consignment
 Trading arrangement in which a seller sends goods to a buyer or
reseller who pays the seller only as and when the goods are sold.
The seller remains the owner (title holder) of the goods until
they are paid for in full and, after a certain period, takes back
the unsold goods. Also called sale or return, or goods on
consignment.
 These goods are exported to the Country of importation for sale
at the best price obtainable for the consignor in the country of
exportation.
 Due to the absence of a price paid or payable the customs value
must be established by proceeding sequentially through the
alternative valuation methods
Goods Imported for Sale by
Auction
 In the case of importation of goods (paintings, artefacts,
cars and other articles) imported for sale by auction, the
normal valuation rules apply.
 Due to the absence of a price paid or payable, the customs
value be established by proceeding sequentially through
the alternative valuation methods.
Place of Introduction
Standard Place of Introduction
 For the purposes of establishing the transport, handling
and insurance charges to be included in the customs
value, the place of introduction should be established:
 for goods carried by sea, the port of unloading, or the port
of transshipment certified by the customs authorities as
the port of introduction;
 for goods carried by rail or road, the place where the first
customs office of the country of importation is situated;
for goods carried by air, the place where the land frontier
of the customs territory of the Country of importation is
crossed.
 goods may be introduced into the customs territory of
the Country of importation then carried by sea to a
destination in another part of that territory. In these
circumstances, the customs value should be determined
by reference to the first place of introduction into the
customs territory of the Community.
Invoices and Payments in Foreign
Currencies
 Where factors used to determine the value of goods for customs purposes are
expressed in a currency other than the Euro, the rate of exchange to be used is the
periodic rate established in accordance with the customs legislation of the country of
importation;
 In the EU:
Articles 168 to 172 of the Customs Code Implementing Provisions (CCIP). reflect
effectively the current value of currencies in commercial transactions;
- are published by the competent authorities of the Member States; and
- apply during a fixed period.
- The significant features of the provisions are that rates of exchange used in
determining the customs value are fixed monthly and if no significant fluctuation on
the exchange markets affects them ( Article 171(1)), they remain unchanged for
a month, and that a special provision exists with regard to establishing exchange
rates to be used with periodic declarations.
Insofar as the rates of exchange are fixed as much as fourteen days before they enter
into use and normally apply unchanged for one month, the rules facilitate the
operation of simplified entry procedures.
Establishing the Rate of Exchange
 The rates of exchange quoted by the Central Bank on
the second last Wednesday of each month are used for
customs valuation purposes for the following calendar
month.
 Tolerance limit (5% above or below); In cases where
the tolerance limits are exceeded, the revised rates and
operative dates will be posted
Publication of Rates of Exchange
 Details of the rates to be applied in a particular
calendar month are posted by the state authorities
This list of periodic rates of exchange is to be displayed
for the information of the public in offices where
Customs entries are presented.
Payment Made At Fixed Rate Of
Exchange
 An invoice may be made out in Euro but indicates that
payment is to be made in foreign currency at a fixed rate
of exchange with a specific declaration to that effect
being made on the entry.
 In case that customs are satisfied as to the “bona fide”
of the transaction, the calculation can be made.
 This will be done by converting the national currency
into foreign currency at the fixed rate of exchange and
re- converting the resulting figure into national currency
as indicated in the customs legislation.
Valuation Rules for Specific
Customs Procedures
 Specific provisions exist relating to certain customs
procedures where goods are released for free circulation
after being assigned a different treatment or use, for
example Inward Processing.
Content
 Customs warehousing
 Inward processing
 Outward processing
 Release of goods in advance
 Declaration of customs value
Valuation – Customs Warehousing
 Type D & E Warehouses ( private customs warehouses,
which means that only the administrator /warehouse
keeper is allowed to store goods in them)
 Value established at time when the goods were placed
under the customs warehousing arrangements, the value
of the goods at that time should be applied. However,
upon the importer request, the value at the time of release
for free circulation may be accepted.
 Other Types: The value to be taken is the value determined at the time the goods
were released for free circulation.
 The costs of warehousing and of preserving goods while they remain in the
warehouse need not be included in the customs value if they are shown
separately from the price actually paid or payable for the goods.
 Paragraph 7.8 concerning successive sales may be applied when goods are being
entered for the warehousing procedure or at the time the goods are being
released for free circulation, as appropriate
Inward Processing
 the suspension system or the drawback system .
 If a product was sold on the customs territory of the Country of
importation, the customs value is usually determinate by transaction
method;
 No sale – alternative methods
 A customs debt related to imported goods :
- incorporated in processed products that were released into the free
circulation in the country of importation
- Goods that did not undergo processing operation in the country of
importation
- Valuation based on the price of goods declared at the time of their entry
into the inward procedure ,
- exception - location of the compensating products in a free zone or free
warehouse where the customs debt is calculated according to relevant
provisions
- Processing costs means all costs incurred in the production of processed
products
Outward Processing
 Based on commercial contracts - procedure or
adjustment or reparation of goods according to owner
requirements and for its own account outside of the
country where the owner of goods is based
 the cost of processing / adjustment or reparation of
the goods imported back to the customs territory is
considered as base for valuation
 If the goods contain goods from imported to the
country of processing from the third country, these are
considered as the part of the customs value
 The additions to the customs value to be included
(transportation, insurance handling...)
Release of Goods in Advance of
Final Determination on Value
 Where doubts exist as to the accuracy of declared
valuation , release of goods should only be refused or
unduly delayed in the most exceptional circumstances
(e.g. suspicion of fraudulent activity).
 In normal circumstances, goods should be released on
provision of a suitable. In this context, it is paramount that
the level of security/deposit taken should be sufficient to
cover the potential duty at risk.
Customs Value Declaration
 Subject to certain exemptions, all consignments in
excess of €10,000 require the production, with the
relevant customs entry, of a declaration of particulars
relating to the customs value of the goods being
imported.
 The declaration is used where there is a price actually
paid or payable. Where appropriate, this form may be
supplemented by one or more continuation sheets
 Where, exceptionally, there is no price actually paid or
payable, the requirement for a customs value declaration
form may be not claim and an appropriate declaration,
supported by documentary evidence, should be made on
the entry
 It should be noted that the special declaration on the entry
is only appropriate in cases where the transaction value
method is not available at the time of entry and a price will
not be available in the future.
 It should NOT be used in cases where goods are cleared on
security of duties, pending production of satisfactory
evidence of value, and a price will be available for
declaration to Customs later. Such cases should continue
to be dealt with in accordance with paragraph 13 relating to
release of goods in advance of determination of the amount
of duty payable.
Questions?