valuation

The fixing of value to anything.
(customs) The appraisal of the worth of imported goods by customs officials for the purpose of determining the amount of duty payable in the importing country. The WTO Customs Valuation Code obligates governments that sign it to use the “transaction value” of imported goods–or the price actually paid or payable for them–as the principal basis for valuing the goods for customs purposes.
Customs officers are required by law to determine the value of imported merchandise. Valuation is necessary for statistical purposes as well as to determine the amount of import duty which must be paid if the duty rate is stated as a percentage of value (ad valorem duty).
Article VII of the General Agreement on Tariffs and Trade (“GATT”) in the 1994 WTO agreement outlines methodology for Customs Valuation: https://www.cbsa-asfc.gc.ca/publications/dm-md/d13/d13-2-4-eng.html. These are the uniform bases of appraisal for customs valuation among signatory countries. The 6 methods must be applied in the prescribed hierarchical order (if method #1 doesn’t apply, you must go to #2 next, and can’t skip to #4), and are as follows:
·       Method 1 Transaction Value
·       Method 2 Transaction Value of Identical Goods
·       Method 3 Transaction Value of Similar Goods
·       Method 4 Deductive Value
·       Method 5 Computed Method
·       Method 6 Fallback Method

The order of precedence of the Methods 4 & 5 can be reversed if the importer so requests and Customs officer approves.
(general) The price actually paid or payable for merchandise.
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The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation, plus amounts for the following items if not included in the price:
(1) The packing costs incurred by the buyer.
(2) Any selling commission incurred by the buyer,
(3) The value of any assist,
(4) Any royalty or license fee that the buyer is required to pay as a condition of the sale, and
(5) The proceeds, accruing to the seller, of any subsequent resale, disposal, or use of the imported merchandise.
The amounts for the above items are added only to the extent that each is not included in the price actually paid or payable and information is available to establish the accuracy of the amount. If sufficient information is not available, then the transaction value cannot be determined and the next basis of value, in order of precedence, must be considered for appraisement.
If the transaction value cannot be used, then certain secondary bases are considered. The secondary bases of value, listed in order of precedence for use, are:

·       Method 2 Transaction Value of Identical Goods
·       Method 3 Transaction Value of Similar Goods
·       Method 4 Deductive Value
·       Method 5 Computed Method
·       Method 6 Fallback Method

The order of precedence of the Methods 4 & 5 can be reversed if the importer so requests and Customs officer approves.
(U.S. Customs) U.S. Customs officers are required by law to determine the value of imported merchandise. Valuation is necessary for statistical purposes as well as to determine the amount of import duty which must be paid if the duty rate is stated as a percentage of value (ad valorem duty).
Generally, the Customs value of all merchandise exported to the United States is the transaction value for the goods. The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States, plus amounts for the following items if not included in the price:
1) The packing costs incurred by the buyer.
2) Any selling commission incurred by the buyer,
3) The value of any assist,
4) Any royalty or license fee that the buyer is required to pay as a condition of the sale, and
5) The proceeds, accruing to the seller, of any subsequent resale, disposal, or use of the imported merchandise.
The amounts for the above items are added only to the extent that each is not included in the price actually paid or payable and information is available to establish the accuracy of the amount. If sufficient information is not available, then the transaction value cannot be determined and the next basis of value, in order of precedence, must be considered for appraisement.
The secondary bases of value, listed in order of precedence for use, are:
1) Transaction value of identical merchandise,
2) Transaction value of similar merchandise,
3) Deductive value, and
4) Computed value.
The order of precedence of the last two values can be reversed if the importer so requests.
See transaction value; deductive value; computed value.

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