WTO Seminar on Technical Assistance in Customs Valuation

1. WTO Seminar on Technical Assistance in Customs Valuation Developing capacity building in the area of customs valuation - a perspective from the Commonwealth Secretariat Presented by Angela Strachan Chief Programme Officer Special Advisory Services Division Commonwealth Secretariat

2. Trade and Commonwealth States • The Commonwealth: • 54 countries • 30% of the world ’s population • 32 small states • 14 LDCs • 23% of world trade • 40% of WTO membership

3. Trade and Commonwealth States WORK PROGRAMME IN TRADE • Goals: • To assist developing countries to protect their interests and benefit from trade, investment and new information technology • To provide practical assistance that supports their efforts to achieve the Millennium Development Goals • To promote international attention to and provide support for the special needs of small states

4. Trade and Commonwealth States • Assistance to: • Develop and implement trade policy capacity • Promote regional integration • Expand enterprise development • Implement emerging priority areas for the Commonwealth

5. ACV Implementation concerns • Economic, political and infrastructural challenges: • High turnover of customs personnel in some administrations • Fear of loss of Customs revenue since imported duties and related taxes still represent a significant % of total revenue in most countries • Political instability • Informal trade • Presence of PSI companies • Insufficient political will

6. Trade Capacity BuildingCustoms Valuation • CFTC/WTO sponsored Training programmes to better understand Article V11 of the GATT and to better implement spirit of the Agreement (ACV) • Accomplishments to date 2000 and 2001 • ACV training programme done for 33 countries from Africa, Asia,Pacific and the Caribbean 2002 • 34 customs officials from English speaking Africa will take part in 2 week training course in South Africa (11-22, Nov) 2003 • French instructed Course designed for Francophone African countries (possible venue- Mauritius) • Training programmes are unique: combination of lectures, case studies,group work and on-the-job training • Plus Handbook on Frequently Asked Questions on Customs Valuation

7. Barbados, Dominica, Guyana, Jamaica,Kiribati,Tonga,Tuvalu, Solomon Islands,Vanuatu, Samoa,Maldives, Tanzania Malaysia, Bangladesh, Sri Lanka, Ghana,Nigeria, Maldives, Brunei Darussalam, Fiji, Papua New Guinea Sierra Leone, The Gambia, Mozambique, Botswana + Philippines,Laos, Bhutan, Mongolia, Nepal * (N.B. Non-Commonwealth funded by WTO) Mauritius, Zambia, Uganda, Kenya, Swaziland,Lesotho,Namibia Malawi, Seychelles,Zimbabwe Sudan, Eritrea, Ethiopia, Egypt, Zimbabwe Project Partners: WTO, WCO, plus Host country Revenue Authority/Customs Administration -India (2000, 2001) -South Africa (2002) , Customs Valuation Trainingbeneficiary countries 2000 - 2002

8. ACV Implementation concerns • High levels of tariff encourage undervaluation and other valuation fraud • Commonwealth developing countries rely heavily on revenue from customs duties Avg. 30 -60 percent of Govt. Revenue • More time required to develop infrastructure including: • legislation • human resources • administrative procedures

9. ACV Implementation concerns • Core capacity building needs: • Design and adopt model customs legislation • Establish Valuation Divisions • Design and deliver public education programmes • Develop training material incl.procedures manuals • Acquire or update computer systems • Develop declaration forms • Develop valuation databases • Develop and implement appeals mechanisms

10. ACV Implementation concerns Computed value method presents some difficulty because of inability to get: • Information : • On cost of production in developed countries • Other elements of cost • Other Issues such as: - Distance from manufacturing locations • Confidentiality regarding commercial costing • Insufficient confidence in levels/type of mutual assistance provided by customs administrations in developed countries

11. ACV Technical Assistance Best Practices • Modality for training programmes • practical courses required • Target group for training need to be senior officials • Sustainability of assistance is an issue • South -south assistance is desirable in many cases

12. ACV technical assistance needs to enhance WTO compliance • In depth training on the ACV • Attachments to suitable administrations of comparable size and effective competence based on applying the Agreement • Assistance to develop the machinery for appeals as provided for in legislation • Introduction of computerisation and databases in Valuation Divisions - essential to facilitate administration of the identical value method, similar value method and deductive value method • Assistance with developing and administering an ACV implementation plan and work programme • Assistance with developing funding briefs for donors

13. Notes for Consideration • Problems universal but solutions local - so each country encouraged to develop recommendations to solve its own constraints • Further CFTC technical assistance possible particularly where other donors have an interest.