14.2. Statistical value. IMTS 2010 (para. 4.1) recommends that for all goods covered in international merchandise trade statistics, whether sold, exchanged or provided without payment, a statistical value should be recorded. IMTS 2010 (para. 4.8) further recommends that the statistical value of exported goods be a FOB-type value and the statistical value of imported goods be a CIF-type value. Countries are encouraged to compile FOB-type value of imported goods as supplementary information. The statistical value is defined in terms of three components: (a) the transaction value of the goods, (b) the value of services performed to deliver the goods to the border of the exporting country that is not already included in the transaction value and (c) the value of the services performed to deliver the goods from the border of the exporting country to the border of the importing country that is not already included in the transaction value. FOB-type value comprises components (a) and (b), while CIF-type value comprises the sum of (a), (b) and (c).
14.3. Need to consider all appropriate sources of information. The recommendations imply that compilers should develop statistical procedures to make use of all of the price and value information available in customs records, other administrative sources and commercial documents and to estimate the statistical value of goods where such information is not provided or appears inaccurate. In order to obtain the statistical value of the goods, compilers should have a clear understanding of the basic concepts relevant to the valuation as well as a knowledge of the advantages and limitations of various data sources.
14.4. Definition of transaction value. IMTS 2010 (annex D, para. D.1) recommends that the transaction value of the goods should be established in accordance with the World Trade Organization Agreement on Customs Valuation,[2] which in its article 1 defines it as “the price actually paid or payable for the goods when sold for export to the country of importation adjusted in accordance with the provisions of Article 8. This price is to be calculated as “the total payment made or to be made by the buyer or for the benefit of the seller for the imported goods”;[3] payments can be monetary or “in the form of specified goods or services”.[4] The compiler should be aware that the total payment made or to be made by the buyer or for the benefit of the seller for the imported goods according to Article 8 of the Agreement should include only the following items to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the goods:
(a) Commissions and brokerage, except buying commissions[5];
(b) The cost of containers which are treated as being one for customs purposes with the goods in question;
(c) The cost of packing whether for labour or materials;
(d) The value, apportioned as appropriate, of the goods and services supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or payable:
(e) Royalties and license fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;
(f) The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller.
(g) Any costs incurred by the seller associated with goods delivery to the buyer and which the buyer agrees to pay, can be part of transaction value (e.g., export taxes and duties).
14.5. The Agreement covers only the case of imported goods subject to ad valorem duties. However, IMTS 2010 (para. 4.4) recommends that, for statistical purposes, the transaction value of all imported and exported goods should be established on the basis of the Agreement.
14.6. Relationships between transaction value, customs value and statistical value. Compilers should be aware of the fact that the WTO Agreement on Valuation defines customs value as transaction value, but gives customs authorities flexibility in determining its components. Countries are free to include in or exclude from the customs value, in whole or in part: (a) the cost of transport of the imported goods to the port or place of importation; (b) loading, unloading and handling charges associated with the transport of the imported goods to the port or place of importation; and (c) the cost of insurance (see article 8, para. 2). This means that, depending on the country customs practice, the transaction value can be defined differently and cover partially or wholly the cost of services performed to deliver the goods from their location in the exporting country to the border of the importing country.
14.7. Customs rules may require that the transaction value of imported goods includes all cost components of CIF-type value and that the transaction value of exported goods include all components of FOB-type value. Whenever this is the case, it is good practice to accept the customs value as the statistical value. In all other cases, compilers should make the necessary adjustments to the available customs values as set out in Article 8.1 of the WTO Agreement on Valuation, including adjustments concerning insurance and freight. If the required information is not available or does not exist (e.g., where goods cross the border without being sold, as is the case for food and other humanitarian aid), the statistical value should be estimated using valuation principles contained in IMTS 2010, chapter IV, and as set out below.
14.8. Statistical value and invoice price. These are two different concepts. The invoice price represents an expected direct monetary payment to the seller and may not take account of other payments (both monetary and non-monetary) which should be included in or excluded from the transaction value. Therefore, the invoice price is usually only a starting point for the derivation of the customs and/or statistical values and has to be adjusted as necessary. The invoice price may not be acceptable for this purpose if the conditions of Article 1 of the WTO Agreement on Customs Valuation are violated (e.g., if the buyer is precluded by the seller from reselling the goods), in which case the transaction value should be determined on another basis provided for in the Agreement. Further, the invoice value depends on the terms of delivery of the goods and may include various service components conceptually covered in items (b) and (c) of para. 14.2 above. Therefore, it is very important that when estimating the statistical value, compilers have information about the delivery terms, so that the specific items and their costs included or not included in the invoice price can be identified and compilers are in a position to make the calculations needed to obtain the recommended statistical value (see sects. B and C).
14.9. The value of service components. The services rendered in the delivery of goods to the border of the exporting or importing country include, for example, loading and unloading of the goods, fulfillment of the customs formalities such as clearing goods for exportation and paying applicable taxes and duties, transportation, and insurance. They may or may not be included in the invoice price and, in many cases, they should be evaluated with respect to their inclusion in or exclusion from the invoice price in order to obtain the required statistical value. It is advised that compilers apply generally accepted accounting principles which would allow the establishment of the value of these services, and follow broadly, in this regard, the definition of the transaction value of goods as provided in the WTO Agreement on Customs Valuation. It is further advised that the guidelines of the 2008 SNA and BPM6 on valuation of services be taken into account, whenever appropriate.[6]
14.10. List of cost items relevant for the determination of the statistical value. The main cost items relevant for the determination of the statistical value of the goods for purposes of international merchandise trade statistics are:
(a) Cost of the goods at “factory” gates;
(b) Cost of loading on internal transport;
(c) Cost of transportation from seller’s warehouse to main carrier (including container stuffing costs);
(d) Cost of insurance to border of exporting country;
(e) Contract of carriage, trade documents in exporting country;
(f) Cost of loading on main carrier (including transport and warehouse port costs);
(g) Cost of customs clearance at exportation, including any export duties and other charges;
(h) Cost of international carriage to border of importing country;
(i) Cost of insurance while in international carriage;
(j) Cost of customs clearance at importation, including import duties and other charges;
(k) Cost of unloading at the port of importation (including transport and warehouse port costs);
(l) Cost of transportation in the importing country (including container un-stuffing costs);
(m) Cost of insurance while in transport in the importing country;
(n) Cost of unloading at the buyer’s warehouse.
[2] See Legal Instruments Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations: done at Marrakesh on 15 April 1994 (GATT secretariat publication, Sales No. GATT/1994-7). Available from www.wto.org/english/docs_e/legal_e/legal_e.htm#artvii.
[3] Agreement on Customs Valuation, Annex 1, Note to Article 1, para. 1.
[4] Ibid., General Introductory Commentary, para. 1.
[5] Buying commissions are the fees paid by the buyer to a bona fide buying agent (a third party acting as an intermediary on behalf of the buyer) for its services in connection with the purchase of an imported good. Typically, the commission is equal to an agreed-upon percentage of the price of the goods. See, e.g., United States Customs and Border Protection (2006), “Buying and Selling Commissions”.
[6] See the 2008 SNA, paras. 3.118-3.150; and BPM6, paras. 3.68-3.80.