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Public Consultation Launched into Possible Customs Law on Binding Valuation of Goods

Hong Kong traders may like to be informed that on 1 March 2018, the European Commission launched a public consultation on whether to introduce a legal basis for decisions on Binding Valuation Information in the EU. Its full title is “Exploratory Public Consultation on the establishment in the EU of Decisions relating to binding information in the field of customs valuation”.

This much-awaited consultation is an important step in the legislative process which may lead to the introduction of Binding Valuation Information in the EU. Stakeholders, namely those interested in the issue and likely to be affected by it, are advised to participate in the consultation, since such rulings would help to increase legal certainty in a controversial area such as customs valuation.

The European Commission will take the outcome of this consultation into account when deciding whether to take its initiative further and present a formal legislative proposal to allow Binding Valuation Information decisions in the EU.

The policy areas covered by the Commission initiative are the calculation of customs duties, international customs cooperation and customs procedures. The exploratory consultation seeks the view of business – and particularly economic operators and importers – business organisations, public authorities, academia and members of the public. Those selling goods from Hong Kong in the EU may find that some of the questions are more specifically addressed to businesses.

The aim of the Commission in launching this consultation is to obtain the views of stakeholders on: the level of interest in, and the need for, a possible initiative by the Commission, on the basis of the Union Customs Code, to establish a legal basis for decisions on Binding Value Information; the potential scope of Binding Value Information; and identifying those elements (components) of the customs value of goods which could be covered by such decisions.

The results will feed into the more general project undertaken by the Directorate General on Taxation and the Customs Union on the analysis of the need, relevance, scope, feasibility and implications of a possible initiative by the Commission to provide for Binding Value Information at EU level.

The text notes that key elements of international trade in goods, and on which customs declarations are based (which are essential for the calculation of customs duties), are the tariff classification of the goods, their origin and their value. So-called “advance rulings” (in the EU, these are described as customs decisions, also known as Binding Information) relating to the determination of tariff classification and origin of goods are already established. On the other hand, advance rulings in the field of Customs Valuation are not yet available in the EU.

A number of initiatives have led to the consideration of advance rulings in the field of customs valuation (Binding Value Information decisions - BVI). Notably, the WTO Trade Facilitation Agreement encourages WTO Members to provide advance rulings in the field of customs valuation. The WTO Agreement on Trade Facilitation covers a range of commitments on trade facilitation, including advance rulings. Furthermore, WTO Members are encouraged to provide advance rulings on “the appropriate method or criteria, and the application thereof, to be used for determining the customs value under a particular set of facts.”

The EU’s Customs Code (the UCC) provides for decisions relating to the application of customs legislation, including decisions relating to binding information on tariff classification and origin. Advance rulings on customs valuation (BVIs) may be a useful tool to make available, at EU level, the valuation treatment that an economic operator can expect at national level under the EU valuation law. Such rulings will not determine or confirm the actual customs value of a particular consignment but would indicate the treatment to apply to a certain element of the customs value.

In relation to the questionnaire, some questions require expert knowledge and companies are informed that they may answer only some of the questions. At the end of the questionnaire those wishing to submit further information will have the possibility to upload a document or position paper.

The questionnaire can be submitted until 1 June 2018 and should take around 20 minutes to complete. The contributions and the report will be published on DG TAXUD's webpage in the third quarter of 2018. Please click on the following to access the questionnaire and other information on the public consultation.

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