WTO Agreement - Method 1 Theory

Question 1

What are the principles in the determination of dutiable value?

Answer 1

• rules for the application of the provisions of the WVA be elaborated

*need for a fair, uniform and neutral system for the valuation of goods for customs purposes
that precludes the use of arbitrary or fictitious dutiable values;

*basis for valuation of goods for customs purposes should, to the greatest extent possible, be the
transaction value of the goods being valued;

*dutiable value should be based on simple and equitable criteria consistent with commercial
practices

*Valuation procedures should not be used to combat dumping.

Question 2

What are the 6 methods of valuation?

Answer 2

Method 1 - Transaction Value (Sec. 701- Art.1)
Method 2 - Identical Goods
(Sec. 702- Art.2)
Method 3 - Similar Goods
(Sec. 703- Art.3)
Method 4 - Deductive Value
(Sec. 704- Art.4)
Method 5 - Computed Value
(Sec. 705- Art.6)
Method 6 - Fallback Value
(Sec. 706- Art.7)

Question 3

What is transaction value?

Answer 3

the price actually
paid or payable for the goods when sold for export
to the Philippines adjusted

Question 4

PAPP?

Answer 4

total payment made or to be made by the
buyer/importer to or for the benefit of the seller/exporter for the
imported goods.

*Refers to any INCOTERM except DAP,DPU,DDP

Question 5

What is direct payment?

Answer 5

sum of money the buyer pays the seller or
another person, either related or not, as directed by the seller.
(Ex. Cash, Letter of Credit, Debit Note, Cheque, Electronic Fund
Transfer, etc.)

Question 6

What is indirect payment>

Answer 6

settlement by the buyer of a debt owed by the
seller is a standard example.

Question 7

Types of Discounts

Answer 7

Cash Discount

Quantity Discount

Trade Discount

Question 8

a discount expressed in % based
on commercial level purchased over a given period
of time.

Answer 8

Trade Discount

5% for
retailers, 15% for wholesalers and 25% for distributors.

Question 9

a discount based on quantity
purchased over a given period of time.

Answer 9

Quantity Discount

3% for purchases up to
100 pieces, 10% for purchases up to 500 pieces and 20% for purchases
over 1,000 pieces.

Question 10

a discount expressed in %
granted to a purchaser for the payment of cash or
payment within specified period of time.

Answer 10

Cash Discount

50% for
payment within 3 days, 25% within 5 days and 5% within 10 days.

Question 11

CRITERIA TO BE CONSIDERED IF GOODS ARE SOLD FOR
EXPORT TO THE PHILIPPINES:

Answer 11

GOODS MUST BE SOLD

FOR EXPORT TO THE PHILIPPINES

TO A PURCHASER IN THE PHILIPPINES

Question 12

NO SALE SITUATIONS:

Answer 12

IMPORTED GIFTS, SAMPLES AND PROMOTION ITEMS FURNISHED FREE OF CHARGE.

IMPORTED GOODS SHIPPED ON CONSIGNMENT BASIS WHICH WILL BE SOLD AFTER
IMPORTATION FOR THE ACCOUNT OF SUPPLIER.

GOODS IMPORTED UNDER LEASING CONTRACT OR LOANED.

COUNTER TRADE “RECIPROCITY’’.