Changes Needed in U.S. Valuation System for Imported Merchandise

GGD-79-29: Published: Mar 23, 1979. Publicly Released: Mar 23, 1979.

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Over the years, various changes have occurred in the U. S. valuation system, which is the process of determining a unit value for imported merchandise so that duties can be collected. The nine standards currently being used are confusing to importers and administratively expensive for the Customs Service.

Two of the four valuation standards established in 1956 should be repealed because the U.S. value and American selling price cannot be determined or apply to only a few items. The remaining two standards, export value and constructed value, require Customs to determine (1) if a foreign manufacturer's merchandise qualified for valuation at the point where goods are manufactured, and (2) whether commissions of agents are dutiable. Application of these two standards is timeconsuming and sometimes leads to protests by importers. Repealing some and redefining other U.S. standards would eliminate some valuation problems. Another alternative would be to adopt the Brussels Definition of Value or a similar system in which value is based on the actual price of the transaction. The Brussels method of valuation is used by over 90 nations, and results in similar values for all but a small number of products.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: In the event the trade negotiations now being conducted by nations participating in the General Agreement on Tariffs and Trade do not result in adoption of the Brussels system or a similar one, it is recommended that Congress amend the Tariff Act of 1930 to: (1) repeal the old valuation standards and the new U.S. value and American selling price standards; and (2) modify the definitions of the export and constructed value standards to include all costs.


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