Brussels Definition Of Value
Summary of Brussels Definition Of Value
A system for the valuation of imports for the application of ad valorem duties, adopted in 1953 following attempts to establish a European customs union. The European Customs Union Study Group submitted to the contracting states the Convention on the Valuation of Goods for Customs Purposes, along with conventions to adopt uniform tariff nomenclature and to establish the Customs Cooperation Council. All three proposals were signed in Brussels on December 15, 1950; the valuation agreement came into force on July 28, 1953.
The Brussels definition embraces the notional concept of value: that is, goods should be valued at the price at which such goods would sell under specified conditions, irrespective of the actual selling price of the given transaction. For duty purposes, adherents to the convention assess duties upon the normal price of the goods, which is determined according to the following assumptions: that goods are delivered to the buyer at the port or place of introduction into the country of importation; that the seller bears all costs, charges, and expenses incidental to the sale and to the delivery of the goods at the sale and to the port or place of introduction, which are hence included in the normal price; and that the buyer bears any duties or taxes applicable in the country of importation, which are hence not included in the normal price. The normal price itself is defined as the price that the goods would “fetch at the time the duty becomes payable on a sale in the open market between a buyer and a seller independent of each other.”
The following states have acceded to the valuation agreement: Algeria, Cyprus, Haiti, Ivory Coast, Kenya, Korea, Nigeria, Pakistan, Portugal, Rwanda, Senegal, Spain, Tanzania, Tunisia, Turkey, Uganda, Yugoslavia, Zaire.
In addition to those nations that formally adopted the Brussels convention, many trading nations, with the notable exception of the United States, employed the Brussels definition as the basis of valuing imports for duty purposes. The adoption by most nations of the Customs Valuation Agreement that emerged from the Tokyo Round of multilateral trade negotiations has served to supplant the role of the Brussels definition; however, the Brussels definition may continue to be used as an alternative valuation scheme, even in those nations that have adopted the Customs Valuation Code (read this and related legal terms for further details) agreement.
(Main Author: William J. Miller)
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