Customs appraisement and the collection of import duties

 

Responsibility for the assessment of import tariffs and collection of revenues can be traced back to the Constitutional Convention of 1787 when the first Congress delegated authority to the central government to levy a national import tax the first national tariff act known as the

 

Customs Organization Act was enacted in 1789 to establish the mechanism for collecting the revenue necessary to fund the new government during its first year Customs collected $ 2 million in import duties for the next 124 years Customs revenues were virtually the only source of income for the U.S. Government although Customs duties have been replaced by personal and corporate income taxes as the principal source of government revenues revenue collection remains a primary component of the mission of the 21st Century Customs Service in 1993 Customs contributed more than $ 18 billion to the national treasury while the revenue aspects of import duties have decreased the U.S. Customs Service remains committed to enforcing U.S. valuation laws the concern of Customs is the correct valuation and proper payment of applicable import duties not appraising merchandise at the value which generates the most duty title 19 Section 1401a of the U.S. Code establishes the bases for appraising merchandise imported into the United States the U.S. valuation law is based on the Agreement to Implement Article VII of the General Agreement on Tariffs and Trade (GATT) to which most major trading countries are signatories.

 

II. The paragraphs of the following text are mixed. Rearrange them in the correct logical order. Find the most appropriate headline to the text. Choose from:

 

a. Historical background g. International Co-operation

b. BDV e. Brussels Definition of Value

c. Methods of valuation f. Customs Valuation System

d. GATT

 

(1) The Agreement states that the basis for Customs value should to the greatest possible extent be the actual price of the goods, which is usually indicated on the invoice; this price, subject to certain adjustments, is called the transaction value. This transaction value of imported goods should serve as the basis for Customs valuation of the majority of imports; hence it is the first and principal method set out in the Agreement.

(2) A further step towards international co-operation in Customs valuation stemmed from the work of the European Customs Union study group, which produced a definition of value suitable for use world-wide: the Brussels Definition of Value, or BDV.

 

You are not quite right...

You are mistaken...

You are wrong...

Just the reverse...

It would be wrong to say...

I can't agree with you...

(3) After several fruitless attempts organized under the auspices of the League of Nations, the first agreement on the general principles of Customs valuation was reached in 1947 and embodied in Article VII of the General Agreement on Tariffs and Trade (GATT).

 

(4) At the beginning of the century, groups wishing to promote international trade began to study ways of replacing unstable and arbitrary methods of valuation with an international system which would be neutral in its effects on competition and trade policy alike.

 

(5) The question of Customs valuation was once again in the forefront during the Tokyo Round of the GATT negotiations which took place in Geneva between 1973 and 1979; these were among the most important trade policy initiatives of that time. It was hoped that these negotiations would «achieve the expansion and ever-increasing liberalization of international trade, inter alia by gradually removing barriers to trade». One of the instruments adopted to achieve this was a common Customs valuation system more widely acceptable than the existing international system.

(6) The BDV follows a national concept whose principle elements are sale, price, time, place, quantity and commercial level. During the 1970s, when membership was at a peak, 33 countries were Parties to the BDV and around 70 were applying it de facto.

 

III. Agree or disagree with the following statements. Give your reasons. Discuss your answers with your partner. Supply some additional information. Make use of the following phrases:

 

I quite agree with you...

You are right...

That's right...

Indeed...

Exactly...

I'm of the same opinion...

I think so...

Quite so...

In connection with this, it is interesting to consider

one more aspect...

Moreover, I'd like to add that...

But there's one more thing which should be noted (considered)...

 

1. Tariff agreements are not effective if, under the valuation system in force, the real impact of the negotiated tariff rates cannot be altered by changing the valuation criteria. Otherwise, countries could employ their valuation system to obtain the same effect as would result from manipulating rates.

 

2. Since trade statistics refer to the Customs value, a uniform basis for the latter makes international comparisons based on the value of goods more reliable and thus facilitates, inter alia, the negotiation of tariff agreement.

 

3. Tariff quotas, rules of origin and tariff preferences are among the measures which depend on the value of goods. Consequently, all of these will be undermined by an inadequate valuation system or if based on criteria which differ from country to country.

 

4. At the international level, similar and stable valuation systems are a serious obstacle to the expansion of trade.

5. International trade would be facilitated if countries adopted the same valuation criteria. Thus, in addition to knowing the rate of duty which is to be applied to their goods, importers and exporters would be aware of the value upon which these rates are based.

 

6. Uncertainty and arbitrariness distort international trade and hinder trade liberalization, thus creating further uncertainties.

7. In ten years there will be no VAT in the world.

8. Tax avoidance cannot be stopped.

9. All Member States of the WTO will have to apply the GATT Valuation Agreement. What about Belarus?

 

10. The determination of the value of imported goods is not vital for the accurate assessment of duty and tax.

11. What monetary payments are associated with Customs?

 

IV. Read the following information. Write down three why-questions in your note-book. Discuss the reasons for omissions or inaccuracies in invoices in Belarus.

 

Specific examples of common invoice omissions or inaccuracies which affect Customs valuation in the USA include the following:

 

ü a foreign manufacturer produces goods using materials and machinery supplied by the U.S. importer but invoices the goods at the

 

actual production cost, failing to include the value of the materials and machinery supplied by the importer;

 

ü a foreign seller assuming that a commission, royalty, or other charge is non-dutiable, omits the charge from the invoice;

ü a foreign manufacturer shipping goods to a U.S. customer invoices the goods at a price reflecting an adjustment for previously shipped goods found to be defective, rather than the actual price of the goods;

ü a foreign seller sells goods to a U.S. importer at a delivered price but invoices the goods at the cost of production, failing to include subsequent costs of delivery.

 

V. Fill in the gaps with the English equivalents of the words in brackets.

 

Reference words: speed up the process, GATT, ago, agreement, annual, breakthrough, harmonization of Customs valuation procedures, goal, objective, trade negotiations, WCO, WTO.

 

A UNIVERSAL SYSTEM

 

Some years (назад), at its (ежег дный) meeting held in Seoul, the (BTO) set itself an ambitious (цель): to promote the adoption and use of the (ГАТТ) Valuation (С глашение) in order to achieve the (гармонизация процедуры аможенной оценки) throughout the world. Although considerable progress had been made over the intervening years towards achieving that (цель), it was clear that a major (прорыв) would be necessary to (ускорить процесс). The Final Act, comprising the conclusion of the Uruguay Round Multilateral (торговые перегов ры) as well as the Agreement establishing the World Trade Organization (BTO), became that (прорыв).

 

VI. Look through the following list of Customs payments. Discuss with your classmates in what cases (situations) each of the mentioned payments should be made (and by whom). Make use of the following phrases:

 

From my point of view... I'm not sure if I agree...

By the way... That's exactly what I think...

 

1. Customs duty;

2. value added tax;

 

3. excises;

4. fees for issuing licences;

5. fees for issuing a qualification certificate of a Customs declarant;

6. Customs fees for performing Customs operations;

7. Customs fees for storing goods;

8. Customs fees for accompanying goods;

 

9. payment for adopting a preliminary decision.

 

DO IT FOR FUN

 

I. Fill in the table «False Friends». Consult the dictionary if necessary.

 

	FALSE FRIENDS
Russian	English	False friend	Russian
	present
Актуальный	current	actual
	topical
Комбинация	scheme	combination
petticoat
Комплекция	build	complexion
constitution
Перспектива	prospects	perspective
plans
Оказия	opportunity	occasion
	scheme	project
	draft

ПроектII.Explain the meaning of the following proverb in English and translate it into Russian:

Look before you leap.

 

III. Exercise your brains by solving these puzzles.

 

 

1.

 

2.

 

 

3.

 

 

4.

 

5.

 

6.

 

 

IV. Speculate about the following:

 

A money lender serves you in the present tense, lends you in the conditional mood, keeps you in the subjunctive and ruins you in the future.

 

J. Addison ¹

 

¹ Joseph Addison (1672–1719) – English essayist, poet and dramatist.

 

V. Solve the crossword.

 

Across:

 

2. … of goods is the action by the Customs to permit goods undergoing clearance to be placed at the disposal of the persons concerned.

 

4. Any person who makes a Goods declaration or in whose name such a declaration is made.

5. The expression commonly used to refer to the international Convention on the simplification and harmonization of Customs procedures adopted by the Customs Co-operation Council in 1973.

 

10.The refund, in whole or in part, of duties and taxes paid on goods and the remission, in whole or in part, of duties and taxes where payment has not been made.

12. … procedure is the Customs procedure which, when goods are exported, provides for a refund (total or partial) to be made in respect of the import duties and taxes charged on the goods, or on materials contained in them or consumed in their production.

 

Down:

 

1. The criminal offense of intentionally and secretively bringing an item into a country without declaring it to Customs officials and paying the associated duties or taxes, or of bringing a prohibited item into a country.

 

3. An official paper that gives information about something or that is used as proof of something; a computer file that contains text that you have written.

 

6. Articles which are representative of a particular category of goods already produced or are examples of goods the production of which is contemplated; the term does not include identical articles brought in by the same individual, or sent to a single consignee, in such quantity that, taken as a whole, they no longer constitute samples under ordinary commercial usage.

7. An article of transport equipment (lift-van, movable tank or other similar structure): fully or partially enclosed to constitute a compartment intended for containing goods, of a permanent character and accordingly strong enough to be suitable for repeated use, to be easy to fill and to empty, and having an internal volume of one cubic metre or more.

 

8. The act by which a person who is directly affected by a decision or omission of the Customs and who considers himself to be aggrieved thereby seeks redress before a competent authority.

 

9. A listing of the goods comprising the cargo (freight) carried in a means of transport or in a transport-unit. It gives the commercial particulars of the goods, such as transport document numbers, consignors, consignees, marks and numbers, number and kind of packages, descriptions and quantities of the goods, may be used in place of the Cargo declaration.

 

11. Both natural and legal entities, unless the context otherwise requires.

 

UNIT 7. CUSTOMS AND INTERNATIONAL TRADE

 

 

Study the following words and word combinations from the text.

 

restrictive policy

 

to secure the wealth and power of the state

 

to impose price and wage controls

 

to foster national industries

 

to promote exports of finished goods

 

to prohibit the exports of raw materials

 

liberty of production and trade

 

to voice opposition to prohibitive Customs duties

 

to urge

 

to charge (high) rates on protective duties multilateral trade agreements

 

 

ограничительная политика охранять (обеспечивать) богат-

 

ство_{оплатой}имощь государства установить контроль за ценами

 

труда

 

способствовать развитию нацио-нальной промышленности

 

содействовать экспорту / прод-вигать экспорт готовой продук-ции

 

запрещать экспорт сырья

 

право на свободную торговлю

и производство высказывать несогласие с …

запретительные таможенные пошлины

 

побуждать, настаивать взимать (высокие) налоги с … защитные пошлины

 

многосторонние торговые со-глашения

 

 

General Agreement on Tariffs	Генеральное соглашение по та-
and Trade (GATT)	рифам и торговле
to set forth	излагать
impediments	препятствия
elimination	устранение
to be entitled	иметь право
most-favoured-nation treatment	режим	наибольшего благопри-
	ятствования (один из основных
	принципов международной тор-
	говой	системы, регулируемой
	соглашениями в рамках ВТО,
	в соответствии с которым лю-
	бые условия торговли, предос-
	окдругойраспространены на все ос-
	тавляемые одной страной какой-
	либо	стране, должны
	быть немедленно и без огово-
	тальные страны)
antidumping duties	антидемпинговые пошлины
countervailing duties	компенсационные пошлины