What is the transaction value under the WTO Valuation Agreement, and when is it applicable?

What is the transaction value under the WTO Valuation Agreement, and when is it applicable?

• A. The cost of production plus freight and insurance.
• B. The customs duty payable on import.
• C. The price actually paid or payable for goods sold for export to the country of import, plus specified add-ons; applicable when conditions for transaction value are met and not overridden by related-party concerns.
• D. An arbitrary value determined by customs.

Answer: (C)

The transaction value under the WTO Valuation Agreement is the price actually paid or payable for goods sold for export to the country of import, plus the specific amounts defined by the agreement that accompany the price. These add-ons include packing or container costs, selling commissions, assists provided by the buyer to the seller, royalties and license fees paid as a condition of sale, and other amounts tied to the sale and accruing to the exporter. This method is used when the conditions for the transaction value are met—namely, the buyer and seller are at arm’s length and the price is not influenced by related-party concerns, with enough evidence of the actual price paid or payable. If those conditions aren’t met because of related-party influence or other issues, the transaction value is not applicable and other valuation methods must be used instead.

The transaction value under the WTO Valuation Agreement is the price actually paid or payable for goods sold for export to the country of import, plus the specific amounts defined by the agreement that accompany the price. These add-ons include packing or container costs, selling commissions, assists provided by the buyer to the seller, royalties and license fees paid as a condition of sale, and other amounts tied to the sale and accruing to the exporter.

This method is used when the conditions for the transaction value are met—namely, the buyer and seller are at arm’s length and the price is not influenced by related-party concerns, with enough evidence of the actual price paid or payable. If those conditions aren’t met because of related-party influence or other issues, the transaction value is not applicable and other valuation methods must be used instead.