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05BANGKOK1427 Thailand: Customs Valuation Issues

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BANGKOK 001427

 

SIPDIS

 

SENSITIVE

 

DEPT FOR EB AND EAP/BCLTV

 

COMMERCE FOR ITA:JKELLY

 

STATE PLEASE PASS TO USTR

 

E.O. 12958: N/A

TAGS: ETRD ECON TH GATT WTRO

SUBJECT: Thailand: Customs Valuation Issues

 

REF: A) KELLY/VAUGHN EMAIL 2/1/05 B) KELLY/VAUGHN EMAIL

 

1/22/05

 

– (U) THE FOLLOWING MESSAGE IS SENSITIVE BUT UNCLASSIFIED

PLEASE PROTECT ACCORDINGLY –

 

¶1. (SBU) Summary: On February 18, Embassy representatives

met with the Customs Department’s Mr. Watana U-Thasoonthorn,

Director, Customs Procedures and Valuation Directorate.

Noting that some customs officers continue to assign

arbitrary values to data on carrier media (CD) imports,

Watana agreed to resend instructions to the port customs

bureaus that when no declared value for the data is listed,

only the carrier media should be assessed customs duties. He

explained there are no plans to adopt a GATT (General

Agreement on Trade and Tariffs) decision that only carrier

media should be assessed customs duties, but explained Royal

Thai Government (RTG) practice is to continue to assess only

the carrier media when no value for the data is listed.

Econoff raised concerns that Thailand’s practice of using the

retail price of an automobile in the country of manufacture

for valuation purposes is inconsistent with its WTO

commitments. Watana countered that while this is true for

customs valuation, it is permissible for determining a “test

value.” We welcome further information from Washington to

arm us for continued dialogue with Customs on its auto

valuation practices. End Summary.

 

¶2. (SBU) Econoff raised the issue of software valuation

related in Ref A, noting that while Thai Customs has advised

that its officers at the port of entry are prohibited from

assessing tax and duties on software based on an arbitrary

value (such as USD 20 per CD), reports are that this

continues to happen. Director Watana explained that officers

have been told to assess the carrier media (the physical CD)

and the software or data on the CD separately, according to

the values reflected on the invoice provided by the importer.

He explained that the problem arises when the importer

provides a value for the disc, but not for the software on

the disc; Watana explained that in such a case the official

is supposed to assess the carrier media alone. He said these

instructions had been sent in a memo to the Customs Bureaus

at the ports a year ago. Noting the continued difficulties

importers experience, Watana promised to resend the memo to

Customs port authorities.

 

¶3. (SBU) Addressing the longer-term issue of adopting the

1984 GATT (General Agreement on Trade and Tariffs) decision

4.1 on carrier media (which states that customs duties should

be applied only to the value of the carrier media rather than

the value of the “data or instructions” contained thereon),

Watana clarified the Royal Thai Government (RTG) position.

He said that the RTG had no plans to adopt decision 4.1 at

this time, noting that there was no consensus among countries

and that no other ASEAN country had formally adopted the GATT

decision. However, he noted that while RTG policy was to

continue to apply separate customs duties on the carrier

media and the information it contained, that since there is

currently no rational method to determine the value of the

data when no value is reflected on the invoice, RTG practice

in those instances is to assess duties only on the carrier

media in keeping with decision 4.1.

 

¶4. (SBU) Econoff then broached the issue of Thailand’s new

guidelines in determining valuation for automobile imports

when the customs officer has doubts about the declared price

on the invoice. According to the new guidelines, the

declared value is compared with the value of identical goods

previously accepted by Customs (reference pricing). When the

declared value is the same or higher than the previously

accepted customs value within a 30-day period, the declared

value is used as a customs value. Where value of identical

or similar goods previously accepted by customs is not

available or the declared value is lower than the previously

accepted customs value within the 30-day period, the declared

value will be compared with the test value.

 

¶5. (SBU) Watana explained that the test value is determined

by a formula that utilizes the retail price in the

manufacturing country. Econoff raised congressional concerns

(ref B) that Article 7.2 (c) of the WTO Agreement on Customs

Valuation expressly forbids reference for valuation purposes

to the price in the country of exportation or manufacture.

While Watana agreed that is the case for the customs

valuation, he asserted that determining the “test value” by

referencing the retail price in the manufacturing country is

NOT prohibited by article 7.2.

 

¶6. (SBU) Comment: While the RTG continues to use GATT

decision 4.1 on carrier media in practice, there are no plans

to implement the legislative changes needed to formally adopt

4.1 as the government does not want to tie its hands should

other countries determine a rational method to assess data

contained on carrier media. Customs continues to assert that

its auto valuation methodology is consistent with its WTO

commitments. We welcome further evidence from Washington

agencies to arm us in our discussions with Thai Customs on

this issue. End Comment.

 

Boyce

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Written by thaicables

August 26, 2011 at 5:38 am

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