05BANGKOK1427 Thailand: Customs Valuation Issues
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
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
— (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.