New U.S. Valuation System for Imported Products Is Better and Easier To Administer

GAO reviewed the new valuation system for imported products and the effectiveness of its implementation. The review was made to evaluate the impact of the new system on the U.S. Customs Service, importers, and customs brokers.

GAO stated that the consistency of the method of valuation, which is the process of determining a unit value for imported products, can be as important as the tariff rate itself in determining the amount of duty charged. The U.S. Customs Service administers the U.S. valuation system. The prior valuation standards were confusing to importers and expensive for the Customs Service to administer. The valuation system has been simplified and made more specific by establishing one primary method, transaction value, and four secondary methods for determining customs value. The new valuation methods went into effect in July 1980 and have resulted in two major benefits: (1) the customs value of imported products and the amount of duties can be determined with more certainty by both the international trade community and the Customs Service; and (2) preparation and processing costs for entry documentation on imported products have been reduced. Simplifying the valuation system has also reduced the number of incorrect entries and resulted in fewer Customs Service billings for additional duties or refunds. The Customs Service's training programs and seminars contributed significantly to the successful implementation of the new valuation systems.