CUSTOMS

VALUATION
Prepared By:
Gabriel B. Carumba, LCB
MIDTERM
1. Conversion of Units
 QUIZ
2.INCOTERMS 2020
 QUIZ
3. Methods of Valuation
Section 700 – 701
QUIZ
MIDTERM
4. Section 702 – 706
QUIZ
5. LONG QUIZ
6. CMO 16 – 2010
7. LONG QUIZ
8. RECITATION OF
SECTION 700 - 701
MIDTERM
9. RECITATION OF
SECTION 702 – 706
10. MIDTERM EXAM
FINALS
1. Conversion of Units
 QUIZ
2.INCOTERMS 2020
 QUIZ
3. Methods of Valuation
Section 700 – 701
QUIZ
FINALS
4. Section 702 – 706
QUIZ
5. LONG QUIZ
6. CMO 16 – 2010
7. LONG QUIZ
8. RECITATION OF
SECTION 700 - 701
FINALS
9. RECITATION OF
SECTION 702 – 706
10. FINAL EXAM
INCOTERMS 2020

The Incoterms® rules are the regulations that define responsibilities of

buyers and sellers operating in the international trade system.
They are the authoritative rules for determining how costs and risks are
allocated to the parties.
Incoterms rules are regularly incorporated into contracts for the sale of goods
worldwide and have become part of the daily language of trade.
International Chamber of Commerce (ICC) has launched
Incoterms® 2020 set that contains the rules for use of the 11 Incoterms® trade
terms.
It takes into account the latest developments in commercial practice, and
updates the rules to make them more accessible and easier to use.
The new rules will enter into force on 1 January 2020. As of this date, all
sales contracts should make reference to the Incoterms® 2020 rules as the latest
version of the Incoterms rules.
INCOTERMS 2020
INCOTERMS 2020
EXW (Ex-works)

FCA (Free-Carrier)
FCA (Free-Carrier)

CPT (Carriage Paid To)

CIP (Cost and Insurance Paid To)

DAP (Delivered at Place)

DPU (Delivered at Place Unloaded)

DDP (Delivered Duty Paid)

FAS (Free Alongside Ship)

FOB (Free On Board)

CFR (Cost and Freight)

CIF (Cost, Insurance and Freight)

 BASIS OF VALUATION

Sec. 700. Sequential Application of Valuation Methods. – Imported goods

shall be valued in accordance with the provisions of Section 701 of this Act
whenever the conditions prescribed therein are fulfilled.

Where the customs value cannot be determined under the provisions of Section 701
of this Act, it is to be determined by proceeding sequentially through the
succeeding sections hereof to the first such section under which the customs value
can be determined. Except as provided in Section 704 of this Act, it is only when
the customs value cannot be determined under the provisions of a particular
section that the provisions of the next section in the sequence can be used.

If the importer does not request that the order of Sections 704 and 705 of this Act
be reversed, the normal order of the sequence is to be followed. If the importer so
requests but it is impossible to determine the customs value under Section 705 of
this Act, the customs value shall be determined under Section 704.

When the customs value cannot be determined under Sections 701 through 705, it
may be determined under Section 706 of this Act.
Sec. 701, Transaction Value System – Method One. – The transaction value
shall be the price actually paid or payable for the goods when sold for export to the
Philippines adjusted in accordance with the provisions of tins
section: Provided, That:

(a) There are no restrictions as to the disposition or use of the goods by the buyer
other than restrictions which:

(i) Are imposed or required by law or by Philippine authorities;

(ii) Limit the geographical area in which the goods may be resold; or

(iii) Do not substantially affect the value of the goods;

(b) The sale or price is not subject to some condition or consideration for which a
value cannot be determined with respect to the goods being valued; and
(c) The buyer and the seller are not related, or where the buyer and the seller are
related, that the transaction value is acceptable for customs purposes under the
provisions hereof.

For purposes of this Act, persons shall be deemed related only if:

(i) They are officers or directors of one another's business;

(ii) They are legally recognized partners in business;

(iii) There exists an employer-employee relationship between them;

(iv) Any person directly or indirectly owns, controls or holds five percent (5%) or
more of the outstanding voting stocks or shares of both seller and buyer;

(v) One of them directly or indirectly controls the other;

(vi) Both of them are directly or indirectly controlled by a third person;

(vii) Together they directly or indirectly control a third person; or

(viii) They are members of the same family, including those related by affinity or
consanguinity up to the fourth civil degree.
CONSANGUINITY
- Relationship by blood

AFFINITY
- Relationship by marriage
Persons who are associated in business with one another in that one is the sole agent,
sole distributor or sole concessionaire, however described, of the other shall be
deemed to be related for the purposes of this Act if they fall within, any of the eight (8)
cases cited in the preceding paragraph.

In a sale between related persons, the transaction value shall be accepted as basis for
customs valuation whenever the importer demonstrates that such value closely
approximates one of the following occurring at or about the same time:
(a) The transaction value in sales to unrelated buyers of identical or similar goods for
export to the same country of importation;

(b) The customs value of identical or similar goods as determined under the
provisions of Section 704 of this Act; or

(c) The customs value of identical or similar goods are determined under the
provisions of Section 705 of this Act.

In determining the transaction value, the following shall be added to the price
actually paid or payable for the imported goods:
(1) To the extent that they are incurred by the buyer but are not included in the
price actually paid or payable for the imported goods:

(a) Commissions and brokerage fees except buying commissions;

(b) Cost of containers;

(c) Cost of packing, whether for labor or materials;

(d) Value, apportioned as appropriate, of the following goods and services:

materials, components, parts and similar items incorporated in the imported
goods; tools; dies; moulds and similar items used in the production of imported
goods; materials consumed in the production of the imported goods; and
engineering, development, artwork, design work and plans and sketches
undertaken elsewhere than in the Philippines and necessary for the production of
imported goods, where such goods and services are supplied directly or indirectly
by the buyer free of charge or at a reduced cost for use in connection with the
production and sale for export of the imported goods; and
(e) Amount of royalties and license fees related to the goods being valued that the
buyer must pay either directly or indirectly, as a condition of sale of the goods to the
buyer.

(2) Value of any part of the proceeds of any subsequent resale, disposal or use of the
imported goods that accrues directly or indirectly to the seller;

(3) Cost of transport of the imported goods from the port of exportation to the port of
entry in the Philippines;

(4) Loading, unloading and handling charges associated with the transport of the
imported goods from, the country of exportation to the port of entry in the
Philippines; and

(5) Cost of insurance.

All additions to the price actually paid or payable shall be made only on the basis of
objective and quantifiable data.