Customs Valuation Appraisement Methodology: a Comparative Analysis of European and United States Governing Legislation

Abstract

This research sets out to identify the customs duty appraisement methodology best suited to modem international trade. The research identified the most effective method from the position of reducing operational barriers to trade. The operational review identified that the use of an appraisement methodology could be detrimental to trade overall, acting as a barrier to trade facilitation and fueling internal competition. The research also identified why traditional protectionist measures do more harm than good to the domestic activity of the trade nation employing such measures.

Research methods employed as part of this study included a mix of qualitative and quantitative research through industry research surveys focused on EU and US industry professionals. Legislative analysis and practical observations from industry experience were also considered within the research. The major findings of this research were that the US has clearly founded legislation driving the use of a specific method of appraisement aimed at ensuring equity and fairness amongst its member states. In contrast, the European method creates internal competition through lack of appropriate legislation, demographics and misalignment across tax law. Therefore, allowing individual member states to implement programmes to promote locations as a point of import, thus creating internal competition amongst member states. The main finding was that alignment of legislation and practise between the two trade blocks would be advantageous to trade facilitation overall.

This is a significant consideration, given that the centre of this research focused on trade facilitation measures of the two largest trade nations in the world, as they look to embark upon a trade facilitation agreement. There is no evidence available in the public domain to show that this misalignment between processes and practices has been considered, or how it will ultimately lead to disparity in trade practices. The limitations of this research were that, because of its unique nature, very little information was available on the financial impact of alignment. For this reason, further study is needed in this area of duty appraisement alignment, together with any financial impact that this may have on either trade block.