What is Valuation and Why Does it Matter? Customs Valuation is a procedure to determine the customs value of imported goods. The customs value is essential to calculate the total duty to be paid on an imported good. Because there was a need for the international community to have a standardized system for valuing imports, many nations became signatories to a World Trade Organization (“WTO”) agreement that established valuation norms known as the Tokyo Round Valuation Code (later amended into the WTO Agreement on Implementation of Article VII of the GATT 1994).
The United States was a signatory to these treaties and currently maintains and enforces a rigorous valuation system. The U.S. Customs valuation methodology (as well as a summary of relevant Customs rulings) are described in detail in the Valuation Encyclopedia. A common customs valuation standard is important because it ensures that: