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Chapter 4: Problem 2

What methods do customs appraisers use to determine the values of commodity imports?

Short Answer

Expert verified
Customs appraisers typically use five methods to value commodity imports: the transaction value method, identical goods value method, similar goods value method, deductive value method, and computed value method. Each method involves a different approach, and the choice of method depends on the specific situation and the data available to the appraiser.

Step by step solution

01

Transaction Value Method

This is the most preferred and commonly used method. It relies on the price actually paid or payable for the goods when sold for export to the country of importation.
02

Identical Goods Value Method

When the transaction value method can't be used, appraiser might resort to Identical Goods Value Method. This includes finding the value of identical commodities imported at or about the same time.
03

Similar Goods Value Method

If the Identical Goods Value Method isn't feasible, Similar Goods Value Method can be applied where the customs appraiser would look into value of similar commodities imported at or about the same time.
04

Deductive Value Method

In the situation when neither of the above methods can be applied, appraisers can establish the price at which the goods or identical/similar goods are sold in the greatest aggregate quantity to buyers in the country of importation.
05

Computed Value Method

This method is used as a last resort when none of the above methods can be used. It includes the cost of production, general expenses, and profit in the country of production.

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