DUTYCAST - Custom Tariff and Trade Intelligence

Ad Valorem Tariff

An ad valorem tariff is a customs duty levied based on the value. Ad valorem tariffs are expressed as a percentage of the value of goods cleared through customs. For example 15% of CIF value.

Ad valorem equivalent (AVE)

A tariff that is not a percentage (e.g., dollars per ton) can be estimated as a percentage of the price — the ad valorem equivalent.

Additional taxes and charges

Additional taxes and charges are additional charges, which are levied on imported goods in addition to customs duties and surcharges and which have no internal equivalents. They include tax on foreign exchange transactions, stamp taxes, import license fees, consular invoice fees, statistical taxes and tax on transport facilities.

Administrative pricing

Administrative pricing refers to the fixing of import prices by the authorities of the importing country by taking into account the domestic prices of the producer or consumer (e. g. establishing floor and ceiling price limits; reverting to determined international market values). There may be different price-fixing methods, such as minimum import prices or prices set according to a reference.

Advance import deposit

An advance import deposit is a requirement that the importer should deposit a percentage of the value of the import transaction before receiving the goods (e.g. payment of 50% of the transaction value is required three months before the expected arrival of the goods to the port of entry). See Finance measures. An advance import deposit is a requirement that the importer should deposit a percentage of the value of the import transaction before receiving the goods (e.g. payment of 50% of the transaction value is required three months before the expected arrival of the goods to the port of entry).

Advance payment of customs duties

Advance payment of customs duties is a requirement to pay all or part of the customs duties in advance. However, no interest is paid on these advance payments (e.g. payment of 100% of the estimated customs duty is required three months before the expected arrival of the goods to the port of entry).

Advance payment requirements

Advance payment requirements are related to the value of the import transaction and/or related import taxes. These payments are made at the time an application is lodged, or when an import license is issued.

Anti-competitive measures

Anti-competitive measures are levied to grant exclusive or special preferences or privileges to one or more limited group of economic operators. They include for example restrictive import channels (e.g. Imports of salt and tobacco are reserved for the respective state trading companies) and compulsory national service (e.g. a requirement that imports must be carried by a national shipping company).

Anti-dumping measure

An anti-dumping measure is a countermeasure taken against a dumping action of an exporter. It is considered that dumping takes place when a product is introduced into the commerce of an importing country at less than its normal value, i.e. if the export price of the product exported is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

Anti-dumping duties

Anti-dumping duties are levied on certain goods originating from specific trading partner(s) to offset the dumping margin. Duty rates are generally enterprise-specific.

Applied tariffs

Applied tariffs or applied tariff rates are considered to be the tariff rates applied by a customs administration on imported goods. They are the rates published by national customs authorities for duty administration purposes. These rates can be lower than the WTO bound rates.

Automatic import licensing

Import licensing where approval of the application is automatically granted in all cases.

Bilateral agreement

A bilateral agreement is an agreement between two parties, which is different from a multilateral agreement, which is between more than two parties.

Bilateral quotas

Quotas reserved for a specific exporting country (e.g. maximum of 1 million tons of wheat may be imported from Country A).

Cash margin requirement

A cash margin requirement is a regulation to deposit the total amount of the transaction value in a foreign currency, or a specified part of it, in a commercial bank, before the opening of a letter of credit (e. g. deposit of 100% of the transaction value is required at the designated commercial bank).

Codex Alimentarius

The Codex Alimentarius is a collection of standards, guidelines, and codes of practice to protect consumer health and promote fair practices in food trade. These standards are adopted by the Codex Alimentarius Commission established by the FAO and WHO.

Common external tariff

A tariff rate that is applied uniformly by a common market or customs union to imports from countries outside the region. For example, the European Common Market is a free internal trade area with a common external tariff applied to products imported from non-member countries.

Compound Duty

A compound duty is a combination between a specific tariff rate of duty and an ad valorem duty. (e.g. 10% plus $2.00/KG; 20% less $2.00/KG).

Compulsory licensing

It is a license issued by authorities to different companies or individuals granting them the right to use, make, sell or import a product under patent. The license is issued without the permission of the patent owner. It is also issued under certain conditions and procedures stated under the WTO’s TRIPS agreement (agreement on intellectual property).

COMTRADE database

It is a database held and managed by the United Nations Statistics Division (UNSD). It contains import and export data reported by most countries that go back to 1962.

Concession

It is any sort of trade agreements that have the purpose of reducing import restrictions through minimizing tariffs on imports.

Contingent Protection

It is all measures put in place to form a certain barrier to trade. They are only imposed if certain harmful circumstances on domestic market appear. (e.g. of those measures anti-dumping or countervailing duties (to offset subsidies) and safeguards).

Countervailing measures

A measure by the importing country, in the form of additional duties, to offset the subsidies given to exporters in the exporting countries.

Customs duty

Custom duties are tariffs imposed at the border of a country when entering or leaving its territories. These charges are specified in the national tariff schedule.

Decreed customs valuation

A decreed customs valuation is a practice to determine the value of goods by a decree for the purpose of imposition of customs duties and other charges. It is applied as a mean to avoid fraud or to protect domestic industry. The decreed value de facto transforms an ad-valorem duty into a specific duty (e. g. the so-called "valeur mercuriale" in Francophone countries). Decreed customs valuation can be appealed according to the WTO rules.

Everything But Arms (EBA)

EBA is a European Union initiative that grants full duty-free and quota-free access to the EU Single Market for all products except arms and ammunition originating in least developed countries.

Export Processing Zone (EPZ)

They are fenced-in zones that give the right to the firms within them to import duty-free inputs as long as they will be used in the production of exported goods. These zones has become more flexible in terms of permitting domestic sales upon payment of duties when leaving the zone. EPZs provide to the firms involved an environment free of regulatory necessities.

Finance measure

Finance measures are intended to regulate the access to and cost of foreign exchange for imports and define the terms of payment.

Free trade agreement (FTA)

Free trade agreements takes place between one or more countries to establish a free trade zone among them.

General tariff

The general tariff is imposed on a product imported from a country that is neither granted the most-favoured nation status nor is subjected to a preferential arrangement.

Global quota

A global quota is the limit of quantities allowed to enter a country as imports. It is applicable to all import sources combined regardless the country of origin.

Harmonized System (HS)

It is a system of classification for different traded goods that has been set up by the World Customs Organisation (WCO). All participating countries have to follow the same classification for their products to facilitate the customs related processes. At the international level, the Harmonized System for classifying goods is a six-digit code system.

Hygienic requirements

Hygienic requirements are the requirements assessing food hygiene in terms of quality, composition, and safety. This assessment is practiced in the form of analysis methods and sampling (e.g. requirements on water quality, use of detergents and hygienic quality of equipment in the cow-milking farm).

Import licensing

It is a group of administrative procedures to obtain a licence to be able to import a certain product.

International standards, guidelines and recommendations

International standards, guidelines, and recommendations include:

Inside quota tariff rate (IQTR)

The tariff rate applicable to a product imported within the limits of a tariff quota volume.

International Plant Protection Convention (IPPC)

The International Plant Protection Convention (IPPC) is a 1951 multilateral treaty overseen by the Food and Agriculture Organization that aims to secure coordinated, effective action to prevent and to control the introduction and spread of pests of plants and plant products. Standards developed under the auspices of the IPPC Secretariat are recognized by the World Trade Organization’s Agreement on the Application of Sanitary and Phytosanitary measures (SPS Agreement) and the IPPC Secretariat is the only international plant health standard-setting organization.

Labelling requirement

Labelling requirements are measures defining the information which should be provided to the consumer. Labelling is any written, electronic, or graphic communication on the consumer packaging or on a separate but associated label (e.g. labels that specify the storage conditions; 5 degree C maximum, or room temperature for dry foods).

Licence combined with or replaced by special import authorization

Licence combined with or replaced by special import authorization means that a special import authorization required, in addition to or instead of, a licence issued by the main licensing body (usually the Ministry of Trade). This authorization or a requirement for an inscription in a register is required by a specialized authority which is coordinating the sector of the domestic economy related to the concerned products (e. g. A special import authorization from the Ministry of Agriculture is required to import rice).

Licence for specific use

A licence for specified use is a licence granted only for imports of products to be used for pre-specified purpose. Normally granted for use in operations generating anticipated benefit in important domains of the economy (e.g. licence to import steel is granted only if it is used for the construction of a bridge).

Licence linked with local production

A licence linked with local production is a licence granted only for imports of products with linkage to local production (e.g. licence to import coal is granted only if it is used for the production of electricity).

Licence linked with non-official foreign exchange

A licence linked with non-official foreign exchange is a licence granted only if non-official foreign exchange is used for the import payment.

Licence with no specific ex-ante criteria

A licence with no specific ex-ante criteria is a licence issued at the discretion of the issuing authority. It may also be referred to as a discretionary licence (e.g. imports of automobiles are subject to discretionary licence).

Local content measures

Local content measures are requirement to use certain minimum levels of locally made component, restricting the level of importing components (e.g. Imports of clothing is allowed only if more than 50% of the materials used are originating from the importing country).

Market Access

Refers to the ease of penetration for a foreign product into the domestic or local market. The more competition there is in the local market the hardest it was for the foreign products to access it. The market access can also be controlled by the domestic authorities through the implementation of certain taxes and import regulations.

Marking Requirements

Marking requirements are measures defining the information for transport and customs that the packaging of goods should carry (e.g. country of origin, weight, special symbols for dangerous substances, etc).

MFN (most-favoured-nation) tariff

MFN tariffs are the tariffs applied by WTO members to goods imported from any other WTO member countries in respect of the Most-Favoured Nation principle.

Mirror Data

Mirror data are statistics constructed on the basis of data reported by partner countries. They constitute a second-best solution to get an approximation of a non-reporting country data. In fact, even though better than no data at all, they present several shortcomings. For example, it does not cover trade with other non-reporting countries, inverts the reporting standards by valuing exports in CIF terms and imports in FOB terms, and may hide the actual source of supply in the event of transshipments.

Mixed Tariff

A mixed tariff is a rate of duty that is based on a conditional choice between an ad valorem duty and a specific duty, subject to an upper (ceiling) and/or a lower (floor) limit (e.g.: 30% or £2 per kg, whatever is the highest).

Multi-column Tariff

A multi-column tariff is a tariff schedule that discriminates between the various trading partners. Tariff rates in the first column might be reserved for countries receiving only the general tariff rate and the second column may display the favoured nation (MFN) treatment. The third and additional columns would contain the rates applicable to various preferential trade arrangements, such as free-trade area partners or those given to developing countries under the Generalized System of Preferences (GSP).

Multilateral trade agreements

Multilateral agreements are intergovernmental agreements aimed at expanding and liberalizing international trade under non-discriminatory, predictable and transparent conditions set out in an array of rights and obligations.

Multiple exchange rates

Multiple exchange rates are varying exchange rates for imports, depending on the product category. Usually, the official rate is reserved for essential commodities while the other goods must be paid at commercial rates or occasionally by buying foreign exchange through auctions (e.g. only the payment for infant food and staple food imports may be made at the official exchange rate).

National Tariff Line

National Tariff Line codes refer to the classification codes, applied to merchandise goods by individual countries, that are longer than the HS six-digit level. Countries are free to introduce national distinctions for tariffs and many other purposes. The national tariff line codes are based on the HS system but are longer than six digits. For example, the six-digit HS code 010120 refers to Asses, mules, and hinnies, live, whereas the US National Tariff line code 010120.10 refers to live purebred breeding asses, 010120.20 refers to live asses other than purebred breeding asses and 010120.30 refers to mules and hinnies imported for immediate slaughter.

Non-automatic licensing

A non-automatic licence is an import licence which is not granted automatically. The licence may either be issued on a discretionary basis or may require specific criteria to be met before it is granted. See also multi-agency classifications of NTMs.

NTMs

Non-tariff measures include market requirements, taxes, and procedures that countries apply to products that are imported or exported. These can include for example health regulations on food quality, rules about packaging, minimum safety standards for manufactured products, internal taxes that are levied in addition to import duties and many more. Market Access Map provides information on a wide range of regulations applied by countries as well as links, where available, to the responsible institutions and / or the regulations themselves to help users further research the product and process-related compliance issues involved in exporting or importing.

OIE International Standards

OIE’s international standards are aimed at improving the prevention and control of animal diseases, including those transmissible to humans (zoonoses), and to improve animal welfare worldwide; in particular, by establishing high-quality national Veterinary Services. They also constitute the animal health standards of reference recognized by the World Trade Organization (WTO), to ensure health safety in the international trade of animals and their products. These intergovernmental standards are revised and adopted each year by the 180 Member Countries of the OIE

Outside quota tariff rate (OQTR)

An OQTR is the tariff rate applicable to products imported in excess of a tariff quota volume. It is usually much higher than the one applied to imports within the quota.

Packaging requirements

Packaging requirements are measures regulating the mode in which goods must or cannot be packed, or defining the packaging materials to be used (e.g. Restricted use of PVC films for food packaging).

Para-tariff measures

Para-tariff measures are measures that increase the cost of imports in a similar manner to tariffs. These measures include customs surcharges, additional taxes and charges (e.g. tax on foreign exchange transactions, stamp tax), service charges, internal taxes, and charges levied on imports (e.g. general sales taxes, excise taxes) and decreed customs valuation.

Preferential trade arrangements (PTAs)

Preferential trade arrangements remove barriers to trade between members and offer preferential access to markets on a reciprocal basis. In addition to trade in goods, PTAs usually cover trade in services and investment provisions as well as remove both tariff and non-tariff barriers to trade. They can also include a range of provisions on customs cooperation and trade facilitation as well as harmonize standards and encourage regulatory cooperation in various areas.

Private/Voluntary standards

The term private standards as used by WTO, FAO or UNIDO relates to standards developed by non-governmental entities. These include individual firms, industry organizations, and non-governmental organizations, among others. As such, compliance to these standards is not legally required by national governments or multilateral regulations as opposed to public standards. Private standards vary widely in their objectives and scope.

Prohibition of foreign exchange allocation

Prohibition of foreign exchange allocation means that no official foreign exchange allocations available to pay for imports (e.g. foreign exchange is not allocated for imports of luxury products such as motor vehicles, TV sets, jewelleries).

Pre-shipment inspection

Pre-shipment inspection are a physical inspection of goods before they are shipped in the country of export, which establishes the exact nature of the goods. The inspection assures that the goods are in accordance with the accompanying documents that specify their customs tariff code, quality, quantity and price (e. g. a pre-shipment inspection of textile imports by a third party for verification of colours and types of materials).

Prohibitions

A non-tariff measure used to control imports. There are total prohibitions (e. g. Import of "motor vehicle with cylinder under 1500c" is not allowed to encourage domestic production), Suspensions of issuance of licences (e.g. Issuance of licence to import "motor vehicle with cylinder under 1500cc" is suspended until further notice.), seasonal prohibitions (e.g. Import of strawberries is not allowed from March to June each year.), temporary prohibitions (e.g. Import of certain fish is prohibited with immediate effect until the end of the current season), prohibitions of products infringing patents or intellectual property rights (e.g. Import of imitation brand handbags is prohibited) and prohibitions for non-economic reasons (e.g. imports of books and magazines displaying pornographic pictures are prohibited).

Quarantine Requirement

A quarantine requirement is a requirement to detain or isolate animals, plants or their products on arrival at a port or place for a given period in order to prevent the spread of infectious or contagious disease, or contamination (e.g. quarantine requirements for live dogs; plant quarantine measures to terminate or restrict the spread of harmful organisms and mitigate the adverse impacts thereof).

Quantity control measures

Quantity control measures are aimed at restraining the quantity of goods that can be imported, regardless of whether they come from different sources or one specific supplier. These measures can take the form of restrictive licensing, fixing of a predetermined quota, or through prohibitions.

Quotas

Quotas are explicit limits on the quantity of a good that can be imported or exported during a specified time period. Such limits are usually measured by physical quantity but sometimes by value. A quota may be applied on a selective basis, with varying limits set according to the country of origin or destination or bilaterally (to a single trading partner), or on a global basis (to all countries) that specifies only the total limit and thus tends to benefit more efficient suppliers. Quotas are frequently administered through a system of licensing. Non-automatic licensing usually the means for administering a quota. GATT Article XI prohibits the use of quantitative restrictions, subject to specific exceptions. For example, Article XIX permits quotas to safeguard certain industries from damage by rapidly rising imports.

Quotas linked with the purchase of local goods

Quotas linked with the purchase of local goods are quotas defined as a percentage of the value of goods purchased locally (i.e. in the importing country) by the exporter (e.g. imports of refined oil in the volume are limited to the volume of crude petroleum purchased locally).

Regional trade agreements (RTAs):

The WTO uses the term Regional trade agreements (RTAs) as a generic name for all reciprocal agreements such as customs unions, FTAs, and partial scope agreements. This can be explained by the fact that, initially, such treaties were within the jurisdiction of the WTO’s Committee on Regional Trade Agreements. In reality, such trade agreements do not have to include members from the same region (e.g. the EU-Canada or Peru-South Korea FTAs).

Regulations concerning terms of payment for imports

Regulations concerning terms of payment for imports are regulations related to conditions of payment for imports and for obtaining and using credit to finance imports (e.g. no more than 50% of the transaction value can be paid in advance of the arrival of goods to the port of entry).

Rules of Origin (ROO)

Origin can be understood as the economic nationality of the good. All internationally traded goods are required to have an origin when they are declared to customs at the point of import . Rules of origin enable to establish the origin of the good. There are two types of origin: preferential (which are the key focus of this tool) and non- preferential. Both are determined by respective rules of origin.

Safeguard measures

A WTO member may take safeguard measures (i.e., restrict imports of a product temporarily) to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, serious injury to the industry.

Seasonal duties

Seasonal duties are duties applicable at certain times of the year, usually in connection with agricultural products. For example, imports of "Fresh perry pears, in bulk" from 1 August to 31 December may enter free of duty, while in other months, positive duties (seasonal duty) are applied.

Seasonal quotas

Seasonal quotas are quotas established for a given period of the year, usually set for certain agricultural goods when the domestic harvest is in abundance (e.g. quota for import of strawberries is established for imports from March to June each year).

Specific tariff

A specific tariff is a tariff charged as fixed amount per quantity unit such as $100 per ton.

Sanitary and Phytosanitary measures (SPS)

Any measure applied: (a) to protect animal or plant life or health within the territory of the Member from risks arising from the entry, establishment or spread of pests, diseases, disease-carrying organisms or disease-causing organisms; (b) to protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs; (c) to protect human life or health within the territory of the Member from risks arising from diseases carried by animals, plants or products thereof, or from the entry, establishment or spread of pests; or (d) to prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests. Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and procedures including, inter alia, end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety.

Subsidy

Subsidies are grants given to enterprises/firms by their governments. There are two main types of subsidies: export and domestic. An export subsidy is a grant given to enterprises engaging in international trade through exportations. A domestic subsidy is a grant not directly linked to exports.

Tariff binding

Tariff binding is a commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.

Tariff escalation

In the case of tariff escalation, import duties are higher on semi-processed products than on raw materials, and higher still on finished products. This practice protects domestic processing industries and discourages the development of processing activity in the countries where raw materials originate.

Tariff peaks

A tariff peak is a relatively high tariff, usually on “sensitive” products, amidst generally low tariff levels. For industrialized countries, tariffs above 15% are generally recognized as “tariff peaks”.

Tariff rate quota

A tariff-rate quota is a combination of an import tariff and an import quota in which imports below a specified quantity enter at a low (or zero) tariff and imports above that quantity enter at a higher tariff. A tariff quota has thus two parts, the Inside Quota Tariff Rate, and the Outside Quota Tariff Rate.

Tariff regime

A tariff regime is a set of tariff rates covering all products for a particular importing country, exporting country, preferential status (specific preferences or MFN/General rates) and time period.

Tariffs

Tariffs are customs duties on merchandise imports, levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kg). Tariffs can be used to create a price advantage for similar locally-produced goods and for raising government revenues. Trade remedy measures and taxes are not considered to be tariffs.

Technical barriers to trade (TBT)

Technical Barriers to trade are measures referring to the technical specification of products or production processes and conformity assessment systems thereof.

Technical tariff

A customs tariff whose tariff rate is determined by specific technical factors of the product such as size or alcohol content (e.g a 9% tariff levied on dairy spreads with a fat content between 39% and 60%)

Testing requirements

A testing requirement is a requirement for products to be tested against a given regulation, such as performance level. It includes sampling requirement (e.g. a testing on a sample of motor vehicle imports is required against the required safety compliance and its equipment).

Trade agreement

A trade agreement is a contractual agreement among two or more countries concerning policies affecting their trade relationship. Trade agreements may be signed bilaterally or multilaterally and may concern several types of measures such as tariffs, nontariff barriers or prohibitions.

Trade Promotion Organization (TPO)

TPO are organisations to promote trade.

Trade remedies

Trade remedies include anti-dumping duties, countervailing measures or safeguards measures.

Trade Support Institution (TSI)

Trade support institutions (TSIs) are national institutions charged with enhancing both the international competitiveness of the business community and their integration into the global economy.

Untapped export potential

Untapped export potential is the difference between actual and potential exports. They are estimated by the expected growth in supply and demand in the coming five years, taking into consideration different trade relationships and market access conditions.

UPOV

International Union for the Protection of New Varieties of Plants.

Variable levies

A customs duty rate which varies in response to domestic price criterion.

WCO

WCO stands for the World Customs Organization. It is a multilateral organization located in Brussels which aims to simplify and rationalize customs procedures among participating countries.

Wholly obtained products

It is a provision related to the Rules of Origin that help determine the origin status of different products. This provision states that if a product is 100% obtained from a certain territory than the product can hold its origin. (e.g. a manufactured good is 100% obtain in country X, it is concerned to have the origin of country X).