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WTO Considers Updating Decision on Customs Valuation of Software

Tuesday, May 20, 2014
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization’s Committee on Customs Valuation is considering a proposal by Uruguay to update a 1984 decision that allows members to value software or data for customs purposes on the basis of the cost of the carrier media (e.g., magnetic tapes, CDs and DVDs) in which they are transported from one country to another. Uruguay said that under this decision software on a CD-ROM may be valued at $5 while the same software imported using a USB key could be valued at $1,000. Given the growing popularity of USB flash drives and similar devices as carrier media for software, Uruguay is calling for an amendment clarifying that such items are considered integrated circuits, semiconductors and devices incorporating same, which the 1984 decision already exempts from the definition of carrier media.

According to the WTO, Argentina and Mexico supported the proposal and the U.S., Canada, the European Union, Japan and the Philippines said they are open to it. The committee chair asked the WTO secretariat to prepare a study on the trade volumes involved, as requested by China, and said there is a need for further discussions.

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