The draft system of terms and conditions for determining the customs value, issued in accordance with paragraph (i) of Article (31) of Customs Law No. (20) of 1998 and its amendments, revealed the most important amendments that the government intends to introduce into the system.
According to what Hala News has seen, the government aims for the new amendments; Finding legislative texts that allow the customs department to determine the customs value of imported goods, in line with the customs law and international agreements.
Here are the details of the revised draft system: 
The system of terms and conditions for determining the customs value
Article 1 - This system is called (the system of terms and conditions for determining the customs value for the year 2022) and it shall come into force after thirty days from the date of its publication in the Official Gazette.
Article 2 a- The following words and expressions, wherever mentioned in this system, shall have the meanings assigned to them below unless the context indicates otherwise:
Law: The customs law in force.
Directorate
: Directorate of Value Affairs in the department.
Customs value: The value approved by the department for imported goods in accordance with the provisions of the law and this system in accordance with any of the customs conditions in which goods imported into or through the Kingdom enter, and it is the basis for collecting or guaranteeing customs duties and other taxes.
Information-carrying media: The carriers designated for programs, excluding integrated circuits and similar tools, manufactures, and devices that include such circuits and semiconductors such as calculators, computers and video recorders.
Software: All types of software that process data, except for audio, cinematic, or video recordings.
The time of exporting the goods: It is the date of shipment of the goods from the country of export, and it means the date of the bills of lading for goods received by sea or by air and the date of indicating the source of the goods arriving by land.
b- The definitions mentioned in the law shall be adopted wherever they are stipulated in this system, unless the context indicates otherwise.
Article 3- Transaction value (the price paid or payable):
The term price actually paid or payable under the provisions of paragraph (a) of Article (28) of the Act includes all actual payments made or to be paid as a condition of the sale of the imported goods by the buyer to the seller or by the buyer to a third party in fulfillment of the seller's obligations.
Article 4 - Acceptance of the transaction value:
A- The transaction value is accepted according to the following conditions:
1- Completion of all elements of the deal, including the following:
There should be a sale with the intention of exporting to the Kingdom.
There is a price actually paid or payable that can be determined based on objective and quantitative data.
There should be goods imported into the Kingdom.
2- Not to violate the conditions stipulated under the provisions of Articles (28/a/1), (28/a/2), (28/a/3) and (28/a/4) of the law.
3- Justifying the reasons for doubt mentioned in Article (5) of this system by providing evidence acceptable to the department.
4- Presenting the original paper and electronic documents required by the department to verify the value of the transaction.
5- Declare all discounts obtained.
6- Declaring all customs value additions mentioned in paragraph (f) of Article (28) of the law.
B- A specific condition or consideration in accordance with the provisions of Article (28/a/2) of the law is considered to be any of the following cases, including but not limited to:
1. If the determination of the value of the imported goods by the seller depends on the buyer purchasing specific quantities of other goods.
2. If the price of the goods depends on the price or prices at which the importer will sell other goods to the seller of the imported goods.
3. If the price is determined on the basis of a payment method that is not related to the imported goods.
C- Excluded from the provisions of Paragraph (B) of this Article are the conditions or considerations related to the sale for the purposes of producing or marketing goods imported into the Kingdom.
Article 5- Reasons for doubting the value of the transaction:
A- Subject to the provisions of Paragraph (H) of Article (28) of the Law, each of the following is considered a reason to doubt the value of the transaction:
1. Mismatch of the information contained in the documents attached to the customs declaration, including the condition of shipment and delivery, values of goods and any other documents.
2. The fact that the goods actually received do not match in terms of type, quantity and origin with what is declared in the documents attached to the customs declaration.
3. That commercial invoices be issued by a party other than the manufacturers, their branches, or their officially approved export agents in a place other than their origin, or they are issued by a party other than the actual sellers of the merchandise.
4. Declaration of one total value under commercial invoices for goods of different types or specifications.
5. Declaring one single value for goods of different specifications and of the same type.
6. The declared prices shall be lower than the normal competitive prices for identical or similar goods imported into the Kingdom.
Article 6- A- Each of the following cases does not constitute a sale incident within the meaning of Paragraph (a) of Article (28) of the Law:
1- Goods received free of charge.
2- Goods imported for sale.
3- Goods that are imported from branches that are not legally separate from the parent companies.
4- Leased goods.
5- Goods loaned to importing companies.
6- Goods (waste or scrap) that are paid to the importer in return for obtaining them.
B- The customs value of the cases mentioned in Paragraph (A) of this Article shall be determined in accordance with the provisions of Articles (29-31) of the Law, taking into account what is stated in Articles (21) and (22/b) of this system.
Article 7 - When applying the provisions of paragraph (d) of Article (28) of the law, to determine the test (standard) value of the imported goods, the surrounding conditions of the nature of those goods, the nature of the industry itself and the season in which they were imported shall be taken into account.
What is added to and excluded from the customs value:
Article 8- Discounts:
A- The discounts specified below are considered acceptable to the Department for the purposes of determining the customs value, provided that it is proven that the importer has obtained them:
1. Commercial level discount.
2. Quantity discount.
3. Discount caused by import volume.
4. Cash discount.
B- The discounts specified below are not acceptable to the Department for the purposes of determining the customs value:
1. Compensatory discount.
2. Ambiguous opponent.
C- The Directorate may consider any discounts that appear or arise during the sale of imported goods for the purpose of determining the customs value within the following conditions:
1. That the importer actually obtained the discount before the process of importing the goods.
2. The declared price of the goods after discounting should be within the competitive value of identical or similar goods exported to the Kingdom.
3. That the discount relates to the goods being valued.
Article 9- Guarantee of imported goods:
a- The value of the goods guarantee is considered part of the customs value if it is a condition for sale.
B- The value of the guarantee is considered part of the customs value in the event that the importer pays it to a third party at the seller’s request and in accordance with the condition mentioned in paragraph (a) of this article.
Article 10 - Interest costs:
Interest received under financing arrangements to which the buyer (importer) is a party and relating to the purchase of imported goods shall not be considered part of the customs value, whether such interest is at the request of the seller, the bank or any other natural or legal person, and even if the goods are valued under a non-valued method deal, subject to the following terms:
a- That the interest costs are separate from the price actually paid or payable for the goods.
b- The financial arrangements have been made in writing.
C- That the buyer proves, when necessary, that the declared interest rate does not exceed the interest rate of the transactions prevailing at the same time and in the country in which the financing was provided.
Article 11 A- When determining the customs value of the media carrying programs and information, the value of those media and the value of the programs they contain shall be considered an integral part of the customs value.
B- The value of programs or data obtained through the Internet shall not be considered part of the customs value unless they are essential to the operation of goods that have been, are or will be imported across borders.
c- The customs value of integrated circuits, semiconductors and similar tools, manufactures, devices, audio, cinematic and video recordings is determined in accordance with the provisions of Articles (28-31) of the law.
Article 12 A- The Department shall base the distribution of the value of the goods and services provided by the buyer to the seller free of charge or at a reduced value in accordance with the provisions of Paragraph (and/4) of Article (28) of the law when determining the customs value of the imported goods on two factors:
1. The value of goods and services.
2. Making the appropriate distribution of the value of the imported goods and services in accordance with the documents submitted by the importer to the Department under a written agreement between the Department and the importer.
B- The value of the goods and services provided by the buyer to the seller free of charge or at a reduced value shall be determined according to the following:
1. The value of the goods or services provided by the buyer to the seller of the goods or service subject of customs evaluation, provided that there is no relation between them.
2. Subject to the provisions of Clause (1) of this paragraph, the test value method shall be followed if there is a correlation between the seller of the goods or service and the buyer.
3. The value of identical or similar goods, taking into account the value additions mentioned in Article (28/f/7) and (28/f/8) of the law.
4. The value of production of goods and services if they are produced by the buyer.
5. The full rental value if the goods and services are leased by the buyer.
C- The value of freight charges, fees and taxes paid by the buyer in the country of export for the goods and services provided by the buyer to the seller shall be added.
D- If the product was previously used by the importer, the original value of the product shall be approved, minus the previous consumption value.
Article 13- Property rights:
A- In addition to what is stated in paragraph (f) of Article (28) of the law, the value of licenses and royalties paid by the buyer in return for his exploitation of a property right shall be included in the customs value as follows:
1- Property rights that are paid to a third party on the same invoice or in a separate contract.
2- The property rights that the importer must pay to the seller (the patent holder) for the right to incorporate or use the patented concentrate in the products for resale.
3- Licensing fees paid by the seller for the right to resell trademarked merchandise.
4- Licensing fees that the importer must pay to the seller in return for the right to use a patented technology in return for its use in manufacturing operations.
5- Property rights paid to the licensee located in the country of import.
6- Royalty and licensing fees paid to the licensor who is not related to the manufacturer.
b- Notwithstanding what is stated in paragraph (f) of Article (28) of the law, the proceeds from the right to reproduce goods in the Kingdom are excluded from the price actually paid or payable for the imported goods when determining the customs value.
C- The costs paid by the buyer in exchange for the right to distribute or resell the imported goods shall be included in the price actually paid or payable when determining the customs value if it is a condition for exporting to the Kingdom.
Article 14- a- For the purposes of implementing the provisions of paragraphs (a, b) of Article (30) of the law, the phrase “issued at or about the same time as the goods being evaluated” means that the goods were exported within a period of 90 days before or After the export of the goods being evaluated.
b- For the purposes of implementing the provisions of paragraphs (a, b) of Article (30) of the law, the customs value is determined according to the transaction value of identical or similar goods from the same country of export.
Article 15- When determining the customs value according to the transaction value of identical or similar goods, the following shall not be taken into consideration:
(a) Goods produced by another person, except when there are no identical or similar goods produced by the same person.
b- Identical or similar goods imported by the same importer.
Article 16 - The phrases identical goods and similar goods mentioned in the law do not include - as the case may be - goods that embody or reflect engineering, technical, or development works, designs, plans and drawings, which are included in the transaction value in accordance with the provisions of Paragraph (f) of Article (28) of Law.
Article (17): Deductive Method:
A- The phrase “the unit price at which the goods were sold…… in the largest total quantity at the time of importing the goods” mentioned in paragraph (C/1) of Article (30) of the law means the price at which the largest number of units in sales are sold to unrelated persons. With the people who buy from them.
B- The department, when applying the deductive method for calculating the customs value, shall take into consideration the profit and general expenses referred to in paragraph (C/1) of Article (30) of the law as a whole for the purposes of deduction, and shall be determined on the basis of the information provided to it by the importer or his representative. On the condition that the information provided is consistent with the information obtained for sales that took place in the Kingdom for the same category and type of goods.
C- The term overhead includes direct and indirect marketing costs for goods under evaluation.
D- For the purposes of implementing paragraph (c) of Article (30) of the law, the term identical or similar goods includes goods imported from the same country from which the goods being valued were imported, in addition to goods imported from other countries.
e- For the purposes of implementing Paragraph (C/3) of Article (30) of the law, deductions for value added due to additional manufacturing are based on objective and quantitative information related to the cost of this work and are based on manufacturing equations and other industrial practices.
Article 18- Calculated value:
A- The Department may use the calculated value method in determining the customs value stipulated in Paragraph (D) of Article (30) of the law in cases where the buyer and seller are related and the producer is willing to provide the Department with the necessary cost and provide facilities for any verification that may be required for it regarding distance.
B- When using the calculated value method for the costs referred to in paragraph (d) of Article (30) of the law, the value of the elements specified in paragraph (4) of Article (28/f) of the law shall be added, with the exception of engineering, designs, development, artwork, plans and drawings if conducted in the Kingdom.
C- The amount of profit and general expenses stipulated in paragraph (d) of Article (30) of the law shall be determined on the basis of the information provided by the seller (exporter) or his representative to the extent that these expenses are consistent with the figures usually reflected in the sales of goods from The same class and type of goods being valued as produced by producers in the exporting country for export to the Kingdom.
D- When using information other than that provided by the producer or provided in his name for the purposes of determining the calculated value, the department shall inform the importer upon his request of the source of this information, data used and calculations based on these data, taking into account the provisions of paragraph (j) of Article (31) of the law.
E- The “general expenses” stipulated in this article include the direct and indirect costs of producing goods for export to the Kingdom that are not mentioned in paragraph (D/1) of Article (30) of the law.
Article 19 - Last resort:
A- When it is not possible to determine the customs value in accordance with Articles (28-30) of the law, the department may follow any of the following bases for determining the customs value:
1. The transaction value of identical or similar goods exported from a country other than the country of export for the goods being valued in the Kingdom.
2. The value of identical or similar imported goods whose value was previously determined in accordance with the provisions of paragraphs (c) and (d) of Article (30) of the law.
3. The transaction value of identical or similar goods imported into the Kingdom at any time in accordance with the nature of the imported goods.
4. According to Article (30/c) of the Law, without being bound by the stipulated time requirement.
B- If the customs value cannot be determined according to the bases specified in Paragraph (a) of this Article, the Department may determine it through customs values previously determined for identical or similar goods.
C- If the customs value cannot be determined according to the bases specified in Paragraph (B) of this Article, the Department may determine it through any method it deems appropriate and in a manner that does not conflict with the provisions of Article (31/a) of the law.
Article 20 - Subject to the provisions of Paragraph (g) of Article (31) of the Law, the Department has the right to request documents, contracts, documentary credits, and original paper and electronic commercial correspondence.
Article 21- If the department finds that the goods imported into the Kingdom are leased from the country of export, their customs value shall be determined according to the following bases:
a- By applying Article (30) of the law.
b- If it is not possible to determine the value of the leased goods in accordance with the provisions of Article (30) of the law, then Article (31) of the law shall be applied, taking into account the following methods, which are most appropriate to the information provided by the importer or available to the department:
1- According to price lists with either the brand agent or the private distributor that are valid for new or used goods, and in the absence of lists for used goods, the lists can be used for new goods, taking into consideration the consumption of the goods being evaluated.
2- If the lease contract includes the value of the goods, and if the importer wishes to purchase them at the beginning of the contract period, this value shall be approved as the customs value of the goods to be evaluated in accordance with the provisions of the law and this regulation.
3- If the lease contract includes the value of the goods, and if the importer wishes to purchase them during or at the end of the contract, this value is taken in addition to the rent value for the previous period - whose rent was paid - and this value is considered as the customs value of the goods to be evaluated in accordance with the provisions of the law and this regulation .
4- An estimated value of the goods to be evaluated can be determined by determining the economic life of the goods and multiplying it by the rent value agreed upon in the contract between the exporter and the importer, and considering the total value as the customs value in this case, taking into account the economic life of the new and used goods, so the “complete economic life” is taken for new merchandise and the “remaining economic life” for used merchandise.
Article 22- For the purposes of this system and for the purposes of applying Articles (28-31) of the law in determining the customs value, the value of the goods that are imported as a substitute for the imported goods that may be damaged or are likely to be damaged during the shipping process shall be determined according to the following:
a. In the event that the substitute goods are received in a separate shipment with a free value, the free value shall be rejected and the customs value of the goods shall be determined in accordance with Articles (30-31) of the law.
B. In the event that substitute goods are received in the same shipment with a free value, no customs value is determined for them, and the transaction value is considered inclusive of the total shipped quantity, provided that the goods are perishable goods according to the bases issued by the department for this purpose.
Article 23 A- When applying the provisions of Articles (28-31) of the law, the department may use accounting information to determine the customs value, in a manner consistent with generally accepted accounting principles in the Kingdom or the country of production of the goods, as the case may be.
b- For the purposes of this Article, GAAP means the recognized consensus or opinion at a particular time regarding the following:
1. Economic resources and liabilities that should be recorded as assets and liabilities.
2. Changes in assets and liabilities that should be recorded.
3. How to measure assets and liabilities and changes in them.
4. Information that should be disclosed.
5. Financial statements to be prepared.
These standards may be general guidelines or detailed practices and procedures.
Article 24 The Director shall issue the instructions, principles and decisions necessary to implement the provisions of this Bylaw.
Article 25 - The customs value instructions No. (6) of 2000 shall be repealed.

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