Royalties and Licence
Fees CV
The World Customs
Organisation (WCO) on
31 May announced that a
new advisory opinion on
royalties and licence fees
had been adopted by the
Technical Committee on
Customs Valuation (TCCV)
at its 44th session which
took place in Brussels from
8-12 May.
It provides an opinion
on a scenario where
royalties have been paid by
a franchisee to a franchisor
for the use of the brands
and system connected to the
operation of stores under a
franchise agreement.
The advisory opinion
concludes that as the
payment of royalties in this
particular case is not related
to the imported goods but
to the use of the brands and
system of the franchisor in
the country of importation
for the manufacture and
sale of the products bearing
the intellectual property of
the franchisor, the royalties
are not to be included in
the Customs value of the
imported goods.
Under the World Trade
Organisation (WTO)
customs valuation (CV)
agreement, certain royalties
and licence fees are to be
included in the customs value
of imported goods. You are
reminded that royalties and
licence fees are an important
and complex aspect of CV
and each case must be
examined on its own merits
to determine whether or not
the royalties and licence fees
should be included.
The adopted text is now
subject to approval by the
WCO Council, which is due
to meet in July.
182nd WCO Member
On 30 May the WCO
announced that Antigua
and Barbuda, an Englishspeaking
Island State in
the Eastern Caribbean, had
become its 182nd member.
Antigua and Barbuda will be
part of the WCO’s Americas/
Caribbean region.
Deferment Draft
Rules
The South Africa Revenue
Service (Sars) on 2 June
announced the draft rules
to the Customs Duty Act,
2014 in part 2 of chapter 3,
on which comment is due by
31 July.
Note that the draft part
has not been renumbered as
renumbering will be done
once the part is inserted
into the text of chapter 3.
Customs Duty Act
Workshop
Sars held a workshop on
29 May on the comments
received on the second draft
Customs Duty, 2014 rules.
The workshop included
discussion of the deferment
model, on which comment
is due by 31 July.
Sars also released the
presentation of the two
topics.
Rules of Origin Guide
The WCO on 1 June
announced the addition
of Annexes I-B to III-B
(impact of Harmonised
System Amendments
on rules of origin) and
Appendix (presentation)
to the ‘WCO Guide for
Technical Update of
Preferential Rules of Origin’
to improve the guide’s
usability.
WTO 2017 Annual
Report
On 31 May the WTO
released its annual report
for a year that marked the
entry into force of its Trade
Facilitation Agreement
(TFA).
Duty Calls’ Watch List
Comment on the proposed
increase in the “general”
rate of customs duty on
biaxially oriented propylene
polymers is due by 16 June.
Duty Calls
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