Fall-back method
Sixth and last customs valuation method, allowing value to be determined by reasonable adaptation of previous methods when none can be applied directly.
Definition and principle
The fall-back method is the sixth and last customs valuation method. It applies when none of the five previous methods can be used. It allows customs value to be determined by reasonable means consistent with the general principles and provisions of the WTO Customs Valuation Agreement.
Legal framework
The method is provided for by article 74, paragraph 3 of the UCC and corresponds to article 7 of the WTO Customs Valuation Agreement. The interpretive note to article 7 and the advisory opinions of the WCO Technical Committee on Customs Valuation frame its application. This method grants certain flexibility but within strict limits.
Application rules
The customs value determined by this method cannot be based on:
- The selling price in the domestic market of the country of exportation
- A system accepting the higher of two alternative values
- The price of goods on the domestic market of the EU produced in the EU
- Minimum values or arbitrary or fictitious values
- Costs of production other than those computed under method 5 for identical or similar goods
Practical application
- The method generally consists of a flexible adaptation of methods 1 to 5, relaxing certain strict conditions (e.g., broader timeframes for identical/similar goods)
- Customs authorities must inform the importer of the method used and give them the opportunity to make observations
- In case of disagreement, the importer may exercise a right of appeal against the valuation decision
- This method is often used for goods imported other than by sale (free samples, leased goods, intra-group transfers without sale)