Similar Goods Method
Third customs valuation method based on the transaction value of goods that, while not identical, have closely resembling characteristics and composition.
Principle and Distinction from Identical Goods
The similar goods method is the third customs valuation method (Article 3 of the WTO Agreement, Article 74(2)(b) UCC). It applies when neither the transaction value of the imported goods nor that of identical goods can be used.
Definition of Similar Goods
Unlike identical goods (the same in all respects), similar goods are those that:
- Have closely resembling characteristics and are composed of similar materials
- Are capable of performing the same functions and are commercially interchangeable
- Are produced in the same country as the goods being valued
For example, textiles of the same composition but different patterns, or industrial equipment with slightly different specifications but fulfilling the same function.
Application Rules
The conditions of application are the same as for the identical goods method:
- Same or approximately the same time of export
- Same commercial level and comparable quantity (otherwise adjustments)
- Lowest value used when multiple references exist
Practical Difficulties
This method poses more difficulties than the identical goods method, as the assessment of "similarity" involves a degree of subjectivity. Disputes often focus on the degree of functional and commercial comparability. It is recommended to build a solid file with technical analyses and market data.