EXAMINATION OF CUSTOMS DUTIES ON IMPORTS UNDER TARIFF BARRIERS

Gökhan Turhan

EXAMINATION OF CUSTOMS DUTIES ON IMPORTS UNDER TARIFF BARRIERS
I. OVERVIEW
II. CUSTOMS DUTIES ON IMPORTS
A) Types of Customs Duties
B) National Customs Tariff
C) Purpose of Customs Duties on Imports
D) The Main Principle of WTO System and Past Tariff Negotiations
E) Tariff Concessions and Tariff Bindings
F) Modification or Withdrawal of Tariff Concessions
III. IMPLEMENTATION OF CUSTOMS DUTIES ON IMPORTS
A) Proper Classification for Tariff Purposes
B) Valuation for Customs Purposes
C) Determination of Origin
IV. CONCLUSION

I. OVERVIEW
Market access for goods and services from other countries may be restricted by many ways and methods; however barriers to market access can be divided into two main categories which are (1) tariff barriers and (2) non-tariff barriers. In our article we will focus on the issue of tariff barriers. In general speaking, tariff barriers includes customs duties and other relevant charges on imports.
In order to reach a better understanding, the term of custom duty shall be described in a broad manner, since the term of custom duty is not defined under GATT 1994 or in any other multilateral agreements on trade in goods.1 In a broad manner, a customs duty is a financial charge or tax on imported goods. Before we examine customs duties it would be beneficial to understand the differences between the internal charges and customs duties. In order to understand whether a charge is kind of an internal charge or customs duty, we should look at the aim of the charge. The time when charging accrues does not matter in that sense. In the case, such charge accrues due to importation event; the type of charge is customs duties.2

II. CUSTOMS DUTIES ON IMPORTS

A) Types of Customs Duties
Customs duties are classified as ad valorem and non-ad valorem. An Ad valorem customs duty is calculated based on the price of the imported good. In the case that the relevant authority charges ad valorem customs duty on imported good, the value of the good shall be taken into account carefully, since an ad valorem customs duty is a percentage of the value of the imported good. As an example, assume that a country charges 10 per cent ad valorem customs duty on a certain kind of imported product. In that case, the duty on such product which is worth $1,000 will be $100.3
The other type of customs duties is non-ad valorem customs duty. A non-ad valorem custom duty is calculated based on a unity of quantity such as weight, length, area or numbers of such imported good. A duty of $10 per hectolitre of water or a duty of $5000 on each car can be given as examples for non-ad valorem customs duties.4
It should be noted that that ad valorem customs duties are by far the most common type of customs duties.

B) National Customs Tariff
Customs tariff is a detailed and structured list of product descriptions and their corresponding customs duty. The customs duties or tariffs, which are due on importation, can be seen in a country’s customs tariff. C) Purpose of Customs Duties on Imports
Generally speaking, almost all of the developing countries impose high customs duties on goods for a few reasons. First of all, customs duties are implemented by the governments of developing countries on imported goods, they provide revenue. The second reason is that customs duties improve economic returns to firms and suppliers of resources to domestic industry that face competition from foreign imports. In other words, within the scope of second reason, customs duties are being used as tools for protecting and promoting domestic products. Therefore, consumers prefer cheap domestic products of their country in the relevant market to expensive products imported from other countries with high customs duties.

D) The Main Principle of WTO System and Past Tariff Negotiations
As a main principle, imposing customs duties on imported goods