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HMRC internal manual

Guidance on the Audit of Customs Values

Method 4: unit price

The Law (Article 142.1(a) of the UCC IA) states:

‘The unit price used to determine the customs value under Article 74.2(c) of the Code shall be the price at which the imported goods or imported identical or similar goods are sold in the Union, in the condition as imported, at or about the time of importation of the goods being valued.’ 

Thus there is no prohibition on taking into consideration sales of identical or similar goods imported by importers other than the importer of the goods to be valued. Nevertheless, in practice, it will be difficult to access details of sales other than those made by the importer in question. Consequently Customs would not normally look beyond sales made by the importer of the goods to be valued.

In circumstances where the unit price, at which the goods being valued are sold in the EU, is known at or about their time of importation, as well as the unit price at which identical or similar goods are so sold; given the hierarchical nature of the valuation system, the unit price of the goods being valued takes precedence (CVS Conc 17 refers).

The term ‘at or about the time of importation’ is not defined. However, ideally sales should have taken place as close as possible to the date of entry to free circulation of the goods to be valued and not exceeding 90 days. The scope for flexibility will depend on market conditions and the volatility of price changes. In circumstances, where, for example, the price changes every six months, it would be reasonable to take into account sales over that period when establishing the unit price. In cases where neither the imported goods nor identical nor similar goods are sold before entry to free circulation of the goods to be valued, it is necessary to proceed from Method 4(a) to Method 4(b) (Article 142.3 of the UCC IA refers).

The unit price must also be based on the price at which the greatest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at the first commercial level after importation at which such sales take place. Thus sales to related parties are to be disregarded. In addition, where for example there are sales to retailers and wholesalers, it is the sales to wholesalers which are to be taken into consideration.

Any sales to a person, who supplies ‘assists’ (Article 71.1(b) of the UCC), are also to be disregarded.