Processed film, video, cinematographic and sound recordings: film for broadcast transmission
In most cases, videotape and cinematographic film is imported for a limited period during which the transmission takes place and it is then returned to the owner. If there is a charge for this loan, or the film is sold outright to the importer the price payable by the importer is to be taken as the value for duty. When there is no charge the value is to be determined according to the value of the material imported. It is the practice in the UK to accept a nominal value.
In addition to this, it is general practice in the UK to consider royalties/licence fees as being separate from the value of the imported material, where it can be established that the fees are in payment for the right to broadcast the material recorded on the film. The UK takes the view that such fees are payment for ‘rights of reproduction’ and not to be included in the customs value.
Where no charge is made for the imported goods it is not possible to show that the licence fees are a condition of sale as no sale takes place. However, even if a charge is made for outright sale of the film, rights of reproduction are specifically excluded from the customs value under Article 71 of the Code.
In many cases of this nature the licence fees are payable to a third party and thus may be excluded from the customs value because the payment does not benefit the seller of the goods.
In cases involving the payment of royalties and/or licence fees care must be taken to confirm the facts of the case by examination of the relevant contracts and by verification of the payments made.