What are the 6 methods of Customs valuation?

The WTO Customs Valuation Agreement prescribes six methods of customs valuation to determine the value of imported goods for duty assessment. These methods must be applied in sequential order unless the importer requests to reverse Methods 4 and 5.

1. Transaction Value Method: The primary method, based on the price actually paid or payable for the goods when sold for export to the importing country. It includes adjustments like freight, insurance, commissions, royalties, and assists. It requires the buyer and seller to be unrelated or for the relationship not to influence the price.
2. Transaction Value of Identical Goods: If the first method can’t be used, this method uses the transaction value of identical goods sold to the same country at or about the same time.
3. Transaction Value of Similar Goods: Applies when identical goods are not available. It uses the transaction value of similar goods with comparable characteristics and functions.
4. Deductive Value Method: Based on the sale price of the imported goods (or identical/similar goods) in the importing country, minus typical costs such as profit margins, transport, and duties.
5. Computed Value Method: Based on the cost of production, materials, profit, and expenses in the country of export.
6. Fallback Method: A flexible method that uses reasonable means consistent with GATT principles, such as a mix of previous methods with necessary adjustments.