U.S. Distilled Spirits Companies Win Resolution of Customs Valuation Concerns in Thailand

The Department of Commerce’s International Trade Administration (ITA) worked with the Distilled Spirits Council of the United States (DISCUS) to change Thailand’s customs valuation procedures that had led to increased costs for U.S. distilled spirits exports to Thailand. Through ITA’s intervention, the companies also received long-awaited refunds of overpayments made as a result of Thai Customs’ inappropriate valuation determinations.

Photo compliments of: Distilled Spirits Council of the United States, Inc.

Why it Matters: Thailand’s valuation procedures were improperly increasing the customs value for imports of distilled spirits, forcing companies to pay additional duties and taxes.  It was especially important for the United States to ensure that Thailand upheld its obligations under the World Trade Organization’s Customs Valuation Agreement so that other American exports to Thailand would benefit from the transparency and predictability provided in the agreement.

The Problem: Beginning in August 2006, Thai Customs began using an inappropriate methodology to determine the customs value of imports of alcoholic beverages.  Under this new approach, the customs duties and taxes owed were inappropriately raised.  The United States persuaded Thailand to revise its procedures.  However, two DISCUS member companies encountered difficulty getting refunds for the higher payments they had made based on the earlier, inappropriate, customs valuation determinations.

The Solution:  A team of ITA specialists and representatives from other USG agencies persuaded Thai Customs to follow the procedures prescribed by the WTO Customs Valuation Agreement, and in March 2008, Thailand resumed its acceptance of the declared invoice value for imports of alcoholic beverages.  By October 2010, with continued assistance from ITA, the last two members of DISCUS received full refunds of the cash deposits and bank guarantees that they were force to pay based on the higher, inappropriate, customs valuation determinations.