ITA Utilizes Free Trade Agreement to Ensure Proper Customs Valuation and Appeal Procedures in Chile

The Department of Commerce’s International Trade Administration (ITA) worked with Epson Chile (Epson), a wholly-owned subsidiary of Epson America Inc., based in Long Beach, CA, to ensure that Chile’s customs valuation methods and appeal procedures complied with the World Trade Organization’s (WTO) Customs Valuation Agreement and the U.S.-Chile Free Trade Agreement (FTA).

Why it Matters

If the U.S. government (USG) had not ensured Chile’s adherence to the relevant provisions under the WTO Customs Valuation Agreement and the U.S.-Chile FTA, the additional costs that Epson faced would have significantly impacted the competitiveness of its exports to the Chilean market. Inconsistent customs valuation procedures can cause uncertain business transactions and reduce the confidence of U.S. companies seeking to export to new markets.

Courtesy of Epson America

The Problem

In February 2008, Epson reported to that Chile’s respective customs agency had accused the company of undervaluing its imports of ink cartridges and other printing supplies. Epson maintained that it had not undervalued its goods and that it should not be subject to over $4 million in potential penalties and fines.

The Solution

Advocating on behalf of Epson, ITA officials, along with other USG agencies, supported Epson by raising its concerns with the Chilean government and pressing the importance of transparent customs valuation procedures and predictable appeal mechanisms consistent with its trade agreement obligations. In early 2012, the Chilean Customs’ administrative review system found that Epson was not guilty of undervaluing its products, in turn demonstrating the value of the WTO Customs Valuation Agreement and the U.S.-Chile FTA.