tariff which is imposed in percentage terms over the value of the
good. For example, a 5% tariff, which means that the import tariff is
5% of the appraised value of the good in question.
Ad valorem equivalent
a tariff is fixed in specific or mixed terms, usually an “ad valorem
equivalent” of the non ad valorem portion of the duty is calculated
for reference purposes. There are several formulas for estimating the
AVEs. One common approach is based on MFN trade dividing duties
collected by Customs value.
Automatic import licensing
Import licensing where approval of the application is granted in all
cases, and is not administered in such a manner as to have restricting
effects on imports subject to automatic licensing.
Customs procedure which, when goods are exported, provides for a
repayment (total or partial) to be made in respect of the import
duties and taxes charged on the goods, or on materials contained in
them or consumed in their production.
Duty-free shop is a licensed warehouse that has obtained permission
from the government to make sales free of customs duty, domestic taxes
and excises, to persons traveling out of the country. Most of these
shops are located in ports, airports, and international borders. There
are normally two categories of duty-free shops, ‘outwards’ duty-free
shops and ‘inwards’ duty-free shops. ‘Outwards’ duty-free shops are
allowed to sell tax-free items to individuals departing a country.
‘Inwards’ duty-free shops are located within international airport
terminals between the disembarkation gates and the customs processing
areas. These shops can only sell duty and tax-free goods to arriving
passengers. They are limited in the range of items that they can sell.
Similarly, passengers are constrained in the amount of certain goods
they can purchase.
Duty deferral program
import scheme which includes provisions for the deferral in the
payment of import duties such as those governing free zones, temporary
importations under bond, bonded warehouses, “maquiladoras”, and inward
Export processing zone
clearly delineated industrial estate which constitutes a free trade
enclave in the customs and trade regime of a country, and where
foreign and local manufacturing firms producing mainly for export
benefit from a certain number of fiscal and financial incentives.
Harmonized Commodity Description and Coding System
Harmonized Commodity Description and Coding System, generally referred
to as “Harmonized System” or simply “HS”, is a multipurpose
international product nomenclature developed by the World Customs
Organization (WCO). It comprises about 5,000 commodity groups, each
identified by a six digit code, arranged in a legal and logical
structure and is supported by well-defined rules to achieve uniform
classification. The system is used by more than 177 countries and
economies as a basis for their Customs tariffs and for the collection
of international trade statistics. The Harmonized System is governed
by “The International Convention on the Harmonized Commodity
Description and Coding System”.
See “Harmonized Commodity Description and Coding System”, see above.
Administrative procedures requiring the submission of an application
or other documentation (other than those required for customs
purposes) to the relevant administrative body as a prior condition for
importation of goods. WTO Agreement on Import Licensing Procedures.
A tariff which combines ad valorem and specific tariffs.
Legal provision that seeks to avoid discrimination and protectionism
in the application of internal tax and regulatory measures. It
normally states that, once imports have entered the territory of an
importing country, 1) internal taxes must be applied equally to
imports and the like domestic production, and 2) national regulations
must not treat imports “less favorably” than similar domestic
production. See Investment, page 33 and Services, page 39, where
this text may have a slightly different meaning.
Non-automatic import licensing
Licensing not falling within the definition of automatic import
licensing. Nonautomatic licensing is used to administer trade
restrictions such as quantitative restrictions when justified within
the international trade legal framework.
Non-tariff measures that have a protectionist impact. Examples:
quotas, tariff-rate quotas, licensing regimes, price bands.
measures imposed on trade flows that are not tariff measures. Some of
these measures may constitute non-tariff barriers.
legal requirement imposed on producers of goods and/or services, which
impose on them certain obligations. For instance, some trade
agreements include the following performance requirements, among
others: (i) that a given level or percentage of goods or services be
exported; (ii) that domestic goods or services of the producing
country granting a waiver of customs duties be substituted for
imported goods or services; (iii) that a person benefiting from a
waiver of customs duties purchase other goods or services in the
territory of the producing country granting the waiver or accord a
preference to domestically produced goods or services; (iv) that a
person benefiting from a waiver of customs duties produce goods or
provide services, in the territory of the producing country granting
the waiver, with a given level or percentage of domestic content; or
(v) a requirement that relates in any way the volume or value of
imports to the volume or value of exports or to the amount of foreign
exchange inflows. See Government Procurement, page 27 and
Investment, page 34, where this text may have a slightly different
tariff which is imposed in terms of specific monetary charges per unit
or quantity of the imported good. For instance, $100 per metric ton of
a given good.
Tariff-rate quota/ Tariff-quota
trade protection system by which a lower tariff rate is imposed on
imports of specified quantities of a given product, and higher rates
are imposed on imports that exceed those quantities. The size of the
quota is normally defined by the government on a periodical basis, for
Voluntary export restraint
measure adopted by an exporting country by which it voluntarily agrees
to limit the volume or value of exports of a given product to a
particular importing country.