How is the term "valuation" defined in customs?

The term "valuation" in customs specifically refers to the process of determining the economic value of goods for the purpose of establishing duties and taxes that must be paid when those goods are imported into a country. This is a critical aspect of customs operations, as it directly influences the revenue collected by customs authorities and impacts pricing for consumers and businesses.

When valuing goods, customs authorities typically use established methods according to the World Trade Organization's Agreement on Customs Valuation to ensure that the assessment is fair and consistent. The valuation includes considerations such as the transaction value, which is based on the price actually paid or payable for the goods when sold for export to the country of importation, plus adjustments for certain costs, such as packing and shipping.

In contrast, calculating shipping costs solely focuses on the logistics and transportation expenses associated with moving goods, which does not encompass the valuation required for customs duties. Assessing product quality pertains to the standards and regulations surrounding the condition and functionality of goods rather than their economic worth. Evaluating compliance with customs regulations involves ensuring that goods and their documentation meet legal requirements, which is separate from the process of determining their value for duties. Therefore, the definition that aligns with customs' objectives and operations is the one that identifies valuation as the economic