Liberia: Customs Ignores Revenue Code and WTO Valuation Rules

Published: July 9, 2026

This paper seeks to explain customs valuation in laws and recommended standards of the Liberia Revenue Code and the World Trade Organization’s Customs Valuation Agreement. The objective of the paper is to discuss the framers’ thoughts and my expert opinion. It questions MEDTech Liberia’s approach to customs valuation and raises the need to challenge both customs and MEDTech Liberia’s customs valuation methods.

Over the past ten years, Liberia has been going back and forth on how it should conduct customs valuation, especially of motor vehicles. All customs valuation trainings delivered to officers of the Liberia Customs Department had been premised on the GATT/WTO Valuation Agreement, but the method being applied is the Brussels Definition of Value (BDV). This has created more problems than solutions for economic operators – especially the used car dealers. The BDV National Concept does not support best practice. The BDV was introduced by the European Commission in 1953 after World War II. There were two concepts of the BDV – National Concept and the Positive Concept. The National Concept is based on the price a good would fetch in an open market under competitive conditions, while the Positive Concept is based on the actual price paid or payable or ascertainable equivalent price. United States of America, Australia, and New Zealand refused to join the BDV and advocated for a positive concept, which requires Customs to determine the value on the basis of the actual price paid for imported goods. In the view of the USA and others, the positive concept would considerably reduce the discretion available to Customs and further facilitate trade. Implementation of the positive concept, which evolved into what is now the GATT/WTO Customs Valuation Agreement, is mandatory for all WTO contracting parties, of which Liberia is one.

Liberia Customs Administration currently applies the BDV National Concept to motor vehicle valuation, which highly contravenes the current WTO Customs Valuation Agreement and the Revenue Code of Liberia. It does not support/correlates to Liberia’s treaty obligation to the World Trade Organization. It is an archaic valuation method for any customs administration to implement in this digital age – when, in fact, it is much easier to verify almost all the information on an invoice. Liberia chose to use the Kelly Blue Book (KBB) or internet value, which is deeply rooted in the BDV National Concept. Customs valuation experts advise that the use of the internet should only be used as a fall-back method after using the steps prescribed in the WTO and Liberia Revenue Code. Even with this provision, it is required that before rejecting any value, customs shall require importers to submit additional information. Liberia MUST follow the laws it made – NO illegal excuses should be accepted.

ESTABLISHING THE LEGAL CONTEXT

In July of 2016, Liberia became a member of the World Trade Organization (WTO). The WTO is the intergovernmental body responsible for setting rules of the global trading system. The WTO’s rules are generally accepted by the majority of countries in the global trading system but are binding only on its contracting parties. Acceding to the WTO Agreement is a single undertaking initiative – meaning, once a party has acceded to the WTO Agreement, it has agreed to be an integral party to the WTO single undertaking requirement. The single undertaking requirement entails implementing all agreements of the WTO as if the newly contracted party was part of the rulemaking during the time of the Treaty negotiation.

Liberia’s accession to the WTO Agreement obliges it to implement all other WTO Agreements affected by the single undertaking provision, including the GATT/WTO Customs Valuation Agreement. Aside from the single undertaking requirement, Liberia made a specific commitment to implement the WTO Customs Valuation Agreement as at the day/date of accession. This commitment is highlighted in both the Working Party report, Paragraph 156, and the specific commitment.[1] Reference is made to both documents in the Accession Protocol (the Ministerial decision of 16, December 2015). The Accession documents has already been ratified by the Liberian Legislature since 2016, which made provisions of the WTO Valuation Agreement part of our domestic law, except where special and deferential treatment(s) are allowed. Considering the foregoing and the provisions of Articles 26 and 27 of the Vienna Convention on the Law of Treaties (Pacta Sunt Servanda), Liberia is legally obliged to implement the GATT/WTO Valuation Agreement in good faith.

It has no legal ground whatsoever to invoke domestic law to the contrary. Additionally, this is clearly written in the Liberia Consolidated Revenue Code as amended and published on March 24, 2021. Having established the context and legal basis, it would be important to discuss some basic principles and practices of the WTO Customs valuation method as prescribed in the WTO Valuation Agreement and the Liberia Revenue Code.

SOME BASIC PRINCIPLES AND PRACTICES OF CUSTOMS VALUATION

Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the duty rate is ad valorem, the customs value is essential for determining the duty payable on an imported good. Both the GATT WTO Valuation Agreement and the 2021 Revenue Code stipulate that “the primary method of customs valuation of imported goods SHALL be based on the TRANSACTION VALUE, the actual price paid for the goods to be valued”, which is generally shown on the invoice. This price, plus adjustments for certain elements listed in Article 8, equals the transaction value, which constitutes the first and most important method of valuation under the Agreement.

The basic aim of the Customs Valuation Agreement is to protect the interests of honest traders by requiring that customs should accept for determining dutiable value the price actually paid by the importer in a particular transaction. Customs may reject the transaction value in such situations only if it has reasons to doubt the truth or accuracy of the declared price of the imported goods. The mere fact that the price obtained by a particular importer is lower than that at which other importers have imported the product cannot be used as a ground for rejecting the transaction value. Once the invoice value is authentic and verifiable, customs cannot reject the value. For example, most used car dealers in Liberia buy from auction, and invoices by all auctions are verifiable and MUST be treated as authentic unless it is established that the invoice was tampered with or it is faked. MEDTech/Customs have no legal basis to reject a verifiable authentic invoice. THIS SHOULD BE CHALLENGE IN COURT.

Based on the understanding that customs may reject the invoice price of imported goods on reasonable grounds if it doubts, the WTO Agreement made provision for the use of up to six methods of valuation in the below sequence:

Method 1 — Transaction value
Method 2 — Transaction value of identical goods
Method 3 — Transaction value of similar goods
Method 4 — Deductive method
Method 5 — Computed method
Method 6 — Fall-back method

It is required that members (Customs) follow the sequence as listed above. Our focus will be on the first method because it lays the foundation for all other methods in sequence.

Method 1 — Transaction value
Revenue Code section 1613 provides that the primary basis for the customs value of imported goods SHALL be the TRANSACTION VALUE, that is the price actually paid or payable for the goods when sold for export to Liberia, adjusted, where necessary, in accordance with Section 1620 and Section 1621. Customs is allowed to reject the transaction value of imported goods under the following conditions and prescribed procedure set by the WTO.

Cases where Customs Administrations have reasons to doubt the truth or accuracy of the declared value.

Customs valuation under the transaction value method largely relies on documentary input from the importer. Article 17of the WTO Agreement confirms that customs administrations have the right to satisfy themselves as to the truth or accuracy of any statement, document or declaration. Where customs has reason(s) to doubt the accuracy of the invoice value, the first step prescribed by the WTO requires customs to ask the importer to provide further explanation/information to prove that the declared value submitted represents the actual amount paid or payable for the imported goods. If the doubt persists after receiving further information from the importer, or in the absence of a response, customs may rule that the value cannot be determined using the transaction value method. With this, Customs may use the second valuation method, which is the Transactional value of identical and/or similar goods.

But before proceeding to the second method, it is required that Customs communicate its reasoning to the importer, who, in turn, must be given a reasonable time to respond. If customs sees it necessary to use the second method as the final decision, this must also be communicated to the importer. Furthermore, importers have the right to be consulted throughout all stages of the determination of value. To the contrary, Liberia Customs does not follow this procedure – instead, it goes ahead and manufactures its own fictitious value as the base for the calculation of customs duties on motor vehicles.

CURRENT SITUATION WITH SPECIFIC EMPHASIS USED VEHICLE VALUATION

Customs through MEDTECH currently use the BDV National when it is assessing a certain number of imported goods, but this paper laid specific emphasis on motor vehicle valuation. In MEDTECH’s method of valuation, it does not follow the procedures prescribed by the WTO or the Liberia Consolidated Revenue Code, as amended in 2021. Instead, MEDTECH derives fictitious values for importers because it wants to apply the 1.5% rate, ignoring the flat rate required by international Law. With regard to MEDTECH’s application of the ad valorem method or rate, it has been investigated and concluded that the application of higher fees (which is achieved using the BDV to increase values) that does not commensurate with the service(s) provided is illegal and arbitrary, and it constitutes extortion. MEDTECH has set a threshold that subjects values above the threshold to attract a 1.5% rate, which contravenes WTO provisions on service fees.

CUSTOMS ARGUMENT:

CONDITION OF GOODS NOT CONSIDERED – Customs has insisted that it will not accept the value presented by importers and the existing condition of vehicles during valuation, and that they will use the internet or Kelly Blue Book value as a guide. Their reason is that dishonest importers have been abusing the allowance for defective goods and that declarants are manufacturing fake invoices. This indicates customs’ laziness and inability to distinguish between honest importers and dishonest importers – thus punishing the honest importers for the wrongdoing of the dishonest importers.

COUNTER-ARGUMENT – If customs argue that it will only consider the value provided by the Kelly Blue Book as opposed to the actual price paid for the goods, then why are they refusing to also adhere to KBB’s policy of not assigning value to salvage vehicles. In the USA, motorcycles and cars with a salvage title may not be registered and driven on public roads in most states, which affects the resale value.

Industry standards followed by the National Automobile Dealers Association Appraisal Guides, Kelley Blue Book Market Report Official Guide, and the International Society of Automotive Appraisers devalue a motor vehicle that has a salvage title. The Kelley Blue Book automatically rates any salvage vehicle as poor and does not value it at all. The value of a vehicle with a salvage title is generally 65-75% lower than the vehicle’s estimated value. If the argument is that fake invoices are being submitted, then the right thing to do is to go after those presenting fake invoices and stop using the one-size-fits-all approach, which constitutes collective guilt.

SPECIAL AND DIFFERENTIAL TREATMENT (SDT) ARGUMENT – assuming that Liberia argues that it falls in the WTO categorization that allows for special and differential treatment, which allows for a certain category of countries to delay implementation of a certainAgreement. SDT can only be invoked if, at the time of accession negotiations, the country made a reservation to delay.

COUNTER-ARGUMENT – Part I: Count three of Liberia’s Protocol of Accession made it clear that Liberia agreed to implement all WTO Agreements on a Single Undertaking basis and the accompanying annexes as if it had accepted those agreements on the date of entry into force. See word-for-word cut and paste below.

“Except as otherwise provided for in paragraph 332 of the WTO Working Party Report, those obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be implemented over a period of time starting with the entry into force of that Agreement shall be implemented by Liberia as if it had accepted that Agreement on the date of its entry into force”.

Liberia did not make any reservation to the Valuation Agreement as evidenced by the accession protocol and the specific commitments in the Working Party’s Report. Therefore, it cannot invoke the Special and Differential Treatment Provision also.

CONCLUSION

Customs and its hired third party (MEDTech) must make every effort to apply the Customs Valuation laws (GATT WTO Valuation Agreement and Revenue Code Act of 2021) accordingly and stop using fictitious values from the internet. It is illegal. Customs must do everything humanly possible to design a comprehensive customs valuation guide premise highly on the Customs Valuation laws for its hired third-party valuation service provider. This would reduce the space for discretionary treatment of importers and imported commodities and further make the valuation regime predictable.

Mohamed H Bility is a customs expert with twenty years of customs management experience. He served has Director for Anti-Smuggling Unit, Assistant Commission of Customs for Compliance (with supervisory oversight on Anti-Smuggling, Post-Clearance Audit, Risk Management and Debt Management). He served as Senior Advisor to the Commissioner General on Customs Policy. His most senior position in the Liberia customs was Deputy Commissioner of Customs for Policy and Compliance.

Mr. Bility holds a master’s degree in international Customs Law and Administration from the Center for Customs and Excise Studies at the University of Canberra, Australia. He holds a Postgraduate diploma in international Trade and Development, a Postgraduate Certificate in Trade Law.