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    The impact of customs duties on trade in intellectual property and services

    Prepared by the ICC commission on : Commission on Customs and Trade Facilitation
    Publication date : 18/02/1997 | Document Number : 103-32/53

    The International Chamber of Commerce (ICC) wishes to comment on the impact of customs duties on trade in intellectual property and services, which can arise when such are transmitted across national frontiers by means of goods used as carrier media for this purpose.

    The International Chamber of Commerce (ICC) wishes to comment on the impact of customs duties on trade in intellectual property and services, which can arise when such are transmitted across national frontiers by means of goods used as carrier media for this purpose.

    Intellectual property and services (IP/services) transmitted internationally by goods subject to ad valorem customs duties can become subject to such duties whereas if transmitted by other means (e.g. by satellite, radio, telecommunications, goods free of duty or subject to specific duty only) they cannot.

    This is because the rules of the General Agreement on Tariffs and Trade (GATT) for determining the value of goods for customs duty purposes (customs value) _ the Valuation Code _ are interpreted by some customs administrations as requiring the inclusion of the value of IP/services borne thereon in the customs value of goods used as carrier media, when such goods are subject to ad valorem customs duties.

    Consequently, IP/services supplied by such means become burdened with the same customs duties as apply to the carrier medium. The direct effect of this is to create a tariff barrier to the importation of IP/services in such instances. This is not consistent with the overall objectives and principles of the World Trade Organization (WTO).