Customs duties on intellectual contents of disks and CDs are distorting trade

Paris, 24 April 1997 - The International Chamber of Commerce today called on governments to reach a globally binding agreement to exclude the intellectual content of tapes, disks and CDs from customs duties on such products.

The ICC said those customs administrations that added the value of the information contained on the carrier media to its intrinsic worth when assessing duty were imposing a tariff barrier to imports of intellectual property and services. This was against the trade liberalization objectives of the World Trade Organization.

In a statement to WTO member governments, the ICC pointed to differing practices among national customs administrations and said these discrepancies caused confusion and uncertainty for companies trading in intellectual property and services.

"Because the value of intellectual property and services is many times greater than the value of the carrier medium, even at low rates the adverse efects of the additional duties is very considerable. At higher rates, they cripple business and trade," the statement said.

It noted that the very same information transmitted by such means as satellite, radio or telecommunications could not be subject to duties.

As international trade rules now stand, the ICC said governments were free to raise additional revenues by including intellectual content on customs valuations of goods used as carrier media. "But the effects on trade in intellectual property and services of such government action are to distort markets, increase cost s for suppliers and buyers, depress commercial activity and to impede the availability of intellectual property and services in the country imposing the tariffs."

The ICC warned that the size of the problem would increase as the volume of intellectual property and services traded grows.

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