What is Advance Rulings?
The key objective of advance ruling programmes is to provide decisions on the classification, origin, and valuation of commodities prior to their importation or exportation, thus adding certainty and predictability to international trade and helping traders to make informed business decisions based on legally binding rulings.
YCA also benefits from having advanced knowledge of future importations which is useful for risk management purposes.
For further information, please follow the WCO Technical Guidelines aimed to provide assistance to the relevant bodies and traders in the practical implementation and application of advance ruling programmes.
Classification of Goods
General Description
The Classification of Goods means determining the subheadings or further subdivisions of the Yemen Tariff under which the goods will be classified. Yemen is using the Harmonized Commodity Description and Coding System (HS).
Classification is not just used to determine the customs duty rate for a specific subheading. It is also used to apply non-tariff measures (policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both). So, even if all goods were zero-rated for customs purposes, classifications could still be necessary if you need to:
- apply for an import or export license
- find out if import or export restrictions apply
- issue a certificate of origin
- claim an export refund or similar
- determine whether or not a product is liable to excise duty
- find out if a reduced value-added tax rate applies
The structure of Yemen HS tariff for 06011000 بصلات وبصيلات ودرنات وجذور درنية وبصلية,تيجان,وسيقان ارضية(جذاميراو ريزومات) راقدة..إلخ (Bulbs, tubers, tuberous roots, corms, crowns and rhizomes, dormant) is presented in the picture below:
Tariff Rate Distribution
| Tariff Rate | Number of Items (HS) | % of Items |
|---|---|---|
| 0% | 235 | 3.66% |
| 5% | 4431 | 69.00% |
| 10% | 1285 | 20.01% |
| 15% | 27 | 0.42% |
| 25% | 444 | 6.91% |
Application Form for Classification Advance Ruling
Download Classification Application Form
Explanatory Notes
Box 1. Applicant (name and address)
For these purposes, an applicant means a person who has applied to the Customs authorities for an advance ruling. Full name and address of the applicant should be provided.
Box 2. Description of goods
A description of the goods in question should be sufficiently detailed to enable the goods to be identified and classified in the Customs tariff nomenclature. Also, detailed information about the composition of the goods (where the classification depends on it), degree of processing, makeup (retail packings, etc.), intended use, commercial denomination, any trade name(s) or identification marks should be provided.
Box 3. Enclosures being submitted to assist with advance ruling of the goods
Any samples, photographs, plans, catalogues or other documents available, which may assist in determining the correct classification of the goods in the Customs tariff nomenclature, should be attached as annexes, if necessary.
Box 4. Commercial designation and additional information
Any information which the applicant wishes to be treated as confidential, including the trademark and model number of the goods, should be indicated.
Box 5. Classification envisaged by applicant (Customs tariff nomenclature code)
The applicant is invited to express a view as to the commodity code for the goods envisaged.
Box 6. Have you previously applied for an advance ruling for identical or similar goods?
An indication as to whether the applicant has previously applied for an advance ruling for identical or similar goods should be given here. Details with regard to that application should also be included.
Box 8. Are you aware of the existence of an advance ruling for identical or similar goods?
Any knowledge on the part of the applicant of the existence of an earlier advance ruling in respect of goods of the same kind should be indicated, quoting references.
Box 9. Are you aware whether the goods are the subject of a classification verification process or any instance of review or appeal before any governmental agency, appellate tribunal or court?
Any knowledge on the part of the applicant of the existence of a classification verification process or any instance of review or appeal before any governmental agency, appellate tribunal or court with respect to the goods should be indicated, quoting references.
Rules of Origin
General Description
According the WTO Technical Information on Rules of Origin Rules is used:
- to implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures;
- to determine whether imported products shall receive most-favored-nation (MFN) treatment or preferential treatment;
- for the purpose of trade statistics;
- for the application of labelling and marking requirements; and
- for government procurement
According the WCO international recommendations, the following products shall be considered wholly obtained/originatedin the country of export:
- mineral products drawn out directly from their land or their sea bottom;
- vegetal products picked up in that country;
- life animals born and raised in that country – verification should be verified through veterinary documents on registration of borne animal;
- products generated from life animals raised in that country;
- products generated from hunting or fishing performed in that country;
- products from sea fishing and other products taken out of the sea outside of territorial waters of that country with their vessels;
- products made on their boats-plants exclusively for products listed under point (f) of this article
- collected used objects in that country, available only for recycling of raw materials;
- waste material and remains from the manufacture operations performed in that country;
- products taken out from the sea bottom or the territory under it outside of the territorial waters, on the condition that the country in question possesses exclusive rights for exploitation of the sea bottom or the territory under it;
- goods produced in that country only from the products listed under points (1) to (9) of this stand.
From this definition it can be concluded that the products may be considered as “wholly obtained products” if not a single material originating from a third country has been used. In this process, materials originating from the Republic of Yemen may be used, on the condition these materials should not contain materials (components) originating from third countries.
Origin of goods for exportation form Yemen
According the Yemen Customs Code, article 38, the value declared in export is the value of the goods at the time of registering the customs declaration to which are added all costs until the goods leave the frontiers. Such value does not include:
- Fees and taxes imposed on exports
- Internal fees and taxes and production taxes and others that are refunded upon export
Application Form for Rules of Origin
Download Origin Application Form
Explanatory Notes
Box 1. Applicant (name and address)
For the purpose of an advance ruling, an applicant means a person who has applied to the Customs authorities for an advance ruling.
Box 2. Importer and the agent (name, address)
Name and address of importer, and the agent, if applicable, should be provided.
Box 3. Legal framework (preferential/non-preferential)
Applicant should state whether the advance ruling required is for preferential or non-preferential purposes. If an advance ruling is required for preferential origin purposes, applicant should indicate which regime applies.
Box 4. Description of Goods
A description of the goods in question should be sufficiently detailed to enable the goods to be identified (and classified in the Customs nomenclature). Also, detailed information about the composition of the goods and the methods used to determine their composition should be provided.
Box 5. Tariff Classification of Goods
The full commodity code for the goods concerned should be provided.
Box 6. Description of Materials used in manufacture
A detailed description of the goods should be provided (it is possible to submit another document using the detailed description of the goods should be provided. Using the columns and headings provided, applicant should list all the materials/components/parts used in manufacture, together with their country of origin, tariff heading, and value.
Box 7. Rule considered to be satisfied
The preferential or non-preferential origin rule which is considered to be appropriate to the product concerned should be explained. In addition, applicant should explain how that rule has been met in the country of manufacture/origin by providing a full and detailed description of all stages of any manufacturing process.
Box 8. Country of Origin/Export envisaged by applicant
The applicant is invited to express a view as to the country of origin envisaged.
Box 9. Enclosures being submitted to assist with determining the origin of the goods
Any samples, photos, plans, catalogues or other documents available relative to the composition of the goods or their constituent materials which may illustrate the working or manufacturing process which those materials have undergone should be attached as annexes, if necessary.
Box 10. Commercial designation and additional information
Any information which applicant wishes to be treated as confidential including the trademark and model number of the goods should be indicated.
Box 11. Have you previously applied for an advance ruling for identical or similar goods?
An indication as to whether the applicant has previously applied for advance ruling for identical or similar goods should be given here. Details with regard to that application should also be included.
Box 12. Are you aware of the existence of an advance ruling for identical or similar goods?
Any knowledge on the part of the applicant of the existence of earlier advance ruling in respect of goods of the same kind should be indicated, quoting references.
Box 13. Are the goods subject to origin verification process or any instance of review or appeal before any governmental agency, appellate tribunal or court? The applicant should inform the competent authority responsible for the issuance of advance rulings, if the goods are subject to origin verification or any instance of review or appeal before any governmental agency, appellate tribunal or court.
Customs Valuation
General Description
The customs value of imported goods is the transaction value, which is the price paid or payable for the goods when imported into the customs territory of Yemen. It is usually calculated on the basis of the CIF value. If the customs value cannot be determined on the basis of the transaction value of the imported goods, the following values are, in compliance with the rules on determining the customs value according to the Agreement on Implementation of Article VII (Customs Valuation) of the General Agreement on Tariffs and Trade (GATT 1994), to be applied successively as a basis for its calculation:
- the transaction value of identical imported goods
- the transaction value of similar imported goods
- the deductive value
- the computed value
- the value deduced by way of an appropriate fall-back method.
The legal ground for determine the customs value is defined in 1990 Customs Law No. 14 of and its amendments by Law No. 12 of 2010 of the Yemen Customs Authority Act.
As many other customs administrations worldwide, YCA is facing problems to determine the real value of the imported goods, which is the basis in the process of calculating customs duties, taxes and other revenues. Therefore, the General Department of Value is extracting the statistical reports of imported and customs-treated goods for the previous year (last edition 2013) and analyzed those values to reach the volume of commercial activity and the volume and quantity of imported goods and goods, as well as the customs value of those goods from the statistical reality and the automated system reports.
Another limitation of determine the value of the goods is the ASY++ CDPS. The data related to valuation must be extracted from the database and manually analyzed. ASYCUDA World will provide the facility to monitor the customs value systematically thought Tariff Specification Code and Valuation list (explained in detail later in this document).
According the YCA statistics and the analysis performed for this document, 21 commodities participate in 70% of the total YCA revenue.
Relevant International Standards / Regulations / Recommendations
Purpose of Valuation – The purpose of valuation is to monitor, control the implementation of the World Trade Organization Valuation Agreement and conduct valuation audits on import documents / contracts / agreements to evaluate whether the correct value has been declared or to determine values within the confines of the WTO Agreement
Customs authorities face increasing challenges in the execution of their mission to primarily secure revenue, prevent capital flight, and facilitate legitimate trade. They have to make swift and accurate decisions regarding the value of consignments, either prior to Customs clearance or at the post-clearance stage. However, the frequent lack of information hampers Customs authorities from making reliable decisions and consequently, from collecting the correct duties and taxes.
The problem is further complicated by frequent high levels of fraud in goods valuation and tariff classification, both having a significant impact on revenue collection and capital flight.
Yemen Customs Authority makes an effort to comply with international regulations in the domain of Customs valuation, such as the WTO Agreement on Customs Valuation (WTO ACV) which establishes a set of guidelines and provisions for the determination of the Customs value. The ACV was primarily designed to foster trade globalization, facilitation, and security but does not include any guidance in the prevention of fraud;
“For importers, the process of estimating the value of a product at customs presents problems that can be just as serious as the actual duty rate charged. The WTO agreement on customs valuation aims for a fair, uniform and neutral system for the valuation of goods for customs purposes — a system that conforms to commercial realities, and which outlaws the use of arbitrary or fictitious customs values. The Committee on Customs Valuation of the Council for Trade in Goods (CGT) carries out work in the WTO on customs valuation.”
Technical Information on Customs Valuation is available at the WTO Website (Annex II: Technical Committee on Customs Valuation. Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem, the customs value is essential to determine the duty to be paid on an imported good. Customs valuation shall, except in specified circumstances, be based on the actual price of the goods to be valued, which is generally shown on the invoice. This price, plus adjustments for certain elements, equals the transaction value, which constitutes the first and most important method of valuation. For cases in which there is no transaction value, or where the transaction value is not acceptable as the customs value because the price has been distorted as a result of certain conditions, five other methods of customs valuation, to be applied in the prescribed hierarchical order.
According the above mentioned WCO Technical Information on Customs Valuation, the YCA is obliged to apply the following valuation methods:
YCA is applying the Method of Transaction Value in the case when the customs value of the goods is determined with the application of the Method of Transaction Value, it implies that the goods were subject to a transaction on the basis of which the export of the goods from a foreign state was realized and the same goods were imported in the Republic of Yemen.
The other methods are intended to cover situations when the Method of Transaction Value is inapplicable. If the YCA cannot determine the customs value by using the Method of Transaction Value, then the other methods are applied.
YCA is applying the Method of Transaction Value of Identical Goods – this implies that the determination of the customs value of the goods that are valuated shall be done on the basis of the Transaction value of the identical goods sold for export in Yemen approximately at the same time as the goods that are valuated, in approximately the same quantities and at the same commercial level.
If the value cannot be determined with the application of this method, then the YCA applies the following method – Method of Transaction Value of Similar Goods. This means that the determination of the customs value of the goods that are valuated shall be done on the basis of the Transaction value of similar goods sold for export in Yemen approximately at the same time as the goods that are valuated, in approximately the same quantities and at the same commercial level.
The next group of methods for determining of the customs value is the Method of Deductive Value and the Method of Computed Value.
When using the method of deductive value, the customs value is determined by “going backwards”, that is the expenses that were added to the goods after the export are deducted from the selling price in Yemen for those imported goods or the identical or similar goods.
According the method of computed value, the customs value is determined on the basis of the production expenses for those particular goods that are valuated, plus the amount of the profit and the general expenses which are in general presented when selling the goods of the same class or type as the goods that are valuated.
Application Form for Customs Valuation
Download Valuation Application Form
Explanatory Notes
Box 1. Applicant (name and address)
For these purposes, an applicant means a person who has applied to the Customs authorities for an advance ruling. Full name and address of the applicant should be provided.
Box 2. Identity of the applicant
The applicant should indicate its identity in the transaction in question. Supporting documents might be needed to be provided to verify the applicant’s claims. If “Other” is indicated, please provide detailed explanation on how they are involved in the issue and provide supporting documents of their status.
Box 3. Description of the goods
A description of the goods should be sufficiently detailed to enable the goods to be identified (and classified in the Customs nomenclature).
Box 4. Ruling to be issued regarding
The applicant should indicate the nature of the issue in which they are seeking the ruling on. If “Other” is indicated, please describe the specific issue in which the ruling is sought.
Box 5. Are the buyer and seller related?
Relationship is defined in Article 15.4 of the WTO Valuation Agreement. Supporting documents may be needed to confirm a relationship between the buyer and the seller.
Box 6. Description of the transaction(s)
A description of the transaction(s) should be sufficiently detailed to assist Customs in making a ruling on the issue. Also, detailed information about the transaction flow, terms of sale (if applicable), conditions of delivery (Incoterms), details of any intermediaries involved in the transaction and their role (e.g. buying or selling agent, brokers, etc.), elements which may be includable under Article 8, method of payment etc. should be provided.
Box 7. Documents being submitted to assist with determining the valuation ruling
The applicant should attach all documents relevant to the transaction in question which would enable Customs to make an informed decision on the ruling to be issued. Failure to submit the relevant supporting documents could lead to the rejection of the application by Customs.
Box 8. Additional information
Any information which the applicant wishes to be treated as confidential including the name of companies involved and importing and exporting country should be indicated.
Box 9. Have you previously applied for an advance ruling on the same or a similar issue?
An indication as to whether the applicant has previously applied for an advance ruling for the same or similar arrangement should be given here. Details with regard to that application should also be included.
Box 10. Are you aware of the existence of an advance ruling/ request made on the same or a similar arrangement?
Any knowledge on the part of the applicant of the existence of a ruling being sought made on the same or a similar arrangement with respect to the transaction should be indicated, quoting references.
Box 11. Is the issue on which a ruling is being sought pending before any governmental agency, appellate tribunal or court?
Any knowledge on the part of the applicant of the existence of a ruling being sought or any instance of review or appeal before any governmental agency, appellate tribunal or court with respect to the goods should be indicated, quoting references.
Box 12. Applicant’s opinion/ position on the ruling being sought
The applicant is invited to express an opinion/ position on the transaction in question and the proposed treatment.