Also known as: Last resort method, Sixth valuation method, Residual method
The sixth and final WTO customs valuation method applied when none of the five preceding methods can determine customs value, using reasonable criteria consistent with the Agreement's principles, based on data available in the country of importation.
The fallback value method is the sixth and final customs valuation method, established in Article 7 of the WTO Valuation Agreement. It applies exclusively when the five preceding methods (transaction value, identical goods, similar goods, deductive, and computed) cannot be used. This method provides flexibility to determine value using 'reasonable criteria' based on available data, provided they are consistent with the Agreement's general principles.
The fallback method CANNOT be based on: export prices to third countries, arbitrary or fictitious values, minimum prices, the higher of two alternative values, or prices of goods in the domestic market of the exporting country.
In practice, the fallback method frequently results in the flexible application of a preceding method—for example, using 'similar' goods with greater tolerance in dates or country of origin—or in using market price databases, manufacturer catalogs, or industry chamber information to establish a reasonable value.
Customs Value
The monetary amount on which import duties are calculated, determined according to the WTO Valuation Agreement with transaction value as the primary method.
ValuationTransaction Value
The price actually paid or payable for imported goods, adjusted as prescribed by the WTO Valuation Agreement. It is the primary method for determining customs value.
ValuationComputed Value
The fifth WTO customs valuation method that determines customs value by adding the production costs of imported goods: materials, manufacturing, producer's profit and general expenses, plus transport and insurance costs to the point of importation.
ValuationCustoms Valuation
Process of determining the customs value of imported goods using the six methods of the WTO Valuation Agreement, used to calculate duties and taxes.