Andean Community decided to partially reduce freight for customs valuation

In Ecuador, the Senae already excludes this cost from customs valuation since the publication of the Organic Law for Economic Development.

The Andean Community of Nations (CAN)decided last Wednesday to partially reduce the freight for customs valuation, a measure that each member country of the organization (Peru, Colombia, Bolivia and Ecuador) may apply.

The measure, which contains 3 items, was included in theDecision 894published in the Official Gazette 4426 of the organization. The first article states: Each member country may temporarily apply, for the tariff subheadings it determines, the reduction of a percentage of transportation and/or related expenses, included in the first paragraph of article 6 of Decision 571.

In the rest of the articles it is stated that the member country that adopts the measure must communicate it to the General Secretariat of the Andean Community, within 90 business days from its entry into force, so that it can be brought to the attention of the other member countries.

The application of the percentage will be valid until December 31, 2023. However, the document indicates that the extension may be evaluated, one time only, for an additional year.

The regional organization indicated that the issue began to be discussed at the meeting of the extraordinary period 154 on October 21, 2021, in which the Andean Community Commission determined that the issue be analyzed by the Customs Affairs Committee and valuation experts in customs.

Finally, the Valuation Expert Group of the Customs Affairs Committee in its meeting held by videoconference on March 15, 2022 agreed to prepare a proposal for the temporary application of a percentage reduction in transportation and/or related expenses.

“The current crisis experienced by the international maritime freight transport sector and the disruption of the supply chain motivated, among others, by the lack of ships in operation, the intermittent closure in ports due to COVID-19, port congestion and the shortage of containers has led to an increase in international freight rates, generating cost overruns for producers and, in turn, increasing the price of final goods for the final consumer," the CAN determined in one of the recitals to issue the decision.

Meanwhile, this decision has already generated positive comments from the Ecuadorian industrial sector. The Guayaquil Chamber of Industries indicated in a statement that the decision is important to provide greater legal security to the national regulations established in the Organic Law for Economic and Fiscal Development, published on November 29, 2021, since the union highlighted that the National Government collected the request made by the production unions and included it in said law and then requested the CAN to modify Decision 571, which establishes the obligation to include said cost in the valuation. customs

“It is important to mention that since the publication of the Organic Law for Economic Development, the Senae has been excluding the cost of freight from the customs valuation,” the Chamber clarified.