The Agreement on Implementation of Article VII of GATT 1994 is a crucial part of international trade that governs customs valuation. The agreement was created to ensure that the customs value of imported goods is determined objectively and that the same valuation criteria are applied to domestic and imported goods. It also aims to prevent the use of customs valuation as a tool for protectionist measures.

The agreement was introduced in 1994 as part of the Uruguay Round of trade negotiations. It came into force on January 1, 1995, and has since been adopted by all members of the World Trade Organization (WTO). The agreement sets out rules on how to determine the value of imported goods for customs purposes.

One of the main principles of the agreement is that the customs value of imported goods should be based on the transaction value of the goods. This means that the value of the goods should be based on the price paid or payable for the goods when they are sold for export to the importing country. If the transaction value cannot be determined, the agreement sets out a hierarchy of alternative methods for determining customs value.

The agreement also includes provisions on the treatment of related-party transactions. Related-party transactions are those between a buyer and seller who have a relationship that could influence the price of the goods. The agreement requires that the customs value of such transactions be based on the transaction value, provided certain conditions are met. If the conditions are not met, other methods can be used to determine the customs value.

One of the most important aspects of the agreement is its role in preventing the use of customs valuation as a tool for protectionism. The agreement requires that customs valuation be based on objective criteria and that the same criteria be applied to domestic and imported goods. This helps to ensure that imported goods are not unfairly targeted by customs authorities.

In conclusion, the Agreement on Implementation of Article VII of GATT 1994 is an important part of international trade that governs customs valuation. It sets out clear rules on how to determine the customs value of imported goods and helps to prevent the use of customs valuation as a tool for protectionism. As such, it plays a crucial role in promoting fair and open trade between countries.