Costs of Quality Assurance Tests
This January, a German court ruled that the cost of quality controls, which an importer paid to a third party (a quality testing agency ) should indeed be included in the customs value ( FG Düsseldorf 4K 188/13)
The case is about a manufacturer that was contractually obligated to have a number of its produced tested by a quality assurance agency. The quality assurance agency was instructed by the manufacturer, but invoiced directly to the importer .
The court recalls that the customs value includes all payments, that are a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller. According to the Court, the payments to the quality agency are a condition of sale, and satisfy an obligation of the seller because the buyer would not have bought the products, and the products would not have been imported, if the quality test would not have taken place. The costs of the quality controls were therefore not costs for activities of the buyer.
Last year, I wrote an article in the e-Magazine “Weg en Wagen” about the cost of quality controls and the customs value . I think it’s an interesting decision, and it is good to read that the criterion for inclusion in the customs value (no longer) is whether the quality controls are absolutely necessary to ensure that the goods are from the agreed quality.
Whether cost of quality controls must be included in the customs value depends very much on what exactly the parties have agreed. I ‘m curious if customs authorities are going to ask quality agencies like for example SGS, HQTS , TTC or VDE for whom they do quality controls in China. That will raise a number of other interesting questions.