What do the terms “ad valorem” and “specific rates” mean?
Duty rates can be based on a percentage of the value of the good being imported (ad valorem) or the rate can be a certain amount of money based on the weight, volume, or per piece. Many countries use primarily ad valorem rates. On some products, there may be a compound rate of a certain percentage plus a specific amount of money per item. Ad valorem rates are based on the value of the goods being imported. WTO members use transaction based valuation. For customs valuation. In general, this may be CIF or FIB.Please see GATT Rules for Customs Valuation for a further discussion of transaction value.
