| Currently developing members are in trouble when they have to implement the WTO Customs Valuation Agreement (CVA) and use Transaction Value Standard (TVS), the prime customs valuation method in CVA, to determine the customs value. Their high tariff rate makes the undervaluation profitable and prevalent. These countries are facing collusive fraud of trade community and experiencing tariff bleeding. At the same time, their customs lack substance recourse to detect fraud and intelligent sophistication to apply the highly technical method. This Article argues that the CVA was not designed for the interest and will of developing countries and the best way for them to be off the hook and make the CVA acceptable is to make use of flexibility of the rules. This article composes of four parts which are listed as follow.Chapter I, the first part of this article, deals with the basic theory of customs valuation, including the purposes and functions of customs valuation, the structure and components of dutiable value, the classification and significance of customs valuation standards. The main point here is the distinction between TVS and Market Value Standard (MVS). These two standards are for different purposes and with different prerequisites. Put it simply, the former is for trade facilitation and the latter is for protection and anti-fraud. In addition, to make the former work, the country needs to be of low tariff rate and away from the concern of fraud or undervaluation.Chapter II, The second part of this article, relates to the process of "Sudden Revival" of the TVS during the GATT Tokyo Round Multilateral Trade Negotiation (MTN). The research aim of this part is to explain why and how the TVS can find its way to enter into the Tokyo Round Custom Valuation Code (CVC). Firstly, the article reviews and criticizes the suggested Market Value Standards which were provided by GATT Article VII and Brussels Definition of Value to harmonize the universal practice. Secondly, the article examines where the legal expression of TVS in CVC came from. The comparison of the CVC and then Tariff Act of 1930 of US/Customs Act of Canada shows that the direct historical source of TVS set forth in CVC is the Export Value Standard in Sec.402 of Tariff Act of 1930. Finally, the further analysis shows that the revival of the TVS was a compromise among the Big Five. The developing countries were excluded from the "pyramid-style negotiation" of CVC at all. The article then argues that the CVC aimed at helping the industrialized counties, which were the dominant power of GATT multilateral trade system and then met the prerequisites of TVS already, remove the non-tariff barriers and facilitate the trade. It was not for the benefit of developing countries at all. The revival process of TVS in MTN foreshadowed current hardship in front of developing countries.In Chapter III, the third part of the piece, the article describes the current hardship confronted by developing countries, including China, in detail and makes comments on the technical solutions put forward by some scholars and officials. The article reveals the limited value of these prescriptions given and argues that taking advantages of flexibility of rules is the way out for developing countries.In Chapter IV, V and VI, the fourth part of the piece, the article explores: a) the interpretation of substantial legal concepts, such as "Sale for Export to Imported Country", "Price Actually Paid or Payable", "Buying Commissions", of TVS by US, EC and Canada; b) the procedural institutions designed by US to secure the accurate and true information of the traction value, such as the "Reasonable Care", "Shared Responsibility" provided by the Customs Mod Act, the availability of tax return information to US Customs Service set forth in IRS regulation implementing Sec.6103 of Internal Revenue Act and the acceptability of APA/TPS information announced by US Customs; c) the judicial review standards which are applied by US courts to valuation cases. The foregoing analysis shows that: a) the most important concepts of TVS are always explained by US, EC and Canada in very protective pattern; b) without any technology investment, some procedural institutions are able to disincent importers to make untrue declaration; c) the De novo Review Standard enacted in the US Customs Court Act is in fact useless because of the correctness presumption of facts found by the Customs and the compulsory application of Chevron analysis in Customs cases. Finally the article argues that the flexibility within the legal frame exists and the abovementioned experiences may help developing countries, including China, to be off the hook.
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