IMPORTS FROM EUROPE.

New Zealand Herald, Volume LVII, Issue 17490, 7 June 1920, Page 5

IMPORTS FROM EUROPE.

ASSESSMENT FOR DUTY. THE CUSTOMS REGULATIONS. PRICE CONVERTED AT PAR. Importers of goods from France and Italy have been much agitated over the regulations of the Customs authorities in regard to exchange rates. The system adopted where invoices are mr.d<- out in the currency of the country of origin, is to convert the currency at the standard or mint rate, and to charge duty on the amount reached by such conversion. Wnere invoices are made out in Veiling currency, the amount is first converted into lbs currency of the country of origin at exchange rates ruling on the date of invoice, and then reconverted inoo sterling at the standard or mint rate; on this amount duty is charged. On tho ground that this method greatly increases the valuation for the assessment of duty of goods "bought at favourable exchanges—in the case of France doubling tho duty— Auckland Importers and Shippers Protection Association communicated with the Customs Department and a reply has been received from the Comptroller. The Department explains that section 114 of the Customs Act, 1913, provides that duty is payable on the fair market value of goods wh.n sold for cash for homo consumption in the country ci ex portation, &id section 121 enacts that where the invoice shows the value of the goods in any currency other than in force in New Zealand the equivalent value shall bo ascertained according to a fair rate of exchange to he declared in case of doubt by the Minister. These provisions have, during the last few months, received the fullest consideration, the law officers of the Crown have advised that the rate of exchange, which should be adopted, is the mintage par rate of exchange, i.e., in the case of France and Italy. 25.23 francs or lira to the sovereign. As goods imported from these countries and invoiced in the currency there have to be converted a't the above rates, the Department could not agree that any merchant should obtain an advantage- over his competitors by having his goods invoiced in British currency based on the* current bank rate of exchange. In such cases, therefore, thero is no option but to require the invoices to be first- converted to the currency of the country of exportation at the appropriate rate, and then to reconvert this amount to English money at the mintage rate of exchange. In explanation of the Department's practice, the letter points out that with the exchanges at par a person might purchase with £10,000 goods from France worth 252.300 francs, from Italy goods worth 252,300 lira, from the United States goods worth 48,600 dollars, • and from Japan goods' worth 97,640.36 yen. Presuming the duty was 37 per cent., tie Customs would levy £4125 in each case, the total cost to the importer being £14,125. Taking similar purchases under' prtrent conditions, the Department shows the cost of thft goods to the importer at the ruling exchanges, the duty plus 1 percent, primage on £10,000 and the aggregate cost as follows (the rate of exchange' in francs, etc., to sterling is shown in parentheses) :— Sterling Invoice Value. Value. Duty. TT" ' France 252,300 frs (50) 5.046 4,235 £0.181 Italy 252,309 lira (65) 3.852 4,235 8117 United States 48,600 dels (3.60) 13,500 4.235 17,735 Japan 97,540 yen (2s BJd) 13.120 4,235 17.355 The letter proceeds:—" It would, therefore, appear that the purchasing of goods in France, Italy or other countries having a depreciated currency, however mucn it may detrimentally affect the manufacturers there, is not to the disadvantage of importers from those countries. It is regretted that the instructions which have been issued with respect to the conversion at current bank rates of exchange of invoices made out in English currency, for goods imported from France or Italy, and their reconversion at the mintage par rate of exchange, cinnot be withdrawn?"