Changes to the Simplified Procedure Value (SPV) system for calculating import duty payments are likely during the course of 2005.

The European Commission had proposed the abolition of the system. If this had been accepted, the alternative methods of duty calculation - invoice value and account sales methods - would be the only options available for use. The complete abolition of the system has been opposed by some member states, but we understand a vote will take place at the end of January on the future of the system.

One possible outcome is a new SPV-type system that would cover a reduced number of products. In addition, the values published would use price information from a reduced number of sources.

Another difference is that it would be compulsory to use the invoice value as the customs valuation method if a contract exists or a price has been agreed. The proposed SPV-replacement system would only be available for use where no contract exists or no price has been agreed.

The proposal for a replacement system, as it is currently formulated, would only cover about half of the products that are currently included. We have stated our objection to the limited range of products to Defra and HM Customs & Excise. We would wish to see as many products as possible included within a replacement system.

If any amendments are agreed, it will no doubt take some months to implement them. The FPC can provide to members Simplified Procedure Values, Standard Import Values and information on import duty rates, as well as a list of the products that are included currently, and those which could be omitted in the proposed replacement system.