Customs Seeks to Eliminate “First Sale” Pricing
Jan. 24, 2008
In a Notice published in the Federal Register on January 24, 2008, Customs has requested comments on its proposal to reconsider the definition of “sold for exportation to the
First sale appraisement presents an opportunity for duty savings where an importer purchases from a middleman and the sale from the middleman’s source (typically an overseas factory) to the middleman qualifies as a sale for exportation to the
A long line of court decisions dating back to the prior valuation statute approved first sale appraisement. More recently, the Court of Appeals for the Federal Circuit recognized that first sale appraisement applies equally as well under the current transaction value statute. See, Nissho Iwai American Corp. v.
Customs proposes that in transactions involving a series of sales prior to the importation of the merchandise, for example, those that include a middle man or trading company, the transaction value, or price actually paid or payable, for the imported merchandise when sold for exportation to the United States is “the price paid to the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale.”
If your company has used first sale appraisement in the past or is contemplating implementing this duty saving method in the future and would like to submit comments to CBP, or if you have any questions regarding this CBP proposal, please contact your nearest BR&C office. Comments are due by March 24, 2008.