29. Classification—Liquidation
Classification
Classification, and, when ad valorem rates
of duty are applicable, appraisement, are the
two most important factors
affecting dutiable
status.
Classification and
valuation, whether or not they are pertinent because an ad valorem
rate of duty applies, must be provided by commercial importers
when an entry is
filed. In addition, classifications
under the statistical
suffixes of
the tariff schedules
must
also be furnished even though
this
information is not pertinent to dutiable
status. Accordingly,
classification is initially the responsibility of
an importer, customs broker
or other person preparing
the entry papers. Section
637 of the Customs Modernization Act imposes
the requirement that importers exercise reasonable
care when classifying and appraising
merchandise.
Familiarity with
the organization of the Harmonized Tariff Schedule of
the United States facilitates
the classification
process. (See Chapter
13 of this booklet relating
to dutiable status.)
The tariff schedule is
divided into various sections
and chapters dealing separately
with merchandise in broad product categories. These categories cover
animal products,
vegetable products, products
of various basic materials such as wood, textiles, plastics, rubber,
and steel and other metal products in various stages of
manufacture, for example.
Other sections
encompass chemicals, machinery and
electrical equipment, and
other specified or non-enumerated products. The last section, Section
XXII, covers certain exceptions from duty and special statutory provisions.
In Sections I through XXI,
products
are classifiable (1) under
items or descriptions
which name them, known as an eo nomine provision;
(2) under provisions of
general description; (3)
under provisions which identify them by component material; or (4)
under provisions
which encompass merchandise
in accordance with its actual
or principal use. When two or
more provisions
seem to cover the same merchandise, the prevailing
provision is determined in accordance with
the legal notes and the General
Rules
of Interpretation for
the tariff schedule. Also applicable are tariff classification
principles contained in
administrative precedents
or in the case
law of the U.S. Court of International Trade
(formerly the U.S. Customs Court) or the U.S. Court of Appeals for
the Federal Circuit
(formerly
the U.S. Court of Customs and Patent
Appeals).
Liquidation
CBP officers
at the port of entry or other officials acting on
behalf of the port director
review selected
classifications and valuations, as well
as other required import information, for correctness or as
a proper basis
for appraisement, as well
as for
agreement of the submitted
data with the merchandise actually imported.
The entry
summary
and documentation may be accepted as submitted without any changes. In
this situation, the entry is liquidated
as entered.
Liquidation is the point
at which CBP’s ascertainment of the rate and amount of duty becomes final for most purposes. Liquidation is accomplished
by posting a
notice on a public bulletin board
at the customhouse. However, an importer may receive an advance notice on CBP Form 4333A “Courtesy Notice” stating when and
in what amount duty will be
liquidated. This form is not the liquidation,
and protest rights
do not accrue until the notice is posted.
Time limits for protesting do
not start until
the
date of posting,
and a protest cannot
be filed before liquidation
is posted.
CBP may determine that an entry cannot be
liquidated as entered for one reason or another.
For example,
the tariff classification
may not be correct or may not
be acceptable because it is not consistent
with established
and uniform classification practice. If the
change required by this determination results in
a rate
of duty more favorable to an importer,
the entry is liquidated accordingly and
a refund is authorized
for
the applicable amount of the deposited estimated duties. On
the other hand, a change may
be necessary which
imposes
a higher rate of duty. For example, a
claim for an exemption
from duty under a free-rate provision
or under a conditional exemption
may be found to be insufficient for lack
of the required supporting documentation. In this situation, the importer will be
given an advance notice of the
proposed duty rate increase and an
opportunity to validate the claim for a free
rate or more favorable rate of
duty.
If the importer does
not respond to the notice, or if the response is found
to be without merit, entry is liquidated
in accordance with the entry as corrected, and the importer is billed for
the additional duty. The port
may find that the importer’s response raises issues of such complexity
that
resolution
is warranted
by a CBP Headquarters decision
through the internal advice procedure.
Internal advice from CBP
Headquarters may be requested by local
CBP officers on their own initiative or in response to
a request by the importer.
Protests
After liquidation,
an importer may
still pursue, on
CBP Form 19
(19 CFR
174), any claims for an adjustment
or refund, for entries filed before 12-18-06,
by filing a protest within 90
days
after liquidation. The protest period
has been
extended to 180 days for entries
filed on or after 12-18-06.
In order to apply for a Headquarters ruling, a request for further review must be filed
with
the protest. The same
Form 19 can be used for this purpose. If filed
separately,
application
for further review must still
be filed within 90 days
of liquidation. However,
if a ruling on the question has
previously been issued in response to a request for a
decision on a prospective transaction or a
request for internal advice,
further review will ordinarily
be denied. If a protest is denied,
an importer has
the right to litigate
the matter by filing a summons
with the U.S. Court of International
Trade within 180 days after
denial of the protest. The rules
of the court and other applicable statutes and
precedents determine the course
of customs litigation.
While
CBP’s ascertainment of dutiable status
is final for
most
purposes at the time
of liquidation, a liquidation
is not final
until any protest which has been
filed against it has been decided. Similarly,
the administrative decision
issued
on a protest
is not final
until any litigation filed against it has
become final.
Entries must be liquidated within one year of the date of
entry unless the liquidation needs to be extended for another one-year
period not to exceed a total of four years
from the date of entry. CBP will
suspend liquidation of
an entry when required by statute or court
order.
A suspension will remain
in effect until the issue is resolved.
Notifications of extensions and
suspensions
are given
to importers, surety companies, and customs
brokers who are parties
to the transaction.
The conversion
of foreign currency for customs
purposes must be made
in accordance with the provisions of 31 U.S.C. 5151.
This section states that CBP
is to use
rates of exchange determined and certified by the Federal Reserve Bank
of New York. These
certified rates are based on the
New York market buying
rates for the foreign currencies
involved.
In the case of widely
used currencies,
rates
of exchange are certified each
day.
The rates
certified on the first business day
of each calendar quarter are
used throughout the quarter except on
days
when fluctuations of five percent
or more occur, in which
case
the actual certified rates for those days are used.
For infrequently used currencies, the Federal
Reserve
Bank of New York certifies rates of
exchanges upon request by
CBP. The rates certified
are only
for the currencies and dates
requested.
For CBP purposes, the
date of exportation of the goods is the date used to determine the applicable
certified rate of exchange. This remains true even though a different rate may
have been used in payment of the goods. Information as to the applicable rate
of exchange in converting currency for customs purposes in the case of a given shipment
may be obtained from a CBP port director.
31. Transaction Value
The entry
filer
is responsible
for using reasonable
care to value imported
merchandise and provide any other information necessary to enable the CBP officer to
properly assess the duty and determine whether
any other applicable legal requirement is met. The CBP officer is then responsible for fixing the value of the imported
merchandise. The valuation
provisions of the Tariff Act of 1930 are found in section 402, as amended by the Trade
Agreements Act of 1979. Pertinent portions are reproduced in the appendix.
Generally, the customs
value of all merchandise exported to the United States will be the transaction
value for the goods. If the transaction value cannot be used, then certain secondary
bases are considered. The secondary bases of value, listed in order of precedence
for use, are:
• Transaction
value
of identical merchandise,
• Transaction value of
similar merchandise,
• Deductive value,
• Computed value.
The order of
precedence of the last
two values can be reversed if the importer so requests
in writing at the time of filing the entry. These secondary bases are discussed in the next two chapters.
Transaction Value
The transaction value
of imported merchandise is the price actually
paid or payable for the merchandise when
sold for exportation
to the United States,
plus
amounts for the following items
if they are not included in the
price:
•
The packing costs
incurred by the buyer,
•
Any selling commission
incurred by the buyer,
•
The value of any assist,
•
Any royalty or
license fee that the
buyer is required to pay as a condition
of the sale,
•
The proceeds, accruing to
the seller, of any
subsequent resale,
disposal,
or use
of the imported merchandise.
The amounts for
the above items are added only
to the extent that each is not
included in the price actually paid or
payable and information is available to establish the
accuracy of the amount. If
sufficient information
is
not available, then the transaction value
cannot be determined and
the next basis of
value, in order of precedence,
must
be considered
for appraisement. A
discussion of these
added items follows:
Packing costs
consist of the cost incurred by the
buyer for all containers and coverings of whatever nature and for the labor and materials used in
packing the imported merchandise so that
it is
ready for export.
Any selling commission
incurred by the buyer with
respect to the
imported merchandise constitutes part of the transaction value. Buying commissions do not. A selling commission means
any commission paid to the seller’s agent, who
is related
to or
controlled by, or works for
or on behalf of, the manufacturer or the seller.
The apportioned value
of any assist constitutes
part of the transaction
value of the imported merchandise. First the value
of the assist
is determined;
then the value is prorated
to the imported merchandise.
An assist is any of the items listed below that the buyer of imported
merchandise provides directly or
indirectly, free
of charge or at a reduced cost, for
use
in the production or sale of
merchandise for
export to the United States.
•
Materials, components, parts, and similar items
incorporated
in the imported merchandise,
•
Tools, dies, molds, and
similar items used
in producing the imported merchandise,
•
Merchandise consumed
in producing the imported merchandise,
•
Engineering,
development, artwork, design work,
and plans and sketches that are
undertaken outside the
United States.
“Engineering...,”
will not be treated as an
assist if the service
or work is:
•
Performed
by a person domiciled
within the United
States,
•
Performed while
that person is
acting as an employee or agent of
the buyer of the imported merchandise,
and
•
Incidental to
other engineering, development, artwork,
design work, or plans or sketches
undertaken within the United States.
In determining the
value
of an assist,
the following rules apply:
•
The
value is either: (a) the cost of acquiring
the assist, if acquired by
the importer from an
unrelated
seller,
or (b) the cost of the
assist, if
produced by the importer or a
person related
to the importer.
•
The value
includes the cost of transporting
the assist
to the place of production.
•
The value
of assists
used
in producing the imported
merchandise is adjusted to reflect use, repairs,
modifications, or other factors affecting
the value of the assists. Assists of this type include such items as tools, dies,
and molds.
For
example, if the importer previously used the assist, regardless of whether
he acquired or produced it, the original cost of acquisition or of production must be decreased to reflect
the use. Alternatively, repairs
and modifications may result in
the value of the assist
having to be adjusted upward.
• In case of engineering, development, artwork, design
work, and plans and sketches undertaken
elsewhere
than in the United States, the value is:
1. The cost of obtaining
copies of the assist, if the assist is available in the public domain,
2. The cost of the purchase
or lease, if the assist was bought or leased by the buyer from an
unrelated person,
3. The value
added outside the United States,
if the
assist
was reproduced in the United States and one
or more
foreign countries.
So
far as possible, the buyer’s
commercial record system will be used to determine the value
of an assist, especially
such
assists as engineering, development, artwork, design work,
and plans and sketches undertaken elsewhere than in the United States.
Having determined
the value of an
assist, the next step
is to
prorate that value to the imported merchandise. The apportionment
is done in a reasonable manner appropriate to the circumstances and in
accordance with generally accepted
accounting principles. By the latter is meant any
generally
recognized
consensus or substantial authoritative support regarding the recording
and measuring
of assets
and liabilities
and changes, the disclosing of information, and the
preparing of financial statements.
Royalty
or license
fees
that a buyer must pay directly or indirectly as
a condition of the
sale of
the imported merchandise for exportation
to the United States
will be included in the transaction value. Ultimately,
whether
a royalty
or license fee is dutiable
will depend on whether
the buyer had to pay it as
a condition of the sale and to whom and under what circumstances
it was paid. The dutiable
status will have
to be decided on a case-by-case
basis.
Charges for
the right to reproduce the imported goods in the United States are not dutiable. This right
applies only to the following types of merchandise:
•
Originals
or copies of artistic
or scientific works,
•
Originals or
copies of models
and industrial drawings,
•
Model machines
and prototypes,
•
Plant and animal
species.
Any proceeds
resulting from
the subsequent resale, disposal, or use of the imported merchandise that accrue, directly or
indirectly, to the seller are dutiable. These proceeds are added
to the price actually paid or payable if
not otherwise included.
The price actually paid or
payable for the imported
merchandise is
the total payment, excluding international
freight, insurance, and other c.i.f. charges, that
the buyer makes to
the seller.
This payment may
be direct or indirect. Some
examples of an indirect
payment are when the buyer settles all or
part of a debt owed by the seller, or when
the seller reduces the price
on a
current importation to settle a debt he owes the buyer. Such indirect payments are
part of the transaction value.
However, if a buyer performs an activity
on his own account, other than those that may
be included in the transaction value, then the
activity is not considered
an indirect payment to the seller and
is
not part of the transaction
value. This applies even
though the buyer’s activity
might be regarded as
benefiting the seller;
for example, advertising.
Exclusions
The amounts to
be excluded from transaction
value are as follows:
•
The cost, charges, or expenses incurred for transportation,
insurance, and related services
incident
to the international
shipment of the goods from
the country of exportation
to the place of importation in the
United
States.
•
Any reasonable cost
or charges incurred for:
•
Constructing,
erecting, assembling,
maintaining, or providing technical
assistance with respect to the goods after
importation
into the United States, or
•
Transporting the goods after importation.
•
The customs duties and other federal
taxes, including any federal excise
tax, for which sellers
in the United States are ordinarily
liable.
NOTE:
Foreign inland freight
and related charges
in bullet 1 (see part 152, CBP Regulations), as well as bullets 2 and
3 above, must be identified separately.
Limitations
The transaction value of imported merchandise
is the appraised value
of that merchandise, provided certain
limitations do not exist.
If any of these limitations
are present, then transaction value cannot be used as the
appraised
value, and the next basis
of value will be considered.
The limitations
can be divided into four
groups:
•
Restrictions
on the disposition or use of the
merchandise,
•
Conditions for which a
value cannot be determined,
•
Proceeds
of any subsequent resale, disposal or use of the merchandise, accruing to the
seller, for which an appropriate adjustment to
transaction value
cannot be made,
•
Related-party transactions where
the transaction value is not acceptable.
The term “acceptable” means
that the relationship between
the buyer and seller did not
influence the price actually paid or payable.
Examining the circumstances of the
sale will
help make this determination.
Alternatively,
“acceptable” can also mean that the
transaction value
of the imported merchandise closely approximates one of
the following test values,
provided these values relate to merchandise exported to the United States at or about the same
time as the imported merchandise:
•
The
transaction value of identical merchandise
or of similar merchandise in sales to unrelated buyers
in the United States,
•
The deductive
value or computed value for identical
merchandise or similar merchandise.
The test values are used for comparison only, they do not form a substitute basis
of valuation. In determining
whether the transaction value is close to one of
the foregoing test
values, an adjustment is made if the sales involved differ
in:
•
Commerci levels, Quantity
levels,
•
The costs, commission, values, fees,
and proceeds added to the transaction
value (price paid) if not
included in the price,
•
The
costs incurred by the seller
in sales in
which he and the buyer are not
related that are not incurred by the
seller in sales in which
he and the buyer are related.
As stated, the test values are alternatives
to an examination of the circumstances
of the sale. If one of the test values is
met, it is not necessary
to examine the circumstances
of the sale to
determine if the relationship
influenced the price.
32. Transaction Value Of Identical
Or Similar Merchandise
When
the transaction value cannot
be determined, then an attempt
will
be made to appraise the imported
goods
under the transaction value of identical merchandise method.
If merchandise identical to
the imported goods cannot
be found or an acceptable transaction
value for such merchandise does
not exist, then the next appraisement method
is the transaction
value of similar merchandise. In either case
the value used would be a
previously accepted customs
value.
The identical
or similar
merchandise must
have been exported to the
United
States at or
about the same time that the merchandise being
appraised is
exported to the United States.
The transaction value
of identical or
similar merchandise must
be based on sales of identical
or similar
merchandise, as
applicable, at the same
commercial level and
in substantially the same quantity
as the
sale of the
merchandise being appraised. If no such
sale
exists, then sales at either a different commercial level or in different quantities, or
both, can be used but must
be adjusted to take account of any such difference. Any adjustment must be based
on sufficient information, that
is,
information establishing the reasonableness
and accuracy of the adjustment.
The term “identical merchandise” means merchandise that is:
•
Identical
in all respects to the merchandise being appraised,
•
Produced in the same country as
the merchandise being appraised,
•
Produced by the
same person as the merchandise being
appraised.
If
merchandise meeting all
three criteria cannot be found, then
identical
merchandise is merchandise
satisfying the first two
criteria but produced by
a different person than the producer of merchandise being
appraised.
NOTE: Merchandise
can be
identical to the merchandise
being
appraised and still show
minor differences in appearance.
Exclusion: Identical
merchandise does not
include merchandise that incorporates or reflects engineering,
development, art work, design work,
or plans and sketches provided free
or at reduced cost
by the buyer and undertaken in the
United States.
The term “similar
merchandise” means merchandise that is:
•
Produced in the same country and by the
same person as the merchandise
being appraised,
•
Like
the
merchandise being appraised
in characteristics
and component materials,
•
Commercially
interchangeable with the merchandise being appraised.
If merchandise
meeting the foregoing criteria cannot
be found, then similar merchandise is merchandise having the same
country of production, like characteristics and component
materials, and commercial
interchangeability but produced
by a different person.
In determining whether
goods are
similar,
some of the factors to be
considered are
the quality of the goods, their
reputation, and existence of
a trademark.
• Exclusion: Similar merchandise does not
include merchandise that incorporates
or reflects engineering,
development, art work, design work, and plans and sketches provided free
or at reduced cost
to the buyer and undertaken in the United States.
It is possible that
two or more transaction values for
identical or similar merchandise, as applicable,
will be determined. In such a case the lowest value will
be used as
the appraised value of the
imported merchandise.
33. Other
Bases:
Deductive And Computed Value
Deductive Value
If the transaction value of imported merchandise, of identical merchandise,
or of similar merchandise
cannot be determined, then deductive value is the next
basis of
appraisement. This method is used unless the importer designates
computed value as the
preferred appraisement method. If computed value was chosen
and subsequently
determined not to exist
for customs valuation purposes, then the
basis of appraisement
reverts to deductive value.
Basically, deductive
value is the resale
price in the United States after importation of the goods,
with deductions for certain items. In discussing
deductive
value,
the term “merchandise concerned” is used. The term means
the
merchandise being appraised, identical
merchandise, or similar merchandise.
Generally, the deductive value is calculated by
starting with
a unit price and making certain
additions to and deductions
from that price.
Unit Price. One of three prices constitutes the unit
price
in deductive
value. The price used depends on when
and in what condition the merchandise concerned
is sold in the
United States.
1.Time and Condition: The
merchandise is sold in the condition as imported at or
about the date of importation
of the merchandise
being
appraised.
Price: The
price
used is
the unit price at which the greatest aggregate
quantity of the merchandise concerned
is sold at or about
the date of importation.
2.Time and
Condition: The merchandise
concerned is sold
in the condition as imported but
not sold at or about the date
of importation of the
merchandise being appraised.
Price: The
price
used is
the unit price at which the greatest aggregate
quantity of the merchandise concerned
is sold after
the date of importation of the merchandise being
appraised but before the close of
the 90th day after the date of importation.
3.Time and
Condition: The merchandise
concerned is not sold
in the condition as imported and not sold
before the close of the 90th
day after the date of importation of the merchandise being appraised.
Price: The price
used is
the unit price at which the greatest aggregate
quantity of the merchandise being
appraised, after further processing, is sold before
the 180th day after
the date of importation.
This
third price is also known as the “further processing
price” or “superdeductive.”
The importer
has the option to ask
that deductive value
be based on the further
processing price.
Under the superdeductive method the merchandise concerned is
not sold in the condition as imported
and not sold before
the close of the 90th day
after the date of
importation, but is sold before the 180th day after the
date of importation.
Under this
method, an amount equal to the value of the further processing must be deducted from the unit
price in determining deductive value. The amount so deducted must be based on objective and quantifiable data concerning the cost of such work as well
as any spoilage, waste
or scrap derived from that work.
Items such
as accepted
industry
formulas, methods
of construction, and industry practices could be
used as
a basis for calculating the amount
to be deducted.
Generally, the
superdeductive
method
cannot be used if the further processing destroys the identity of the goods. Such situations will be
decided on a case-by-case basis for the following
reasons:
•
Sometimes,
even though the identity
of the goods is
lost,
the value added by the processing can be determined accurately
without
unreasonable difficulty
for importers or for CBP.
•
In some cases, the imported goods still keep their identity after
processing but form only a minor part of the goods sold in the
United States. In
such cases, using the superdeductive
method to value the
imported goods will not be justified.
The superdeductive
method cannot be used
if the merchandise concerned is
sold
in the condition as imported
before the close of the
90th day after the date of importation of the merchandise being appraised.
Additions. Packing costs for the merchandise concerned
are added to the price used for
deductive value,
provided these costs have not otherwise
been included. These costs are added regardless
of whether the importer or the buyer
incurs the cost. “Packing costs” means the cost
of:
•
All containers and
coverings of whatever nature, and
•
Packing, whether for
labor or materials,
used in placing
the merchandise in condition,
packed ready for shipment to the United States.
Deductions.
Certain items
are not part of deductive value
and must be deducted
from the unit price. These items
are as follows:
• Commissions
or profit and general expenses. Any commission
usually paid or agreed to be paid, or the
addition usually made for
profit and general expenses,
applicable to sales
in the United States of imported
merchandise that is of the same
class or kind
as the merchandise
concerned, regardless of the country of exportation.
• Transportation/insurance
costs.
(a) The actual and
associated costs of transportation
and insurance incurred with respect to international
shipments concerned from the country of exportation to the United States,
and
(b) The
usual
and associated costs
of transportation and
insurance incurred with
respect
to shipments of such merchandise from the place of importation to the place of delivery in the United
States, provided these costs are not
included as
a general
expense under the preceding item 1.
• Customs duties/federal
taxes. The
customs duties
and other federal taxes payable
on the merchandise concerned because
of its importation plus any
federal excise tax on, or
measured by the value
of, such merchandise
for which sellers
in the United States are
ordinarily liable.
• Value
of further processing.
The value added by processing the merchandise after importation, provided that sufficient information exists concerning the
cost of processing.
The price determined for deductive value
is reduced by
the value of further processing
only if the third unit price (the superdeductive)
is
used
as deductive
value.
For
purposes of determining the
deductive value of imported
merchandise, any
sale to a person who supplies
any assist for use
in connection
with the production or sale
for export of the merchandise shall
be disregarded.
Computed Value
The next basis of appraisement
is computed
value. If customs valuation cannot be based
on any of the values
previously discussed,
then computed value is considered. This value is also
the one
the importer
can select to
precede deductive value as a
basis
of appraisement.
Computed value consists
of the sum of the following items:
•
The cost or value
of the materials, fabrication,
and other processing used in producing
the imported
merchandise,
•
Profit and
general expenses,
•
Any assist, if not
included in bullets 1 and 2,
•
Packing costs.
Materials,
Fabrication, and Other
Processing. The
cost or value of the materials, fabrication,
and other processing
of any kind used in producing
the imported merchandise is based
on (a) information provided by
or on behalf of the producer, and
(b) the commercial accounts of the
producer if the accounts are consistent with generally accepted
accounting principles
applied in the country of
production of the goods.
NOTE: If
the country of exportation imposes an internal tax
on the materials or their disposition and refunds the tax when merchandise produced from the materials is exported, then the amount of the internal
tax is not included
as part
of the cost or value of
the materials.
Profit and
General
Expenses
• The amount is
determined by information supplied by
the producer and is based on his or her
commercial
accounts, provided
such accounts are consistent with generally
accepted accounting principles in the
country of production.
The producer’s
profit and general expenses must be
consistent with those usually reflected in sales
of goods of the same
class or kind as the imported merchandise that are
made by producers
in the country of exportation for export to the
United States.
If they are not consistent,
then the amount for profit
and general expenses is based on the
usual profit and general expenses
of such
producers.
• The amount for profit and general expenses is
taken as a whole.
Basically,
a producer’s profit could be low
and his or her general expenses high, so that
the total amount is consistent with that usually reflected
in sales of goods of
the same class or
kind. In such a situation,
a producer’s actual
profit figures, even if low, will be used
provided he or she has
valid commercial reasons to justify them and
the pricing policy reflects usual pricing policies
in the industry concerned.
Under computed value, “merchandise of the same class and
kind” must be imported from the same country as
the merchandise being appraised and
must
be within a group or range of
goods produced by a particular industry or industry sector. Whether certain merchandise is of
the same class or
kind as other merchandise will be determined on a case-by-case basis.
In determining usual profit
and general expenses, sales for export
to the United States of the narrowest group or
range of merchandise that includes the
merchandise being appraised will be
examined, providing the necessary
information can be obtained.
If the value of
an assist used in producing the
merchandise is not included as
part of the producer’s
materials, fabrication, other processing,
or general expenses, then the
prorated value of the assist will
be included in computed value. It is important
that
the value of the assist not be
included elsewhere because no
component of computed value should be
counted more than once in determining computed value.
NOTE:
The value
of any engineering, development, artwork, design work, and plans and sketches
undertaken in the United States
is included in computed value only to
the extent that such value
has been charged to the producer.
The cost of all containers and coverings
of whatever nature, and of packing,
whether for labor or material, used in placing merchandise in condition and packed ready for shipment to
the United States is included in computed value.
Value If Other Values
Cannot Be Determined
If none of the previous five values
can be used to appraise the imported
merchandise, then the customs
value must be based on a value
derived from one of the five previous
methods, reasonably adjusted
as necessary. The value so
determined should be based, to the
greatest extent possible, on previously
determined values. Some
examples of how the other methods can be reasonably
adjusted are:
Identical
Merchandise (or Similar
Merchandise):
1.
The
requirement
that the identical merchandise
(or similar
merchandise) should
be exported at or about the
same time as
the merchandise being appraised could
be flexibly interpreted.
2.
Identical imported merchandise (or similar imported merchandise)
produced in a country other than the country
of exportation of the
merchandise being appraised could be the basis for customs
valuation.
3.
Customs
values of identical imported merchandise (or similar imported merchandise) already determined
on the basis of
deductive value and computed
value could be used.
Deductive
Method: The 90-day requirement
may be administered flexibly
(19 CFR 152.107(c)).
34. Rules of
Origin
The origin of merchandise that is imported into the customs
territory of the United States can affect the rate
of duty,
entitlement
for special programs,
admissibility,
quota, anti-dumping or countervailing
duties, procurement by government
agencies and marking
requirements. In order to
determine a product's country of
origin, the importer should consult the
applicable rules of origin.
There are
two basic types of
rules
of origin: non-preferential and preferential. Non-preferential rules
generally
apply in the absence of bilateral or multilateral trade
agreements. Preferential rules
are
applied to merchandise to determine its eligibility
for special treatment under
various trade agreements or
special legislation such as the Generalized System of
Preferences
(GSP),
the North American Free Trade
Agreement (NAFTA), or the African Growth and Opportunity Act (AGOA). There are also rules
of origin for textile
and apparel articles; these
are
provided for by statute.
A more detailed
discussion of these
rules may
be found in the publications What Every
Member of the
Trade
Community Should Know About:
Rules
of Origin and What Every
Member
of the Trade Community Should
Know About: Textile
& Apparel Rules of Origin, which are available on the CBP Electronic Bulletin
Board and the CBP Website, www.cbp.gov.