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WMTA MEETING 6/15/2011

WMTA MEETING 6/15/2011. RENZA, INC. There are several methods used by CBP to value goods imported into U.S. Most widely used are: Transaction Value – Usually non-related parties Computed Value- Usually related parties.

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WMTA MEETING 6/15/2011

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  1. WMTA MEETING6/15/2011 RENZA, INC.

  2. There are several methods used by CBP to value goods imported into U.S. • Most widely used are: • Transaction Value – • Usually non-related parties • Computed Value- • Usually related parties

  3. Reconciliation is a procedure to adjust or correct values on previous entries. • Most commonly used in conjunction with computed value • But It can be used with both methods

  4. What about TV between related parties? • CBP says OK if certain conditions are met • What about TV and reconciliation between related parties? • One seems to negate the other, however it is advantageous under some circumstances

  5. 19 U.S.C. § 1401a(b)(4)(B) provides that any rebate of, or other decrease in, the price actually paid or payable that is made or otherwise effected between the buyer and seller after the date of importation of the merchandise into the United States shall be disregarded in determining transaction value.

  6. CBP has accepted changes to the TV price if there was an agreement to do so prior to the date of exportation, such as a formula tied to some condition. • One form of such an agreement can be an Advance Price Agreement (APA).

  7. Some APA set profit targets between the buyer and the seller with a mechanism for making adjustments at some point in time. • CBP’s position is that an APA alone does not substantiate the acceptance of TV between related parties. Further documentation is necessary.

  8. In a recent ruling CBP denied a protest of a reconciliation entry that claimed a reduction in prices that were required under a bilateral APA. See HQ H022287 • The importer contended that the parties did meet the requirements of arms-length pricing, but cited only the APA as evidence.

  9. Bottom Line • Do not rely solely on an APA as proof of arms-length pricing and • Get CBP acceptance of a TV pricing agreement if reconciliation is to be used for retroactive price adjustments.

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