Commodity Clips

Special Issue: Customs Proposal to Eliminate First Sale

On January 24th, the Bureau of Customs and Border Protection (CBP) published the notice of proposed interpretation relative to the definition of “sold for exportation to the United States” for purposes of determining Transaction Value in a multi-tiered sale. In this Federal Register Notice and Request for Comment, CBP announced a proposed change of interpretation of the US valuation law which, if adopted, would result in the revocation of the First Sale For Export (FSFE) concept, thereby requiring the customs value of goods imported into the United States to be predicated on the price paid by the US importer. Comments on the proposed change are due by March 24, 2008.

While this is a highly significant event, it is important to note that CBP’s notice does not translate into a change in the current legal framework. Accordingly, clients who are currently utilizing FSFE as the basis of their customs value in the US should not immediately change their present course of actions.

PwC is currently analyzing CBP’s arguments contained in the notice. In the coming days and weeks, we will issue periodic updates as we monitor developments and recommend the best strategy. We encourage all clients who are currently utilizing FSFE (as well as those contemplating this method of appraisement), to stay connected to our upcoming communications. Of course, WMS consultants stand ready if you wish to discuss this matter.