US Court of International Trade issues major decision on FSFE

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

March 2021

Overview

The US Court of International Trade (CIT) on March 1 issued a lengthy decision in Meyer Corp. U.S. v. United States, addressing two important issues affecting goods imported from China and Thailand.

The CIT considered whether sales from a related manufacturer to a related middleman were eligible for appraisement under the well-established concept of first sale for export (FSFE), a strategy affirmed by the US Court of Appeals for the Federal Circuit’s decision in Nissho Iwai America Corp. v. United States, 982 F.2d 505 (Fed.Cir. 1992). The CIT also considered whether goods imported from Thailand were eligible for duty-free treatment under the Generalized System of Preferences (GSP) program.

The takeaway

It remains unclear how CBP will apply or interpret the Meyer decision. While the CIT decision in Meyer causes concern and could raise the bar for use of a traditional FSFE strategy, importers should note that the CIT acknowledged that further clarification likely will be required from the Federal Circuit, which would hear an appeal of the CIT decision.

Until we see how CBP applies the Meyer holdings to other situations — particularly regarding the impact of NMEs on FSFE criteria and, more broadly, transaction value for any import with an NME country within the supply chain — and how the Federal Circuit addresses these issues if the case is appealed, the ultimate impact of Meyer on the future use of FSFE remains uncertain.

Contact us

Anthony Tennariello

Customs and International Trade Co-leader, PwC US

Follow us