RR:IT:VA 548520 RFC
Ms. Vera Adams, Port Director
U.S. Bureau of Customs and Border Protection
Los Angels-Long Beach Seaport
301 E. Ocean Boulevard
Long Beach, CA 90802
RE: Bona Fide Sale; Nissho Iwai; Multi-tiered Transactions
Dear Ms. Adams:
This letter is in reference to your March 29, 2004, memorandum forwarding a request for internal advice submitted by Expeditors Tradewin, LLC on behalf of [ ] The request relates to Nissho Iwai-type claims on goods imported by [ ] from Asia. In addition to the importer’s February 25, 2004, request and submission, a telephone conference was conducted between the importer’s representatives and this office on June 29, 2004. The importer also made a supplemental written submission on July 9, 2004.
[ ] requested confidential treatment for certain information submitted in connection with its request for internal advice. As it conforms to the requirements of 19 CFR § 177.2(b)(7), the request is approved. The information determined to be confidential will be contained within brackets in this internal advice ruling, and it will be redacted from published versions of the ruling.
FACTS:
This request relates to purchases of candles, candleholders and ceramic tableware made in China and imported by [ ] The transactions involve various manufacturers (or factories) that produce the goods and two different foreign middlemen: (1) [ ], Taipei, Taiwan and (2) [ ], Hong Kong. In addition, a buying agent, [ ], is involved in the transactions. [ ] receives a five-percent commission, which is not part of the entered and appraised value. The merchandise was entered on five entries. The first four entries involve [ ] and ceramic tableware with each entry declaring a different factory. The fifth entry involves [ ] and candles and candleholders that were apparently produced by three different factories.
The importation process begins with [ ] sending [ ] an “objective sheet.” This sheet provides product specifications, quantities, delivery dates and the “estimated landed cost” that [ ] is prepared to pay for the goods. [ ] sends the objective sheet to a number of “makers,” which bid on the order. The makers are foreign middlemen in the transactions.
The importer describes the ordering process in detail in its request as follows:
The order process is common to almost all purchases made by [ ]. [ ] buyer initiates a bidding process by inviting various makers to bid on selling an item to [ ]. In the case of both wearing apparel and hard goods, the product specifications are generally set forth in an objective sheet, which is prepared and sent by the [ ] buyer electronically to [ ]. The objective sheet provides a reference to the target estimated landed cost which is the price [ ] is prepared to pay for the goods, total quantity, delivery date and in the case of apparel, breakdown by size and color. The factory which is to produce the goods is often nominated. [ ] then sends the objective sheet to a number of potential makers (often up to ten), who are on a pre-approved list maintained by [ ] and who are possible bidders for the purchase. The pre-approved list is comprised of makers who have entered into an Electronic Data Interchange Trading Partner Agreement with [ ]. [ ] makes its selection from among those listed makers. At this time, [ ] approves the factory that the maker proposes to use to actually produce the goods.
A print screen purchase order is issued by [ ] via EDI approximately ninety days prior to the start ship date to cover a specific style and the purchase order is sent via EDI to [ ]. The purchase order contains details such as the ship date. Any changes to the agreed details must be approved by [ ] and recorded in a notice of change issued by [ ]. Based on the order objective sheet, [ ], acting as [ ] agent, will prepare a placement memorandum, which is another document central to the order process. The placement memorandum actually serves as a conventional purchase order and names the vendor as well as the factory, which the vendor will be using to actually make the article. The placement memorandum refers to both [ ] purchase order number and style number, gives quantity and price details as well as required shipping carton markings. These latter requirements refer to [ ] as the destination address, and its purchase order and style numbers. The placement memorandum is signed by the vendor and by [ ] on behalf of [ ].
The general practice is to rely on letters of credit for payment to the makers. For the products that are the subject of this request, [ ] will open up a letter of credit for the vendors on net thirty day terms, and the vendors will use the fact that they have the financial expectation of this letter of credit as the basis for their own bank financing. The maker will be able to present the necessary documents, such as the payment release letter, bill of lading or forwarder’s cargo receipt, and invoice to the bank for a drawdown of the letter of credit. This drawdown payment from the letter of credit is made possible after [ ] issues a payment release letter. Once the goods are on the vessel, [ ] will enter them into its inventory and make the necessary entries at the purchase order level. [ ] can also bill [ ] accounts payable department for payment by way of reimbursement of the letter of credit, and these weekly summary statements are sent electronically by [ ] for receipt by [ ] every Friday. The invoice-by-invoice breakdown will be received by [ ] the following day, Saturday, giving purchase order, invoice number and purchase price details. The two documents are matched on a line item basis. [ ] will make payments by remitting funds to [ ] by wire transfer on the Thursday closest to the 30th day. [ ] will self-generate invoices for the purchase goods based on the detailed requests for payment from [ ], and will also self-generate the [ ] commission invoices.
The importer states that [ ] issued purchase orders to four separate and unrelated manufacturers or factories based in China to make the goods (ceramic tableware) in fulfillment of its sale to [ ]. The manufacturers have been identified as [ ]; [ ]; [ ]; and [ ].
The importer states that [ ] buys its articles from unrelated manufacturers or factories in order to fill its sales orders to [ ]. In this case [ ], [ ] purchased candle and candleholders from three separate manufacturers located in Shenzen, China: [ ].
The importer submitted numerous documents as part of its request. They include the following as found in the referenced exhibits: [ ] International Limited buying agency agreement with [ ](exhibit 1); objective sheet (exhibit 2); [ ] electronic data interchange trading partner agreement (exhibit 3); purchase orders (exhibit 4); placement memorandum (exhibit 5); letters of credit (exhibit 6); payment release letter (exhibit 7); entry documents and other documents relating to [ ] (exhibit 8); payment release letters (exhibit 9); objective sheet and placement memorandum (exhibit 10); purchase order inquiry (exhibit 11); sales confirmation, payment release letter and other documents relating to [ ] (exhibit 12); production reports (exhibit 13); inspection and analysis reports (exhibit 14); shipment release authorization (exhibit 15); and forwarder’s cargo receipt (exhibit 16).
The importer contends that the merchandise that is the subject of the above-mentioned entries should be appraised on the basis of the alleged sales between the various above-mentioned factories (or manufacturers) and the two middlemen [ ] and [ )] rather than on the basis of the sales between the two middlemen (or vendors) and [ ]. The port believes that the merchandise should be appraised on the basis of the sales between the two middlemen and [ ].
ISSUE:
Whether the evidence presented is sufficient to establish that the transaction value of the imported merchandise should be based on the alleged sales between the various above-mentioned factories (or manufacturers) and the two middlemen [ ] and [ ], or whether the transaction value of the imported merchandise should be based on the sales between the middlemen and the importer ([ ]).
LAW AND ANALYSIS:
The preferred method of appraising merchandise imported into the United States is the transaction value method as set forth in section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA), codified at 19 U.S.C. §1401a. Section 402(b)(l) of the TAA provides, in pertinent part, that 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 enumerated statutory additions. In order for imported merchandise to be appraised under the transaction value method it must be the subject of a bona fide sale between a buyer and seller, and it must be a sale for exportation to the United States.
The courts have had the opportunity to address the issue of the use of the transaction value method in multi-tiered transactions (involving foreign middlemen and foreign manufactures). In Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992), the Court of Appeals for the Federal Circuit addressed the method for determining the use of transaction value in a three-tiered distribution system involving a foreign middleman. The court indicated that a manufacturer's price for establishing transaction value is valid so long as the transaction between the foreign manufacturer and the foreign middleman falls within the statutory provision for valuation. In this regard, the court stated that in a three-tiered distribution system:
The manufacturer's price constitutes a viable transaction value when the goods are clearly destined for export to the United States and when the manufacturer and the middleman deal with each other at arm's length, in the absence of any non-market influence that affect the legitimacy of the sale price.
Id. at 509. See also, Synergy Sport International, Ltd. v. United States, 17 C.I.T. 18 (1993).
In response to the decision in Nissho Iwai American Corp. v. United States, the CBP issued its official position on the application of that decision in the form of a Treasury Decision (T.D.). In T.D. 96-87, Determining Transaction Value in Multi-Tiered Transactions, Vol. 30/31, Customs Bulletin No. 52/1, (January 2, 1997), the CBP clarified some of the issues that arise in multi-tiered transactions in determining which sale is the sale for exportation to the United States for the purposes of determining transaction value. Specifically, T.D. 96-87 states, in part, that:
[I]n fixing the appraisement of imported merchandise, Customs presumes that the price paid by the importer is the basis of transaction value and the burden is on the importer to rebut this presumption. In order to rebut this presumption, in accordance with the Nissho Iwai standard, the importer must prove that at the time the middleman purchased, or contracted to purchase, the goods were “clearly destined for export to the United States” and the manufacturer (or other seller) and middleman dealt with each other at “arm's length.” In reaching a decision, Customs must ascertain whether the transaction in question falls within the statutory provision for valuation, i.e., that it is a sale, that it is a sale for exportation to the United States in accordance with the standard set forth above, and that the parties dealt with each other at “arm's length.” As stated in Nissho Iwai, these questions are determined case-by-case on the evidence presented.
T.D. 96-87 also identifies the documentation and information needed to support a determination that transaction value should be based on a sale involving a middleman and the manufacturer or other seller rather than on the sale to which the importer is a party. First, a complete paper trail of the imported merchandise showing the structure of the entire transaction must be provided. Second, if the parties to the requested transaction are related, the importer must provide CBP with information that demonstrates that transaction value may be based on the related party sale as provided in 19 U.S.C. § 1401a(b)(2)(B) (i.e., that the circumstances of sale indicate that the relationship did not influence the price or that the transaction value closely approximates certain test values). Finally, sufficient information must be provided with regard to the statutory additions set forth in 19 U.S.C. § 1401a(b)(1) (i.e., packing costs, selling commissions, assists, royalty or license fees, and proceeds of any subsequent sale), for the alleged sale between the manufacturer and the middleman.
With respect to the documentation required for the importer to rebut the presumption that the price paid by the importer is the basis of transaction value, T.D. 96-87 states that:
In order for an importer to rebut the presumption…[that the price paid by the importer is the basis of transaction value]…, certain information and documentation must be provided. Specifically, the requestor must describe in detail the roles of all the various parties and furnish relevant documents pertaining to each transaction that was involved in the exportation of the merchandise to the United States. If there is more than one possible sale for exportation, information and documentation about each of them should be provided. Relevant documents include, purchase orders, invoices, proof of payment, contracts and any additional documents (e.g. correspondence) which demonstrate how the parties dealt with one another and which support the claim that the merchandise was clearly destined to the United States. If any of these documents do not exist, or exist but are not available, the ruling request should so provide. What we are looking for is a complete paper trail of the imported merchandise showing the structure of the entire transaction.
o o o
Finally, Customs decisions will be based on the evidence presented when the ruling request is submitted. Although we would not be precluded from asking for additional information, this will not be done routinely. If insufficient evidence is provided, the claim will be denied.
In summary, the public should be aware that Customs presumes that transaction value is based on the price paid by the importer and in order to rebut this presumption and prove that transaction value should be based on some other price, complete details of all the relevant transactions and documentation (including purchase orders, invoices, evidence of payment, contracts and other relevant documents) must be provided, including the relationship of the parties and sufficient information regarding the statutory additions. Customs rulings will be based on the evidence submitted with the request.
In the instant cases, the presumption is that transaction value is based on the price the importer ([ ]) pays to the foreign middlemen ([ ] and [ ]). In order to rebut this presumption and to base the transaction value on the prices [ ] and [ ] paid to the various above-mentioned manufacturers, there must be sufficient evidence that shows: (1) that the [ ] and [ ] purchases from the various manufacturers are bona fide sales; 2) if so, that all the imported goods were clearly destined for exportation to the United States at the time [ ] and [ ] purchased or contracted to purchase the goods from all the various manufacturers; 3) if so, that the sales between [ ] and [ ] and all the various manufacturers were arm's length sales; and 4) where necessary, the amounts to be added to the price actually paid or payable for assists, royalties, etc.
Bona Fide Sale
The term “sale,” as articulated in the case of J.L. Wood v. United States, 62 CCPA 25, 33, C.A.D. 1139, 505 F.2d 1400, 1406 (1974), is defined as the transfer of property from one party to another for consideration. In considering whether a bona fide sale has taken place between a potential buyer and seller of imported merchandise, however, no single factor is determinative. Rather, the relationship is to be ascertained by an overall view of the entire situation, with the result in each case governed by the facts and circumstances of the particular case itself. See Dorf International, Inc. v. United States, 61 Cust. Ct. 604, A.R.D. 245, 291 F. Supp. 690 (1968).
Several factors may indicate whether a bona fide sale exists between a potential buyer and seller. In determining whether property or ownership has been transferred, the CBP considers whether the potential buyer has assumed the risk of loss and acquired title to the imported merchandise. In addition, the CBP may examine whether the potential buyer paid for the goods, and whether, in general, the roles of the parties and circumstances of the transaction indicate that the parties are functioning as buyer and seller.
In the instant cases, upon a review of the record, we conclude that the transactions between [ ] and [ ] and the various above-mentioned manufacturers do not constitute bona fide sales—despite, among other documents, the purchase orders to the manufacturers that contain references to [ ] purchase orders. First, the invoices from the factories submitted with the importer’s February 25, 2004, request do not support bona fide sales. All the invoices are dated after the dates shown on the middlemen’s invoices to [ ]. In the case of the transactions involving [ ], the factory invoices are dated October 17, 2003, which is after the dates the merchandise was exported and after the dates of the records of disbursements on the letters of credit provided as evidence of payment for what appears from the documents to be for three of the factory transactions.
In response to the above-mentioned issue of the factory invoice dates that was raised by the CBP during the above-mentioned telephone conference, in the importer’s July 9, 2004, supplemental submission, with respect to the transactions involving [ ], it indicates that “We were informed that, because [ ] was endeavoring to be helpful, they had requested that the invoices be run anew by the factories. All invoices bore the same date—October 17, 2003—but we now present as Exhibit 17 the original factory to [ ] invoices.” The importer then requests that these newly submitted factory invoices involving [ ]’s transactions be substituted for the factory invoices that [ ] previously submitted to the CBP with its February 25, 2004, request for internal advice. These newly submitted factory invoices list dates that are earlier than the dates on the factory invoices submitted with the importer’s February 25, 2004, request. The dates listed on these newly submitted factory invoices, however, are after the dates shown on the middlemen’s invoices to [ ] (as is the case with the factory invoices submitted with the importer’s February 25, 2004, request).
The newly submitted factory invoices are in Chinese with hand-written English language notations or translations written on them. No information was provided as to when these newly submitted factory invoices were first or originally submitted or sent by the various factories to [ ] or when they were first or originally received by [ ]. Moreover, no information was provided as to why these newly submitted invoices were not submitted with the importer’s February 25, 2004, request, as they were presumably in [ ]’s files or possession.
It should be noted that no information was provided in the July 9, 2004, supplemental submission relating to the reason why the dates of the invoices from the three factories to [ ] are later than the dates of the invoices from [ ] to [ ].
In light of the above, one must conclude that in the instant cases the factory invoices do not support bona fide sales between the two middlemen and the various factories.
Second, the records of payment to the factories submitted with the importer’s February 25, 2004, request do not support bona fide sales. One of the records of payment is illegible. Four of the others do not show the name of the declared factories, except that on two of them the name of the factory appears in hand-written notations that were apparently added after the documents were prepared. In addition, the beneficiary is shown to be a party other than the declared factory on three of the records of payment. Finally, the amounts on the records of payment do not, in any instance, correspond to the typewritten amounts on the factory invoices.
In response to the above-mentioned issue of the records of payment that was raised by the CBP during the above-mentioned telephone conference, in the importer’s July 9, 2004, supplemental submission, a list of entities stated to be the factories and payees is provided. With respect to the records where the beneficiary is shown to be a party other than the declared factory, the supplemental submission indicates that:
Note that the factories, and in some cases the middleman vendors, are reluctant to rely upon the banking system in China. There are built-in delays in the funds clearing and there are limits in the withdrawal and availability of funds. As a consequence, the factories and vendors have evolved a system of what they term “triangle trade.” This calls for payments into accounts maintained in offshore locations by related entities. These offshore locations are frequently jurisdictions where favorable tax treatment is available. One such favored jurisdiction is in the British Virgin Islands. In short, where the “payee” name differs from the name noted on the other commercial documents, such as purchase orders and commercial invoices, those names merely represent entities being used by the factories for the limited purposes of accepting offshore payment for the goods.
This information in the supplemental submission only serves to provide a possible reason for why some of the records show the beneficiary to be a party other than the declared factory. The supplemental submission does not, however, provide any documentary evidence or proof (i.e., banking, financial, or commercial documents) to establish conclusively that in these cases that a particular factory was indeed paid for the merchandise by the middleman.
With respect to the records of payment that do not, in any instance, correspond to the typewritten amounts on the factory invoices, the supplemental submission indicates that:
[T]he amounts do not match up on a strict one-to-one basis because the payments routinely covered other POs, many of which were for goods being made to fill other, non-[ ] orders. Again, as is standard commercial practice, the payments were rolled into a single payment, generally on a monthly basis. This is done for economy (to save on banking charges) and efficiency reasons.
This information in the supplemental submission only serves to provide a possible reason for why the amounts on the records of payment do not, in any instance, correspond to the typewritten amounts on the factory invoices. The supplemental submission does not, however, provide any documentary evidence or proof (i.e., banking, financial, or commercial documents) to establish conclusively that in each of the instant cases a particular factory was indeed paid the specific amount identified in the relevant factory invoice for the particular merchandise by the relevant middleman (i.e., [ ] or [ ]).
Third, the invoices of both the factory level and the middlemen level transactions show identical FOB terms of sale. The terms of sale are “FOB Yantien” for all of the transactions involving the ceramic articles, whether at the factory level or at [ ]’s level. The terms of sale are “FOB Hong Kong” for all transactions, at whatever level, of the candles and candleholders for the fifth entry. Identical terms of sale gives rise to whether a “flash sale” or “simultaneous passage of title” occurs. This tends to show that the sale to the middlemen is not a bona fide one. See HQ 547697 (December 27, 2001). In the importer’s request and submission, it states that:
We are mindful that the sales terms for both sale transactions to the makers presented here are the same--FOB port—as from the makers to [ ]. Nonetheless, a reading of the totality of circumstances of these transactions supports the validity of the first sale between the various Chinese factories and both makers, [ ] and [ ], as buyers.
In light of the above and contrary to the statements by the importer in its request and submissions, we cannot conclude that the totality of the circumstances supports the validity of the first sale between the various manufacturers and the middlemen ([ ] and [ ]). Rather, we conclude that no bona fide sales occurred between the manufacturers and the middlemen in the transactions under consideration.
Clearly Destined for Export to the United States
The next requirement is that at the time the middleman and manufacturer concluded their agreement the merchandise was clearly destined for export to the United States.
In the instant cases, upon review of the evidence, we have concluded that none of the merchandise under consideration was clearly destined for export to the United States. First, it must be evident throughout the entire transaction that the merchandise is clearly destined for the United States. See HQ 546658 (January 30, 1998). As discussed above, in view of the inconsistencies with the invoices from the factories and the records of payment to the factories, one cannot conclude that it was evident throughout the entire transaction that the merchandise in each case was clearly destined for the United States.
Second, both Nissho Iwai American Corp. v. United States and Synergy Sport International, Ltd. v. United States involved merchandise that was clearly destined for export to the United States. Nissho Iwai American Corp. v. United States involved rapid transit passenger cars or vehicles that were manufactured using components from the United States and Japan for the Metropolitan Transportation Authority of New York City (MTA). The vehicles were specifically intended for sale to the MTA and could not be used for any other purpose. Synergy Sport International, Ltd. v. United States involved garments with required labels that served to reflect the fact that the goods were destined for the United States and always for a particular ultimate consumer. In each case, the merchandise was made to the specifications of the U.S. purchaser such that the merchandise was clearly destined for the United States and the manufacturer was aware that the merchandise was intended for sale to the United States for a particular U.S. purchaser. Clearly, the court in both cases was willing to accept the manufacturer’s price to the foreign middlemen because of the indisputable destination of the merchandise at the time the two parties entered into their sale’s contracts.
In the instant cases, unlike in Nissho Iwai American Corp. v. United States and Synergy Sport International, Ltd. v. United States, there is nothing unique about the merchandise, its production or designation to indicate that it was clearly destined for export to the United States or for sale to a particular consumer. Although [ ] states in its request that “the goods themselves are made to [ ] design or if of a factory design, it has been adapted to [ ] standard,” there is nothing in the record to indicate that the merchandise is of such a unique nature that it is clearly intended for export to the United States. Candles, candleholders and ceramic tableware can easily be sold for export to numerous other countries and for use by numerous consumers outside of the United States. Moreover, there is nothing in the record to indicate that the goods would or could only be sold in the United States or for a particular ultimate consumer (e.g., labels, logos or other unique marks or designations placed on the goods, the goods were packaged for the United States or met special U.S. labeling requirements that indicates their destination to the United States or use by a particular consumer in the United States). See HQ 547035 (August 18, 1999). The CBP is aware that certain ceramic merchandise is certified to comply with U.S. Food and Drug Administration requirements. This fact was weighed but does not enable the importer to overcome its burden. Finally, despite the arguments by the importer to the contrary, the fact that [ ] only has stores in the United States does not establish that the above-mentioned goods were clearly destined for export to the United States.
Finally, some of the goods are not shipped directly to the United States but first to Hong Kong. While this fact does not preclude a finding that the merchandise was clearly destined for exportation to the United States, it is an important factor that is considered along with the other evidence in Nissho Iwai-type claims involving foreign middlemen and foreign manufacturers. See HQ 547035 (August 18, 1999); HQ 547349 (May 5, 2000); HQ 547197 (August 22, 2000).
Despite the existence of some evidence in the record favorable to the importer’s position (e.g., purchase orders to the manufacturers with references to [ ] purchase orders and certificates of inspections of the merchandise), in light of the above-discussed contrary and inconclusive evidence, we cannot conclude that the goods were “clearly” destined for the United States. The entire record and totality of circumstances does not support such a conclusion.
Arm's Length
The next requirement is that the alleged sales between the middlemen and the manufacturers be arm's length sales that can serve as the basis for transaction value.
[ ] contends in its submission that the foreign middlemen ([ ] and [ ]) and the foreign manufacturers are not related parties. The CBP will generally presume that transactions between unrelated parties are conducted at arm’s length. Without evidence to the contrary, we do not find that the parties are related within the meaning of the U.S. value law.
Statutory Additions
The final requirement that must be established in order to rebut the presumption that the price actually paid or payable by the importer to the middleman is the transaction value involves the statutory additions to the price that are set forth in 19 U.S.C. 1401a(b)(1). With respect to those statutory additions, T.D. 96-87 states that:
[I]n order for a particular transaction to be a viable transaction value there must be sufficient information available with respect to the amounts, if any, of the statutory additions set forth in 19 U.S.C. 1401a(b)(1) (i.e., packing costs, selling commissions, assists, royalty or license fees, and proceeds of any subsequent sale). The statute provides that if sufficient information is not available, for any reason, with respect to any of these amounts, the transaction value of the imported merchandise concerned shall be treated as one that cannot be determined. Therefore, in order to determine whether a particular transaction may be the basis for transaction value, the requestor must provide Customs with sufficient information regarding the amounts, if any, of the statutory additions set forth in 19 U.S.C. 1401a(b)(1). For example, if the importer claims that transaction value should be based on the sale between the middleman and the manufacturer, the importer must inform Customs whether the middleman provided any assists to the manufacturer and if so, the value of the assists and how the value was determined. If the importer does not have this information, transaction value cannot be based on this sale.
In the instant case, no information was submitted with respect to statutory additions as concerns the transactions between the middlemen and the various manufacturers. Therefore, this requirement was not satisfied. This is another reason why the alleged sales between the middlemen and the manufacturers cannot be used as the basis for transaction value. See HQ 547672 (May 21, 2002).
In conclusion, as indicated in T.D. 96-87, it is presumed that the price paid by the importer is the basis of transaction value and the burden is on the importer to rebut this presumption. In light of the above, in each of the instant cases, the importer has not rebutted this presumption. Therefore, the price actually paid or payable by the importer to each of the middlemen for each transaction is the proper basis of transaction value.
HOLDING:
The transactions between the above-mentioned middlemen ([ ] and [ ]) and the various above-mentioned manufacturers do not constitute bona fide sales nor is the merchandise that is the subject of the alleged sales clearly destined for export to the United States. Additionally, no information has been provided regarding the statutory additions. Accordingly, an appraisement using the transactions between the middlemen and the manufactures is inappropriate in these cases. Therefore, the price actually paid or payable by the importer ([ ]) to each of the middlemen for each transaction is the proper basis of transaction value.
This internal advice should be mailed by your office to the requester no later than sixty days from the date of this letter. Sixty days from the date of this letter, the Office of Regulations and Rulings will take steps to make this decision available to CBP personnel and to the public on the CBP’s web site, and by means of the Freedom of Information Act as well as by other means of public distribution.
Sincerely,
Virginia Brown, Chief
Value Branch