OT:RR:CTF:VS H348804 RMC
Philip Peerless
Atlantic Veal & Lamb
275 Morgan Ave.
Brooklyn, NY 11211
RE: Appraisement of Frozen Veal Carcasses; Transaction Value
Dear Mr. Peerless:
This is in response to your letter of May 29, 2025, in which you request a binding ruling
pursuant to 19 C.F.R. Part 177 on the valuation of imported veal carcasses.
FACTS:
According to the information provided, Atlantic Veal & Lamb (“Atlantic”) regularly imports
frozen veal carcasses into the United States from Europe. In a typical transaction, the exporter
purchases animals from regional farmers in Europe and processes them to remove “the hides, offals,
and other by-products (collectively referred to as the ‘drop’).” Atlantic then purchases the processed
carcasses for approximately $1,000 each, with the exporter retaining the drop components.
Furthermore, you estimate that the exporter derives approximately $300 per head in value
from the sale of the drop components, which are not imported into the United States. Accordingly,
you ask whether, for purposes of customs valuation, the $1,000 price that Atlantic pays for the
merchandise should be “adjusted downward . . . to reflect the fact that the imported merchandise
excludes the economically valuable drop components retained and monetized by the importer.”
ISSUE:
Whether the customs value of imported veal carcasses should account for the value of
certain “drop components” retained and resold by the exporter.
LAW AND ANALYSIS:
Merchandise imported into the United States is appraised in accordance with section 402 of
the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (“TAA”) codified at 19
U.S.C. § 1401a. The preferred method of appraisement under the TAA is transaction value, defined
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as “the price actually paid or payable for the merchandise when sold for exportation to the United
States,” plus five statutorily enumerated additions. 19 U.S.C. § 1401a(b)(1). For purposes of this
ruling request, we assume that transaction value is the appropriate method of appraisement for the
imported veal carcasses.
The “price actually paid or payable” is defined as the:
total payment (whether direct or indirect, and exclusive of any costs, charges,
or expenses incurred for transportation, insurance, and related services
incident to the international shipment of the merchandise from the country of
exportation to the place of importation in the United States) made, or to be
made, for imported merchandise by the buyer to, or for the benefit of, the
seller.
19 U.S.C. § 1401a(b)(4)(A).
Here, “the merchandise” that is “sold for exportation” to the United States is the veal
carcasses with drop components removed. No provision of the valuation statute or regulations
authorizes a deduction from this price based on the exporter’s retention and resale of the drop
components. Accordingly, the transaction value will be based on the “price actually paid or payable”
for the imported merchandise (i.e., $1,000).
HOLDING:
Under the facts as presented, the customs value of the imported veal carcasses should not
account for the value of certain “drop components” retained and resold by the exporter.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the
assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a Customs Service field
office to the transaction to which it is purported to relate is subject to the verification of the facts
incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this
merchandise is entered. If the documents have been filed without a copy, this ruling should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika Brenner, Chief
Valuation and Special Programs Branch
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