OT:RR:CTF:VS H354576
Patrick Covington
Cummins Inc.
4155 Quest Way
Memphis, TN 38115
RE: Valuation Treatment of Platinum Provided by Buyer to Seller; Assists
Dear Mr. Covington:
This is in response to your letter, dated October 2, 2025, on behalf of Cummins Inc.
(“Cummins”). In your letter, you request a binding ruling pursuant to 19 C.F.R. Part 177 on the
valuation treatment of platinum owned by the importer and provided to the seller for use in the
production of the imported merchandise.
FACTS:
Cummins purchases Platinum Group Metals (“PGM”), including platinum, palladium,
and rhodium, from various suppliers. These PGMs are then deposited into a pool account
managed by BASF India Ltd. (“BASF”), but ownership remains with Cummins. The PGMs are
used by BASF for coating catalyst substrates. BASF invoices Cummins for the substrate and
coating fee only (approximately $58.35/piece). However, in import declarations, BASF has
reported that the coated catalysts have a value of $183.15/piece, which includes the PGM value
of $124.80/piece. Cummins claims that the actual price paid between itself and BASF should
only include the substrate and coating fees because Cummins owns the PGM throughout the
coating process.
ISSUE:
Whether the value of the PGM should be included in the transaction value of the coated
catalysts.
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
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19 U.S.C. § 1401a. The preferred method of appraisement under the TAA is transaction value,
defined as “the price actually paid or payable for the merchandise when sold for exportation to
the United States,” plus certain enumerated additions, including “the value, apportioned as
appropriate, of any assist.” 19 U.S.C. § 1401a(b)(1)(C).
Section 402(h) of the Tariff Act of 1930, as amended by the Trade Agreements Act of
1979 (TAA), codified at 19 U.S.C. § 1401a(h), provides, in relevant part:
(1)(A) The term “assist” means any of the following if supplied directly or
indirectly, and free of charge or at reduced cost, by the buyer of imported
merchandise for use in connection with the production or the sale for export to the
United States of the merchandise:
(i) Materials, components, parts, and similar items incorporated in the
imported merchandise . . . .
Here, the platinum Cummins provides to BASF constitutes a “material” that will be used
“in connection with the production or the sale for export to the United States of the
merchandise.” As indicated in 19 U.S.C. § 1401a(h)(1)(A), however, such materials constitute
“assists” for purposes of customs valuation only if the buyer of the imported merchandise
provides them “free of charge or at a reduced cost.” Here, BASF does not purchase the PGM
from Cummins; it is provided to BASF by Cummins free of charge for the production of the
coated catalysts.
Cummins argues that, because it retains ownership of the PGM, the PGM does not
constitute an assist. However, the definition of “assists” does not require ownership of the
materials to be transferred to the producer of the goods but only requires that the materials be
supplied to the producer. Therefore, we do not believe Cummins’s continued ownership of the
PGM affects the analysis of whether the PGM is an assist.
Further, in Headquarters Ruling Letter (“HQ”) H004684, dated March 16, 2007, CBP
addressed a situation in which the importer retained ownership of fabric used to make clothing at
a factory in China. CBP stated that this scenario is similar to Example 1 of 19 C.F.R. §
152.103(a)(3), which states, “[t]he importer previously has supplied an unrelated foreign
assembler with fabricated components ready for assembly having a value or cost at the
assembler’s plant of $1.00 per unit. The importer pays the assembler 50¢ per unit for the
assembly. The transaction value for the assembled unit is $1.50.” Because CBP previously held
that materials owned by the importer constituted an assist and the PGM otherwise meets the
requirement of an assist, we believe the PGM supplied by Cummins to BASF constitutes an
assist and should be added to the transaction value of the coated catalysts.
.
HOLDING:
Under the facts as presented, the PGM will constitute an assist for purposes of customs
valuation.
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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 R. Brenner, Chief
Valuation and Special Programs Branch
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