CLA-2 CO:R:C:V 543913 EK
District Director of Customs
Boston, Massachusetts
RE: Decision of Application for Further Review of
Protest No. 0401-4-000375
Dear Sir:
This protest was filed against your decision in the
liquidation of Entry No. 83-308251 dated March 16, 1984. The
protesting party is disputing the dutiability of quota charges
incurred by the importer. The merchandise was appraised pursuant
to transaction value, section 402(b) of the Tariff Act of 1930,
as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C.
1401a(b)).
FACTS:
The goods were manufactured by (seller's name)
(hereinafter referred to as seller) who is also a quota holder in
Hong Kong. When the importer purchases merchandise from the
seller, a portion of the seller's quota is provided to the
importer as part of the agreed upon purchase price. On occasion,
the importer purchases more garments than the seller is
authorized to export under its quota allocation. Therefore, the
importer provides the seller with quota authorization acquired
from unrelated third parties. The importer states that the
seller acts as its agent in receiving quota acquired from
unrelated third parties.
The importer argues that the manufacturer in receiving the
quota from the unrelated third party merely acted as an
intermediary and that the quota transaction is completely
separate from the import transaction.
ISSUE:
Whether the amount assessed for quota is included in the
price actually paid or payable.
Whether the exchange rate in effect at the time of
exportation is appropriate.
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LAW AND ANALYSIS:
The best evidence available in this case as to the
identity of the seller and quota holder is the export license
issued by the Hong Kong government. That document indicates the
seller and quota holder as the same party. Moreover, no transfer
documentation or record of payment has been submitted indicating
that the importer purchased the quota from a third party.
It is our conclusion that the amount assessed for quota is
clearly included in the "price actually paid or payable" for the
imported merchandise and forms part of transaction value. The
transaction is governed by the well-settled proposition that if
the payments are made to the seller, or a party related to the
seller, then they are included in the transaction value of the
merchandise. See, TAA Ruling Nos. 6 and 14.
The importer further alleges that if in fact the payment is
deemed to be dutiable, then the exchange rate in effect at the
time of exportation is appropriate, rather than at the time the
quota was purchased. We agree that the exchange rate which
governs is that which exists at the time of exportation
See, 31 U.S.C. 372.
HOLDING:
Accordingly, you should deny the protest with respect to
the dutiability of the quota; however, the protest should be
granted with respect to the exchange rate which should govern. A
copy of this decision should be attached to the Form 19, Notice
of Action, to be sent to the protestant.
Sincerely,
John Durant
Acting Director, Commercial
Rulings Division