HQ 545434
May 31 1994
CO:R:C:V 545434 er
District Director
Champlain, New York 12919
RE: Application for Further Review of Protest No. 0712-93-
100379 Concerning Dutiability of Transportation Charges;
Country of Exportation; Sale For Exportation; Transaction
Value; Other Methods of Appraisement.
Dear Sir:
This is in response to your memorandum dated September 16,
1993, forwarding the application for further review and protest
(protest #0712-93-100379), dated April 2, 1993, submitted by Tower
Group International, Inc. ("Tower") on behalf of their client,
Abraham & Rose, Inc., located in Plattsburgh, New York. We regret
the delay in responding.
FACTS:
The entered merchandise consists of flatware, glass tumblers
and tableware sets which are manufactured in Indonesia. It is your
position that the merchandise is not sold for exportation to the
United States at the time it is shipped from Indonesia.
Accordingly, you propose to appraise the merchandise under section
402(f) of the Trade Agreements Act of 1930, as amended ("TAA"),
treating as dutiable all transportation charges incurred to ship
the merchandise from Indonesia to Canada.
Tower claims that the merchandise was sold for exportation to
the United States from Indonesia through a factoring agent, Federal
Plastics Mfg. Ltd. ("Federal Plastics"), in Canada. Copies of
invoices from the Indonesian manufacturer to Federal Plastics and
bills of lading between Indonesia and Canada were submitted in
addition to an executed GSP form which specifies Canada as the
shipping destination.
ISSUE:
Whether the merchandise was sold for exportation to the United
States at the time the merchandise was shipped from Indonesia.
LAW AND ANALYSIS:
As you know, transaction value, the preferred method of
appraisement, is defined in section 402(b) of the TAA as the "price
actually paid or payable for the merchandise when sold for
exportation to the United States", plus enumerated additions. For
purposes of determining transaction value in appraising imported
merchandise, a sale for exportation to the United States must take
place at some unspecified time prior to the exportation of the
goods. (HRL 543868 dated March 5, 1987).
In the instant case neither you nor Tower is claiming that a
sale for exportation occurred between Federal Plastics in Canada
and the importer. Tower contends, however, that a sale for
exportation was contemplated at the time the goods were shipped
from Indonesia. For a sale for exportation to exist, one of the
criterion that must be established is that at the time the buyer
purchased the imported merchandise, it was "clearly destined for
the United States." See, Nissho Iwai American Corp. v. United
States, No. 92-1239, slip op. (Fed.Cir. Dec. 28, 1992) and Synergy
Sport International, Ltd. v. United States, No. 93-5, slip op. (CIT
Jan. 12, 1993).
While it is undisputed that the goods originated in Indonesia,
nothing in the documentation submitted indicates that the
merchandise was destined for the United States at the time it was
exported from Indonesia. To the contrary, each of the documents
submitted indicates Canada as the final destination of the goods.
Therefore we have no evidence that the merchandise was sold for
exportation to the United States at the time it was exported from
Indonesia.
Nor is there any evidence or a claim that a bona fide sale for
exportation occurred between Federal Plastics in Canada and the
importer. In the absence of any sale for exportation to the United
States, transaction value is not an appropriate means of
appraisement.
In instances where transaction value cannot be determined, or
cannot be used, sections 402(a)(B) and (C) provide for appraisement
under section 402(c) -- transaction value of identical or of
similar merchandise. (The terms "identical merchandise" and
"similar merchandise" are defined in sections 402(h)(2) and
402(h)(4), respectively.) This means of appraisement is acceptable
provided sufficient information is available in order for Customs
to make any adjustment that may be necessary under section
402(c)(2). No specific information pertaining to section 402(c)
has been submitted to Headquarters. If in fact a section 402(c)
appraisement is possible, this means of appraisement may not be
disregarded by either Customs or the importer. (HRL 543912 dated
April 19, 1988)
Because transaction value cannot be determined and so long as
transaction value of identical or similar merchandise is not
available, then appraisement under deductive value is appropriate
provided the statutory requirements of section 402(d) are met and
that the necessary documentation and information is obtainable. In
the event a section 402(d) appraisement is not possible, then
appraisement should proceed under computed value as defined by
section 402(e) provided the statutory requirements of this section
are satisfied. Only if none of the above methods of appraisement
is possible, may you appraise the merchandise in accordance with
section 402(f) and calculate the dutiable value of the merchandise
on the basis of the invoice price of the merchandise entered, plus
the amounts incurred to transport the merchandise between Indonesia
and Canada.
HOLDING:
Transaction value under section 402(b) does not exist where
there is no sale for exportation to the United States.
Accordingly, you are directed to deny this protest and to appraise
the merchandise in accordance with the hierarchal means of
appraisement set forth under section 402, as discussed above.
In accordance with section 3A(11) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office to the
protestant no later than 60 days from the date of this letter. Any
reliquidation of the entry in accordance with the decision must be
accomplished prior to mailing of the decision. Sixty days from the
date of the decision the Office of Regulations and Rulings will
take steps to make the decision available to customs personnel via
the Customs Rulings Module in ACS and the public via the Diskette
Subscription Service, Lexis, Freedom of Information Act and other
public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division