CLA-2 CO:R:C:V 544432 DHS
David Serko, Esq.
Serko & Simon
One World Trade Center
New York, New York 10048
Re: Discrepancies Between the Visa Amount
and the Invoice Amount
Dear Mr. Serko:
This is in reply to your letter dated December 15, 1989,
and other incorporated submissions, requesting a ruling regarding
the entry of merchandise in which the visa price and the invoice
concerning the imported merchandise are not the same and the
effect of T.D. 86-56 on this situation. The merchandise is to be
appraised under 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:
You state that several middlemen purchased certain men's and
lady's apparel from various manufacturers located primarily in
China at various prices depending on the apparel in order to
fulfill their contracts with a third-party purchaser. You state
that the third-party purchaser has breached the contract and will
not take delivery of the merchandise. In order to quickly
relinquish themselves of this seasonal merchandise the middlemen
have contracted with your client for their purchase at the
greatly reduced rate of 38 cents on the dollar. You have added
that the approximate value of the merchandise is estimated at $8
million dollars. All entries with respect to this merchandise
will occur at the port of Columbus, Ohio. These shipments are to
be received by the purchaser within a four to six week period.
As part of your submission, you have provided an affidavit
from the vice-president of your clients' company which describes
the above circumstances that lead to the sale of the merchandise
to your client.
ISSUE:
Does the discrepancy between the visaed invoice which
represents the original price of the goods and the quota and the
invoice to the ultimate purchaser mandate rejection of the
entries.
LAW AND ANALYSIS:
Instructions regarding the implementation of T.D. 86-56 were
issued by this office on May 1, 1986 (Headquarters Ruling No.
543731). The instructions indicated that if an importer provides
an acceptable explanation for differences in the price or value
information in visas and invoices, then the entry may be
accepted by Customs. Several examples were listed which set
forth acceptable scenarios in light of T.D. 86-56. Although the
list was not exhaustive, the instructions stated that additional
legitimate reasons for differences in the entry documentation may
exist, and in these cases, Customs will act in accordance with
the policy set forth in T.D. 86-56.
Headquarters Ruling No. 543792 dated August 14, 1986, in
citing the T.D., stated:
The "action" section of the T.D. clearly and
unambiguously indicates that, "any
differences or inconsistencies in the
information presented to Customs . . . shall
be considered as an indication that one or
more of such documents contains false or
erroneous information." Additionally, it is
indicated that where a visaed invoice or
document is presented to Customs containing
erroneous price or value information, such
invoice or document can only be corrected by
the presentation to Customs of a new and
corrected document or invoice stamped with
the visa of the country of origin. (emphasis
added)
The policy consideration regarding the adoption of T.D. 86-
56 is the proposition that false or erroneous documents are not
to be presented to Customs. This will inevitably result in the
facilitation of the appraisement and entry process.
The scenario you have presented is similar to that addressed
in T.D. 86-56. You suggest, however, that since these documents
are not false or erroneous that this situation does not fall
within the provisions of the treasury decision. While we agree
that T.D. 86-56 was intended to prevent false or erroneous
invoicing, it was also intended to place upon the importer the
burden of proving the validity of information on the documents
and veracity of the transaction in question in order to properly
appraise the merchandise. Presently, you have not provided the
invoices or other information evidencing the original contract
for the purchase of the merchandise, any information of
cancellation of this contract, or any invoice or other evidence
of the subsequent purchase from your client. In order to find
that the invoice price paid by your client to the middlemen is
the proper price for appraisement purposes and not the price
displayed on the visaed invoice, the importer is required to
provide these invoices and notices of cancellation. The
affidavit which you have submitted while sustaining your
submission of the facts does not provide any evidentiary support
for the appropriate invoice price.
You have indicated that your client is able to obtain the
relevant commercial documents. Assuming that to be the case,
then we would agree that transaction value as represented by the
"settlement price" would be appropriate. Also, assuming that
your client is able to produce the relevant commercial
documentation set forth above, we would agree that entry could be
made using the original visaed invoice and transaction value as
represented by the "settlement price."
The District Director for the concerned port of entry will
make the final determination as to whether you have established
the transaction value to be represented by the "settlement
price."
Sincerely,
John Durant, Director
Commercial Rulings Division