OT:RR:CTF:VS H258738 AJR
Mr. Joseph J. Siprut
Suzlon Wind Energy Corporation
8750 W. Bryn Mawr Ave., Suite 720
Chicago, IL 60631
Re: Deductive Value; Wind Turbine Generators
Dear Mr. Siprut:
This is in response to your letter, dated October 2, 2014, requesting a ruling on behalf of Suzlon Wind Energy Corporation (“SWECO”) regarding the acceptability of deductive value for purposes of appraising imported components of wind turbine generators.
Inasmuch as your request conforms to the requirements of 19 C.F.R. § 177.2(b)(7) that certain information in your submission be treated as confidential, we will excise the bracketed confidential information from public versions of this decision.
FACTS:
SWECO purchases wind turbine components for delivery to designated United States ports, from manufacturing affiliates of Suzlon Energy Limited (“SEL”), an Indian holding company and ultimate parent company of SWECO. The wind turbine major components consist of the nacelles, the towers, and the rotor and blades. The nacelle is a large fiberglass structure that includes the major functioning components of the wind turbine generator, such as the generator, the gearbox, and the drive train. The rotor and blades attach to the nacelle, and the entire sub-assembly attaches to the tower. SEL and its manufacturing affiliates do not sell to any other company in the United States, except for SWECO.
SWECO enters into contracts with other United States companies for the sale of complete wind turbine generators. The contract scope of supply for SWECO normally includes delivering the equipment to the site, technical assistance during customer installation, and commissioning of the turbine. The sales price to the United States customer is determined by the market, project location, utility rates, and energy production of the particular model of wind turbine generator being sold. The United States federal and state tax incentives available to the customer also play a key role in the sales price. Depending on the economic circumstances, SWECO also has the option to purchase the towers and rotor and blades from unrelated parties, including local sources in the United States. SWECO believes the deductive value method is the correct method for appraising the imported components.
In appraising the imported components through deductive value, you state that the starting price is the unit price of the merchandise first sold to an unrelated party after importation into the United States. From this sale price, you state that profit and designated expenses incurred in connection with the sales of the complete wind turbine generators after their importation would be deducted. You state that these deductions would include (“Designated Expenses”):
Supplies for the tower by unrelated foreign or U.S. companies;
Ancillary equipment supplied by U.S. companies as required;
Project management and construction technical support;
Commissioning of the complete wind turbine generators;
International freight and insurance;
U.S inland freight and Insurance;
General job site operating expenses;
U.S. Customs broker fees;
Duties;
Warranties; and
Reasonable allocation of profit and general expenses.
You state that the Designated Expenses are estimated to match the contractual scope of the work for local supply and services after importation of the major components from SEL. Specifically, in support of the deductive value calculation, you submitted a sample calculation, which starts at a unit cost of $[XXXX] for the sale of a complete wind turbine generator. The sample calculation categorizes the deductions (“Sample Calculation Expenses”) with an amount of $[XXXX] for overhead and profit allocation; $[XXXX] for project contingency; and $[XXXX] for local costs supplied by SWECO in the United States. This latter category includes costs for: SCADA, FAA Lights, and DFIG License; Tower LOCAL Incidentals and cables/internals installation; tools and other miscellaneous site expenses; gearbox oil and “Comm” spares; project management and technical assistance; installation and supervision; commissioning; installation of internals related to shipping; packing, freight, port fees, and other miscellaneous costs; insurance for the project; a standard two year warranty provision; warranty insurance; and the delivery costs from the port to the site, including trucking and railing. Based on the sample calculation, the total project cost after deducting the Sample Calculation Expenses is $[XXXX], which you state would be the value declared to Customs.
Additionally, you provided the following documents:
Two transfer pricing analysis reports (“Transfer Pricing Studies”) prepared by PriceWaterhouseCooper, for fiscal years ending on March 31, 2010, and March 31, 2011. The Transfer Price Studies discuss the sales process and payments schedule between SWECO, its customers, SEL, and SEL’s affiliates.
A contract between SEL and Suzlon Energy A/S (“SEA”), a Danish subsidiary of SEL and parent of SWECO, which you state generally represents the standard terms and conditions in contracts between SEL and SWECO.
ISSUE:
Whether SWECO’s proposed deductive valuation method is an acceptable method of appraisement for the imported components.
LAW AND ANALYSIS:
Merchandise imported into the United States is appraised for Customs and Border Protection (“CBP”) purposes in accordance with Section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. § 1401a). The primary method of appraisement is transaction value, which is defined as "the price actually paid or payable for the merchandise when sold for exportation to the United States," plus five statutorily enumerated additions, including selling commissions incurred by the buyer. 19 U.S.C. § 1401a(b)(1). When transaction value cannot be applied, then the appraised value is determined based on the other valuation methods in the order specified in 19 U.S.C. §1401a(a). In this case, SWECO believes the deductive value method is applicable.
When parties are related, section 402(b)(2)(B) of the TAA (19 U.S.C. § 1401a(b)(2)(B)) provides that transaction value is acceptable only if an examination of the circumstances of the sale indicates that the relationship did not influence the price actually paid or payable, or the transaction value of the merchandise closely approximates certain “test values.” 19 U.S.C. § 1401a(b)(2)(B); 19 CFR § 152.103(l). In this case, while SWECO submitted Transfer Pricing Studies, such a submission, by itself, is not sufficient to satisfy the circumstances of the sale test, without additional findings to show that a related party transaction value is acceptable for CBP purposes. See Headquarter Ruling (“HQ”) 546979, dated August 30, 2000; HQ 547672, dated May 21, 2002; and HQ 548482, dated July 23, 2004. Because we cannot rely on these Transfer Pricing Studies by themselves, and because SEL ultimately controls SWECO’s pricing and customer selection, we find that the submitted documents do not provide sufficient information to conclude that the SWECO and SEL relationship did not influence the price charged for the imported merchandise for purposes of transaction value.
When imported merchandise cannot be appraised on the basis of transaction value, it is appraised in accordance with the remaining methods of valuation, applied in sequential order. 19 U.S.C. § 1401a(a)(1). The alternative bases of appraisement, in order of precedence, are: the transaction value of identical or similar merchandise (19 U.S.C. § 1401a(c)); deductive value (19 U.S.C. § 1401a(d)); computed value (19 U.S.C. § 1401a(e)); and the “fallback” method (19 U.S.C. § 1401a(f)).
The transaction value of identical merchandise or similar merchandise is based on sales, at the same commercial level and in substantially the same quantity, of merchandise exported to the United States at or about the same time as the merchandise being appraised. See 19 U.S.C. § 1401a(c). Based on the information available, there are no previously accepted and adjusted transaction values of identical or similar merchandise on which to base appraisement of the imported components. We note that no information was provided for our review with respect to this issue, and thus the merchandise cannot be appraised using transaction value of identical merchandise or similar merchandise.
The next method of appraisement is deductive value. Under the deductive value method, merchandise is appraised on the basis of the unit price at which it is sold in the United States in its condition as imported and in the greatest aggregate quantity either at or about the time of importation, or before the close of the 90th day after the date of importation. 19 U.S.C. § 1401a(d)(2)(A)(i)-(ii). Merchandise that is not sold in its condition as imported, nor by the close of the 90th day after the date of importation, can still be appraised under deductive value by using the unit price at which the merchandise, after further processing, is sold in the greatest quantity before the 180th day after the date of importation, provided the importer so elects and properly notifies Customs. 19 U.S.C. § 1401a(d)(2)(A)(iii).
In this case, SWECO proposes calculating the deductive value of its imported wind turbine generator components by deducting its post-importation selling, distribution, and service profit and expenses from the United States resale value of the imported components. As noted in the Sample Calculation Expenses, this resale value consists of the complete construction of the wind turbine generator, which includes post-importation expenses that result from assembling the imported components with additional parts into the final completed project. Thus, the imported components are not sold in their condition as imported, since what is sold under the contract between SWECO and its customer is the complete wind turbine generator project, and not specifically the imported components themselves. Therefore, because the imported components are not sold in their condition as imported, the only deductive value approach available to SWECO is “superdeductive” pursuant to 19 U.S.C. § 1401a(d)(2)(A)(iii).
For purposes of 19 U.S.C. § 1401a(d)(2)(A)(iii), the unit price at which merchandise is sold in the greatest aggregate quantity is the unit price at which it is sold to unrelated persons, after further processing at which such sales take place, in a total volume that is greater than the total volume sold at any other unit price, and sufficient to establish the unit price. 19 U.S.C. § 1401a(d)(2)(B). Furthermore, the price determined under 19 U.S.C. § 1401a(d)(2)(A)(iii) is to be reduced by an amount equal to the following:
(i) any commission usually paid or agreed to be paid, or the addition usually made for profit and general expenses, in connection with sales in the United States of imported merchandise that is of the same class or kind, regardless of the country of exportation, as the merchandise concerned;
(ii) the actual costs and associated costs of transportation and insurance incurred with respect to international shipments of the merchandise concerned from the country of exportation to the United States;
(iii) the usual costs and associated costs of transportation and insurance with respect to shipments of such merchandise from the place of importation to the place of delivery in the United States, if such costs are not included as a general expense under clause (i);
(iv) the customs duties and other Federal taxes currently payable on the merchandise concerned by reason of its importation, and any Federal excise tax on, or measured by the value of, such merchandise for which vendors in the United States are ordinarily liable; and
(v) (but only in the case of a price determined under paragraph (2)(A)(iii)) the value added by the processing of the merchandise after importation to the extent that the value is based on sufficient information relating to cost of such processing.
U.S.C. § 1401a(d)(3)(A).
In this case, the components will be imported and further processed into a complete wind turbine generator. You have provided a sample unit cost for the sale of a complete generator $[XXXX] from which you propose certain deductions.
Section 1401a(d)(3)(A)(i): Profit and General Expenses
Section 19 CFR 152.105(d)(1), Customs Regulations (19 CFR § 152.102(d)(1)), allows for a deduction for any commission usually paid or agreed to be paid or the addition usually made for profit and general expenses in connection with sales in the U.S. of imported merchandise that is of the same class or kind; regardless of the country of exportation, as the merchandise concerned.
The rules for deducting profit and general expenses are set forth in 19 CFR § 152.105(e). The deduction made for profit and general expenses shall be based upon the importer’s profit and general expenses, unless such profit and general expenses are inconsistent with those reflected in sales in the United States of imported merchandise of the same class or kind, in which case the deduction shall be based on the usual profit and general expenses reflected in such sales, as determined from sufficient information. 19 CFR § 152.105(e)(1). In determining deductions for commissions and usual profit and general expenses, sales in the United States of the narrowest group or range of imported merchandise of the same class or kind, including the merchandise being appraised, for which sufficient information can be provided, will be examined. 19 CFR § 152.105(e)(2).
The Statement of Administrative Action ("SAA"), adopted by Congress with the passage of the TAA, explains that the determination of usual profit and general expenses under the provisions of deductive value would be carried out utilizing information prepared in a manner consistent with generally accepted accounting principles (“GAAP”) in the United States. In HQ 546120, dated March 26, 1996, CBP stated that if an expense is incurred by the importer after the merchandise is released from CBP, it is likely to be a general expense.
In HQ H007667, dated May 25, 2007, the costs and expenses for marketing and distribution of the product, the overhead charges that included both actual costs of overhead and profit, the costs of loading and unloading the imported merchandise at the port of destination in the United States, and the actual shipping and landing inspection costs of the imported merchandise were included as deductible profit and general expenses. HQ H007667 explains that the reason these amounts can be included as deductible profit and general expenses is because the expenses were incurred after the merchandise was released from Customs custody and because they were incurred in connection with sales in the United States.
In HQ 545187, dated February 14, 1995, CBP reviewed “operating expenses” designated on an income statement, such as salaries and wages, rent, taxes, travel, advertising, automotive expense, and contract services, and determined that the designated operating expenses were deductible profit and general expenses for deductive value purposes. HQ H019749 dated July 22, 2008, considered a company’s general and administrative expenses, which included the company’s per facility operating expenses, division sales expenses, field sales expenses, and allocation for cost of executive staff expenses, as deductible profit and general expenses.
Here, to the extent that “overhead and profit allocation” in the Sample Calculation Expenses aligns with the overhead charges that includes both actual costs of overhead and profit described in HQ H007667, then we find such expense is deductible provided that the profit charged is the normal and usual profit in the industry. To the extent that “general job site operating expenses” in the Designated Expenses refers to the type of operating expenses noted in HQ H019749, and such expenses will be incurred in connection with sales in the United States and after the merchandise will be released from Customs custody, then these expenses may be deductible for purposes of deductive value.
You also propose deducting for an item indicated as “packing.” Section 152.102(e), Customs Regulations (19 CFR § 152.102(e)), defines packing costs as the cost of all containers and coverings of whatever nature and of packing, whether for labor or materials, used in placing merchandise in condition placed ready for shipment to the United States. Section 152.105(f), Customs Regulations (19 CFR § 152.105(f)), states that the price determined under deductive value shall be increased (but only to extent that such costs are not otherwise included) by an amount equal to the packing costs incurred by the importer or buyer, with respect to the merchandise concerned. On this basis, the packing costs cannot be deducted from the price used to calculate the deductive value, but must be added to the unit price to determine the adjusted deductive value. See HQ 546120. However, the importer’s expenses for repacking merchandise incurred after Customs releases the merchandise, and in selling the merchandise in the United States, are deductible expenses incurred in connection with the selling of the merchandise in the United States. See id; see also HQ H007667 discussing packing as a deductible general expense.
Therefore, “packing” in the Sample Calculation Expenses is only properly deductible if it means the repacking costs of the imported components incurred by SWECO, after the imported components will be released by Customs, and in SWECO’s process of selling the imported components to its United States customers. Otherwise, SWECO cannot deduct its packing cost, but must add it to its unit price to determine the adjusted deductive value. This packing expense is not described in the Designated Expenses, but to the extent any of the Designated Expenses include packing expenses, such must be added to or deducted from the unit price in the same manner.
As noted in the SAA, the expenses categorized as deductible profit and general expenses in HQ H007667, HQ 545187, and HQ H019749 should qualify as profit and general expenses under GAAP in the United States. That is, if an expense cannot be categorized as a profit and general expense under GAAP in the United States, it should not be considered a profit and general expense for deductive value purposes. Under GAAP in the United States, such expenses typically relate to the day-to-day operations of a business, pertaining to operations expenses, rather than to expenses that can be directly related to the production of any goods and or services. These expenses may be listed on an importer’s income statement, and may be noted as “general and administrative expenses,” “selling, general, and administrative expenses,” “operating expenses,” or a similar variation depending on the particular accounting practices of the company and its industry. Aside from the expenses noted in HQ H007667, HQ 545187, and HQ H019749, expenses for insurance, consulting expenses, depreciation, legal expenses, utilities, subscriptions and office supplies are other expenses that may be found in this category.
It is not clear whether “warranty” in the Designated Expenses, and “project contingency,” “SCADA, FAA Lights, and DFIG License,” “tools and other miscellaneous site expenses,” “installation of internals related to shipping,” “other miscellaneous costs,” “insurance for the project,” “a standard two year warranty provision,” and “warranty insurance” in the Sample Calculation Expenses, are deductible under this category. Some of these expenses may be deductible, if categorizing such as profit and general expenses of the importer is consistent with the manner that profit and general expenses are prepared under GAAP in the United States. However, we note that GAAP in the United States tends to differentiate general, administrative, and operating expenses listed on an income statement from the “cost of sales,” which refers to the amount of money a company spends to produce the goods or services it sold during the accounting period. Therefore, SWECO should verify whether these expenses are properly booked as profit and general expenses under GAAP in the United States, and not something else such as cost of sales, before deducting them for purposes of deductive value.
Section 1401a(d)(3)(A)(ii)-(iii): Transportation and Insurance
Section 152.105(d)(2), Customs Regulations (19 CFR § 152.105(d)(2)), states that the “actual costs and associated costs of transportation and insurance incurred with respect to international shipments of the merchandise concerned from the country of exportation to the United States,” may be deducted. Section 152.105(d)(3), Customs Regulations (19 CFR § 152.105(d)(3)), states that the “usual costs and associated costs of transportation and insurance with respect to shipments of the merchandise concerned from the place of importation to the place of delivery in the United States, if those costs are not included as a general expense under (d)(1) of this section,” may be deducted. HQ H007667 included ocean freight and the insurance paid in connection with such freight, U.S. inland freight, and foreign-inland freight as deductible amounts pursuant to 19 CFR § 152.105(d)(2)-(3). HQ 547826 dated January 22, 2002, explained that foreign inland freight, meaning the pre-importation freight costs from the country of exportation to a contiguous country, was a deductible transportation cost for purposes of deductive value, provided there was one through-bill of lading for the entire shipment.
In this case, we find that “U.S inland freight and insurance” in the Designated Expenses is a proper deduction under deductive value. “International freight and insurance” in the Designated Expenses is also properly deductible, but if this includes foreign inland freight charges as described in HQ 547826, then it would require a through-bill of lading, for the entire amount to be properly deductible. These transportation and insurance expenses were not separately identified in the Sample Calculation Expenses. To the extent that “freight” and “delivery costs from the port to the site, including trucking and railing” in the Sample Calculation Expenses are meant to reflect “U.S inland freight and insurance” or “international freight and insurance” from the Designated Expenses, then such expenses would be deductible, provided there is a through-bill of lading for the entire shipment.
The listing of “U.S. Customs broker fees” in Designated Expenses is also deductible within this section. HQ 542267 dated April 3, 1981, held that a customhouse broker's fee is either a general expense or a cost of transportation that is deductible under deductive value. HQ 547826 notes that this deduction only applies to charges from United States brokers, and does not apply to charges from foreign brokers. Therefore, “U.S. Customs broker fees” in the Designated Expenses is a proper deduction under deductive value. “U.S. Customs broker fees,” however, were not separately identified in the Sample Calculation Expenses. To the extent that “port fees” in the Sample Calculation Expenses is meant to reflect “U.S. Customs broker fees” from the Designated Expenses, and not charges from a foreign broker, then such an expense would be deductible.
It is unclear whether “installation of internals related to shipping” in the Sample Calculation Expenses is meant to express “associated costs of transportation” within the meaning of 19 CFR § 152.105(d)(2)-(3). There is also no indication whether “insurance for the project” or “warranty insurance” in the Sample Calculation Expenses is meant to express insurance within the meaning of 19 CFR § 152.105(d)(2)-(3). Therefore, we cannot make a determination whether these items would be deductible pursuant to 19 CFR § 152.105(d)(2)-(3).
Section 1401a(d)(3)(A)(iv): Customs Duties and Other Federal Taxes
Section 152.105(d)(4), Customs Regulations (19 CFR § 152.105(d)(4)), states that “customs duties and other Federal taxes currently payable on the merchandise concerned by reason of its importation, and any Federal excise tax on, or measured by the value of, the merchandise for which vendors in the United States ordinarily are liable” are deductible amounts under deductive value. HQ H007667 included customs duties, harbor taxes or merchandise processing fees paid by the United States vendor as deductible amounts pursuant to 19 CFR § 152.105(d)(4). Therefore, to the extent that “duties” in the Designated Expenses means “customs duties” as expressed in 19 CFR § 152.105(d)(4), then such an expense is a proper deduction under deductive value. These “duties” were not separately identified in the Sample Calculation Expenses. To the extent that “port fees” in the Sample Calculation Expenses is meant to reflect “duties” from the Designated Expenses, or harbor taxes or merchandise processing fee as described in HQ H007667, then such an expense would be deductible.
Section 1401a(d)(3)(A)(v): Further Processing
Section 152.105(d)(4), Customs Regulations (19 CFR § 152.105(d)(4)), states that the value added by the processing of merchandise after importation is deductible only in cases where the pricing is determined under 19 U.S.C. § 1401a(d)(2)(A)(iii). The value added by processing must be based on objective and quantifiable data relating to the cost of the work performed, such as accepted industry formulas, recipes, methods of construction, and other industry practices. See 19 CFR § 152.105(i)(1). This deducted value may include amounts for spoilage, waste, or scrap derived from the further process. Id. However, this method is not normally applicable when as the result of further processing, imported merchandise loses its identity, unless the value added by the processing can be determined accurately without unreasonable burden on the importer or Customs. 19 CFR § 152.105(i)(2).
In HQ H020270, dated July 3, 2008, CBP held that imported transmission cores that were remanufactured and sold in the United States should be appraised under the “superdeductive” value method of appraisement set forth in 19 U.S.C. § 1401a(d)(2)(A)(iii) to the extent possible, or if not possible, by reasonably adjusting the superdeductive method on the basis of the “fallback” method pursuant to 19 U.S.C. § 1401a(f). The imported transmission cores underwent further processing because the importer changed the condition of the imported product by rebuilding the transmissions in the United States, with additional parts and labor after the importation. The additional parts cost, the processing and labor costs, and the administrative costs for the rebuilding program were deductible values added by processing of the merchandise after importation.
The values in HQ H020270 seem to align more with “costs of sales” as defined above, since these expenses reflected the amount the company spent to remanufacture the goods it sold in the United States, rather than general, administrative, and operating expenses, as defined in the Profit and General Expenses Section above. However, we note that the fact that an expense is categorized as “cost of sales” is not a requirement to, and does not necessarily support a conclusion of, deductibility as “value added from further processing.” We merely note that such a categorization tends to be differentiated from “profit and general expenses” under GAAP in the United States.
In this case, the “supplies for the tower by unrelated foreign or U.S. companies,” “ancillary equipment supplied by U.S. companies as required,” “project management and construction technical support,” and “commissioning of the complete wind turbine generators” in Designated Expenses and “Tower LOCAL Incidentals and cables/internals installation,” “gearbox oil and ‘Comm’ spares,” “project management and technical assistance,” “installation and supervision,” and “commissioning” in Sample Calculation Expenses may be deductible as value added from further processing. Similar to HQ H020270, these expenses seem to relate to the cost of additional parts and labor incurred by SWECO in the United States after importation, for the purpose of processing the imported components into the complete wind turbine generators. However, though SWECO should ensure that these expenses are based on objective and quantifiable data; to the extent that these expenses align with the expenses in HQ H020270, they are likely deductible as value added from further processing after importation.
As noted above, it was not clear whether “warranty” in Designated Expenses and “project contingency,” “SCADA, FAA Lights, and DFIG License,” “tools and other miscellaneous site expenses,” “installation of internals related to shipping,” “other miscellaneous costs,” “insurance for the project,” “a standard two year warranty provision,” and “warranty insurance” in Sample Calculation Expenses fit within the category of profit and general expenses. If they do not fit within that category, they may be deductible as value from further processing after importation. Similar to HQ H020270, SWECO changes the condition of its imported components after importation by assembling the components together into the completed wind turbine, adding parts separate from the imported components, and using extensive labor to complete the project for its United States customer. Additionally, some of these listed expenses may be more reflective of the “cost of sales” and thus might not be properly booked as profit and general expenses. Therefore, SWECO should determine how these expenses are booked and ensure the amounts are based on objective and quantifiable data in order to determine whether any of these expenses are deductible as value added from further processing.
To the extent that SWECO determines that all the items listed in the Designated Expenses and Sample Calculation Expenses are properly deductible, as specified in 19 U.S.C. § 1401a(d), SWECO may use the deductive value methodology. However, to use deductive value, SWECO should ensure that the expenses, which we could not verify as properly deductible, meet the technical requirements of 19 U.S.C. § 1401a(d) and 19 CFR § 152.105(d), and also verify whether the final accounting of all pertinent revenue and expenses figures are maintained in accordance with generally accepted accounting principles ("GAAP").
Additionally, it is unclear whether SWECO plans to use estimated costs rather than actual costs since its Sample Calculation Expenses are categorized under the title “Estimated Local USA Scope Costs.” In HQ H233789 dated July 21, 2013, CBP accepted a modified deductive value method under 19 U.S.C. § 1401a(f), but did not allow deductions based on the profit and general expenses calculated from a transfer pricing study because such did not account for the actual amount of profit realized and cost incurred for each imported merchandise. Accordingly, SWECO should ensure that it accounts for the actual amount of profit realized and costs incurred for each imported merchandise. For this purpose, SWECO may want to consider using the reconciliation program.
Furthermore, it is not clear whether the imported merchandise will be resold within the 180 day timeframe requirement specified for the superdeductive value method pursuant to 19 U.S.C. § 1401a(d)(2)(A)(iii). Although we know some of the merchandise is delivered by SWECO to its customer’s project site right after importation, we were also informed that some of the merchandise is stored in SWECO’s warehouses for unspecified times until the customer is ready for delivery. Accordingly, SWECO must ensure that the imported components it is claiming deductive value for, meet the timing requirements in 19 U.S.C. § 1401a(d)(2)(A)(iii). If SWECO cannot meet these requirements, and there is no information regarding computed value, then an adjusted form of deductive value under 19 U.S.C. §1401a(f) should be used to appraise the merchandise.
HOLDING:
The imported merchandise should be appraised using deductive value under 19 U.S.C. §1401a(d)(2)(A)(iii) (i.e. superdeductive value), provided that SWECO adequately notifies CBP of this elected method, and the technical requirements for appraising the merchandise under 19 U.S.C. §1401a(d) are met.
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 Customs officer handling the transaction.
Sincerely,
Monika R. Brenner
Chief, Valuation & Special Programs Branch