• HQ H283094
• Aug 15, 2023

• Type : Valuation • HTSUS :
•  Related:   544658; 545474; 545709; 545705; 548239; 542446; 543446; 544852; 543708; 546998; 547672; 542261; 547019; 563407; H326633; H008101; H316932; H327067; H235553; H032883; H106603; H065015; H065024; H037375; H235527; H292850   

OT:RR:CTF:VS H283094 RMC/JW


U.S. Customs & Border Protection
Attn: Jason LemieuxApparel, Footwear and Textiles Center237 West Service Rd.Champlain, NY 12919

Re: Application for Further Review of Protest No. 0712-17-100230; Valuation of Apparel; Bona Fide Sale

Dear Center Director:

This is in response to the Application for Further Review (“AFR”) of Protest No. 0712-17-100230, timely filed by Sandler, Travis & Rosenberg, P.A. on behalf of the importer, Capital Garment Co. USA Inc. (“CG USA”).

CG USA has asked that certain information submitted in connection with this AFR be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets will not be released to the public and will be withheld from published versions of this response.

FACTS:

This AFR arises out of transactions between Capital Garment Co. Inc. (“CG Canada”), an outerwear wholesaler based in Saint-Laurent, Quebec, Canada, and its related U.S. subsidiary, CG USA. While some of those transactions are not strictly at issue in this AFR, certain information available as a result of those transactions is nonetheless relevant to the question presented in this AFR.

Entry of October 26, 2014

On October 26, 2014, CG USA entered a shipment of women’s outerwear, listing itself as the buyer on the entry documents and claiming the invoice price from the transaction between it and CG Canada, the seller, as the transaction value. Subsequently, on November 19, 2014, the Apparel, Footwear and Textiles Center issued a Request for Information (CBP Form 28) related to this entry. The Center requested documentation to establish that a bona fide, arm’s-length sale occurred between CG Canada and CG USA and that transaction value was the appropriate method of valuation.

a. CG USA’s December 19, 2014 Response to the CBP Form 28

In its initial response, dated December 19, 2014, CG USA stated that there is “common ownership between the two companies”, i.e., CG USA and CG Canada. However, CG USA suggested that “the relationship does not influence price.” CG USA further explained its position that a bona fide sale occurred between CG Canada and itself and provided information in support of its position that transaction value was appropriate in the import transaction under consideration. Specifically, CG USA claimed that “generally speaking, the selling policy between the two companies is that of buyer and seller.” According to CG USA, the merchandise at issue in this entry consisted of closeout goods that CG Canada had agreed to sell to CG USA at the original FOB price for which CG Canada had acquired the goods from an unrelated manufacturer in China. After the goods arrived at CG USA’s contract warehouse in Massachusetts, they were subsequently sold to U.S. retailers.

CG USA’s initial response further indicated that the pricing for the closeout merchandise under consideration was an exception to its normal pricing policies. CG USA stated that “[u]nder normal circumstances, for goods sold out of its Canadian inventory,” CG Canada would normally sell to CG USA at the FOB price at which CG Canada acquired the goods, plus a [ ]% markup. For goods that “are purchased by [CG] Canada that are shipped directly to the United States where CG USA is the importer of record,” pricing is based on the first sale FOB value (i.e., the price that CG Canada would pay the unrelated foreign manufacturer) plus a [ ]% markup. Finally, in cases where goods were sold for export to CG USA (presumably from China or a third country), but first held in a bonded warehouse in Montreal pending export to the United States, pricing is based on the first sale FOB value plus a [ ]% markup.

Included with its initial response was information on (i) CG USA’s U.S. operations, (ii) transfer of title and risk of loss for the merchandise from CG Canada to CG USA, and (iii) proof of payment, insurance information, and other information on the subsequent transactions between CG USA and its U.S. customers. This information shows that CG USA was incorporated in the Commonwealth of Massachusetts on April 12, 1995. The address listed on the incorporation documentation provided appears to list a residence in Newton, Massachusetts as the location of the principal office. However, CG USA explained that it uses a UPS Store postbox as an address in the United States “as a convenience.”

CG USA stated that it has one employee in Massachusetts who serves as the company’s treasurer and manager of U.S. operations. The employee is responsible for overseeing all of CG USA’s operations including warehousing of arriving merchandise, shipping to U.S. customers, and managing three U.S. sales representatives. The incorporation documentation lists this U.S. employee as the registered agent and secretary of CG USA, while the president, treasurer, and director have Canadian addresses. A paystub submitted with the information above indicated that the U.S. employee is paid on a biweekly basis.

CG USA further explained its position that title and risk of loss transferred from CG Canada to CG USA when the goods arrived at the border in Champlain, New York. CG USA claimed that the shipping terms were Delivery Duty Unpaid (DDU). In support, CG USA provided a freight bill issued to CG Canada listing the “pick up” point as CG Canada and the “delivery” point as CG USA’s contract warehouse in New Bedford, Massachusetts. The contract warehouse is responsible for receiving, storing, picking, and shipping the merchandise to the end U.S. customer. According to CG USA, the warehouse generally has an inventory between $[ ] to $[ ].

As for proof of payment, CG USA noted that as of its December 19, 2014 response, payment for the goods at issue in the CBP Form 28 had not yet been made, but CG USA “enclosed proof of payment for earlier shipments” and provided three checks made out to CG Canada: the first dated October 15, 2014, in the amount of $[ ]; the second dated November 15, 2014, in the amount of $[ ]; and the third dated November 24, 2014, in the amount of $[ ].

Additionally, a “Memorandum of Insurance” issued by Seymour Alper, Inc. listed the period of insurance as March 30, 2014 to March 30, 2015, and those identified on the list as the insured included both CG Canada and CG USA.

b. Center’s Proposed Notice of Action of January 29, 2015

After considering the information CG USA provided, the Center issued a Proposed Notice of Action (CBP Form 29) on January 29, 2015. In the notice, the Center concluded that CG USA was a selling agent for CG Canada and, therefore, that no bona fide sale had occurred between the parties. Accordingly, the Center proposed rejecting the declared transaction value.

c. CG USA’s March 9, 2015 Response and Prior Disclosure

In response, CG USA provided additional information and arguments on March 9, 2015. CG USA claimed that “there is no reasonable basis for a rejection of the price between the related foreign seller and U.S. importer for the closeout merchandise.” The documentation submitted to support this position included, inter alia, (1) purchase orders for closeout merchandise that CG USA issued to CG Canada, dated October 31, 2014 and November 30, 2014; (2) a pro-forma invoice issued by CG Canada to CG USA, dated October 22, 2014, (3) intercompany invoices between CG Canada and CG USA, dated October 31, 2014 and November 30, 2014, and (4) the invoices to the U.S. retailers, dated October 30, 2014 and December 18, 2014. The pro-forma invoice and the intercompany invoices all correspond directly to the purchase orders (shown through numbering annotations added by CG USA). The invoices to the U.S. retailers, which do not appear to have similar annotations from CG USA that demonstrate direct correlation, were provided by CG USA “to support the prices at which Capital USA resold the closeout merchandise to its unrelated U.S. customers.”

On the same day, CG USA filed a prior disclosure informing CBP that it had failed to include a [ ]% design fee and a [ ]% quality control fee in 56 of its entries.

d. Center’s Notice of Action of April 13, 2015

Having considered this additional documentation, on April 13, 2015, the Center issued a Notice of Action (CBP Form 29) (Taken) concluding that “[t]he documents and information presented to CBP failed to demonstrate a bona fide sale between related parties Capital Garments Co USA and Capital Garments Co, wherein the parties acted as independent buyer and seller.” Accordingly, the Center stated that “[t]he referenced entry will be value advanced to reflect the transaction value of the sale for export to the U.S. between CG and the U.S. [retailers].”

Despite its disagreement with this decision, as reflected in its initial and subsequent responses to the CBP notices mentioned above, CG USA did not file a protest challenging CBP’s decision with respect to this entry.

The Entries at Issue in the Protest and this AFR

According to the information provided in relation to the October 26, 2014 entry, the Port of Champlain began rejecting entries that CG USA attempted to make at the related company price. In conformity with the position adopted in the CBP Form 29 (Taken) from April 13, 2015, the Port directed CG USA to enter the merchandise at the price charged to the end U.S. customer.

On January 11, 2016, the Center issued a Request for Information (CBP Form 28), subsequently replaced with a separate CBP Form 28 (dated February 19, 2016), requesting “commercial billing invoices that [CG USA] issued to its U.S. buyers which are associated with the import of goods to the U.S. under the attached list of entry numbers.” The CBP Form 28 identified the original entry from October 26, 2014, for which action had already been taken pursuant to the CBP Form 29 of April 13, 2015, as well as 117 other entries. Those entries included the 56 entries identified in the prior disclosure as well as some, but not all, of the 20 entries that are the subject of this protest.

In the following months, the Center and CG USA exchanged numerous messages about the scope of information requested and the validity of the prior disclosure. Following these discussions, the Center issued a CBP Form 29 (Proposed) indicating that it intended to value advance the entries previously identified. In its response, CG USA provided additional information and arguments and incorporated its previous submissions related to the October 26, 2014 entry that was the subject of the CBP Form 28 from November 19, 2014. a. Center’s Notice of Action of June 15, 2016 for the 20 Entries at Issue in this AFR

In the CBP Form 29 (Taken), dated June 15, 2016, the Center stated that the entries “will be value advanced to reflect the transaction value of the sale for export to the U.S. between [CG Canada] and its customers.” Moreover, the notice stated that “[i]n the case where no customer invoices were provided to indicate the exact values, CBP will advance values by 187%, which is the lowest average mark-up for which actual values were obtained.”

In reviewing the entries listed in the June 15, 2016 CBP Form 29, counsel for CG USA identified “three different types of entries.” The first type of entry consisted of goods that were entered in accordance with CBP’s prior instruction, contained in the April 2015 CBP Form 29, to declare the price paid by the end U.S. customer. The second type of entry consisted of goods that “had not been resold to anyone in the U.S. beyond the sale to CG USA, i.e., a shipment of inventory.” The declared value of those entries was established on the basis of a transfer price of “cost +[ ]%,” which counsel has stated covers “costs plus a reasonable profit.” The third and last type of entry consisted of goods that were presumably pre-sold to U.S. customers but were also declared on a “cost +[ ]%” basis.

On September 14, 2016, CG USA requested, pursuant to 19 C.F.R. § 152.101(d), a written explanation of how CBP had determined the value for entries that were declared at the price paid by the end U.S. customer and for merchandise that was imported for inventory. CBP provided an Excel spreadsheet showing the calculations used and further explained in an email (dated September 26, 2016) that “[s]ince the requested U.S. buyers’ invoices were not provided to be used as actual values, the Import Specialist appraised the merchandise as follows: 187% of the declared value which is the average increase in the value of the declared values, as compared to U.S. Buyer Invoice values provided by [counsel] on March 9, 2015 . . .” In other words, an average mark-up had been calculated based on previous information relating to the declared value and the price paid by the end U.S. customer, and that mark-up was applied to the entries at issue here to arrive at a customs value.

b. CG USA’s Protest of January 11, 2017, its AFR, and Subsequent Submissions

On January 11, 2017, counsel for CG USA timely protested the liquidation of the entries identified in the June 15, 2016 CBP Form 29 (Taken) and sought further review of its protest. In sum, CG USA argues that, whether or not the merchandise was presold to U.S. customers at the time of entry, the transactions between CG Canada and CG USA constitute bona fide sales for export to the United States. Therefore, the entries should be appraised on the basis of the transfer price between CG Canada and CG USA. In the alternative, counsel argues that if the transfer price is found to be unacceptable, the proper method of appraisement is the deductive value method.

In subsequent submissions and an in-person meeting, counsel provided additional information to substantiate its claim that a bona fide sale occurred and that the related-party price is acceptable as the transaction value in the entries at issue in this protest. In response to a request for documents establishing when title and risk of loss for the merchandise transferred from CG Canada to CG USA, CG USA noted that no sales contract exists between the parties. However, it pointed to the shipping terms and a letter from its insurance agent as evidence of a bona fide sale.

In contrast to its previous transactions, which CG USA stated were conducted on a DDU basis, the CG Canada invoices submitted in connection with the protested entries list the shipping terms as “C&F” (Cost and Freight). CG USA states that “while C&F is not an activeIncoterm, it is nearly equivalent to CIF, but for the insurance.” In other words, under the C&F shipping term, the seller pays for freight but not for insurance, which is the buyer’s responsibility. CG USA also notes that “[u]nder any of the ‘C’ [Incoterms], risk of loss passes to the buyer once the seller delivers the goods to the first carrier.”

CG USA also points to a letter provided by Seymour Alper Inc., CG Canada’s insurance agent, as evidence that risk of loss transfers to CG USA when the goods are picked up from CG Canada’s premises. The letter contains a sample invoice from one of the entries covered by the protest and the following comments:

. . . the attachment of insurance and ownership would always be determined based on the documentation and terms for each particular case. But it is clear on our policy that goods owned by [CG USA] are insured at the [CG USA] wholesale selling price. Based on the attached invoice it is clear [CG USA] owns those goods outright [when they are loaded at CG Canada’s premises] and there is no issue. i.e. the documentation issued is C&F. . . .

In response to CBP’s questions about proof of payment, CG USA noted that it makes lump sum payments to CG Canada for merchandise as its cash flow permits. The payments are made against a ledger of invoices, which is required to be reconciled at the end of each season. CG USA states that this is normal industry practice and is consistent with how CG Canada pays its unrelated vendors and how CG USA is paid by its unrelated customers.

Regarding payments for the entries at issue in this protest, CG USA provided the “vendor accounts payable ledger” for the winter 2014-2015 season (which covers the period of October 1, 2014 to February 16, 2015) and copies of corresponding checks from CG USA to CG Canada. The ledger contains columns for the date of payment, invoice number, debit, credit, and balance. Payments from CG USA to CG Canada are reflected as “debits” and invoices are reflected as “credits.”

In sum, the ledger shows that on October 10, 2014, CG USA incurred a credit of $[ ], which corresponds to CG Canada invoice numbers 1891 to 1920. At that point, the balance on the ledger was therefore -$[ ]. The next day, CG USA made a payment of $[ ] via check number 7306. This payment was reflected on the ledger as a debit of $[ ], bringing the balance to -$[ ]. This process was continued for all the invoices until, on February 16, 2015, CG USA made a final payment of $[ ], bringing the balance for the 2014-2015 winter season to zero. Regarding the acceptability of the transfer price, CG USA argues that the “cost +[ ]%” policy supports a finding that its relationship with CG Canada did not influence the price paid for the imported merchandise. The cost basis for “cost +[ ]%” pricing is the FOB cost of the merchandise (in the sale between CG Canada and an unrelated seller in Asia), plus a [ ]% mark-up. CG USA states that this results in a gross margin of approximately [ ]%, which allows CG Canada to recover all of its costs plus a profit that is representative of its overall profit in sales of merchandise of the same class or kind.

In support of this contention, CG USA provided a letter dated August 14, 2018, from the Fuller Landau accounting firm, which serves as the auditor for CG Canada. The letter states, in pertinent part:

Beginning in 2008, [CG Canada] increased the price at which it sold merchandise to [CG USA] from a pricing structure of cost (i.e., its FOB cost from its foreign vendors) plus a [ ]% gross margin, to cost plus [ ]% plus another [ ]% for operating expenses, which includes a [ ]% design fee and [ ]% administrative services charge to [CG USA]. The estimated gross margin on the sales to USA is [ ]%.

Since that time, [CG Canada] has maintained a consistent pricing strategy with [CG USA], and for the time period currently under review. We attest that the gross margin for the fiscal years ended March 31, 2014 and 2015 were [ ]% and [ ]%, respectively.

CG USA provided an Excel spreadsheet containing detailed information about how CG Canada actually priced certain merchandise in the entries covered by this protest. Specifically, it shows the FOB prices at which CG Canada acquired merchandise from unrelated foreign vendors and the prices at which it subsequently resold the merchandise to CG USA. As an example, CG Canada acquired garments identified as “Style No. 7714RM-44” at an FOB price of $[ ]. This style was then resold to CG USA under invoice number 1900. To establish the transfer price, CG Canada increased the FOB price by $[ ] (representing a [ ]% design fee), $[ ] (representing a [ ]% quality control fee)0F and $[ ] (representing a [ ]% markup over the FOB price plus the design fee and the quality control fee). The resulting transfer price in the sale between CG Canada and CG USA was therefore $[ ] per unit.

CG Canada’s gross margin percentage is determined by applying the formula ((Revenue – Cost of Goods Sold) / (Revenue)) * 100. Taking the example of Style No. 7714RM-44, CG Canada therefore earned a gross margin percentage of (($[ ] - $[ ]) / ($[ ])) * 100 = [ ]%.

The Excel spreadsheet indicates that the merchandise in the sampled transactions were priced in accordance with the “cost+[ ]%” policy. However, as noted above, in accordance with instructions from the Port in a CBP Form 29 (Taken) dated April 13, 2015, CG USA entered merchandise which it had pre-sold to U.S. customers at the price paid by the U.S. customer, rather than the “cost+[ ]%” transfer price between CG Canada and CG USA.

The Excel spreadsheet did not address all merchandise that CG Canada sold to CG USA on a closeout basis which, as originally noted in CG USA’s submission of December 19, 2014, constitutes an exception to CG Canada’s normal pricing policies. Because this merchandise is not priced in accordance with the “cost+[ ]%” policy, CBP requested a complete list of each closeout transaction included in the protested entries and information on how each transaction was actually priced.

CG USA’s response indicated that three entries contained seven styles of closeout merchandise that CG Canada sold at its FOB cost plus a markup ranging from [ ]% to [ ]%. Although CG USA acknowledged that these markups did not permit CG Canada to earn a [ ]% gross margin, it provided additional information to establish that the merchandise was sold at “market value.” First, CG USA provided information about the normal pricing practices of discount retailers such as TJ Maxx, Burlington Coat Factory, Ross, Marshall’s, and Nordstrom Rack, which are the types of customers that generally purchase closeout merchandise for resale. CG USA cites TJ Maxx’s website, which explains its business model as follows:

We take advantage of a wide variety of opportunities, which can include department store cancellations, a manufacturer making up too much product, or a closeout deal in which a vendor wants to clear merchandise at the end of a season, as well as lots of other ways to bring our customers tremendous value.

The majority of products we sell are high quality, fashionable, brand name, and designer merchandise generally sold at prices 20%-60% less than full-price retailers’ regular prices on comparable merchandise. Most of our merchandise is fashionable, current season styles.

See TJ Maxx, “How We Do It”, available at https://www.tjx.com/company/how-we-do-it (last visited June 14, 2023).

In sum, CG USA characterizes closeout sales as a highly common retail-industry practice in the apparel industry, which is seasonable and subject to rapidly changing trends. CG USA states that CG Canada offers closeout merchandise to all buyers on a first come, first served basis, and that it buys closeout merchandise at its own discretion, based on its anticipated downstream sales to discount retail customers.

Furthermore, CG USA submitted an Excel spreadsheet that compares the prices it paid for nine styles of closeout merchandise to the prices that unrelated Canadian buyers paid to CG Canada for those same styles. The spreadsheet shows that, for eight of the nine styles, CG USA paid a slightly higher price than the unrelated domestic buyer. CG USA states that any variance in pricing between what it paid for the merchandise and what unrelated Canadian buyers paid is strictly due to the nature of the apparel market rather than its relationship with CG Canada.

ISSUE:

Whether transaction value is the proper method of appraisement in the import transactions in question between CG Canada and CG USA.

LAW AND ANALYSIS:

Merchandise imported into the United States is appraised for customs 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 amounts for certain statutorily enumerated additions to the extent not otherwise included in the price actually paid or payable. See 19 U.S.C. § 1401a(b)(1) When transaction value cannot be applied, the appraised value is determined based on the other valuation methods in the order specified in 19 U.S.C. § 1401a(a). Id. At 1330.

In order to use transaction value, there must be a bona fide sale for exportation to the United States. VWP of America, 175 F.3d at 1331 (citing CBP Headquarters Ruling Letter HQ 544658, dated March 26, 1991 at 3); see also Midwest-CBK LLC v. United States, 2022 Ct. Intl. Trade LEXIS 48, *17 (C.I.T. 2022) (“Appraisal on the basis of transaction value has two requirements: (1) that the merchandise is sold and (2) that the sale is for exportation to the United States.”) (citations omitted).

Additionally, imported merchandise will be appraised under transaction value only if the buyer and seller are not related, or if related, either (1) the circumstances of sale indicate that the relationship did not influence the price actually paid or payable, or (2) the transaction value approximates certain test values. See 19 U.S.C. § 1401a(b)(2)(A)-(B); see also VWP of America, Inc. v. United States, 175 F.3d 1327, 1335 (Fed. Cir. 1999) (“Congress intended the two methods set forth in § 1401a(b)(2)(B) to be the exclusive means of determining the acceptability of a transaction value between related parties[.]”). More specifically, that statute provides that:

The transaction value between a related buyer and seller is acceptable . . . if an examination of the circumstances of the sale of the imported merchandise indicates that the relationship between such buyer and seller did not influence the price actually paid or payable; or if the transaction value of the imported merchandise closely approximates—

(i) the transaction value of identical merchandise, or of similar merchandise, in sales to unrelated buyers in the United States; or

(ii) the deductive value or computed value for identical merchandise or similar merchandise;

but only if each value referred to in clause (i) or (ii) that is used for comparison relates to merchandise that was exported to the United States at or about the same time as the imported merchandise.

19 U.S.C. § 1401a(b)(2)(B); see also VWP of America, 175 F.3d at 1330-31.

At issue in this case is: (1) whether a bona fide sale for exportation to the United States occurred based on the transactions between CG Canada and CG USA and (2) if so, whether the related-party price is acceptable as transaction value.

Bona Fide Sale for Exportation to the United States

As noted above, in order for transaction value to be used as a method of appraisement, there must be (1) a bona fide sale between the buyer and seller, and (2) the sale is for exportation to the United States. See VWP of America at 1331; see also Midwest-CBK LLC, 2022 Ct. Intl. Trade LEXIS 48 at *17.

Bona Fide Sale

In VWP of America, Inc. v. United States, 175 F.3d 1327 (Fed. Cir. 1999), the Court of Appeals for the Federal Circuit found that the term “sold” for purposes of 19 U.S.C. § 1401a(b)(1) means a transfer of title from one party to another for consideration (citing J.L. Wood v. United States, 505 F.2d 1400, 1406 (CCPA 1974)). While several factors may indicate that a bona fide sale occurred between the purported buyer and seller, no single factor is determinative. See VWP, 175 F.3d at 1339 (“[A] determination that goods are being sold or assembled for exportation to the United States is fact-specific and can only be made on a case-by-case basis”).

In determining whether property or ownership has been transferred, CBP considers whether the potential buyer has assumed the risk of loss and acquired title to the imported merchandise. See Headquarters Ruling (“HQ”) 548239, dated June 5, 2003. In addition, CBP may examine whether the purported buyer paid for the goods (i.e., consideration passed between the potential buyer and seller for the imported merchandise). See HQ 545474, dated August 25, 1995; and HQ 545709, dated May 12, 1995. Evidence that would establish that consideration has passed from one party to another party includes evidence of payment by check, bank transfer, or payment by any other commercially acceptable manner,and it also is necessary to demonstrate that payment was made for the imported merchandise in question. General transfers of money from one corporate entity to another that cannot be linked to a specific import transaction are not sufficient to show passage of consideration between the parties with respect to that import transaction. See, e.g., HQ 545705, dated January 27, 1995.

Contracts, distribution and other similar agreements, invoices, purchase orders, bills of lading, proof of payment, correspondence between the parties, and company reports all may serve as evidence that a party possesses title in and assumes the risk of loss for the imported merchandise and functions as a buyer or a seller. Such documentation should be consistent in its entirety and with the transaction. See, e.g., HQ H326633, dated September 20, 2022. Additionally, CBP reviews and interprets the terms of the sale consistent with the International Chamber of Commerce’s Incoterms and the Uniform Commercial Code (“UCC”). See id.

Other factors that CBP will also consider in determining whether a bona fide sale occurred are whether, in general, the roles of the parties and circumstances of the transaction indicate that the parties were functioning as buyer and seller. See HQ 548239, dated June 5, 2003. Specifically, CBP considers as evidence of a valid buyer-seller relationship whether the buyer provided or could provide instructions to the seller, was free to sell the transferred item at any price he or she desired, selected or could select its own downstream customers without consulting with the seller, and could order the imported merchandise and have it delivered for its own inventory. See HQ 545474.

Here, no sales contracts exist that set forth the conditions under which title and risk of loss pass between the buyer and the seller. However, the shipping terms contained on the invoices between CG Canada and CG USA are instructive as to the risk of loss. The invoices indicate that the shipping terms are “C&F” (Cost and Freight). CG USA explains that “while C&F is not an active Incoterm, it is nearly equivalent to CIF, but for the insurance.” This is generally confirmed by the Uniform Commercial Code (“UCC”) as well, which states “[u]nless otherwise agreed the term C. & F. or its equivalent has the same effect and imposes upon the seller the same obligations and risks as a C.I.F. term except the obligation as to insurance.” See UCC § 2-320 (3).

However, it appears here that C&F was erroneously used as the mode of transport for the import transactions at issue was by truck. The term “C&F” is “commonly but erroneously used” to refer to “Cost and Freight” or “CFR transactions.” See R. Deusenberg & L. King, Sales & Bulk Transfers under the UCC § 8.02 (2021). Moreover, the “Cost and Freight” term is “used in sea and inland waterway transport only” and “[i]f the parties do not intend to deliver the goods across the ship’s rail, the CPT term should be used.” See id.

According to the International Chamber of Commerce,

“Carriage Paid To” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

See Incoterms 2010, International Chamber of Commerce, http://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-2010/ (last visited April 18, 2022).

As further explained in R. Deusenberg & L. King, Sales & Bulk Transfers under the UCC § 8.02 (2021):

CPT signifies “Carriage Paid To,” and its usage includes all modes of transport including combined transport. The use of this term signifies that the seller has agreed to pay the freight for the carriage of the goods to the named destination, but that the risk of loss or damage and additional costs after delivery to the carrier transfers from the seller to the buyer when the goods have been delivered to the carrier, or the first carrier if there is more than one, such as when there is combined transport.

Therefore, rather than the erroneously used C&F term, the Incoterm that actually describes the responsibilities of CG Canada and CG USA in the transactions at issue is CPT. In the transactions under review, the carrier picked up the merchandise directly from CG Canada’s premises in Saint-Laurent, Quebec. Accordingly, both “delivery to the carrier” and the corresponding transfer of risk of loss or damage from CG Canada to CG USA occurred at that time.

On the issue of transfer of title, however, CBP has previously explained that Incoterms and other shipping terms do not, by themselves, establish when title transfers. See HQ H008101, dated October 9, 2012, quoting St. Paul Guardian Ins. Co. v. Neoromed Med. Sys. & Support, 2002 WL U.S. Dist. LEXIS 5096 at *12 (“INCOTERMS, however, only address passage of risk, not transfer of title.”) (citations omitted). The parties may incorporate Incoterms into a sales contract that specifies that title passes at the same time as risk of loss. But here, as in HQ H008101, no written sales contracts are available.

Without a written sales contract between the parties, the UCC, specifically UCC § 2-401, may aid in determining when title to the goods was transferred to the buyer from the seller. See, e.g., HQ H316932, dated August 5, 2021 (“Without a sales contract between the parties, the Uniform Commercial Code [ ] aids in determining when title to the goods was transferred.”); see also, e.g., HQ H327067, dated September 1, 2022 (looking to UCC § 2-401 for guidance as to the passage of title); but compare e.g., HQ H235553, dated December 23, 2014) at 10-11 (“N.Y. UCC § 2-401 applies to situations in which there is a buyer and seller, but the role of the parties in this case have not been proven.”).

UCC § 2-401(2) provides, in pertinent part:

Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place . . . .

See, e.g., HQ 542446, dated April 2, 1986 and HQ H316932.

Applying UCC § 2-401(2), in HQ 543446, CBP concluded that “unless the parties otherwise agree, title passes from the seller to the buyer on delivery of the property, irrespective of whether the agreed-upon purchase price has actually been paid.” In this case, delivery occurred when CG Canada provided the merchandise to the carrier at its premises in Saint-Laurent, Quebec. Therefore, under UCC § 2-401(2), title transferred from CG Canada to CG USA at that time. This conclusion is consistent with the letter from Seymour Alper Inc., CG Canada’s insurance agent, expressing the opinion that CG USA “owns those goods outright [when they are loaded at CG Canada’s premises].”

This is also consistent with the “C&F” and “FOB Montreal” terms (albeit erroneously used) on the invoices of the transactions at issue. See e.g., Midwest-CBK LLC v. United States, 2022 Ct. Intl. Trade LEXIS 48, 25-6 (C.I.T. 2022) citing Litecubes, LLC v. N. Light Prods., 523 F.3d 1353, 1358 n. 1 (Fed. Cir. 2008). (“The term ‘FOB’ means ‘free on board’ and denotes a ‘method of shipment whereby goods are delivered at a designated location, usually a transportation depot, at which legal title and thus the risk of loss passes from seller to buyer.’”); see also, e.g., HQ 544852, dated September 30, 1994 citing, HQ 543708, dated April 21, 1988 (“According to these [UCC] provisions, FOB point of shipment contracts and all CIF and C&F contracts are ‘shipment’ contracts, while FOB place of destination contracts are ‘destination’ contracts. These provisions indicate that, unless otherwise agreed by the parties, title and risk of loss pass from the seller to the buyer in ‘shipment’ contracts when the merchandise is delivered to the carrier for shipment, and in ‘destination’ contracts when the merchandise is delivered to the named destination.”) (alterations and emphasis in original).

The documentation submitted with this AFR also demonstrates that CG USA provided consideration in exchange for the merchandise by making full payment. The “vendor accounts payable ledger” reflects the invoices associated with the entries at issue, for which CG Canada incurred a credit for each purchase and a debit for each payment. Although CG USA characterizes the payments as “lump sum,” each payment is associated with a particular invoice or set of invoices in the entries subject to this protest, and the balance of the account is brought to zero at the end of each season. Moreover, CG USA states that such arrangements for payment are normal industry practice and that it applies the same methods for unrelated vendors. See, e.g., HQ H032883, dated March 31, 2010 (“The Company [***] demonstrated that the “like-kind” payment system used is linked to specific, individual import transactions and purchase orders”); see also HQ H316932(“The documentation provided shows that the Protestant issued a purchase order to the Vendor, the Vendor issued an invoice to the Protestant, and the Protestant made payment against that invoice.”)

Finally, the roles of the parties and circumstances of the transaction also tend to indicate that the parties were functioning as buyer and seller. CG USA contends that it is not a “selling agent” and it does not have an agency relationship with CG Canada. Instead, CG USA claims that there is evidence of a valid buyer-seller relationship as “it objectively showed that buyer provided or could provide instructions to the seller, was free to sell the transferred item at any price he or she desired, selected or could select its own downstream customers without consulting with the seller[.]” CG USA further stated the following:1F CG USA was incorporated in the State of Massachusetts in April of 1995 and its physical corporate office is located in Massachusetts, as is the company’s bank account and warehousing space. The Secretary of CG USA was a U.S. resident2F and responsible for the administration of the company including operations, warehousing, and sales via independent representatives in the United States. CG USA sells goods in the United States. CG USA carries insurance for the imported goods and assumes bad debts.

In support of these statements, CG USA provided documents such as a website page showing where CG USA was incorporated and its officers, a business card of the Secretary showing the address of the company, an example of the Secretary’s compensation through a check and pay stub, example payments to the Secretary for her office space, example payments for the warehousing space, an example corporate tax return, other tax related documents, purchase orders and invoices.

In some of the entries at issue in this protest, CG USA made purchases without having arranged a subsequent sale to a U.S. customer. Although several entries consist of pre-sold merchandise, CG USA has established that it could and did order imported merchandise and have it delivered for its own inventory, and that it selected or could select its own downstream customers without consulting with the seller.

In sum, CG USA took title and risk of loss for the merchandise, provided consideration that could be linked to the transactions at issue and, taking into consideration the roles of the parties and the circumstances of the transaction, CG Canada and CG USA were “acting as buyer and seller.” See, e.g., HQ 545474; HQ 545709. Accordingly, in the transactions at issue in this protest, we hold that a bona fide sale occurred between CG Canada and CG USA.

For Exportation to the United States

Having established that the transactions at issue between CG Canada and CG USA constitute a bona fide sales, the second issue under 19 U.S.C. § 1401a is whether the merchandise was sold “for exportation to the United States.” There is generally no dispute here that the merchandise was sold for exportation to the United States. The invoices from CG Canada to CG USA all indicate that the shipping addresses were to places in the United States.

Acceptability of the Related-Party Price as Transaction Value

It is undisputed that the seller, CG Canada, and the buyer, CG USA, are related parties as defined in 19 C.F.R. § 152.102(g). While the fact that the buyer and seller are related is not in itself grounds for regarding transaction value as unacceptable, where CBP has doubts about the acceptability of the price and is unable to accept transaction value without further inquiry, the importer is given the opportunity to supply such further detailed information as may be necessary to support the use of transaction value. See 19 C.F.R. § 152.102(l)(1)(i); see also VWP, 175 F.3d at 1337 (“A sale by a corporation to ‘a subsidiary’ cannot serve as the basis for transaction value unless (i) the parent corporation and the subsidiary properly qualify as ‘persons who are related’ under 19 U.S.C. § 1401a(g)(1)(F) and (ii) the acceptability of the sales price as a transaction value is established by one of the methods set forth in 19 U.S.C. § 1401a(b)(2)(B).”).

The importer may substantiate the use of transaction value in a related-party transaction if it satisfies one of two tests: (1) circumstances of the sale; or (2) test values. See 19 U.S.C. § 1401a(b)(2)(B); 19 C.F.R. § 152.103(l). More specifically,

Section 1401a(b)(2)(B) establishes two methods for determining whether the value of a transaction between a related buyer and seller may serve as the basis for appraising imported merchandise. Under the first method, if an examination of the circumstances of the sale of the imported merchandise indicates that the relationship between the related parties did not influence the price, the transaction value is acceptable for purposes of § 1401a(a)(1)(A). The second method involves comparing the transaction value between the related buyer and seller to determine whether it “closely approximates” either the transaction value of identical or similar merchandise in sales to unrelated buyers in the United States or the deductive or computed value for identical or similar merchandise. See 19 U.S.C. §§ 1401a(b)(2)(B)(i-ii). These two methods for determining the acceptability of the value of a transaction between related parties are intended to “insure that a particular transaction is bona fide and ‘at arm's length’ before the transaction value standard will apply.” See S. Rep. No. 96-249, at 115, 1979 U.S.C.C.A.N. at 501.

VWP, 175 F.3d at 1335 (emphasis added).

Here, no information regarding test values has been submitted or is available. Consequently, the circumstances of the sale approach must be used in order to determine the acceptability of transaction value.

Under the circumstances of the sale approach, the transaction value between related parties will be considered acceptable if the parties buy and sell from one another as if they were unrelated, meaning their relationship did not influence the price actually paid or payable. See e.g., HQ H032883 dated March 31, 2010. All relevant aspects of the transaction are analyzed including: (1) the way the buyer and seller organize their commercial relations, and (2) the way that the price was determined. Id.; see also 19 C.F.R. § 152.103.

The three examples to demonstrate that a relationship did not influence the price under 19 C.F.R. § 152.103(l) are as follows: (i) the price was settled in a manner consistent with the normal pricing practices of the industry in question; (ii) the price was settled in a manner consistent with the way the seller settles prices for sales to buyers who are not related to it; or (iii) the price is adequate to ensure recovery of all costs plus a profit that is equivalent to the firm’s overall profit realized over a representative period of time in sales of merchandise of the same class or kind.

Here, CG USA makes separate circumstances of the sale arguments for goods priced in accordance with the “cost+[ ]%” policy and closeout merchandise. For the former, CG USA contends that the “all costs plus a profit” test in 19 C.F.R § 152.103(l)(1)(iii) is satisfied. For the latter, CG USA argues that the totality of the circumstances demonstrates that its relationship with CG Canada did not influence the price, focusing on the normal pricing practices of the industry and the way CG Canada settles prices with unrelated buyers.

Merchandise Priced in Accordance with the “Cost+[ ]%” Policy

To explain the “all costs plus a profit” test, Interpretative Note 3, at 19 C.F.R § 152.103(l)(1)(iii) states as follows:

If it is shown that the price is adequate to ensure recovery of all costs plus a profit which is equivalent to the firm’s overall profit realized over a representative period of time (e.g., on an annual basis), in sales of merchandise of the same class or kind, this would demonstrate that the price has not been influenced.

An important consideration in the “all costs plus a profit” method is the “firm’s” overall profit in sales of merchandise of the same class or kind. In applying the “all costs plus a profit” test, CBP normally considers the “firm” to be the parent company. If the seller of the imported goods is a subsidiary of the parent company, the price must be adequate to ensure recovery of all the seller’s costs plus a profit that is equivalent to the parent company’s overall profit in sales of merchandise of the same class or kind. See HQ 546998, dated January 19, 2000. In this case, the relevant “firm” is CG Canada, which was also the seller of the merchandise. Although the CBP regulations do not define “equivalent profit,” if the profit that the seller earns in a related-party transaction equals or exceeds its overall profitability in sales of the same class or kind, the purchase price would not be artificially low for Custom’s purposes. See, e.g., HQ H106603, dated July 25, 2011; HQ H065015, dated April 14, 2011; and, HQ H065024, dated July 28, 2011.

Further, the CBP regulations do not define what type of profit should be considered. However, CBP usually considers operating profit because it is a more accurate measure of what the company actually earns on sales once associated expenses have been paid. See, e.g., HQ H037375, dated December 11, 2009. Nevertheless, CBP has considered gross profit in certain circumstances. For example, CBP has considered gross profit where, as here, only gross profit information was provided for the relevant period. See HQ H235527, dated August 4, 2015. Therefore, in analyzing whether the “all costs plus a profit” test has been satisfied, we will use the gross profit information provided.

Finally, an all costs plus profit claim should be supported by information and documentation regarding both the seller’s costs and the firm’s profit. [T]he importer should be prepared to provide records and documents of comprehensive product related costs and profit, such as financial statements, accounting records including general ledger account activity, bills of materials, inventory records, labor and overhead records, relevant selling, general and administrative expense records, and other supporting business records. See, e.g., HQ H292850, dated December 13, 2018.

With respect to this AFR, the letter dated August 14, 2018 provided by the Fuller Landau accounting firm, CG Canada’s auditor, states that “the gross margin for the fiscal years ended March 31, 2014 and 2015 were [ ]% and [ ]%, respectively.” As illustrated in the example from above in the “Facts” section, pricing in accordance with CG Canada’s “cost+[ ]%” policy resulted in a gross margin of approximately [ ]% in a representative sale to CG USA. Accordingly, CG Canada earned a slightly higher profit in the sale to CG USA than it did on its total sales during the applicable period under review. Specifically, it earned 1.24% and 2.81% more as compared to the gross margin for the fiscal years ended March 31, 2014 and 2015, respectively.

Lastly, in deciding whether the “all costs plus a profit” test has been satisfied, we must consider whether CG Canada’s overall profits that are used as a comparison were calculated from sales of merchandise of the same class or kind. See 19 C.F.R. § 152.103(l)(1)(iii). Merchandise of the “same class or kind” means “merchandise (including, but not limited to, identical merchandise and similar merchandise) within a group or range of merchandise produced by a particular industry or industry sector.” 19 C.F.R. § 152.102(h).

Although the information provided by Fuller Landau appears to report CG Canada’s overall profitability on all sales for its 2014 and 2015 fiscal years, CG Canada’s business is limited to selling outerwear for women. For example, its website, for which CG USA provided a reproduction in PDF format on July 14, 2021, lists four different brands (Arctic Expedition, Nikki Jones, Nuage, and Etage Denmark), which all appear to produce various types of winter coats and parkas. Even if these garments do not qualify as identical or similar to the women’s outwear imported in the transactions at issue here, they do fall “within a group or range of merchandise produced by a particular industry or industry sector” under 19 C.F.R. § 152.102(h). Therefore, we conclude that the profitability figures used for purposes of the all cost plus a profit test were calculated from sales of goods of the same class or kind.

In conclusion, for merchandise priced in accordance with the “cost+[ ]%” policy, the circumstances of the sale demonstrate that CG Canada and CG USA buy and sell from each other as if they were unrelated because the price paid was adequate to ensure recovery of all costs plus a profit equivalent to CG Canada’s overall profitability over its fiscal year in goods of the same class or kind. Accordingly, we hold that prices established under the “cost+[ ]%” policy can serve as a basis of appraisement under transaction value.

Closeout Merchandise

Regarding the closeout merchandise, CG USA relies on a general approach considering the totality of the circumstances, focusing specifically on the normal pricing practices of the industry in question and the way CG Canada settles prices in sales to unrelated buyers. Regarding the totality of the circumstances, Interpretative Note 1, 19 C.F.R § 152.103(l)(1)(i) states, in relevant part:

In this context, Customs will examine relevant aspects of the transaction, including the way in which the buyer and seller organize their commercial relations and the way in which the price in question was arrived at in order to determine whether the relationship influenced the price.

Interpretative Note 2, 19 C.F.R § 152.103(l)(1)(ii) also provides, in relevant part:

If it is shown that the buyer and seller, although related, buy from and sell to each other as if they were not related, this will demonstrate that the price has not been influenced by the relationship, and the transaction value will be accepted. If the price has been settled in a manner consistent with the normal pricing practices of the industry in question, or with the way the seller settles prices for sales to buyers who are not related to him, this will demonstrate that the price has not been influenced by the relationship.

In order to establish a normal pricing practice for purposes of 19 C.F.R § 152.103(l)(1)(ii), objective evidence is needed on how prices are set in the industry in question. See, e.g., HQ 547672 dated May 21, 2002. For example, in HQ 542261 dated March 11, 1981, Customs determined that, where the transfer price was defined with reference to prices published in a trade journal (the posted price) and the posted price was commonly used by other buyers and sellers as the basis of contract price, the transfer price was acceptable. In such case, a determination may follow that the transfer price was settled in a manner consistent with normal pricing practice in the industry.

While the importer in HQ 542261 provided specific information that allowed Customs to determine that prices were set according to an industry standard, in this AFR, CG USA has only provided a general description of the market for closeout apparel. For example, the TJ Maxx website explains why apparel might be sold at closeout prices (department store cancellations, purchasing too much product, end-of-season sales, etc.) and provides a range of discounts that may be offered to the end customer (20% to 60%). This general information supports CG USA’s contention that closeout sales are a common industry practice but does not establish that the discount that CG Canada actually offered to CG USA was appropriate and in line with the arm’s-length standard. As a result, we hold that CG USA has not met the normal pricing practices test.

Regarding the way that the seller settles prices in sales to unrelated buyers, information that the seller offered the same discounts to both related and unrelated buyers can be instructive. For example, in HQ 547019 dated March 31, 2000, the foreign supplier granted various discounts based on established criteria from a price list. As evidence of this practice, the importer presented invoices from its related foreign supplier to other unrelated foreign buyers showing that identical price discounts for merchandise identical to the imported merchandise were given to other unrelated parties. Based on this information, Customs concluded that that the price was set in a manner consistent with the way the seller settles prices for sales to buyers who are not related to him.

Here, again, CG USA offers no established criteria for determining whether the amount of the discount was consistent between related and unrelated buyers. Instead, it contends that CG Canada offered the closeout merchandise on a first-come, first-served basis to all buyers, and that the prices for sales to unrelated buyers were similar. Although the prices in many cases were indeed similar, the commercial circumstances in the sales to unrelated buyers were not. Most importantly, given the seasonality of the apparel industry and the effect of time on prices, the sales to CG USA generally occurred much earlier. For example, as shown in the PDF of an Excel spreadsheet provided to CBP in an email from CG USA’s counsel dated July 14, 20213F, CG Canada sold the first style of apparel listed in this Excel spreadsheet to an unrelated Canadian retailer on February 9, 2016, while the comparison sale to CG USA occurred on February 28, 2015. Additionally, the comparison sales were to unrelated customers in a different market, at a different commercial level, and possibly in different quantities. Accordingly, we hold that the information provided does not substantiate that the price was settled in a manner consistent with the way CG Canada settles prices for sales to unrelated entities. Moreover, taken as a whole and considering the totality of the circumstances, the information that CG USA provided has not established that transaction value is acceptable in the closeout sales.

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)).

Counsel argues that, if the transfer price is found to be unacceptable, the proper method of appraisement is the deductive value method. Accordingly, we assume that no information concerning the transaction value of identical or similar merchandise exists. Nevertheless, if such information is available, the imported merchandise must be appraised under this method of appraisement rather than deductive value.

Under the deductive value method, imported merchandise is appraised on the basis of the price at which it or identical or similar merchandise 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). This price is subject to certain enumerated deductions. 19 U.S.C. § 1401a(d)(3). Pursuant to 19 U.S.C. § 1401a(a)(2), if the value cannot be determined on the basis of the transaction value of identical or similar merchandise, the merchandise shall be appraised on the basis of the computed value, rather than the deductive value, if the importer makes a request to that effect to the customs officer concerned. See 19 C.F.R. § 152.102(c); see also HQ H065015, dated April 14, 2011.

Here, we agree that if the required information is available and the technical requirements have been satisfied, the deductive value method is an appropriate method of appraisement for the closeout merchandise. We note that the CG USA purchased the closeout merchandise in order to resell it to retailers in the United States. Therefore, provided that the closeout merchandise was sold in the United States within 90 days of importation and the other technical requirements are met, the deductive value method should be used to appraise the closeout merchandise.

If deductive value cannot be applied, the next method of appraisement is computed value. Under the computed value method, merchandise is appraised on the basis of the material and processing costs incurred in the production of imported merchandise, plus an amount for profit and general expenses equal to that usually reflected in sales of merchandise of the same class or kind, and the value of any assists and packing costs. 19 U.S.C. § 1401a(e)(1). CG USA was not the original manufacturer of the merchandise and is unlikely to have access to the information necessary to calculate a computed value. See, e.g., HQ 563407, dated April 13, 2006 (noting that “[d]ue to the difficulty in obtaining original cost and sales records related to the returned used goods, there is insufficient information available to appraise the merchandise pursuant to the computed value method.”).

Last, if none of the preferred methods of valuation are available, the closeout merchandise must be appraised under the “fallback method.” The “fallback method” allows for valuation based on a value derived from one of the methods described above with reasonable adjustments “to the extent necessary to arrive at a value.” 19 U.S.C. § 1401a(f). Among other exclusions, the “price of merchandise in the domestic market of the country of exportation” (for example, the price that CG Canada charged unrelated Canadian retailers) cannot form the basis of an appraisal under the “fallback method.” 19 U.S.C. § 1401a(f)(2)(C).

HOLDING:

The protest should be granted in part and denied in part. A bona fide sale for export to the United States occurred between CG Canada and CG USA in the import transactions under review. For the merchandise priced in accordance with the “cost+[ ]%” policy, the circumstances of the sale demonstrate that the relationship between the buyer and the seller did not affect the price. Transaction value is therefore the appropriate method of appraisement for the imported merchandise.

For the merchandise identified in the prior disclosure which failed to include the [ ]% design fee and [ ]% quality control fee, transaction value will be acceptable only if those fees are included in the price and that price is in accordance with the “cost+[ ]%” policy.

For closeout merchandise, the circumstances of the sale test is not satisfied. As a result, transaction value is not an appropriate method of appraisement, and the merchandise must be appraised under one of the alternative methods of appraisement. The deductive value method may be used provided the closeout merchandise was sold in the United States within 90 days of importation and the other technical requirements are met.

You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision.  Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification.  Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.


Sincerely,

For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division