VAL RR:IT:VA W546709 EK
U.S. Customs Service Newark, NJ 07114
RE: Request for Reconsideration of HRL 546539, W. Weber Co., Inc., Buying Commissions Dear Madam:
This is in reply to the above-referenced request for reconsideration of Headquarters Ruling (HRL) 546539, dated October 30, 1996. The ruling concluded that payments made to an alleged buying agent, Mr. Rauf Alamin, were part of the price actually paid or payable for imported merchandise. This request for reconsideration was initiated by counsel, Mr. Posner of Weltz & Posner, on behalf of the importer W. Weber Co., Inc (hereinafter referred to as Weber). As requested by Mr. Posner, a meeting was held on September 15, 1997, regarding the request for reconsideration.
FACTS:
Counsel argues that contrary to the conclusion in HRL 546539, the commissions paid to
Mr. Alamin are in fact bona fide buying commissions and are not part of the transaction value of
the imported merchandise.
In its request for reconsideration, Weber alleges that the ruling was based upon erroneous
findings of fact regarding the relationship between itself and the alleged agent, Mr. Alamin. Counsel states that contrary to the findings of fact in the ruling, Mr. Alamin did in fact render invoices that clearly establish an amount paid to the factory for cut and make work, the cost of fabric and trim, and the commissions payable to Mr. Alamin. Copies of alleged invoices that counsel claims represent the transactions indicating payment to Mr. Alamin have been submitted.
In addition, counsel indicates that the conclusion that Mr. Alamin lost money in connection with certain transactions is not correct. Counsel states that each charge-back made by Weber against Mr. Alamin was the result of Mr. Alamin's failure to comply with his contractual obligations pursuant to the purchasing agent agreement agreed to between the parties.
Specifically, counsel states that in the event that Mr. Alamin failed to arrange timely shipment via
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an ocean carrier, then it was Mr. Alamin's obligation to arrange for air shipment in order to make timely delivery. The additional freight costs were then charged to Mr. Alamin.
Finally, counsel asserts that the conclusion in HRL Ruling 546539 that Mr. Alamin failed to supply its principal with samples is not accurate.
ISSUE:
Whether the importer has demonstrated that the amounts in question constitute bona fide buying commissions such that they should not be included in the transaction value of the imported merchandise.
LAW AND ANALYSIS:
Counsel is not disputing the legal analysis in HRL 546539. As indicated above, counsel states that there are several issues of fact that are in dispute which should render a different conclusion.
Counsel has provided several copies of alleged invoices which are stated to be representative of each shipment arranged by Mr. Alamin for Weber. Counsel states that an examination of these invoices establish that the amount paid to the factory for cut and make work, the cost of fabric and trim, and the commissions allegedly paid to Mr. Alamin are all delineated.
However, these alleged "invoices" are not persuasive. The alleged "invoices" are handwritten and do not provide any explanation as to what they are representing. They make no reference to commissions nor identify any of the sellers of the imported merchandise. They cannot be considered periodic invoices for agent's commissions as required under paragraph 3 of the submitted buying agency agreement. Despite counsel's claims, none of the submitted documents reference the payment of a buying commission to Mr. Alamin.
With regard to the claim that the statement in HRL 546539 that Mr. Alamin lost money on certain transactions is false, counsel states that each charge-back made by Weber against Mr.
Alamin resulted from Mr. Alamin's failure to comply with his contractual obligations. However, no evidence was submittted substantiating this claim.
The final point made by counsel regarding the factual conclusions of the prior ruling relates to the providing of samples. HRL 546539 states that there was no evidence that Mr. Alamin obtained samples and submitted them to Weber. Counsel has submitted four invoices issued by two Bulgarian suppliers for samples that are allegedly taken by Mr. Alamin in order to present samples for customer confirmation. We accept these invoices for what they are; however, this does not change our conclusion regarding Mr. Alamin's role in the transactions. The fact that
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Mr. Alamin may have provided samples is not conclusive of a buyer/agent relationship with Weber.
Based on the evidence presented, we adhere to our previous determination that Weber has not established that Mr. Alamin actually acted as a bona fide agent in the transactions in question. Such determination was based on the fact there was no evidence that Mr. Alamin negotiated the cut and make price on behalf of Weber, that he exercised any supervisory quality control, or that he submitted periodic invoices for agent's commissions. In addition, no evidence has been submitted to refute the determination in HRL 546539 that Mr. Alamin lost money on certain transactions in which he purported to act as agent for Weber, or that Weber dealt with Mr.
Alamin on open account. The evidence submitted with the request for reconsideration does not refute these facts.
HOLDING:
The amounts in question are properly included in the transaction value of the imported merchandise. We affirm the holding in HRL 546539.
Sincerely,
Stuart P. Seidel, Assistant Commissioner
Office of Regulations and Rulings