U.S. CUSTOMS AND BORDER PROTECTION SHELVES PROPOSAL TO ELIMINATE FIRST SALE RULE

U.S. Customs and Border Protection announced that it would not pursue the proposed elimination of the First Sale principal for valuation of merchandise entering the U.S. for duty purposes. CBP had proposed that the price paid by the buyer in the U.S. to the foreign supplier form the basis for valuation in a series of sales importation scenario. The present interpretation allows importers to use the price paid by the intermediary to a foreign manufacturer (the first sale) as the basis for transaction value. The CBP commissioner has stated they do not intend to proceed with this proposal prior to January 1, 2011. CBP will not change the current interpretation without consulting with Congress and the private sector, or without explicit approval of the Secretary of Treasury.

The Farm Bill instructs CBP to require for a one-year period, that each importer declare whether the transaction value of the imported merchandise has been determined on the basis of the first sale. Preliminary discussions with the trade have been held to determine the most efficient way of collecting this information while minimizing the impact on trade. We will advise of any further developments in this respect as they become available to the public.