1 CHAPTER XIV TRANSACTION VALUE  Transaction Value of Imported Merchandise  Transaction Value of Identical Merchandise  Transaction Value of Similar Merchandise  Deductive Value  Computed Value Copyright(c) 2012 Dr. Chase C. Rhee

2 Transaction Value of Imported Merchandise  The price actually paid or payable for the merchandise for exportation to the United States,  plus amounts for the following items if not included in the price 1)The packing costs incurred by the buyer. 2)Any selling commission incurred by the buyer 3)The value of any assist 4)Any royalty or license fee that the buyer is required to pay as a condition of the sale. Copyright(c) 2012 Dr. Chase C. Rhee

3 Transaction Value of Imported Merchandise  Assists  Items that the buyer provides free of charge or at a reduced cost for use in the production or sale of the goods for export to the United States Materials, components, parts Tools, dies, molds Merchandise consumed in producing imported goods Engineering, development, artwork, design work, and plans and sketches that are undertaken outside the United States Copyright(c) 2012 Dr. Chase C. Rhee

4 Transaction Value of Imported Merchandise  Exclusion  The freight, insurance and other expenses from the country of exportation to the place of importation in the U.S.  The costs for technical assistance after importation  Transportation cost after importation  Import duties and other Federal taxes Copyright(c) 2012 Dr. Chase C. Rhee

5 Transaction Value of Imported Merchandise  Limitations : The transaction value cannot be used as the appraised value  Restrictions on the disposition of the merchandise  Condition for which a value cannot be determined  Proceeds of any subsequent resale accruing to the seller, for which an appropriate adjustment to transaction value cannot be made  Related-party transactions where the transaction value is not acceptable. Copyright(c) 2012 Dr. Chase C. Rhee

Transaction Value of Imported Merchandise  For related-party transactions to be acceptable –Transaction value of identical merchandise or of similar merchandise sold to unrelated buyers in the U.S. –Deductive value or Computed value for identical or similar merchandise. –Value of the Advance Pricing Agreement(APA) with the Internal Revenue Service (IRS) 6Copyright(c) 2012 Dr. Chase C. Rhee

7 Alternative Valuations  Transaction Value of Identical Merchandise  Transaction Value of Similar Merchandise  Deductive Value  Computed Value Copyright(c) 2012 Dr. Chase C. Rhee

8 Transaction Value of Identical Merchandise 1)Identical in all respects to the merchandise being appraised 2)Produced in the same country as the merchandise being appraised 3)Produced by the same person as the merchandise being appraised  All three criteria or the first two criteria Copyright(c) 2012 Dr. Chase C. Rhee

9 Transaction Value of Similar Merchandise 1)Produced in the same country and by the same person 2)Like merchandise being appraised in characteristics and component materials 3)Commercially interchangeable with the merchandise being appraised  All three criteria or all other criteria but produced by the different person Copyright(c) 2012 Dr. Chase C. Rhee

10 Deductive Value  The resale price in the United States after importation of the merchandise, with deductions for certain items  Items to be deducted from the unit resale price 1)Commission or profit and general expenses 2)Transportation and insurance cost from the port of exportation to the place of resale. 3)Custom duties and federal taxes 4)Value of further processing  If an assist is involved, Deductive value cannot be used. Use the Computed Value instead. Copyright(c) 2012 Dr. Chase C. Rhee

11 Computed Value  The sum of various costs up to exportation 1)Materials, fabrication, and other processing 2)Profit and general expenses of the producer 3)Any assist, if not included in items 1) and 2) 4)Packing costs  Importer can designate either Deductive Value or Computed Value. Copyright(c) 2012 Dr. Chase C. Rhee