December 29, 2008
News Release 08-126
Inv. No. 332-505
Contact: Peg O'Laughlin, 202-205-1819
USE OF THE "FIRST SALE RULE" FOR CUSTOMS VALUATION OF U.S. IMPORTS
SUBJECT OF ITC REVIEW
The U.S. International Trade Commission (ITC) will conduct a review of the use of the "first sale rule" for U.S. imports for the 12-month period from September 2008 through August 2009.
The ITC, an independent, nonpartisan, factfinding federal agency, anticipates delivering its report, Use of the "First Sale Rule" for Customs Valuation of U.S. Imports, to the U.S. House of Representatives' Committee on Ways and Means and the U.S. Senate's Committee on Finance in February 2010, depending on receipt of data from U.S. Customs and Border Protection. The review is mandated by the Food, Conservation, and Energy Act of 2008.
As required by the legislation, the ITC will provide data regarding use, frequency, value, and tariff and sector classifications of "first sale rule" applications based on data provided by U.S. Customs and Border Protection.
The "first sale rule" is a method of determining the transaction value of imported goods. An item that is imported into the United States may have been subject to several transactions, with each interim buyer adding to the ultimate price paid by the U.S. importer. Current law allows U.S. importers, under certain conditions, to base the valuation of a product entering the United States on the first or earlier of the series of transactions, rather than the last one. For example, an item may be produced in China, sold to a distributor in Hong Kong, and in turn sold to a buyer in Los Angeles; the "first sale rule" would allow the U.S. importer to declare the product's value, for import duty purposes, as the price of the original China-Hong Kong transaction. Application of the so-called "first sale rule" may result in the transaction value being determined on the basis of the price paid by a foreign buyer to a foreign seller.
The ITC welcomes written submissions for the record. Written submissions (original and 14 copies) should be addressed to the Secretary to the Commission, 500 E Street SW, Washington, DC 20436, and should be submitted at the earliest practical date but no later than 5:15 p.m. on April 30, 2009. All written submissions, except for confidential business information, will be made available for public inspection.
Further information on the scope of this investigation and appropriate submissions is available in the ITC's notice of investigation, dated December 29, 2008, which may be obtained from the ITC Internet site (www.usitc.gov) or by contacting the Office of the Secretary at 202-205-2000.
ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.