[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR152.106]

[Page 213-215]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 152--CLASSIFICATION AND APPRAISEMENT OF MERCHANDISE--Table of Contents
 
                   Subpart E--Valuation of Merchandise
 
Sec. 152.106  Computed value.

    (a) Elements. The computed value of imported merchandise is the sum 
of:
    (1) The cost or value of the materials and the fabrication and other 
processing of any kind employed in the production of the imported 
merchandise;
    (2) An amount for profit and general expenses equal to that usually 
reflected in sales of merchandise of the same class or kind as the 
imported merchandise that are made by the producers in the country of 
exportation for export to the United States;
    (3) Any assist, if its value is not included under paragraph (a) (1) 
or (2) of this section; and
    (4) The packing costs.
    (b) Special rules. (1) The cost or value of materials under 
paragraph (a)(1) of this section will not include the amount of any 
internal tax imposed by the country of exportation that is directly 
applicable to the materials or their disposition if the tax is remitted 
or refunded upon the exportation of the merchandise in the production of 
which the materials were used.
    (2) The amount for profit and general expenses under paragraph 
(a)(2) of this section will be based upon the producer's profit and 
general expenses, unless the producer's profit and general expenses are 
inconsistent with those

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usually reflected in sales of merchandise of the same class or kind as 
the imported merchandise that are made by producers in the country of 
exportation for export to the United States. In that case, the amount 
under paragraph (a)(2) of this section will be based on the usual profit 
and general expenses of such producers in those sales, as determined 
from ``sufficient information''. See Sec. 152.102(j).
    (c) Profit and general expenses. The amount for profit and general 
expenses will be taken as a whole. If the producer's profit figure is 
low and general expenses high, those figures taken together nevertheless 
may be consistent with those usually reflected in sales of imported 
merchandise of the same class or kind.
    (1) Interpretative note 1. A product is introduced into the United 
States, and the producer accepts either no profit or a low profit to 
offset the high general expenses required to introduce the product into 
this market. If the producer can demonstrate that there is a low profit 
on sales of the imported merchandise because of peculiar commercial 
circumstances, the actual profit figures will be accepted provided the 
producer has valid commercial reasons to justify them and his pricing 
policy reflects the usual pricing policies in the industry.
    (2) Interpretative note 2. Producers have been forced to lower 
prices temporarily because of an unforseeable drop in demand, or they 
sell merchandise to complement a range of merchandise being produced in 
the United States and accept a low profit to maintain competitiveness. 
If the producer's own figures for profit and general expenses are not 
consistent with those usually reflected in sales of merchandise of the 
same class or kind as the merchandise being valued which are made in the 
country of exportation for export to the United States, the amount for 
profit and general expenses will be based upon reliable and quantifiable 
information other than that supplied by or on behalf of the producer of 
the merchandise.
    (d) Assists and packing costs. Computed value also will include an 
amount equal to the apportioned value of any assists used in the 
production of the imported merchandise and the packing costs for the 
imported merchandise. The value of any engineering, development, 
artwork, design work, and plans and sketches undertaken in the United 
States will be included in computed value only to the extent that their 
value has been charged to the producer. Depending on the producer's 
method of accounting, the value of assists may be included (duplicated) 
in the producer's cost of materials, fabrication, and other processing, 
or in the general expenses. If duplication occurs, a separate amount for 
the value of the assists will not be added to the other elements as it 
is not intended that any component of computed value be included twice.
    (e) Merchandise of same class or kind. Sales for export to the 
United States of the narrowest group or range of imported merchandise, 
including the merchandise being appraised, will be examined to determine 
usual profit and general expenses. For the purpose of computed value, 
merchandise of the same class or kind must be from the same country as 
the merchandise being appraised.

    Example A foreign shipper sells merchandise to a related U.S. 
importer. The foreign shipper does not sell to any unrelated persons. 
The transaction between the foreign shipper and the U.S. importer is 
determined to have been affected by the relationship. There is no 
identical or similar merchandise from the same country of production. 
The U.S. importer further processes the product and sells the finished 
product to an unrelated buyer in the U.S. within 180 days of the date of 
importation. No assists from the unrelated U.S. buyer are involved, and 
the type of processing involved can be accurately costed. The U.S. 
importer has requested that the shipment be appraised under computed 
value. The profit and general expenses figure for the same class or kind 
of merchandise in the country of exportation for export to the U.S. is 
known.
    How should the merchandise be appraised?
    The merchandise should be appraised under computed value, using the 
company's profit and general expenses if not inconsistent with those 
usually reflected in sales of merchandise of the same class or kind.

    (f) Availability of information. (1) It will be presumed that the 
computed value of the imported merchandise cannot be determined if:

[[Page 215]]

    (i) The importer is unable to provide required computed value 
information within a reasonable time, and/or
    (ii) The foreign producer refuses to provide, or is legally 
prevented from providing, that information.
    (2) If information other than that supplied by or on behalf of the 
producer is used to determine computed value, the port director shall 
inform the importer, upon written request, of:
    (i) The source of the information,
    (ii) The data used, and
    (iii) The calculation based upon the specified data,

if not contrary to domestic law regarding disclosure of information. See 
also Sec. 152.101(d).