[Code of Federal Regulations]

[Title 19, Volume 2]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR152.106]



[Page 215-217]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)

 

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;



[[Page 216]]



    (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 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



[[Page 217]]



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:

    (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).