supporting CFR

§ 152.106

19 CFR Ch. I (4–1–01 Edition)

total volume sold at any other unit
price.
(1) Interpretative note 1. Merchandise
is sold to an unrelated person from a
price list which grants favorable unit
prices for purchases made in larger
quantities:

Sale quantity

1–10 units ...
11–25 units
Over 25
units.

Unit
price

$100
95
90

Number of sales

10 sales of 5 units ...........
5 sales of 3 units .............
5 sales of 11 units ...........
1 sale of 30 units .............

Total
quantity
sold at
each
price
65
55
80

1 sale of 50 units .............

The greatest number of units sold at a
price is 80; therefore, the unit price in
the greatest aggregate quantity is $90.
(2) Interpretative note 2. Two sales to
unrelated persons occur: in the first
sale, 500 units are sold at a price of $95
each; in the second sale, 400 units are
sold at a price of $90 each. In this example, the greatest number of units
sold at a particular price is 500; therefore, the unit price in the greatest aggregate quantity is $95.
(3) Interpretative note 3. Various quantities are sold to unrelated persons at
various prices:
(I) SALES
Sale quantity

Unit price

40 units ..................................................................
30 units ..................................................................
15 units ..................................................................
50 units ..................................................................
25 units ..................................................................
35 units ..................................................................
5 units ....................................................................

$100
90
100
95
105
90
100

(II) TOTALS
Total quantity sold
65
50
60
25

Unit price

...........................................................................
...........................................................................
...........................................................................
...........................................................................

$90
95
100
105

In this example, the greatest number of
units sold at a particular price is 65;
therefore, the unit price in the greatest
aggregate quantity is $90.
(i) Further processing—(1) Quantified
data. If merchandise has undergone further processing after its importation

into the United States and the importer elects the method specified in
paragraph (c)(3) of this section, deductions made for the value added by that
processing will be based on objective
and quantifiable data relating to the
cost of the work performed. Accepted
industry formulas, recipes, methods of
construction, and other industry practices would form the basis for the deduction. That deduction also will reflect amounts for spoilage, waste, or
scrap derived from the further processing.
(2) Loss of identity. If the imported
merchandise loses its identity as a result of further processing, the method
specified in paragraph (c)(3) of this section will not be applicable unless the
value added by the processing can be
determined accurately without unreasonable difficulty for either importers
or Customs. If the imported merchandise maintains its identity but forms a
minor element of the merchandise sold
in the United States, the use of paragraph (c)(3) of this section will be unjustified. The port director shall review
each case involving these issues on its
merits.
Example A foreign shipper sells merchandise to a related U.S. importer. The foreign
shipper does not sell to any unrelated person. 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.
How should the merchandise be appraised?
The merchandise should be appraised under
deductive value with allowances for profit
and general expenses, freight and insurance,
duties and taxes, and the cost of processing.
[T.D. 81–7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 85–123, 50 FR 29956, July 23, 1985]

§ 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;

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United States Customs Service, Treasury
(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
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 § 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

§ 152.106
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

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§ 152.107

19 CFR Ch. I (4–1–01 Edition)

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.

(b) Identical merchandise or similar
merchandise. The requirement that
identical merchandise, or similar merchandise, should be exported at or
about the same time of exportation as
the merchandise being appraised may
be interpreted flexibly. Identical merchandise, or similar merchandise, produced in any country other than the
country of exportation or production of
the merchandise being appraised may
be the basis for customs valuation.
Customs values of identical merchandise, or similar merchandise, already
determined on the basis of deductive
value or computed value may be used.
(c) Deductive value. The ‘‘90 days’’ requirement for the sale of merchandise
referred to in § 152.105(c) may be administered flexibly.

(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
§ 152.101(d).

§ 152.108 Unacceptable
praisement.

§ 152.107 Value if other values cannot
be determined or used.
(a) Reasonable adjustments. If the
value of imported merchandise cannot
be determined or otherwise used for the
purposes of this subpart, the imported
merchandise will be appraised on the
basis of a value derived from the methods set forth in §§ 152.103 through
152.106, reasonably adjusted to the extent necessary to arrive at a value.
Only information available in the
United States will be used.

bases

of

ap-

For the purposes of this subpart, imported merchandise may not be appraised on the basis of:
(a) The selling price in the United
States of merchandise produced in the
United States;
(b) A system that provides for the appraisement of imported merchandise at
the higher of two alternative values;
(c) The price of merchandise in the
domestic market of the country of exportation;
(d) A cost of production, other than a
value determined under § 152.106 for
merchandise that is identical merchandise, or similar merchandise, to the
merchandise being appraised;
(e) The price of merchandise for export to a country other than the
United States;
(f) Minimum values for appraisement;
(g) Arbitrary or fictitious values.
[T.D. 81–7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 85–123, 50 FR 29956, July 23, 1985]

PART 158—RELIEF FROM DUTIES ON
MERCHANDISE LOST, DAMAGED,
ABANDONED, OR EXPORTED
Sec.
158.0

Scope.

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