Customs and Border Protection Withdrawals First Sale Proposal

  • Customs and Border Protection Withdrawals First Sale Proposal


    The First Sales rule allows an importer to base the value of imported finished goods for purposes of duty on the cost of the product at the first sale, typically to a middleman under the First Sale scenario, rather than the value at the time of importation. It is typical for importers pay duty on the price of the good from the overseas supplier before it is marked up for re-sale.

    On January 24, 2008, Customs and Border Protection (CBP) published in the Federal Register (73 FR 4254) a notice informing interested parties that CBP was proposing a new interpretation of the expression “sold for exportation to the United States” for purposes of applying the transaction value method of valuation in a series of sales importation scenario.

    Under this proposed interpretation by Customs and Border Protection, in a transaction involving a series of sales, the price actually paid or payable for the imported goods with regards to duty when sold for exportation to the United States would be the price paid in the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale.

    On July 9, 2014, U.S. Customs and Border Protection (CBP) circulated a draft Informed Compliance Publication entitled “Bona Fide Sales & Sales for Exportation to the United States,” which identifies additional documents importers may need to substantiate their use of “first sale” values.

    Further to that, in September 2014, Customs and Border Protection has informally advised trade associations that the proposed changes will be withdrawn. CBP has said that its intentions were to provide more complete guidance about which documents would be required during the audit of first sale transactions. From the introduction of this proposal, First Sale supporters objected citing difficulty obtaining all of the required documents from foreign suppliers, and also due to concerns about confidentiality.

    Are you importing products from overseas through a purchasing agent, or buying directly from a foreign vendor? If you would like to know how the First Sale rule could directly impact your business and bottom line, please contact PNG Worldwide at 717-626-1107 X 2 or email at for more details.

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