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First Sale Declaration Requirement
Date: September 8, 2008
U.S. Customs and Border Protection ("CBP")
has issued instructions to all importers that a declaration must
be made at time of entry when goods are appraised under the "First
Sale Rule". This new requirement was effective on August
20, 2008, but in order to allow the trade sufficient time to comply,
CBP has delayed the enforcement of the "First Sale Declaration
Requirement" for 30 days. Enforcement of this requirement
will begin on September 20, 2008 and will continue for a one-year
period through August 19, 2009.
For the purposes of reporting under the "First
Sale Declaration Requirement", "First Sale" is
defined when there are a series of sales before importation and
the transaction value of the imported merchandise as reported
to CBP is determined on the basis of the "first or earliest
sale" of the merchandise. We believe that a small percentage
of transactions will be affected by this new reporting requirement
since there are few transactions that involve another sale before
importation.
Earlier this year, CBP issued a notice which
proposed to eliminate the use of the first sale rule as a basis
of valuing import transactions. In this proposal, CBP required
that the last price paid prior to importation would determine
the value of the transaction. Through lobbying efforts by the
import trade community, a provision was added to the Farm Bill,
Public Law 110-234, that would not allow Customs to make a change
without proper justification. It was also stated that shipments
imported before January 1, 2011 will not be affected and that
CBP would have to reintroduce the proposed changes to Congress
once again. CBP is now collecting data on the use of first sale
appraisement and will be reporting this information to the International
Trade Commission.
Although CBP has allowed a 30 day interim grace
period for filers to comply, entries made between August 20, 2008
and September 19, 2008 are still subject to the "First Sale
Declaration Requirement". These entries will be required
to be amended by filing a written request to the respective CBP
port where the entry was filed. Retroactive reporting during this
grace period must be reported to CBP no later than the close of
business on September 26, 2008.
Under this new reporting requirement, CBP entries
involving "First Sale" must be flagged with an "F"
indicator next to the declared value of each line item. As your
Customs Broker, we will make the appropriate notification to CBP
on your behalf, but we must be notified if any of your transactions
effective from August 20, 2008 involve a "First Sale".
If we are not notified, we will not make a declaration that a
"First Sale" transaction exists.
As a reminder Customs requires that importers
exercise "Reasonable Care" when entering merchandise
into the United States. Should there be any changes to your import
transactions that could affect this reporting requirement, please
notify us in writing so that we can make the necessary reporting
changes.
For more information on this matter, please
read the CBP Decisions.
The information
accompanying this webpage contains confidential information. The
information is intended only for the use of customers of James
J. Boyle & Co. You are hereby notified that any disclosure,
copying, distribution or the taking of any action in reliance
on the content of this information is strictly prohibited. James
J. Boyle & Co. will also not be held accountable for any discrepant
information. The service we provide is based on our "Terms and
Conditions of Service", which is available upon request.
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