Decision on Application for Further Review of Protest No. 3801-5-001300

HQ 544167 April 5, 1988 CLA-2 CO:R:CV:V 544167 EK CATEGORY: Valuation District Director of Customs Detroit, Michigan RE: Decision on Application for Further Review of Protest No. 3801-5-001300 Dear Sir: This protest was filed against your decision in the liquidation of Entry No. 84-265184 dated September 26, 1984. The protesting party is disputing the inclusion of foreign inland freight in the transaction value of imported merchandise pursuant to section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. 1401a(b)). FACTS: The above-referenced protest concerns the dutiability of alleged foreign inland freight charges incurred upon shipping cold-rolled steel coils manufactured in East Germany and sold by a West German steel company. The importer states that the inland charges from the East/West German border to Hamburg are a deductible item from transaction value. The importer indicates that the consumption entry with respect to the merchandise incorrectly stated West Germany when, in fact, the country of exportation should have been East Germany. The protestant claims that the steel was destined for the United States at the time it left the East German mill. Customs is of the opinion that the appraised value should be based upon the terms of sale FOB Hamburg. - 2 - In this case, the invoice indicates a sale from Klockner Stahl, West Germany to Klockner Inc., New York. The invoice states that the risk of loss passes to the importer in Hamburg, not at the East German mill. LAW AND ANALYSIS: Transaction value is defined in section 402(b) of the TAA as the "price actually paid or payable for the merchandise when sold for exportation to the United States . . . " . The term "price actually paid or payable" is further defined in section 402(b)(4)(A) as: . . . the total payment (whether direct or indirect, . . . ) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. In this case, it is our conclusion that for purposes of determining transaction value, the merchandise was sold for exportation to the United States from Hamburg, West Germany. There is no evidence available to substantiate the importer's claim that the goods were "sold" for exportation to the United States from the East German mill. HOLDING: In view of the foregoing, the protest should be denied in full. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant. Sincerely, John Durant Acting Director, Commercial Rulings Division