Assembly of Motors and Equipment Provided by the Importer

HQ 554993 May 19, 1988 CLA-2 CO:R:CV:V 554993 EK CATEGORY: Valuation RE: Assembly of Motors and Equipment Provided by the Importer Dear --------: This is in response to your letter of April 11, 1988, regarding a prospective ruling request on behalf of your client. You state that your client will be assembling small motors in its production facility in Mexico. You state that transaction value, pursuant to section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b); TAA), will be applicable in appraising the merchandise. Transaction value is defined in section 402(b) of the TAA as the "price actually paid or payable" for imported merchandise when sold for exportation to the United States, plus amounts equal to the value of any assist. In order for transaction value to be applicable, a sale for exportation to the United States must occur. In addition, section 402(b)(2)(B) of the TAA governs the applicability of transaction value in a related party situation. You should also be aware of Section 152.103(a)(3), Customs Regulations [19 CFR 152.103(a)(3)], which states the following: The price actually paid or payable may represent an amount for the assembly of imported merchandise in which the seller has no interest other than as the assembler. The price actually paid or payable in that case will be calculated by the addition of the value of the components and required adjustments to form the basis for the transaction value. - 2 - You further inquire as to the dutiability of a fork lift truck, work tables and benches which will be provided by your client to the Mexican assembly plant free of charge. From the information provided in your letter, it does not appear as if the fork lift truck, work tables and benches are assists within the meaning of section 402(h)(1)(A) of the TAA and therefore, will not be added to the "price actually paid or payable." You state that your client pays a U.S. Customs brokerage firm $5.00 to complete and submit Shipper's Export Declaration form per shipment to Mexico. The shipment may contain duty exempt components, American packaging materials, foreign materials and assists. Your letter does not provide enough information to conclusively determine the nature of the fee; however, the following may be helpful to you. In cases where the value of an assist is to be added to the "price actually paid or payable," such value will include transportation costs to the place of production. See, Section 152.103(d), Customs Regulations [19 CFR 152.103(d)]. Therefore, with respect to shipments which include dutiable assists, the fee paid will be included in the transaction value of the final imported product. We have enclosed information regarding Customs valuation which may be of some use to you. Sincerely, John Durant, Director Commercial Rulings Division