Question 24
Domain 3: Customs ValuationA U.S. furniture company imports dressers from a manufacturer in New Zealand. The U.S. company purchases and sends the designs and materials set forth below to the New Zealand manufacturer to aid in the production process. The cost of which of the following should not be added to the price actually paid or payable as an assist?
Correct answer: D
Explanation
Under 19 U.S.C. 1401a(b)(1), assists include items supplied “free of charge or at reduced cost” by the buyer for use in producing the imported merchandise, including “engineering, development, artwork, design work, and plans and sketches” undertaken outside the United States. A design schematic by a U.S. design firm is not an assist because the statute covers only design work done outside the United States.
Why each option is right or wrong
A. A Canadian keyhole saw
Buyer-supplied production tools can be assists when provided free or below cost for making the imported goods.
B. Italian paint with a satin finish
Buyer-supplied materials used in production are assists when furnished free or at reduced cost.
C. Dresser knobs from France
Buyer-supplied components incorporated into the imported merchandise are assists if provided free or reduced cost.
D. A dresser design schematic by a U.S. design firm
19 U.S.C. 1401a(b)(1)(A) and (E) add to transaction value only assists that are supplied by the buyer free or at reduced cost and consist of engineering, development, artwork, design work, plans, or sketches undertaken outside the United States. Because this schematic was created by a U.S. design firm, it falls outside the statutory scope and its cost is not dutiable as an assist.