Question 29
Domain 4: Duty Calculations, Fees, and Trade ProgramsBebe Mattresses (Bebe), an Italian importer and manufacturer in Italy of toddler bed and baby crib cotton mattresses (mattresses), imported 140 toddler bed mattresses from WeSew, a manufacturer, in China with a value of $2,000.00 US. Bebe repackaged the toddler bed mattresses into individual plastic bags imprinted with Bebe’s logo. Bebe shipped the 140 toddler bed mattresses and 80 baby crib mattresses manufactured by Bebe in Italy to Upscale Baby Furniture, a buyer in the United States. Bebe invoiced Upscale $4,200.00 for the 140 toddler bed mattresses and $1,700.00 for the 80 baby crib mattresses. Which of the formulas below yields the estimated anti-dumping / countervailing duty (AD/CVD) deposit due for the following merchandise? The “all other companies” AD/CVD rates apply. The rate is ad valorem. The possible cases, countries, and rates are: • A-475-845-000; Italy; 257.06% • A-570-092-000; China; 1731.75% • C-570-128-000; China; 97.78% In the formulas below, the “x” stands for “multiplied by.”
Correct answer: C
Explanation
AD/CVD is assessed by country of origin and value: the Italian mattresses use the Italy rate, while the imported Chinese mattresses use the China AD and CVD rates. Because Bebe “repackaged” the 140 imported mattresses, the $4,200 invoice value is the base for both China duties, and the 80 mattresses “manufactured by Bebe in Italy” use $1,700 at 257.06%.
Why each option is right or wrong
A. ($1,700.00 x 2.5706) + ($4,200.00 x 2.5706)
Italy rate is 257.06%, not 2.5706 for both merchandise values.
B. ($1,700.00 x 257.06) + ($2,000.00 x 1731.75) + ($2,000.00 x 97.78)
Percent rates must be decimals, and duties apply to invoice value, not the $2,000 import cost.
C. ($1,700.00 x 2.5706) + ($4,200.00 x 17.3175) + ($4,200.00 x.9778)
Under 19 U.S.C. 1401a and 19 CFR 152, AD/CVD deposits are calculated on the entered value of the merchandise subject to each order, using the country-specific rate tied to origin. The 80 mattresses manufactured in Italy are valued at $1,700 and pick up the Italy “all others” rate of 257.06% (2.5706), while the 140 Chinese mattresses are the imported merchandise and, because they were repackaged and invoiced at $4,200, that invoice value is the base for both the China AD rate of 1731.75% (17.3175) and the China CVD rate of 97.78% (.9778).
D. ($1,700.00 x 257.06) + ($4,200.00 x 1731.75) + ($4,200.00 x 97.78) CBLE P. 34 Section 3: Examination Process Evaluation Survey This survey is administered to collect information about the Customs Broker License Examination process (CBLE). The survey is voluntary, and your responses will have no impact on your score.
257.06 and 1731.75 are percentages, not dollar multipliers; China duties apply to the Chinese goods only.