CBP Notice on Correct Use of Special Value Fields for AD/CV Duty Entries

According to CBP, filers are continually misusing the special deposit field, either due to misunderstanding of the correct usage or otherwise. Continued misuse of these special value fields will be considered for penalty actions pursuant to 19 USC 1641.

CBP states that the AD and CV duty special deposit value fields located on the entry summary records should only be used when the Department of Commerce indicates that a value different from the regular CBP appraised value should be used to calculate the AD/CV duty for a line that is subject to an AD or CV duty case.

CBP states that it does not believe that there are any current cases where the use of the special value field is appropriate, and notes that merchandise classified under General Rule of Interpretation (GRI) 3(b) or GRI 3(c) set provisions should be entered in accordance with the reporting requirements set forth in "Instructions for Preparation of the CF 7501" (Customs Directive 099-3550-061, dated 09/19/92). (See ITT's 11/23/92 news, (Ref:92112025), for BP summary on Customs Directive 099-3550-061.)

Examples of Correct and Incorrect CF 7501 Formats for AD/CV Entries

CBP provides the following examples of correct and incorrect CF 7501 formats for AD/CV entries:

Only a portion of a shipment is subject to AD/CV duties. A shipment contains merchandise that is covered by a single tariff number; however, only a portion of the shipment is subject to AD/CV duties.

An incorrect use of the special value field would occur if the importer enters only a single line on the CF 7501 with the entire entered value for that shipment, and then uses the special value field for only that portion of the shipment that is subject to AD/CV duties.

Instead, the importer should rate the invoice as two lines and enter two lines on the CF 7501 - one for the value of the non-AD/CV merchandise and the other for that merchandise that is subject to AD/CV duties.

For example, a shipment contains $15,000 worth of Italian pasta. $10,000 is organic pasta and not subject to AD/CV duties; however, the remaining $5,000 is subject to AD/CV duties. Although both invoiced lines are classified under the same tariff number (HTS 1902.19.2030), they must be entered as two lines on the CF 7501 because only a portion of the shipment is subject to AD/CV duties.

(See Example A in CBP's notice for the graphic of the correct format of the body of a CF 7501 for this pasta example. See Example B for the graphic of the incorrect format.)

Only a portion of a set is subject to AD/CV duties. Example C in CBP's notice shows the format for use with merchandise correctly entered under a set provision, but only a portion of the set is subject to AD/CV duties.

The example merchandise is wooden and glass votive holders with tea-light candles. The set is classified in HTS 9405.50.4000 and the candles are classified in HTS 3406.00.0000. Candles are from China and are subject to AD duties. (See Example C in CBP's notice for the graphic illustrating the correct format.)

(See ITT's Online Archives or 11/21/03 news, 03112115, for BP summary of Adm: 03-2707, which is a reminder on the use of specific deposit value fields for AD/CV entries. See ITT's 08/02/95 news, (Ref:95080125), for BP summary of Adm: 95-0753, which contains the ABI requirements for sets classified under GRI 3(b) or 3(c). Both of these administrative messages are referenced in the CBP notice.)

CBP notice available at http://www.cbp.gov/linkhandler/cgov/import/add_cvd/add_cvd.ctt/add_cvd.pdf;

also issued as Adm: 04-1995 (dated 09/14/04) available at http://www.brokerpower.com/cgi-bin/adminsearch/admmsg.view.pl?article=2004/2004-1995.ADM (without graphics; contains the sentence on continual misuse, etc.)

Adm: 03-2707 (dated 11/18/03) available at http://www.brokerpower.com/cgi-bin/adminsearch/admmsg.view.pl?article=2003/2003-2707.ADM

Adm: 95-0753 (dated 07/31/95) available at http://www.brokerpower.com/cgi-bin/adminsearch/admmsg.view.pl?article=1995/1995-0753.ADM