CBP OKs Post-Importation Formula for Transaction Value of Precious Metal Bars
The final price EMA Professional Services Corp. pays to its suppliers for precious metal bars after importation is determined according to "an acceptable formula" and meets the "'price actually paid or payable'" standard for purposes of the transaction value method, CBP said. EMA may report any price adjustments through the ACE Reconciliation Program, the agency said in an April 19 customs ruling.
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EMA will purchase the precious metal bars, consisting mostly of platinum group metals like palladium, rhodium and platinum, from unrelated suppliers in South Africa, the United Arab Emirates, and other countries, CBP said. EMA will enter the goods using an "initial, provisional purchase price" on a pro forma invoice, based on supplier's pre-importation preliminary analysis of the bars' precious metal content and the spot price on the London Commodity Market of the precious metals in the bars, CBP said.
However, EMA will carry out sampling and analysis once the bars arrive in the U.S. to determine the final price because it anticipates the bars could differ from the supplier's pre-importation analysis, CBP said. EMA said it will then set a final price based on the results of its analysis and the spot price of the metal on the London Commodity Market on the day it receives the results of its analysis, CBP said.
EMA will then pay the supplier at the revised, final price. It will also report any changes to the bars' initial valuation at entry to CBP via the ACE Reconciliation Program, CBP said.
CBP said that if the final price is not ascertainable at the time of importation, the price may be determined by the application of a formula if the formula is "fixed" at the time of importation and depends on "some future event or occurrence over which neither the seller nor the buyer have any control." EMA has met these requirements for a valid formula, as the price is determined before importation and is based on an objective standard, and so the formula is acceptable. CBP said.
"The final price that EMA will pay is determined before the merchandise is imported and ultimately depends on an objective standard -- specifically, the relevant price on the London Commodity Market on the date that EMA receives the test results," CBP said. "Neither EMA nor the supplier can influence or control this price. As a result, the final price is determined according to an acceptable formula such that it constitutes the “price actually paid or payable” for purposes of the transaction value method."
EMA did not respond to our request for comment.