Surety Says CBP Failed to Use Transaction Value in Appraising Garment Imports
Surety company U.S. Specialty Insurance Company argued in an Aug. 29 complaint at the Court of International Trade that CBP failed to use transaction value to value importer Cheer Rise's garment entries. Instead, the agency arbitrarily decided to use the "fall back method" of appraisal, "rendering the appraisement unlawful," the complaint said (U.S. Specialty Insurance Co. v. United States, CIT # 25-00188).
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At liquidation, CBP opted not to use transaction value to appraise the merchandise but instead used an "unknown method of appraisement," the surety said. After U.S. Specialty Insurance protested CBP's payment demand, CBP said it used the "fall back method," though it didn't "provide the new values, describe its method to derive the new values, or identify any support for the increased value, such as the value of identical or similar apparel," the complaint said.
Under the applicable statute, 19 U.S.C. Section 1401a(1)(A), the surety said the "preferred basis of appraisement for customs purposes" is "transaction value," which is the "price actually paid or payable for the merchandise when sold for exportation to the United States," with certain statutory additions. The surety said that CBP "failed to state why it rejected transaction value as the basis of appraisement" on its form detailing action taken.
Without transaction value, the "goods must be appraised under a different basis in hierarchical order as set" in the statute, the brief said. CBP never opted to use the methods that precede the "fall back method," including a method based on the "price the garments were sold in the United States in the greatest aggregate number."
The values CBP used to appraise the apparel "were based upon multiplying the entered values by an arbitrary uplift of unknown origin," the complaint said. The values used weren't based on "sales of merchandise for exportation to the United States, sales of identical or similar merchandise for export to the United States, computed or deductive value, or any other method of appraisement allowed under" the statute, the surety said. Thus, the values used "were arbitrary and fictitious values, rendering the appraisement unlawful," the brief said.