CCS Customs Valuation Principles 2 — Questions and Answers
Question 1: Under the WTO Customs Valuation Agreement, when transaction value cannot be used, what is the FIRST alternative method to apply?
- Deductive value
- Transaction value of identical goods (Correct answer)
- Computed value
- Fall-back method
Correct answer: Transaction value of identical goods
The hierarchy requires attempting transaction value of identical goods before other alternative methods.
Question 2: A U.S. importer pays $50,000 for goods plus $3,000 for international freight and $500 for insurance. Under U.S. Customs rules, what is the dutiable value?
- $50,000 (Correct answer)
- $53,000
- $53,500
- $50,500
Correct answer: $50,000
The U.S. uses an FOB (origin) valuation standard, so international freight and insurance are excluded from dutiable value.
Question 3: Which condition would DISQUALIFY a sale from being used as the basis for transaction value?
- Buyer and seller are unrelated parties
- Sale involves a quota restraint on resale territory (Correct answer)
- Payment made via letter of credit
- Goods are sold for export to the United States
Correct answer: Sale involves a quota restraint on resale territory
Restrictions on resale territory (other than those imposed by law) can indicate the price is not a 'price actually paid' and may disqualify transaction value.
Question 4: An importer receives a year-end rebate from the seller based on total purchase volume. How should this rebate affect customs valuation?
- It can reduce the dutiable value if it is determinable at time of importation (Correct answer)
- It never affects dutiable value because it occurs after importation
- It always reduces the dutiable value retroactively
- It must be reported as a separate customs entry
Correct answer: It can reduce the dutiable value if it is determinable at time of importation
A rebate that is predetermined and determinable at the time of importation may be used to reduce transaction value.
Question 5: What is 'computed value' in U.S. customs valuation?
- The value based on the price of identical goods sold in the U.S.
- Cost of production plus profit and general expenses typically reflected in sales of same class (Correct answer)
- The appraised value determined by CBP independently
- The transaction value adjusted for freight and insurance
Correct answer: Cost of production plus profit and general expenses typically reflected in sales of same class
Computed value is built up from cost of materials, fabrication, profit, and general expenses for goods of the same class or kind.
Question 6: Which of the following is included in the transaction value under 19 USC 1401a?
- Duties and taxes paid in the country of export
- Packing costs incurred by the buyer (Correct answer)
- Post-importation warranty services paid separately
- Storage costs at U.S. port of entry
Correct answer: Packing costs incurred by the buyer
Packing costs (including labor and materials) are explicitly included in transaction value under 19 USC 1401a.
Question 7: When related-party transaction value is under CBP review, which test can the importer use to justify acceptance of the declared value?
- The 'arm's length' test only
- The 'circumstances of sale' test or the 'test values' approach (Correct answer)
- The 'deductive value' test only
- The 'profit margin' test
Correct answer: The 'circumstances of sale' test or the 'test values' approach
CBP will accept related-party transaction value if the importer demonstrates it passes either the circumstances-of-sale test or matches test values (identical/similar goods, deductive, or computed value).
CCS Customs Valuation Principles 2
Under the WTO Customs Valuation Agreement, when transaction value cannot be used, what is the FIRST alternative method to apply?