HQ 547403 - Transaction value of wearing apparel; Nissho Iwai American Corp; Synergy Sport International, Ltd.; J.L. Wood; importer of record; bona fide arm’s length sale; sale for export to the United States; 19 U.S.C. § 1401a(b); related parties. - United States International Trade Commision Rulings

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HQ 547403

July 13, 2000

RR: IT: VA 547403 LOR

CATEGORY: VALUATION

Port Director
U.S. Customs Service
6601 N.W. 25th Street
Room 202
Miami, Florida

RE: Transaction value of wearing apparel; Nissho Iwai American Corp; Synergy Sport International, Ltd.; J.L. Wood; importer of record; bona fide arm’s length sale; sale for export to the United States; 19 U.S.C. § 1401a(b); related parties.

Dear Mr. Fee:

This is in response to a June 10, 1999, request for a prospective ruling submitted on behalf of Monty Industries by Jonathan Fee of Grunfeld, Desiderio, Lebowitz & Silverman, LLP. Mr. Fee has asked U.S. Customs to confirm the applicability of the court’s decision in Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992) to a prospective three-tiered, related-party agreement for distributing custom made clothing assembled in Honduras to purchasers in the U.S.

Based on conversations between our two offices we have become aware of a number of issues involving Monty Industries and its importing practices that are pending at the port of Miami. Of particular interest, with respect to the request for ruling, are those issues involving transfer pricing and the method of importation. It appears that the company’s practices in these two areas have changed since counsel submitted the request for ruling. In addition, we note that Monty Industries made a prior disclosure pursuant to §162.74, Customs Regulations 19 CFR §162.74, to your office in December of 1998. §177.7(a), Customs Regulations 19 CFR §177(a) states:

[N]o ruling letter will be issued in response to a request for a ruling which fails to comply with the provisions of this part. Moreover, no ruling letter will be issued with regard to transactions or questions which are essentially hypothetical in nature or in any instance in which it appears contrary to the sound administration of the Customs and related laws to do so.

Pursuant to §177.7(a), it is our opinion that it would be contrary to the sound administration of the Customs Service to issue a ruling regarding Monty Industries and multi-tiered transactions at this time. As such, in deference to the issues pending with you, we are requesting that you examine Monty Industries’ request to us in addition to those related matters currently under consideration. If you have any questions regarding this matter, please feel free to contact this office.

Sincerely,

Thomas L. Lobred
Chief, Value Branch

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