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HQ 547604

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April 10, 2001

VAL CO:R:C:V 547604 MMC

CATEGORY: VALUATION

Port Director
U.S. Customs Service
2nd Avenue, Suite 2100
Seattle, Washington 98104

RE: Internal Advice 29/99; furnishings for aircraft; consignment; transaction value not applicable

Dear Port Director:

This in response to your November 30, 1999, internal advice [IA-2-07-S:TC JM], requesting our office’s advice on various aspects of import transactions involving B.F. Goodrich. In a November 7, 2000, memorandum [FOR-1/ENT-1-RR;IT:EC 114921 GG] the Entry Procedures and Carriers Branch of the Office of Regulations and Rulings responded to the entry-related issues raised in your memorandum. This letter will address the proper method of valuation to be used for determining the appraised value of imported aircraft furnishings.

FACTS:

Golden Globe Transport, Inc. (Golden Globe) was the original initiator of the internal advice request made on behalf of its client, the airframe services division of B.F. Goodrich (Goodrich). Goodrich installs imported aircraft furnishings such as seats, galley carts, lifejackets, upholstery fabric, etc. in various new and refurbished aircraft. Goodrich does not own the furnishings or the aircraft into which the imported merchandise is installed. Both the imported furnishing and the aircraft itself are owned by an airline. The airline hires Goodrich to install the imported aircraft furnishings. As a courtesy to the airline, Goodrich serves as the importer of record for the aircraft furnishings. Upon completion of the installation Goodrich bills the airline for time, labor, cost of any parts necessary for installation, Customs brokerage fees, delivery costs and U.S. Customs duties (if any).

In 1999, the port issued a Request for Information (CF 28) to Golden Globe/Goodrich for documents to assist in verifying the validity of the information declared to Customs on the submitted invoices. Because Goodrich does not purchase or take title to the goods it imports, they were unable to provide the port with the
requested information, including information which would have verified the quantity of the goods received and the price paid for the goods.

According to the Entry and Carrier Rulings Branch, Goodrich can serve as the importer of record and serves as the ultimate consignee under this scenario.

ISSUE:

What method of appraisement should be used for the aircraft furnishings imported on consignment?

LAW AND ANALYSIS:

Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C.1401a). The preferred method of appraisement is transaction value, which is defined as the "price actually paid or payable for merchandise when sold for exportation to the United States," plus certain statutorily enumerated additions. 19 U.S.C. 1401a(b)(1)

For Customs purposes, the word "sale" is generally defined as a transfer of ownership in property from one party to another for a price or other consideration. J.L. Wood v. United States, 62 CCPA 25, C.A.D. 1139 (1974); J.H. Cottman & Co. v. United States, 20 CCPA 344, T.D. 46114 (1932). In the instant case, the aircraft furnishing provided by the airline are consigned to the importer of record. The importer is only responsible for installing the imported aircraft furnishings in an aircraft it does not own. For transaction value to apply, the imported goods must have been sold for exportation to the U.S. Therefore, transaction value is inapplicable as a means of appraisement for merchandise imported on consignment.

When imported merchandise cannot be appraised on the basis of transaction value, it is appraised in accordance with the remaining methods of valuation, applied in sequential order. [19 U.S.C. 1401a(a)(1)] The alternative bases of appraisement, in order of precedence, are: the transaction value of identical or similar merchandise [19 U.S.C.1401a(c)]; deductive value [19 U.S.C. 1401a(d)]; computed value [19 U.S.C. 1401a(e)]; and the "fallback" method [19 U.S.C. 1401a(f)].

Based on the facts presented, in particular, the port’s CF 28, and Goodrich’s inability to provide the requested information, the merchandise cannot be appraised using the valuation methods of transaction value of identical or similar merchandise, deductive value or computed value. Therefore, the merchandise must be appraised under 19 USC 1401a(f). The United States Code, specifically19 U.S.C. § 1500, authorizes the appraising Customs officer to consider the best evidence available in appraising merchandise, and to weigh the nature of the evidence. We note that in accordance with its role as importer of record Goodrich is required to follow applicable record keeping requirements outlined in 19 C.F.R. 163.

The best evidence available in this case is the invoice containing the price that the airline paid for the furnishings. A representative invoice provided by your port personnel shows the importer’s premises as the shipment destination. Thus, it appears that the purchasing airline procured the goods with the intent to have them shipped to the U.S., for installation into its airplanes. Thus, this price can be used under the authority of 19 U.S.C. 1401a(f) as a modified transaction value.

HOLDING:

The best evidence available indicates that the imported merchandise should be appraised under the authority of 19 U.S.C. 1401a(f) using the prices between the purchasing airline and the supplier.

This decision must be mailed to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Virginia Brown, Chief

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