Assists in Transaction Value

 

You will need to add costs to your overseas producer when calculating the transaction value of imported merchandise. According to 19 CFR 152.102 (a), aids are items that the buyer of imported merchandise provides “directly or indirectly” and is free or at a reduced cost to him or her in order to help with the export or production of the merchandise to the United States.

Which products are suitable for assistance?

US Customs has determined what an assist is. They have considered the following:

* Additional materials and parts may be added to imported merchandise

* The tools, molds, and dies used to produce the imported merchandise.

* Designed work, engineering drawings, artwork, plans, or developments outside the United States.

These are the things you should consider when evaluating whether your product is an aid.

* US citizens can perform service work on engineered drawings, designs, or artworks outside the United States.

* Designed drawings, artwork, developments, or plans made in the United States

Valuing your assist

It can be challenging to determine the value of an assist. It can be difficult to value an assist, especially if it is manufactured overseas or is purchased by a third party.

* The assist can be produced both in the US or outside of the US. In this case, the assist’s value is the same as it would be in the US in the country where it was made.

* Third-party involvement in the purchase or lease of assist is considered to be the cost of the assist at the time it was bought or leased.

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* Public domain assistance is the cost to obtain copies.

* The valuation of artworks, plans, and drawings made by engineers is more in line with intellectual property. It would be necessary to appraise them according to Generally Accepted Accounting Principles.

Propportionment

Importers can choose to make a one-time payment or to have the money apportioned according to the number of assists purchased.

Example: Let’s say that 2,500 coats were ordered from Taiwan. To complete the manufacturing of the coats, a special button was ordered. 10,000 buttons were purchased for $2,500 at a cost $.25 per button. This assist purchase allows you to order four buttons per coat. You can make 2,500 coats with the help of this purchase. These 2,500 coats will be shipped in four separate shipments. The first shipment of 1,000 coats is $50 each.

This order can have assistance in a few different ways:

* Additional assistance can be added to the initial shipment of 1,000 coats. In a few months, there will be three orders for the 1,500 remaining coats that are bound for the US. The cost of the first shipment would be $52,500. This transaction value includes the $50,000 coats and $2,500 assist. This assist would not be required for the next three coat shipments from this manufacturer.

The individual buttons’ cost can be separated, and the assist costs can be adjusted based on how many coats or buttons are included in the shipment. The assist value for 1,000 coats worth $50,000 would be $1,000, as each button costs $.25 and the 4 buttons cost $1.00. This would bring the transaction value to $51,000. The transaction value would increase to $26,000 if 500 coats were shipped in the next shipment.

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* Assists can be added to coats’ value from the factory, and the cost can be included. Instead of each skin being imported for $50 each, each invoice will show that the assistance was added by quoting each coat at $51 each.

Any method of calculating or apportioning assistance can be used as long as it’s documented and follows the Generally Accepted Accounting Principles.