CBP Finds Insurance Value Allowable as Appraisal Method for Unsold Imported Antiques
An importer of antiques may rely on insurance value as an appraisal method only for antiques that are imported but go unsold in the U.S., the agency said in a Nov. 14 ruling that was recently released. Lorin & Son, an antiques dealer in the U.S., asked CBP to rule on how it should appraise imported antiques under three scenarios, suggesting the use of insurance value as the fallback appraisal method for Lorin's imports. CBP allows for a "fallback method" appraisal for imports that cannot be appraised under the other methods. Jennifer Díaz, a lawyer with Becker & Poliakoff, represented the company in its ruling request.
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Lorin "routinely purchases antiques from other dealers, auctions houses and estate sales, or receives them under consignment from individuals, in the U.S. and abroad," it told CBP. If the goods are not sold at various trade shows outside the U.S., they are reimported into the U.S., said CBP. There is "no confirmed buyer when the antiques are imported, or re-imported, into the U.S., and that articles re-imported are typically not sold within 90 days, but rather it may be many months or years before an article is ever sold at another trade show," the company told CBP. Lorin serves as the importer of record for the import scenarios CBP reviewed, the agency said.
Within the first scenario, antiques that are purchased abroad by Lorin and imported into the U.S should be appraised using the transaction value method, the "primary method of appraisement," said CBP. That scenario "constitutes a sale for exportation to the United States and should be appraised using the transaction value method, assuming there is a bona fide sale for exportation to the U.S.," the agency found.
Antiques that are held and imported under trust or consignment to be sold in the U.S should be appraised using the deductive value method when they are sold within 90 days of import, said CBP. That's also true for "previously imported articles re-imported to the U.S. after being exported for sale outside the U.S., but for which a foreign sale did not materialize," the agency said. The deductive value is based on "the unit price at which the merchandise being appraised, identical merchandise, or similar merchandise, is sold in the United States in its condition as imported, in its greatest aggregate quantity, at or about the time of importation," said CBP. Items sold more than 90 days after importation may be appraised under a "reasonably adjusted" deductive value under the fallback method, said CBP.
Only when "items are imported, but are ultimately not sold, appraisal under the fallback method using the proposed insurance value is appropriate," the agency said. Lorin's insurance policy, which Lorin submitted to CBP, covers property of its consignment clients at “the Selling Price Less 20% or Cost Plus 30%, whichever is greater at the time of loss,” said CBP. Property held in trust or consignment by Lorin is valued at the "net" consignment amount, plus 10 percent, the company said. Lorin is responsible for that "net" amount, the policy said.