Planned Updates to 'First Sale' ICP Being Misinterpreted as Policy Change, Says DiNucci
CBP is working to update the Informed Compliance Publication (ICP) on bona fide sales to list the documents the agency may request in order to validate a “first sale,” said Acting Assistant Commissioner for International Trade Rich DiNucci. The draft revisions have caused somewhat of a “firestorm” recently after the agency sought input from industry leaders on the subject because of the misconception that CBP is working toward a change in policy, he said while speaking June 12 at the Import Compliance and Enforcement forum, hosted by the American Conference Institute. The First Sale rule allows importers, when there are multiple transactions prior to importation into the U.S., to use the price paid in the “first or earlier sale” as the basis for the customs value of the goods rather than the price the importer ultimately paid for the goods.
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The agency has no interest in changing policy regarding first sale, DiNucci emphasized. “There’s no policy changes, no discussion, no contemplation, no conceptual discussion internally about changing anything to do with first sale” and the agency doesn’t have any objection to its legitimate use, he said. CBP would like to add uniformity to the process and remove interpretation from the issue, he said. “All I’m trying to get to, is ‘what is required,’” he said. On the security side of the agency, there’s an emphasis on outlining very clear requirements, said DiNucci. “If you want people to be compliant, give them something to comply with, besides an interpretation.”
The thought was that CBP could circulate the proposed document list, now about two and half pages long, among industry to gather some broader insight on the issue, he said. “If you come back and tell me this documentation doesn’t make sense, it’s not something we have access to, we are going to consider that and probably take it off the list,” he said. That process is hoped to establish a better understanding of the business realities related to the issue, he said. The ICP on “Bona Fide Sales & Sales for Exportation to the United States” (here), has not been updated since 2005.
The issue came up recently as part of a compliance dispute between CBP and a client of Grunfeld Desiderio, said DiNucci. DiNucci got involved at the request of Grunfeld partner Alan Klestadt after progress was not being made between the parties, he said. What he found was a situation that “offended my common sense,” he said. “Should we not have very clear requirements in terms of documentation” for the legitimate use of first sale, he asked. That dispute showed DiNucci it's not "equitable" for CBP to move forward on costly and time consuming audits based on an interpretation, he said.