Importer Says CBP Used 'Arbitrary and Fictitious Appraisement' Method on Apparel Entries
Importer FCMT filed a trio of complaints at the Court of International Trade last week challenging CBP's appraisement of its apparel entries. In all three cases, the importer argued that CBP failed to use the products' transaction value to appraise the merchandise and that CBP engaged in an "arbitrary and fictitious appraisement" of the merchandise (FCMT v. United States, CIT #s 21-00242, -00243, -00247).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
FCMT said CBP appraised the merchandise, which came from China, using an "unknown method of appraisement." The complaint said the agency's appraising officer initially tried to raise the value of the goods by 198%, though another CBP officer later said the entered value should be raised by around 148%. The agency didn't provide any support or explanation of the increased value or identify the method of appraisement it used, FCMT said.
The importer's complaints laid out three claims as to why CBP's actions were unlawful, the first of which says that CBP failed to use the products' transaction value. Under the applicable statute, 19 U.S.C. Section 1401a(b), the "principal basis of appraisement" is the product's transaction value, which is defined as the "price actually paid or payable for the merchandise when sold for exportation to the United States" plus statutory additions, such as the value of packing costs and inland transportation to the port of exportation.
If there is no transaction value, CBP is then required to turn to a "different basis as set forth" in 19 U.S.C. 1401a. The importer said one such appraisal method, which looks at the price of sales of "identical or similar merchandise" from the same country to unrelated purchasers for exportation to the U.S., is inapplicable here, since no such sales were made. Similarly, FCMT isn't the manufacturer of the goods and so doesn't have enough information to allow for the calculation of "computed value" as laid out in the statute.
"Given none of the other methods of appraisement can be used, the merchandise is subject to appraisement based on transaction value," the briefs said.
The importer then noted that imports may not be appraised based on "arbitrary or fictitious values," as outlined in Section 402(f)(2)(G) of the Tariff Act of 1930. Nevertheless, CBP valued the apparel by "multiplying the entered values by arbitrary uplift of unknown origin," the briefs said. The values used by CBP to appraise the importer's goods "were arbitrary and fictitious values, rendering the appraisement unlawful," the company said.
Lastly, FCMT argued that CBP applied inconsistent appraisement, evidenced by the two different appraisal rates from the CBP officers.