CB6u—Intro to U.S. Customs Brokerage, Part 6: Customs Appraisement, Value and Duty Calculation

Subscriber price: $82.00, Non-subscriber price: $121.00
Estimated total study time: 6 hours 9 minutes

This the sixth of the nine-part series of introductory courses in the practical work of U.S. customs brokerage.This course provides a basic understanding of the six methods of appraisement for valuation and duty calculation. These methods of appraisement form the basis of appraisement that the World Trade Organization created so that all importers are treated fairly. Since transaction value is the most common type of appraisement used, there is more comprehensive coverage of the allowed additions and subtractions from the price paid or payable.

Customs Appraisement, Value and Duty Calculation is a segment taken from the sixth course in the Intro to U.S. Customs Brokerage series covering Transaction Value and ABI Entry Processing.

Important: This course can be taken out of sequence if so desired.

Entry Summary Overview; Valuation of Goods

There are 6 different methods that CBP uses to appraise the value of goods so that all importers are treated fairly. In this lesson we will present the basics of the invoice price paid or payable and currency conversion.

(Estimated study time: 53 minutes)

Introduction
Entry Summary Processing Overview
Valuation of Goods for Customs Entry Purposes
The Invoice Price is the Price Actually Paid or Payable
Currency Conversion of the Invoice Price
Valuation by Six Methods of Appraisement

Methods of Appraisement; Adjustments to Transaction Value-Additions

In this lesson we will focus on the most widely used and preferred method of valuation and appraisement, transaction value. This lesson will review the conditions for using transaction value and describe the dutiable charges. These include indirect payments, parts and cost of assembled goods and other dutiable additions to the price actually paid or payable.

(Estimated study time: 52 minutes)

Introduction
Conditions for Using Transaction Value
Adjustments to Transaction Value
Invoice Price Adjustments Added or Included
Indirect Payments are Dutiable
Parts and Costs of Assembly Are Dutiable
Packing Costs as Part of the Dutiable Value
Selling Commissions as Part of the Dutiable Value
Assists as Part of the Dutiable Value
Royalty and License Fees Paid by the Buyer as Part of the Dutiable Value
Subsequent Sale Proceeds as Part of the Dutiable Value
Quota Charges as Part of the Dutiable Value

Methods of Appraisement; Adjustments to Transaction Value-Subtractions

Continuing with the most common method of appraisement, transaction value, we review the deductions from the invoice price.

(Estimated study time: 1 hour 7 minutes)

Introduction
Adjustments to Transaction Value - Continued
Invoice Price Adjustments Subtracted or Deducted
Allowable Discounts from the Invoice Price
International Freight and Insurance Deducted from the Invoice Price
U.S. Customs Brokerage and Service Fees Deducted from the Invoice Price
U.S. Duties and Taxes Deducted from the Invoice Price
Instruments of International Traffic Deducted from the Invoice Price
Cost of Assembly after Importation Deducted from the Invoice Price

Other Methods of Appraisement

There are circumstances that require CBP to base their appraisement on other methods. These other methods include: transaction value of identical or similar merchandise, deductive or computed value, or values if other values cannot be determined. We will cover each of these briefly, in turn.

(Estimated study time: 47 minutes)

Introduction
Methods of Appraisement Other Than Transaction Value
- Reasons for Using Other Methods of Appraisement
- Transaction Valuation of Identical Merchandise
- Transaction Valuation of Similar Merchandise
- Deductive Valuation Method
  - Conditions for Use of Deductive Value
  - The Meaning of "Greatest Aggregate Quantity"
  - Nondutiable Charges (NDC): Subtracted from the Deductive Value
- Computed Valuation Method
- Fall-back Method if Other Values Cannot be Determined
- Using the First Sale Rule
Using the First Sale Rule

Rates of Duty

In order to determine the proper duty rate it is important to be able to read all of the parts of the HTSUS. Different rates of duty columns mean different things. There are codes called special program indicators that increase or decrease normal trade relation duty rates. It is also essential to understand circumstances where articles are exempted from duty or allowed to be commingled together. This lesson addresses these topics.

(Estimated study time: 1 hour 5 minutes)

Introduction
Rates of Duty
HTSUS Duty Columns
Special Tariff Treatment Programs
Types of Duty Rates
- Ad Valorem Duty Rates
- Specific Duty Rates
- Compound Duty Rates
Unit of Quantity

Calculating Duty, Fees, and Taxes

Duty rates come in many forms, some are based on a percentage of the net entered value and some are compound and complex. Taxes may apply to some types of goods like alcohol. Trade agreements affect the duty computation and there is special treatment based on importer and disposition of goods. These will all be demonstrated in this lesson.

(Estimated study time: 1 hour 25 minutes)

Introduction
Calculation of Duty
- To get Net Entered Value
- Calculation of Duty Included
Computation of User Fees that can be Deducted
Agriculture Commodity Fees are not Deducted
Unconditionally Free Goods
Goods Subject to I.R. Tax