Good news for some US importers — the long-standing “first sale” rule will remain in place for the foreseeable future.
Back in January 2008, US Customs (CBP) sought to amend the rule, known as the “first sale” rule, to require that importers, in a transaction involving a series of sales, use the price paid in the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale, based on a new interpretation. This would result in higher duties paid by importers since the value attributable to earlier sales is usually less than that paid in later sales.
In June 2008, Congress enacted the Food, Conservation and Energy Act which among other things required CBP to undertake more research regarding the first sale rule and report those findings to the US International Trade Commission (ITC). In addition, the Act prohibited Customs from making any changes to the its existing interpretation of the first sale rule until after January 1, 2011.
Now, over 2 years later, the agency formalized the withdrawal in a Federal Register notice published last week.
According to an ITC report, about 9% of importers use the first sale rule to calculate import value. Some importers use the reconciliation (recon) process as a means to declare the first sale value at a later time, when the actual value is not known at the time of importation.