[Federal Register Volume 73, Number 165 (Monday, August 25, 2008)]
[Rules and Regulations]
[Pages 49939-49941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19640]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 141

[Docket No. USCBP-2008-0062]
RIN 1505-AB96; CBP Dec. 08-31


First Sale Declaration Requirement

AGENCIES: Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Interim rule; solicitation of comments.

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SUMMARY: This document establishes an importer declaration requirement 
pursuant to section 15422(a) of the Food, Conservation, and Energy Act 
of 2008 to assist Customs and Border Protection (CBP) in gathering 
information for all goods entered for consumption or withdrawn from 
warehouse for consumption on the transaction valuation of goods 
imported into the United States. Effective for a one-year period 
beginning August 20, 2008, all importers will be required to provide a 
declaration to CBP at the time of filing a consumption entry when, in a 
series of sequential sales, the transaction value of the imported 
merchandise is determined on the basis of the ``first or earlier sale'' 
of goods--the first sale in which the goods are ``sold for exportation 
to the United States'' or any other sale earlier than the last sale 
prior to the introduction of the merchandise into the United States. 
CBP will then report the frequency of the use of the ``first sale'' 
rule and other associated data to the International Trade Commission 
(ITC) on a monthly basis.

DATES: This interim rule is effective on August 20, 2008. Comments must 
be received on or before October 24, 2008.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2008-0062.
     Mail: Trade and Commercial Regulations Branch, U.S. 
Customs and Border Protection, 1300 Pennsylvania Avenue, NW., (Mint 
Annex), Washington, DC 20229.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected on regular business days between the hours of 9 
a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Office of International Trade, Regulations and Rulings, Customs and 
Border Protection, 799 9th Street, NW. (5th Floor), Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Mr. Joseph Clark at (202) 572-8768.

FOR FURTHER INFORMATION CONTACT: Monika Brenner, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International 
Trade, (202) 572-8835.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
interim rule. Customs and Border Protection

[[Page 49940]]

(CBP) also invites comments that relate to the economic, environmental, 
or federalism effects that might result from this interim rule. 
Comments that will provide the most assistance will reference a 
specific portion of the interim rule, explain the reason for any 
recommended change, and include data, information, or authority that 
support such recommended change.

Background

    The value of merchandise imported into the United States is 
determined primarily under transaction value which the U.S. value law, 
set forth in 19 U.S.C. 1401a, defines as ``the price actually paid or 
payable for the merchandise when sold for exportation to the United 
States'' plus specified additions to that amount. 19 U.S.C. 
1401a(b)(1). The phrase ``sold for exportation to the United States'' 
is not defined in 19 U.S.C. 1401a, nor in the implementing regulations 
set forth in part 152 of title 19 of the Code of Federal Regulations 
(19 CFR part 152).

Notice of Proposed Interpretation

    On January 24, 2008, CBP published in the Federal Register (73 FR 
4254) a notice informing interested parties that CBP proposed a new 
interpretation of the expression ``sold for exportation to the United 
States'' for purposes of applying the transaction value method of 
valuation in a series of sales importation scenario. Under this 
proposed new interpretation in a transaction involving a series of 
sales, the price paid in the last sale occurring prior to the 
introduction of the goods into the United States, instead of an earlier 
sale, would be considered the price actually paid or payable for the 
imported goods when sold for exportation to the United States. CBP is 
withdrawing the notice of proposed interpretation.

Food, Conservation, and Energy Act of 2008

    On May 22, 2008, Congress passed the Food, Conservation, and Energy 
Act of 2008 (the ``Act''), Public Law 110-234, 122 Stat. 1547 (19 
U.S.C. 1484 note). Section 15422 of the Act, in pertinent part, 
requires:
     CBP must collect a declaration as to whether the 
transaction value of the imported merchandise is determined on the 
basis of the price paid in the first or earlier sale occurring prior to 
the introduction of the merchandise into the United States.
     CBP must provide the collected information to the ITC on a 
monthly basis.
     ITC must submit a report to the House Ways and Means 
Committee and the Senate Finance Committee within 90 days of receipt of 
CBP's final monthly report.
     A ``sense of Congress'' provision advises that CBP not 
amend its interpretation of ``sold for exportation to the United 
States'' for purposes of applying the transaction value of the imported 
merchandise in a series of sales before January 1, 2011. Beginning on 
January 1, 2011, CBP may propose to change its interpretation only if 
CBP: (1) Consults with and provides notice to the committees noted 
above not less than 180 days prior to proposing a change and not less 
than 90 days prior to publishing a change; (2) consults with, provides 
notice to, and takes into consideration views expressed by the 
Commercial Operations Advisory Committee not less than 120 days prior 
to proposing a change and not less than 60 days prior to publishing a 
change; and (3) receives the explicit approval of the Secretary of the 
Treasury prior to publishing a change. CBP should also take into 
consideration the ITC report before publishing any change to the 
expression ``sold for exportation to the United States.''

Required Information on Entry Summary (CBP Form 7501)

    In addition to the entry and entry summary information otherwise 
required for importation into the United States, as per section 484 of 
the Tariff Act of 1930, as amended (19 U.S.C. 1484), the Act obligates 
CBP to require that a U.S. importer of merchandise provide a 
declaration at the time of entry of the merchandise on the entry 
summary form, CBP Form 7501, as to whether the value of the imported 
merchandise was determined on the basis of the price paid by the buyer 
in the ``first or earlier sale.''
    On June 10, 2008, CBP participated in a teleconference call with 
members of the Trade Support Network (TSN), a group of private-sector 
trade representatives that provides CBP with input on the development 
of Customs Modernization projects. Participants in the call discussed 
various ways to indicate when customs value is based on the ``first 
sale'' on CBP Form 7501. Initially, CBP had considered requiring 
importers to provide three data elements on CBP Form 7501. During the 
teleconference, CBP agreed with TSN members that requiring importers to 
provide as few data elements as possible would be the most efficient 
and least burdensome manner in which to implement the declaration 
requirement. CBP has concluded, based upon its consultation with the 
TSN, that it will require importers to provide one data element.
    In order to implement the above requirement of the Act, importers 
will be required to insert a single code on CBP Form 7501 at the line-
item level, indicating when first sale was used to determine the value 
of the imported merchandise. An importer will be required to enter an 
``F'' next to the declared value if the value of the merchandise is 
based on transaction value, and the transaction value of the 
merchandise is based on the price paid by the buyer in the ``first or 
earlier sale.'' This special indicator code will enable CBP to fulfill 
its information collection obligation under the Act.

Inapplicability of Notice and Delayed Effective Date Requirements

    Pursuant to 5 U.S.C. 553(b)(B) and (d)(3), CBP has determined that 
it would be impracticable and contrary to the public interest to delay 
publication of this rule in final form pending an opportunity for 
public comment and that there is good cause for this interim rule to 
become effective immediately upon publication. These interim amendments 
to 19 CFR 141.61(g) conform the regulations to the information 
collection requirements set forth in section 15422(a) of the Food, 
Conservation, and Energy Act of 2008, Public Law 110-234, 122 Stat. 
1547 (19 U.S.C. 1484 note), which is effective August 20, 2008. These 
interim amendments inform the public of the procedures necessary to 
comply with the statutory requirements. For these reasons, pursuant to 
the provisions of 5 U.S.C. 553(d)(3), CBP finds that there is good 
cause for dispensing with a delayed effective date.

Regulatory Flexibility Act and Executive Order 12866

    Because no notice of proposed rulemaking is required for this 
interim rule, the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) do not apply. Further, these interim amendments do 
not meet the criteria for a ``significant regulatory action'' as 
specified in E.O. 12866.

Paperwork Reduction Act

    The collections of information in this document are contained in 
Sec.  141.61(g) (19 CFR 141.61(g)). This information is used by CBP to 
fulfill its information collection obligations under section 15422(a) 
of the Food, Conservation, and Energy Act of 2008, Public Law 110-234, 
122 Stat. 1547 (19 U.S.C. 1484 note), which mandates that CBP require a 
U.S. importer of merchandise to

[[Page 49941]]

provide information at the time of entry of the merchandise on the 
entry summary form, CBP Form 7501, as to whether the value of the 
imported merchandise was determined on the basis of the price paid by 
the buyer in the ``first or earlier sale.'' The likely respondents are 
business organizations including importers and brokers. An agency may 
not conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB. This collection of information falls under the 
previously approved collection 1651-0022 for the Entry Summary, CBP 
Form 7501.

Signing Authority

    This document is being issued in accordance with Sec.  0.1(a)(1) of 
title 19 of the Code of Federal Regulations (19 CFR 0.1(a)(1)) 
pertaining to the authority of the Secretary of the Treasury (or his/
her delegate) to approve regulations related to certain customs revenue 
functions.

List of Subjects in 19 CFR Part 141

    Customs duties and inspection, Entry of merchandise, Reporting and 
recordkeeping requirements.

Amendments to the Regulations

0
For the reasons stated above, part 141 of title 19 of the Code of 
Federal Regulations (19 CFR part 141) is amended as set forth below.

PART 141--ENTRY OF MERCHANDISE

0
1. The general authority citation for part 141 continues to read, and 
the specific authority for Sec.  141.16 is added, to read as follows:

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.
* * * * *
    Section 141.61 also issued under sec. 15422(a), Pub. L. 110-234, 
122 Stat. 1547 (19 U.S.C. 1484 note) and 19 U.S.C. 1401a.
* * * * *

0
2. Section 141.61 is amended by adding a new paragraph (g) to read as 
follows:


Sec.  141.61  Completion of entry and entry summary documentation.

* * * * *
    (g) Declaration of value. Pursuant to section 15422(a) of the Food, 
Conservation, and Energy Act of 2008 (Pub. L. 110-234), for all goods 
entered for consumption or withdrawn from warehouse for consumption 
from August 20, 2008 through August 19, 2009, an importer of 
merchandise must enter an ``F'' next to the declared value on CBP Form 
7501, or the electronic filing equivalent, when the declared 
transaction value of the imported merchandise is determined on the 
basis of the price paid by the buyer in a sale occurring earlier than 
the last sale prior to the introduction of the merchandise into the 
United States.

W. Ralph Basham,
Commissioner, U.S. Customs and Border Protection.
    Approved: August 20, 2008.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E8-19640 Filed 8-20-08; 4:15 pm]
BILLING CODE 9111-14-P