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Trade Agreements & Valuation Flashcards

7 cards from real CCS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Trade Agreements & Valuation flashcards as text

  1. Under the WTO Customs Valuation Agreement, which of the following costs must be ADDED to the price paid or payable when determining transaction value?

    Answer: Assists provided by the buyer free of charge to the producer

    Assists (tools, molds, engineering, artwork, etc.) provided by the buyer free of charge or at reduced cost are dutiable additions to transaction value under 19 USC 1401a(b)(1)(C).

  2. A U.S. importer purchases goods for $10,000 and also pays $500 in buying commissions to its agent abroad. How is the $500 commission treated for customs valuation purposes?

    Answer: Not added to transaction value because buying commissions are excluded

    Buying commissions are specifically excluded from customs value under 19 USC 1401a(b)(3)(A); only selling commissions are included in transaction value.

  3. When goods are sold through a middleman before importation, U.S. Customs may allow 'first sale' valuation. What is the primary condition for using first sale?

    Answer: The goods must be clearly destined for the United States at the time of the first sale

    For first sale valuation, CBP requires that the goods be clearly destined for the U.S. at the time of the first (manufacturer-to-middleman) sale, per T.D. 96-87.

  4. Under USMCA, what is the de minimis threshold for non-originating materials that allows a good to still qualify as originating even if the tariff shift rule is not met?

    Answer: 10% of the transaction value or net cost

    USMCA Article 32.6 provides a 10% de minimis allowance — non-originating materials that do not undergo the required tariff classification change may still be disregarded if they do not exceed 10% of the good's value.

  5. A textile product fails the tariff shift rule under USMCA. Which de minimis rule applies?

    Answer: 10% by weight of the total fiber or yarn of the good

    For textile and apparel goods, USMCA Article 32.6.3 applies a separate de minimis based on 10% by weight of the total fiber or yarn of the component that determines classification.

  6. Under the USMCA Regional Value Content (RVC) calculation, what does the 'build-down' (BD) method measure?

    Answer: Transaction value minus the value of non-originating materials, divided by transaction value

    The build-down method calculates RVC as (TV − VNM) / TV × 100, where TV is transaction value and VNM is the value of non-originating materials.

  7. Which of the following is NOT a recognized basis for customs valuation under 19 USC 1401a?

    Answer: Market value as assessed by CBP appraisers

    CBP appraisers cannot arbitrarily assign a 'market value'; the six statutory methods (transaction value, TV of identical goods, TV of similar goods, deductive value, computed value, and fallback) must be applied in hierarchical order.