CBP Issues ABI System Requirements and and Completes its ABI Changes for New "First Sale" Indicator

The 2008 Farm Bill requires the trade to declare to CBP at the time of filing of a consumption entry if the transaction value of the imported merchandise is determined on the basis of the first or earlier sale of goods.

(At a recent COAC meeting, CBP officials stated that CBP needs to publish an interim rule shortly, as the first sale information will be required as of August 20, 2008. Officials also stated that CBP plans to amend the Customs and Trade Automated Interface Requirements (CATAIR) for this new requirement. See ITT's Online Archives or 08/13/08 news, 08081305, for BP summary.

It is not known how or if CBP is abiding by this August 20, 2008 date.)

System Changes Have Been Made in ABI

CBP states that the above system changes have been made in ABI to accept the new first sale indicator.

First Sale Indicator is Made at the Line Level of Consumption Summaries

According to CBP, the trade submits any first sale indicators at the line level for consumption summaries.

EI Record Identifier 52 Modified to Accept New First Sale Indication

The entry summary (EI) Record Identifier 52 record has been modified to accept the first sale indicator in the new miscellaneous indicator field in position 64 of the entry summary record 52 record:

Record identifier 52 (input)

According to CBP, the following procedure should be followed to declare if the first sale applies, or does not apply, to the summary line:

The letter 'F' will be entered in the miscellaneous indicator field (position 64) if the merchandise value is determined to be a first sale transaction.

The miscellaneous indicator field will be left blank if the merchandise value is determined not to be a first sale transaction.

All consumption entry types are subject to the first sale declaration (i.e., entry types: 01, 02, 03, 06, 07, 11, 12, 31, 32, 34, 38).

The first sale indicator should be printed next to the declared value on the CBP Form 7501.

¹In January 2008, CBP published a notice of proposed interpretation to require that the price paid by the buyer in the U.S. to the foreign distributor form the basis for valuation in a series of sales importation scenario. Congress included in the Farm Bill a provision which stated that it is the "sense of Congress" that the CBP Commissioner should not implement a change to CBP's interpretation of the term "sold for exportation to the U.S." for purposes of applying the transaction value of the imported merchandise in a series of sales, before January 1, 2011. The Farm Bill further stated that it is the "sense of Congress" that beginning on January 1, 2011, the CBP Commissioner may propose to change or change CBP's interpretation of the term ''sold for exportation to the U.S.'' only if CBP consults with and gives prior notice to the appropriate congressional committees and COAC and receives explicit approval of the Treasury Secretary prior to publishing a change. CBP subsequently decided to withdraw its proposed interpretation.

(See ITT's Online Archives or 06/26/08 news, 08062605, for BP summary on CBP testimony that it would shelve its proposal to eliminate the first sale rule.

See ITT's 05/19/08 news, 08051905, for BP summary of the Farm Bill, including its provisions related to first sale.

See ITT's Online Archives or 05/08/08 news, 08050805, for BP summary of Congressional letters sent to DHS opposing CBP's proposed elimination of first sale rule. See ITT's Online Archives or 01/24/08 and 01/25/08 news, 08012405, and 08012505, for earlier BP summaries of CBP's proposal.)

CSMS message 08-000163 (dated 08/20/08) available at http://apps.cbp.gov/csms/viewmssg.asp?Recid=17182&page=&srch_argv=08-000163&srchtype=all&btype=&sortby=&sby=.