Mexican Tomato Import Valuation May Be Based on AMS Data, CBP Says

Tomatoes imported from Mexico and sold on consignment can be valued using pricing data from the Department of Agriculture’s Agricultural Marketing Service, said CBP in a Sept. 12 ruling. Stein Shostak lawyer Richard Shostak requested the ruling on behalf of the Nogales Customs Brokers Association, the Fresh Produce Association of the Americas and the Texas International Produce Association, CBP said. Currently "almost all of the fresh produce presently being entered at Nogales is imported on consignment," CBP said. "In other words, the produce is not sold until after it is imported into the United States, and thus there is no sale for exportation."

CBP said that it was "informed that subsequent to May 2019, some importers are contemplating using transaction value to appraise the imported tomatoes." Importers should use the transaction value "to the extent that a comparison can be made to importations of such tomatoes of the same quality and commercial volume, during the same proximate time, and CBP has determined that the transaction value is acceptable," the agency said. Otherwise, importers must use another valuation calculation.

The use of deductive value, which is based on the sale price "in the U.S. in its condition as imported and in the greatest aggregate quantity either at or about the time of importation, or before the close of the 90th day after the date of importation," is "theoretically possible," but extremely difficult, CBP said. "In many instances importers do not keep track of the merchandise once they transfer it to the next party after importation" and some shipments are commingled, adding "practical administrative complexities." As a result, deductive value is mostly unavailable to be used for such imports. Due to insufficiently available information, neither should the computed value method be used, it said.

Instead, the importer must use another pricing gauge, CBP said. The AMS pricing data, which comes from phone surveys of the merchants in the industry, is one such measure, CBP said. "The prices of produce, such as fresh tomatoes, are reported on a daily and weekly basis and are regularly reviewed by USDA for accuracy," CBP said. "Therefore, we find that under the fallback method, the AMS pricing data provides the most suitable way for ascertaining the proper customs value of the imported consigned produce." But, because AMS doesn't attempt to review any of the transaction documentation, such as invoices or bills of sale, the data can't be used for valuation based on similar transactions, CBP said.

The trade groups also asked that multiple factors be eligible for deduction from the AMS pricing. Although AMS provided CBP updated information about what the pricing data "generally" includes, "the mentioned costs will not be included in the AMS prices in every instance, and thus for any specific transaction, it is not possible to know the exact costs included in the prices paid," CBP said. If a tomato importer "has evidence of a sale to an unrelated party at the first commercial level after importation, and the tomato importer can further document the costs of the various services such as freight, commissions, duties, etc.," the tomatoes "should be valued using the deductive value rather than using the AMS reported prices," CBP said.