H347696

H347696 May 13, 2026 OT:RR:CTF:VS H347696 AMW CATEGORY: Valuation Alexander Chinoy and Cynthia Galvez Covington & Burling LLP One CityCenter 850 10th St., NW Washington, DC 20001 RE: Method of appraisement for reusable transport tanks Dear Mr. Chinoy and Ms. Galvez: This is in response to your correspondence, dated May 1, 2025, requesting a binding ruling on behalf of your client, [ ] (the “Requester”) regarding the method of appraisement for reusable transport tanks to be imported to the United States. You have requested that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets and all attachments to this request will not be released to the public and will be withheld from published versions of this decision. FACTS: The facts are based on your initial ruling request as well as follow-up information submitted to this office on November 7, 2025. The Requester is an American biotechnology corporation that plans to import reusable tanks for the purpose of transporting “drug substances and medicines” internationally, but may also be shipped empty for repositioning between locations in the United States and abroad. The subject tanks are organized into two separate “fleets”: one owned by the Requester and a second owned by the Requester’s corporate parent, [ ] (the “Parent”) which is based outside of the United States in [ ]. Because the Requester may import tanks in either fleet, however, the request pertains to tanks in both fleets (i.e., those owned by the Requester or the Parent). At present, the Requester rotates over 1,200 tanks through its U.S. and global facilities. The tanks consist of three sizes: 35-liter, 120-liter, and 300-liter variants. The Requester and Parent most recently purchased 35-liter tanks in 2013, 120-liter tanks in 2004, and 300-liter tanks in 2015. The original purchase cost for each tank differs based on the tank’s size and material. At present, the subject tanks are solely used to transfer substances between related parties, and no payment is made for the tanks themselves (only the underlying material transported). Each tank possesses a unique Tank ID number and is recorded as an asset value in the Fixed Asset Register of either the Requester or the Parent. Each Fixed Asset Register entry contains the following information: tank description and size, acquisition date, acquisition value, accumulated depreciation, and net book value. The Requester proposes appraising the customs valuation for each tank entered based on the “annual average net book value” (the “AANBV”) of all tanks in each size range. Under this methodology, the net value of each individual tank will first be calculated on an annual basis utilizing a straight-line depreciation method in which the tanks are depreciated over 15 years. Specifically, the Requester will use the following equation: tank acquisition cost – accumulated depreciation = net book value. Although tanks older than 15 years are carried on the parties’ books as fully depreciated (i.e., fully expensed under generally accepted accounting principles (“GAAP”)), the net book value of these tanks will be adjusted to reflect a minimum value of one year of useful life remaining for purposes of establishing a reportable customs value. Once the net book value for each tank has been calculated, the Requester will calculate the AANBV as follows: total net book value for each tank size / total number of tanks for each size = AANBV. the Requester asserts that providing the individual net book value for each tank as the customs valuation at entry would be impractical, necessitating the Requestor to “perform a multitude of everchanging calculations” and “provide these calculations to the exporter to prepare the invoice for declaration upon entry for each and every entry.” ISSUE: Whether the methodology proposed by the Requester to value the tanks is acceptable under the fallback method of 19 U.S.C. § 1401a(f). LAW AND ANALYSIS: Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (“TAA”; 19 U.S.C. § 1401a). The preferred method of appraisement is transaction value, which is defined as “the price actually paid or payable for the merchandise when sold for exportation to the United States,” plus amounts for certain statutorily enumerated additions to the extent not otherwise included in the price actually paid or payable. 19 U.S.C. § 1401a(b)(1). If, for any reason, sufficient information is not available with respect to the additions to the price actually paid or payable, the transaction value of the imported merchandise is treated as one that cannot be determined. 19 U.S.C. § 1401a(b)(1). The term “price actually paid or payable” is defined as: [T]he total payment (whether direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of 2 exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. 19 U.S.C. § 1401a(b)(4)(A). When transaction value is not available as an appraisement method, the remaining methods of appraisement set forth in 19 U.S.C. § 1401a must be considered. The alternative methods of appraisement, in order of precedence, are: the transaction value of identical or similar merchandise (19 U.S.C. § 1401a(c)); deductive value (19 U.S.C. § 1401a(d)); computed value (19 U.S.C. § 1401a(e)); and the “fallback” method (19 U.S.C. § 1401a(f)). In the instant matter, the methods of appraisement found in 19 U.S.C. § 1401a(b), (c), (d), and (e) are not available. Transaction value under 19 U.S.C. § 1401a(b) is not available because the tanks are not subject to a sale for export but are instead transferred between related parties. In addition, the transaction value of identical or similar merchandise pursuant to 19 U.S.C. § 1401a(c) is not available because the Requester does not have access to the transaction value of merchandise at the same commercial level and in substantially the same quantity as the subject tanks. Next, deductive value pursuant to 19 U.S.C. § 1401a(d) is not available because there is no subsequent sale of the tanks in the United States from which to deduct the required elements. Finally, computed value pursuant to 19 U.S.C. § 1401a(e) is not available because the Requester does not have access or insight to the manufacturing costs associated with the subject tanks. Based on the above, we agree with the Requester that the proper method of appraisement in this scenario is the fallback method. This method is set forth in 19 U.S.C. § 1401a(f) and allows for merchandise to be appraised on the basis of a value derived from one of the methods set forth in 19 U.S.C. § 1401a(b) through 1401a(e), reasonably adjusted to the extent necessary to arrive at a value. However, certain limitations exist under this method. For example, merchandise may not be appraised on the basis of the price in the domestic market of the country of export, the selling price in the United States of merchandise produced in the United States, minimum values, or arbitrary or fictitious values. 19 U.S.C. § 1401a(f); 19 CFR § 152.108. In addition, pursuant to section 500 of the Tariff Act of 1930, as amended, which sets forth U.S. Customs and Border Protection (“CBP”) general appraisement authority, the appraising officer may: Fix the final appraisement of merchandise by ascertaining or estimating the value thereof, under section 1401a of this title, by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declar

Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (“TAA”; 19 U.S.C. § 1401a). The preferred method of appraisement is transaction value, which is defined as “the price actually paid or payable for the merchandise when sold for exportation to the United States,” plus amounts for certain statutorily enumerated additions to the extent not otherwise included in the price actually paid or payable. 19 U.S.C. § 1401a(b)(1). If, for any reason, sufficient information is not available with respect to the additions to the price actually paid or payable, the transaction value of the imported merchandise is treated as one that cannot be determined. 19 U.S.C. § 1401a(b)(1). The term “price actually paid or payable” is defined as: [T]he total payment (whether direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of 2 

exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. 19 U.S.C. § 1401a(b)(4)(A). When transaction value is not available as an appraisement method, the remaining methods of appraisement set forth in 19 U.S.C. § 1401a must be considered. The alternative methods of appraisement, in order of precedence, are: the transaction value of identical or similar merchandise (19 U.S.C. § 1401a(c)); deductive value (19 U.S.C. § 1401a(d)); computed value (19 U.S.C. § 1401a(e)); and the “fallback” method (19 U.S.C. § 1401a(f)). In the instant matter, the methods of appraisement found in 19 U.S.C. § 1401a(b), (c), (d), and (e) are not available. Transaction value under 19 U.S.C. § 1401a(b) is not available because the tanks are not subject to a sale for export but are instead transferred between related parties. In add