Valuation: practice questions

1.Your client is importing a used aircraft engine manufactured in England from a Canadian shipper. Your client has accepted the aircraft engine on consignment and has promised to find a US buyer for the engine. Your client will receive a commission on the sale of 5%. The asking price for the engine is $90,000. The shipper paid all of the transportation costs ($1,000) from its dock to your client’s dock on a through bill of lading. What is the entered value of the used aircraft engine?

2.Three importers of covered merchandise have multiple allegations of evading antidumping/countervailing (AD/CVD) orders. Which of the following is TRUE about the consolidation of these allegations?

3.How should the merchandise be appraised in the following scenario? A foreign shipper sold merchandise at $100.00 per unit to a U.S. importer. Subsequently, the foreign shipper increased its price to $110.00 per unit. The merchandise was exported after the effective date of the price increase. The invoice price of $100.00 was the price originally agreed upon.

4.What is the dutiable value based upon the following information? Gemma Jones, a sole proprietor doing business as GJ Imports, wants to begin importing woven furniture but is unable to travel to Asia on a buying trip. The proprietor hires Far East Trading, an established purchasing company, to travel to Asia and make several designated purchases in the proprietor's behalf. The first shipment arrives and is invoiced with the following information:  Per contract 121622; 23 Crates furniture; U.S. $121,900.00; Includes Rattan Chairs, Rattan Tables, Bamboo Stands, and: o Ocean freight and marine insurance ($22,000), o Far East Trading 5% commission, and o All charges and commissions are included in the invoice price payable via letter of credit, Bank of England to Far East Trading.

5.Company A, based in the United States, sells and rents high end sports cars. In 2015, Company A imported an Italian sports car from Italy and paid all applicable duties and taxes. In 2020, Company A leased the car to a client in China and exported it to him. The car did not meet the specifications agreed upon in the contract; however, the client continued to drive it for the remainder of the lease. The sports car was not subjected to any repairs or alterations while in China. In 2024, Company A then reimported the car into the United States. What statement is correct upon reimportation into the United States?

6.In a transaction with Chinese supplier Rose LLC, U.S. importer Thorn Inc. agreed to pay $100,000.00 for the sale of widgets, shipped Free on Board (FOB) Chicago. However, Rose LLC owed a $20,000.00 debt to a third party, Flower Corporation. Thorn Inc. agreed to pay that debt and then pay $80,000.00 directly to Rose LLC. The international shipping cost was $10,000.00. What is the transaction value of the imported widgets from China?

7.Which of the following is NOT an acceptable basis of appraisement for imported merchandise?

8.The importer, Company A, imports 1,000 batteries from an unrelated overseas seller at a price of $0.50 CIF per battery. The overseas seller buys the batteries in bulk from an overseas manufacturer. Company A requires each battery to be individually wrapped in polythene with a cardboard backing for display at retail outlets in the United States. Company A provides the polythene and cardboard backing materials free of charge to the overseas seller. Company A obtains the materials from a supplier in the United States at a cost of $40 for the quantity required to wrap 1,000 batteries. The seller of the imported batteries arranges for an overseas packing company to carry out the wrapping/packing. This company charges the seller of the imported goods, $60 per 1,000 batteries for this service. The documents show that the total overseas freight and insurance costs totaled $10. What is the customs value in the United States for a shipment of 1,000 batteries?

9.What is the duty that will be assessed on a single unit of imported battery-operated cube countdown timers under the following circumstances? The cube is a countdown timer and vibrates at the end of the countdown. These units were originally entered at $5.00 per unit transaction value under subheading 9106.90.6500 of the Harmonized Tariff Schedule of the U.S. with a total entered value for the 10,000 units of $50,000.00 and duty paid of $2,650.00. Batteries are not included, and the timer contains zero jewels. The importer proved by clear and convincing evidence to the Center director that the units were defective at the time of importation because the digital timer was non- functional and that the value of the cube decreased by 65 percent (65%).

10.Which of the following pairings of foreign seller and U.S. importer are NOT related persons as defined in Part 152 of the Title 19 CFR?

11.A foreign commercial invoice reports a value of $7,200 with an addition of $800 for “distributor fee” for a total invoice of $8,000. The fee charged by the seller compensates the exclusive U.S. distributor who, by agreement with the foreign seller, receives 10% of all sales in the U.S. as a commission. The distributor receives this regardless of whether or not they actually make the sale. The $800 would be:

12.USA Corporation imports a specialized machine that is disassembled and split into several shipments for delivery purposes. A specific tool is used to produce this machine, and the cost of that tool is added to the machine's value as an assist. USA Corporation decides to pay duties on the tool's entire value with the first shipment, rather than to split the tool's value between all of the machine's entries. What is the Customs term for this allocation of assists?

13.Which of the following is an element of computed value of imported merchandise?

14.The U.S. importer entered into an agreement with an unrelated exporter/manufacturer for the purchase of 10,000 branded hats. The purchase contract contained the following terms: the price for the 10,000 hats is $50,000.00; the merchandise may be resold only in New York; and the buyer indicates that it will spend $5,000.00 on his own account to promote the sale of the merchandise. No selling commission, assist, royalty, or license fee is involved. Is transaction value the proper method of appraisement and, if so, what is the transaction value?

15.Which of the following is considered an assist and should be included in the entered value?

16.Orange juice in bulk containers is imported into the United States from Morocco. The orange juice is produced as follows: Oranges classified under heading 0805 are imported from Spain into Morocco. Purified water from France is imported into Morocco. Calcium citrate, a preservative, is manufactured in Morocco. The juice from the oranges (25% by volume and 70% by value), water (74.75% by volume and 29.5% by value), and calcium citrate (0.25% by volume and 0.5% by value) are combined in Morocco and repackaged in bulk containers prior to being exported to the United States. Upon importation, the orange juice will be classified under subheading 2009.12.2500. Which of the following correctly states the originating country, special program indicator, and rate of duty for the described orange juice?

17.As part of an investigation, CBP has decided that there is reasonable suspicion that an importer entered covered merchandise into the U.S. through evasion of anti-dumping duties under the Enforce and Protect Act of 2015 (EAPA). The entries are unliquidated. What interim measure must CBP take with respect to the entries?

18.Choose the ONE answer that correctly fills in the blank. The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States, plus amounts equal to _____.

19.A&G, a Minneapolis furniture company, has agreed to purchase 5000 bespoke ironing boards from Kraftsmen, a furniture manufacturer in Slovenia. A&G supplies Kraftsmen with the following inputs to use in the production of the ironing boards, free of charge: • Design specifications created by a Dallas-based furniture designer, purchased for a flat fee of $3200.00. • 2500 yards of cotton fabric, which Kraftsmen procured for $2.00 per yard in Slovenia, then shipped to A&G’s screen printer in Mozambique. A&G paid their screen printer to add a design to the fabric for $1.00 per yard, before returning the fabric to Kraftsmen’s factory in Slovenia. A&G imports the ironing boards to the United States in five shipments of 1000 ironing boards each. A&G agrees to pay Kraftsmen $375,000.00 for the entire order of 5000 ironing boards, not including the value of the assists. If A&G chooses for the total assist value to be apportioned over the entire anticipated production of 5000 ironing boards, what is the dutiable value of one shipment of 1000 ironing boards?

20.The duty free provision for products of the United States returned after 10 years is found in _____.

21.Which is NOT a requirement for an assist?

22.Footwear incorporating a protective metal toe-cap imported on or after July 1, 1981 will be determined in accordance with _____.

23.A car manufacturer is importing parts from its overseas subsidiary for testing in its new electric vehicle model that is in pre-production. The parts are being tested to determine whether changes need to be made before the vehicle goes to market. Under which of the following scenarios would these parts be eligible to receive duty-free treatment under subheading 9817.85.01?

24.Which of the following is NOT an element of the computed value of apparel from Costa Rica?

25.Which program indicator for products eligible for special tariff treatment is used to claim the Column 1 duty preference under the Agreement on Trade in Pharmaceutical Products?