HQ 545263: Discrepancies between visaed and commercial invoices; T.D. 86-56.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 545263

                          August 3, 1993



VAL CO:R:C:V 545263 CRS

CATEGORY:  Valuation

Donald J. Unger, Esq.
Michele E. McGuire, Esq.
Barnes Richardson & Colburn
200 East Randolph Drive
Suite 7920
Chicago, IL 60601

RE:  Discrepancies between visaed and commercial invoices; T.D. 86-56.

Dear Mr. Unger and Ms. McGuire:

     This is in reply to your letter of March 12, 1993, on behalf of ********, in which you
requested a ruling regarding the acceptability of entry documentation where there are differences
between the visaed and commercial invoice prices.  Your request for confidential treatment of the
information contained in your submission has been approved pursuant to section 177.2(b)(7),
Customs Regulations (19 C.F.R.  177.2(b)(7)).

FACTS:

     ******* ("the buyer") is in the process of launching a new line of imported clothing and
accessories under a brand name that as yet has no recognition in the United States.  The merchandise
will be purchased through a related company ("Company X").  The price of each type of imported
clothing was negotiated between the buyer and Company X prior to the latter having ordered the
merchandise from a factory.  The price of the imported articles was derived by the buyer by
subtracting an amount for profit and expenses from the price at which the buyer determined it could
sell the merchandise in the United States.  Although Company X did not negotiate prices with a
manufacturer before contracting to supply merchandise to the buyer, it agreed to structure the
transaction in this manner in order to launch the new line.  Due to the structure of this transaction,
there will be a difference between the visaed invoice value and the commercial invoice value for some
of the merchandise imported by the buyer.

     Attached to your submission as Appendix 1 is an affidavit from the buyer's import liaison
manager stating that the prices reflected on the commercial invoices are the prices buyer actually pays
for the imported merchandise.  The affidavit also specifies the articles for which there will be a
difference in price between the visaed invoice and the commercial invoice, as well as the prices the
buyer will pay Company X.  At the time of entry the buyer will provide Customs with Company X's
purchase orders to the manufacturer and the manufacturer's invoice to Company X, both of which
will reflect the same price for the merchandise as that reflected on the visaed invoice.

     The situation described above is due solely to the launch of the new line of merchandise.  You
state that once the new line is established this situation should not occur.

ISSUE:

     The issue presented is whether the discrepancies between the visaed and commercial invoice
price are acceptable under Treasury Decision 86-56.

LAW AND ANALYSIS:

     Under T.D. 86-56, any differences or discrepancies in the information in the entry
documentation presented to Customs in connection with imported merchandise raise the presumption
that the documents contain false or erroneous information.  T.D. 86-56 provides further that entry
documentation containing erroneous price or value information will not be accepted and must be
returned to the importer for correction.  20 Cust. B. & Dec. 175, 177.

     However, the field instructions implementing T.D. 86-56, issued by this office on May 1,
1986, state that Customs may accept an entry so long as an importer can provide an acceptable
explanation for any differences in the price or value information contained in the entry documentation.

     You contend the discrepancy that will result between the visaed and commercial invoices
submitted in connection with the buyer's merchandise are acceptable under T.D. 86-56.  In support
of this you have submitted an affidavit from the buyer's import manager stating that the commercial
invoice price will reflect the actual price paid by the buyer for the merchandise.  In addition, proof
that the visaed invoice price correctly reflects the price paid by Company X to the manufacturer for
the imported apparel will be supplied at the time of entry.

     On the basis of the information presented, and provided the documentation described above
is presented at the time of entry, we agree that the differences in the invoice values will have been
adequately explained in accordance with T.D. 86-56, and that consequently, the documents need not
be returned for correction.  A copy of this decision should be attached to the documentation
presented with entries of the imported merchandise.

HOLDING:

     The discrepancies that are expected to arise between the visaed and commercial invoices due
to the launch of the buyer's new line of merchandise have been adequately explained for the purposes
of T.D. 86-56.

                         Sincerely,





                         John Durant, Director
                         Commercial Rulings Division