October 2020 (AM) — Question 77

The U.S. importer entered into an agreement with an unrelated exporter/producer for the purchase of 1,000 units of branded merchandise. The purchase contract contained the following terms: the price for the 1,000 units of merchandise is $100,000, the merchandise may be resold only in California, and the importer must spend $10,000 of his own funds 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?

• ANo, transaction value is inapplicable because there is a restriction on the disposition or use of the merchandise (i.e., the merchandise may be resold only in California)
• BYes, $110,000
• CYes, but it is impossible to calculate the transaction value based on the information provided
• DYes, $100,000✓ CBP's answer
• ENo, transaction value is inapplicable because the merchandise is branded