Special Feature - Last Sale Valuation Act
New legislation was recently introduced to abolish the First Sale valuation technique. If passed, importers will pay more duties on their imported products.
First Sale for Customs valuation purposes currently allow importers to declare the transaction value based on the first sale in a multi-tier supply chain rather than the higher, last sale price. CBP has expressed concerns that First Sale complicates enforcement, increases audit burden, and can lead to undervaluation if not properly documented. Abolishing First Sale would require importers to declare value based on the price paid by the U.S. importer to the foreign seller, likely increasing duty liability for many companies. Although no final rule has been implemented, the proposal has generated significant concern among importers due to its potential cost, supply chain, and competitiveness impacts.
If the Last Sale Valuation Act is enacted, importers should reevaluate their current bond limit as an increase in duty obligation may require a higher limit. To avoid an unwanted Bond Insufficiency notice from CBP, Customs Brokers and importers should consult to identify the impact this valuation shift will have on their Customs bond obligation.