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CBP announces First Sale Rule comment period extension
Feb '08
Today, the U.S. Customs and Border Protection (Customs) published in the Federal Register a 30-day extension, to April 23, 2008, of the public comment period regarding the proposal to eliminate the 'First Sale Rule', which is a popular, cost-saving import valuation methodology.

Customs first announced its controversial plan to revoke the First Sale Rule on January 28. Since then, a diverse coalition of industry associations and businesses has been forged for cooperation and collaboration to save the First Sale Rule.

“At a time when intense concern over the economy is generating pressure on all levels, from manufacturing to the consumer, I am hard-pressed to understand why the government would impose a tax where one didn't already exist,” said Peter J. Gabbe, Chief Operating Officer at Carole Hochman Design Group and Chairman of the Board of Directors for the American Apparel & Footwear Association (AAFA).

“The proposed repeal of the First Sale Rule has broad economic implications and unintended consequences. From auto and airplane manufacturers to hardworking American families, the harmful ramifications will potentially ripple through the entire economy.”

The current First Sale Rule allows a company to base the value of an imported finished-good, for purposes of determining the duty rate, on the cost of the product at the first sale in the supply chain, rather than the value at the point of importation.

This lawful, common method of valuation is utilized by businesses across the spectrum, and could potentially cost industries, and their customers, millions of dollars. This increased cost of doing business would likely be passed on to consumers with inflationary retail costs.

“While the 30-day extension allows additional time for interested parties to calculate the true cost of such a broad proposal,” continued Gabbe.

“It is already clear that the cost to consumers at the cash register would under-cut any potential economic stimulus plan coming out of Congress.”

American Apparel & Footwear Association

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