HQ 544256: Ruling Request Regarding Depreciation of Assists

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 544256

                                  November 15, 1988

          CLA-2 CO:R:C:V   544256 EK

          CATEGORY:  Valuation

          Mark R. Kopp
          Sr. Customs/Freight Admin.
          233 Broadway
          New York, New York  10279-0099

          RE:  Ruling Request Regarding Depreciation of Assists

          Dear Sir:

                This is in response to your letter of October 19, 1988,
          requesting a ruling as to the proper valuation of certain assists
          which your company (importer) is providing to the seller of
          imported merchandise.


          FACTS:

                The importer is considering importing leather shoe uppers
          from the People's Republic of China.  The imported uppers will be
          lasted and soled by one of six domestic companies.  The importer
          will be providing to the Chinese factory, free of charge,
          manufacturing machinery.  The machinery is 12-15 years old and
          has been fully depreciated by the importer in accordance with
          generally accepted accounting principles.


          ISSUE:

                What is the proper valuation of the machinery sent abroad,
          free of charge, to the seller?


          LAW AND ANALYSIS:

                As you correctly indicate, the machinery is con-
          sidered an assist pursuant to section 402(h) of the Tariff
          Act of 1930, as amended by the Trade Agreements Act of 1979
          (TAA; 19 U.S.C. 1401a(h)).  Regarding the value of the
          assist, section 152.103(d)(1) and (2), Customs Regulations
          (19 CFR 152.103(d)(1) and (2)), states that, depending upon
















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          the type of assist, the value is either the cost of its
          acquisition or the cost of its production.  In either case, the
          value of the assist includes transportation costs to the place of
          production.

                It is possible to depreciate an assist to a zero value.  In
          Headquarters Ruling No. 543233 dated August 9, 1984, the books
          and records of the importer reflected a zero value for a mold in
          accordance with generally accepted accounting principles.  In
          that case, we held that the value of the assist was limited to
          the costs and expenses incurred in transporting the assist to the
          place of production.

                In this case, if in accordance with generally accepted
          accounting principles, the value of the assist has been fully
          depreciated according to the importer's records, then the value
          of the assist will be equal to the cost of transporting the
          assist to the place of production.


                                  Sincerely,




                                  John Durant, Director,
                                  Commercial Rulings Division