HQ 544008: Decision of Application for Further Review of Protest No. 3801-6-001587

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 544008

                                  August 17, 1988

          CLA-2 CO:R:C:V   544008 DHS

          CATEGORY:   Valuation

          Area Director of Customs
          Detroit, Michigan

          RE:   Decision of Application for Further Review of
                Protest No. 3801-6-001587

          Dear Sir:

                The above-referenced protest and application for further
          review concerns whether a bona-fide buying agency exists and
          whether commissions paid to the foreign corporation are non-
          dutiable buying commissions.

          FACTS:

                The importer has submitted a buying agency agreement as
          well as documentation from the foreign corporation denying the
          request of the importer to present a copy of the invoice from the
          manufacturer or seller.  There has not been any evidence
          submitted which describes the relationships of the parties
          involved or the duties and responsibilities of each.

          ISSUE:

                Is the submission of a buying agency agreement without the
          existence of other evidence sufficient to find a buying agency
          relationship?

          LAW AND ANALYSIS:

                Transaction value is defined in section 402, Tariff Act of
          1930, as amended by the Trade Agreements Act of 1979 (TAA; 19
          U.S.C. 1401a), as the price actually paid or payable for the
          merchandise when sold for exportation to the United States, plus
          amounts for the items specifically enumerated in section
          402(b)(1) of the TAA.  Although selling commissions are one of
          the items listed therein, buying commissions are not included as
          an item to be added to the price actually paid or payable.  While
          buying commissions cannot be added to the price actually paid or
          payable, neither may they be deducted if the price actually paid
          or payable includes a buying commission.  The term "price
          actually paid or payable" is defined in section 402(b)(4)(A) as:














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                    ...the total payment (whether direct or indirect,
                    and exclusive of any costs, charges, or expenses
                    incurred for transportation, insurance, and
                    related services incident to the international
                    shipment of the merchandise from the country of
                    exportation to the place of importation in the
                    United States) made, or to be made, for imported
                    merchandise by the buyer to, or for the benefit
                    of, the seller.

                It is clear from the statutory language that in order to
          establish transaction value one must know the identity of the
          seller and the amount actually paid or payable to him.  Whether
          or not the purported agent is the seller is to be determined by
          the documents presented.  Furthermore, the totality of the
          evidence must demonstrate that the purported agent is in fact a
          bona fide buying agent and not a selling agent or an independent
          seller.  See TAA No. 7, dated September 29, 1980 (542141).

                The burden is placed upon the importer to prove the
          existence of a bona fide agency relationship and that the charges
          paid were, in fact, bona fide buying commissions.  B & W
          Wholesale Co. v. United States, 58 CCPA 92, C.A.D. 1010, 436 F.2d
          1399 (1971); New Trends, Inc. v. United States, 10 CIT_, 645 F.
          Supp. 957 (1986); J.C. Penney Purchasing Corporation et al v.
          United States, 80 Cust. Ct..84, C.D. 4741 (1978), 451 F. Supp.
          Ct. 1008, A.R.D. 251 (1969).  If plaintiff does not clearly
          establish that such a relationship existed, then the relationship
          is not that of an agency.  Globemaster Midwest, Inc. v. United
          States, 67 Cust. Ct. 539, R.D. 11758, 337 F. Supp. 465 (1971).
          The failure to produce documentary evidence of a transaction
          which is normally reduced to writing, and that would be
          indicative of agency status weakens the probative value.  A & A
          Trading Corp. v. United States, 65 Cust. Ct. 785, A.R.D. 276
          (1970).

                The importer relies upon the submission of the buying
          agency agreement to support his contention that an
          agent/principal relationship exists.  No further evidence has
          been offered to support this contention.

                It is well settled that a bona fide agency agreement is not
          dispositive of the determination that a bona fide buying agency
          exists.  New Trends, Inc. v. United States, supra.  The buying
          agency agreement is only evidence that the parties intended to
          create an agency relationship.  The agreement must be supported
          by sufficient evidence.  Rosenthal-Netter, Inc v. United States,















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          12 CIT ____, Slip.  Op. 88-9 (1988).  In Hub Floral Mfg. v.
          United States, 60 Cust. Ct 905, R.D. 11544 (1968), the court
          noted that "Acts may support, or they may cast doubt upon, the
          words which parties speak or reduce to writing." Accordingly, in
          the absence of evidence demonstrating that the party did, in
          fact, operate as a buying agent, we see no basis for providing
          relief.

          HOLDING:

                In view of the foregoing, we are unable to find that a
          buying agency exists.  The importer has the burden of proving the
          existence of a principal-agent relationship and he has failed to
          provide sufficient evidence to meet this burden.  Therefore, we
          hold the commissions in question to be dutiable.  Accordingly,
          you are directed to deny the protest in accordance with the terms
          of this decision.  A copy of this decision should be attached to
          the Customs From 19 to be sent to the protestant.



                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division