## Facts

- Generra Sportswear Co. imported 595 women’s 100% cotton knit blouses from a Hong Kong manufacturer, Bagutta Garment Ltd., at $6.00 per blouse.
- Bagutta agreed to obtain export quota needed to ship the goods to the United States, with quota costs stated at $0.95 per unit (later obtained at a higher market cost).
- Bagutta invoiced Generra $3,570 for the blouses, paid by letter of credit.
- Bagutta separately invoiced Generra’s Hong Kong buying agent, Generra Sportswear (HK) Ltd., $565.25 for quota charges; the agent paid Bagutta for quota charges covering this and other shipments.
- Entry documents included the export license referencing quota transfer and both invoices.
- Customs appraised the merchandise by adding the quota charges to the invoice price, yielding a transaction value of $6.95 per unit.
- Generra protested, arguing quota charges were not part of dutiable transaction value; Customs denied the protest.
- The Court of International Trade ruled for Generra and ordered a refund; the United States appealed.

## Issues

1. Whether export quota charges paid to, or for the benefit of, the seller must be included in “transaction value” as part of the “price actually paid or payable” under 19 U.S.C. § 1401a(b)(1) and (b)(4)(A).
2. Whether Customs may treat payments made to or for the benefit of the seller in connection with the sale for export as presumptively included in transaction value unless the importer proves otherwise.
3. Whether pre-1979 valuation precedent interpreting “export value” properly controls interpretation of the current transaction-value statute.

## Decision

- The Federal Circuit reversed the Court of International Trade.
- The court held the quota charges were part of the “price actually paid or payable” because they were payments made to, or for the benefit of, the seller in connection with the sale for exportation.
- The court upheld Customs’ approach of including all direct or indirect payments to or for the seller in transaction value unless the importer demonstrates that a particular payment falls outside the statutory definition.
- The court rejected the lower court’s reliance on precedent from the former “export value” valuation regime and its multi-factor inquiry emphasizing separate invoicing and seller “benefit.”

## Legal Principles

- Transaction value under 19 U.S.C. § 1401a(b)(1) is based on the “price actually paid or payable” for merchandise sold for exportation to the United States.
- “Price actually paid or payable” includes the total payment, direct or indirect, made by the buyer to, or for the benefit of, the seller for the imported merchandise. 19 U.S.C. § 1401a(b)(4)(A).
- Payments connected to the sale for exportation that are made to or for the seller are generally included in dutiable value, even if separately invoiced or routed through an agent.
- Under the transaction-value system, valuation should focus on total payments to or for the seller rather than requiring granular, item-by-item economic characterization derived from prior statutory regimes.

## Conclusion

The Federal Circuit held that quota charges paid to or for the benefit of the seller to complete exportation of the goods are included in dutiable transaction value as part of the “price actually paid or payable,” and it reinstated Customs’ appraisement that added those charges to the invoice price.


Generra Sportswear Co. v. United States, 905 F.2d 377 (Fed. Cir. 1990)