## Facts

- La Perla Fashions, Inc. (La Perla), a New York corporation, acted as the U.S. wholesale distributor for its Italian parent, Gruppo La Perla S.p.A. (GLP).
- Before 1991, GLP sold garments directly to U.S. buyers through sales agents; after La Perla was activated in 1991, GLP continued some direct U.S. sales while La Perla imported and resold merchandise in the United States.
- The dispute involved three styles of women’s apparel imported in 1995: “Valmy” (top), “Kappa” (bodystocking), and “Arquette” (dress).
- The commercial chain was three-tiered: GLP supplied merchandise to La Perla; La Perla imported it; La Perla sold it to unrelated U.S. retailers.
- The terms of sale between GLP and La Perla were “ex-works, plus insurance.” La Perla’s sales to U.S. customers were delivered to the customer’s premises, duty-paid.
- For appraisement, La Perla declared transaction value based on the intercompany prices it paid GLP under 19 U.S.C. § 1401a(b)(1), claiming the GLP→La Perla transfers were bona fide sales for exportation to the United States.
- U.S. Customs rejected the GLP→La Perla prices, finding the related-party relationship affected the transfer prices and negated their use as transaction value.
- Customs instead appraised the imports using the prices paid by La Perla’s unrelated U.S. customers, deducting amounts for international freight, insurance, customs duties, and other allowable charges.
- La Perla protested; Customs denied the protests; La Perla sued in the U.S. Court of International Trade under 28 U.S.C. § 1581(a), seeking de novo review of the proper valuation method.

## Issues

1. Under 19 U.S.C. § 1401a(b)(1), did La Perla establish that the related-party GLP→La Perla transfers were bona fide sales for exportation to the United States so that the intercompany price could be used as transaction value?
2. If the GLP→La Perla transfer price could not be used, did Customs properly appraise the merchandise by using La Perla’s prices to unrelated U.S. customers (with statutory deductions)?
3. Did La Perla provide verified and dependable evidence supporting computed value or deductive value that required a different appraisement than Customs’ method?

## Decision

- The Court of International Trade entered judgment for the United States and sustained Customs’ appraisements.
- The court held that La Perla did not show a bona fide sale for exportation between GLP and La Perla for purposes of § 1401a(b)(1), and the related-party relationship affected the transfer prices.
- The court upheld Customs’ use of the prices La Perla charged its unrelated U.S. customers (less allowed deductions) as the appropriate basis for valuing the imported merchandise.
- The court rejected La Perla’s proposed computed-value and deductive-value calculations because the supporting information was not sufficiently verified or dependable to displace Customs’ appraisement.

## Legal Principles

- Transaction value under 19 U.S.C. § 1401a(b)(1) is the “price actually paid or payable” for merchandise “when sold for exportation to the United States.”
- When the claimed transaction value rests on a related-party transfer price, the importer must show the relationship did not affect the price and that the transaction is a bona fide sale for exportation within the meaning of the valuation statute.
- If there is no bona fide sale at the related-party tier (or the related-party pricing is shown to be affected by the relationship), Customs may appraise using a more reliable sale in the transaction chain, including sales to unrelated U.S. customers, with appropriate deductions for freight, insurance, duties, and other items allowed by law.
- Alternative valuation methods such as computed value and deductive value require documented, verifiable data; unsupported or non-verifiable calculations may be rejected.

## Conclusion

La Perla Fashions held that Customs properly rejected La Perla’s claimed transaction value based on GLP’s related-party transfer prices because La Perla failed to establish a bona fide sale for exportation to the United States at that tier and the relationship affected pricing. The Court of International Trade therefore sustained Customs’ appraisement using La Perla’s arm’s-length U.S. customer prices, reduced by allowable deductions, and declined to accept La Perla’s computed-value or deductive-value submissions due to inadequate verification.


La Perla Fashions, Inc. v. United States, 9 F. Supp. 2d 698 (1998)