## Facts

- Monarch Luggage Co., Inc. imported luggage from Taiwan in 1981, 1984, and 1985.
- Customs appraised the entries using the full invoice F.O.B. values shown on invoices and entry documentation.
- Monarch asserted that part of the invoiced amounts were “buying commissions” paid to a Taiwanese company, Prosperous, which Monarch described as its buying agent.
- Evidence showed that before 1981 Monarch and Prosperous combined the purported commissions and the goods’ price in a single price; after 1981 they began listing them separately.
- Monarch offered testimony that Prosperous did not take title to the goods, did not bear risk of loss, and acted on Monarch’s instructions in locating manufacturers, placing orders, and arranging shipment.
- Customs maintained that the invoiced F.O.B. values reflected the total amount Monarch agreed to pay for the imported merchandise and that the Prosperous charges were part of that dutiable total.

## Issues

1. Whether Monarch proved Prosperous was a bona fide buying agent so that the payments to Prosperous were non-dutiable buying commissions excluded from transaction value.
2. Whether the Prosperous charges were instead part of the “price actually paid or payable” for the imported luggage and properly included in Customs’ appraisement.

## Decision

- The Court of International Trade upheld Customs’ appraisement as presumptively correct.
- The court held Monarch did not carry its burden to prove the disputed payments were bona fide buying commissions.
- The court sustained appraisement based on the full invoice F.O.B. values, including the Prosperous charges, treating those amounts as dutiable.

## Legal Principles

- Customs’ appraisement is presumed correct; the importer bears the burden to prove claimed buying commissions are bona fide and non-dutiable.
- Under transaction value, the “price actually paid or payable” generally includes total payments made for the merchandise, including amounts paid to intermediaries when the substance of the arrangement shows those amounts are part of the purchase price or for the benefit of the seller.
- Whether a payment is a non-dutiable buying commission turns on the actual relationship and conduct (agency/control, authority over terms, invoicing and payment structure, and commercial reality), not labels used by the parties.
- A history of combined pricing and later separation of invoice line items may support a finding that the intermediary’s compensation is embedded in the goods’ price rather than a distinct agency fee.

## Conclusion

The court sustained Customs’ valuation because Monarch’s evidence did not establish that Prosperous’s charges were paid solely for buying-agency services; the charges were treated as part of the dutiable transaction value reflected in the full F.O.B. invoice prices.


Monarch Luggage Co. v. United States, 715 F. Supp. 1115 (Ct. Int'l Trade 1989)