What Is a "Sale?" (US Customs' View of It, That Is...)

Here in NYC we are wrapping up the season of winter sales (which, as an aside, have been pretty fun to shop), but this has nothing to do with what a “sale” is when it comes to importation as this concept does not relate to discounted merchandise.

A “sale” in Federal Court language is the transfer (or “passage”) of title from one party to another for “consideration.”

In everyday language, it means where I obtain something belonging to someone else in exchange for something else.  For example, trading money (i.e., purchasing) for a cashmere sweater from Bloomingdale’s, which is likely to be discounted now given the winter sales season but alas, I digress…

Having a “sale” is relevant for valuation purposes of an imported product.  This is because duties are collected on the value of merchandise which is typically identified in a commercial invoice.  Where a part of the product is supplied by the importer and the value for this is not accounted for, it can lead to an incorrect declaration and hence, an inaccurate calculation on the collection of customs duties which must be paid to US Customs when goods are entered into the US.

A sale must therefore be identifiable.

While US Customs uses no single factor as evidence, acceptable proofs of such exchange include payment by check, bank transfer, or such other commercially acceptable means of payment.  The payment must also be made for the imported merchandise at issue.  Therefore, a general transfer of money from one corporate entity to another – which cannot be linked to a specific import transaction – would not likely demonstrate the passage of title.

Lastly, when deciding whether a sale happened or not, US Customs will look at whether the circumstances of the transaction indicate that the parties are functioning as buyer and seller.  While this is normally not difficult to identify when unrelated parties are doing business (even at the most basic level like what you would find on www.craigslist.org), when the parties are related such a clearly identifiable transaction isn’t always clear, which could lead to inaccurate value declarations as described above.

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ciao ciao!