Home / Past exams / October 2026 / Question 74
October 2026, question 74
Valuation, Appraisement and Duty Assessment · Valuation
A foreign manufacturer sells industrial equipment to an unrelated U.S. buyer. The sales contract states that the buyer must purchase both the equipment and installation-related technical assistance as part of the same transaction. The technical assistance will be performed entirely in the United States after importation. The contract and commercial invoice separately identify each charge. The terms of sale are cost, insurance and freight (CIF) Long Beach, and the invoice lists: • Equipment price: $10,000.00 • International ocean freight: $5,000.00 • Marine insurance: $2,500.00 • Technical assistance performed in the United States after importation: $10,000.00 Which amount should be reported as the transaction value of the imported merchandise?
- $10,000.00, because the separately stated international ocean freight, marine insurance, and post-importation technical assistance are not included.
- $17,500.00, because CIF charges must be included in transaction value, but post- importation technical assistance is excluded.
- $20,000.00, because the equipment cannot be purchased without the technical assistance.
- $27,500.00, because all amounts paid under a mandatory sales contract are included in transaction value.
Show the answer and walk-through
CBP's answer: A. A: $10,000.00, because the separately stated international ocean freight, marine insurance, and post-importation technical assistance are not included.
The price actually paid for the equipment is $10,000. International ocean freight and marine insurance are excluded from the price actually paid or payable (152.102(f)), and 152.103(i)(1)(i) excludes a separately identified reasonable charge for technical assistance with respect to the merchandise after importation. The contract and invoice identify each charge separately, so the transaction value is $10,000, and A is right. A mandatory purchase does not make the post-importation service dutiable.
The construction, erection, assembly, or maintenance of, or the technical assistance provided with respect to, the merchandise after its importation into the United States; or 19 CFR 152.103(i)(1)(i)
exclusive of any charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise 19 CFR 152.102(f)
Search for: technical assistance provided with respect to, the merchandise after its importation
CBP's key cites: 19 CFR 152.103(i)(2)
Question and key from CBP's October 2026 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).