A Buying Commission is a commission paid by the buyer to an agent who represents the buyer's interests in arranging the purchase of imported merchandise. Buying commissions are not a statutory addition to transaction value and are non-dutiable, provided the relationship is genuinely one of buyer agency.
Typical buying agent activities include:
- Identifying suppliers and obtaining quotations
- Sample procurement and quality inspection
- Placing orders on behalf of the buyer
- Arranging export logistics, customs clearance, and shipping
- Quality control at the factory
The leading CBP guidance is Rosenthal-Netter, Inc. v. United States and CBP's Informed Compliance Publication on Buying and Selling Commissions. To qualify as a buying commission, the agent should:
- Act under the direction and control of the buyer
- Bear no risk of loss in the merchandise
- Receive a clearly identifiable commission rather than profit on the goods
- Not negotiate price against the buyer's interest (i.e., should be transparent on the factory's quoted price)
Recharacterization risk is real. CBP frequently determines that a purported "buying agent" is actually:
- A middleman who takes title and resells (commission is part of PAPP)
- A related party of the seller (commission may be a selling commission)
- A combined buying/selling agent whose loyalty cannot be cleanly assigned
A genuine buying agency agreement, signed before the relationship begins, supported by transparent billing of the factory price, and demonstrating the buyer's control, is the standard documentation package.