The fallback methods in the customs valuation hierarchy come in two forms:
Transaction Value of Identical or Similar Merchandise (19 U.S.C. § 1401a(c)) — the second method, applied when transaction value is unavailable. CBP uses the previously accepted transaction value of:
- Identical merchandise — produced in the same country, by the same person, and the same in all respects (allowing minor differences in appearance)
- Similar merchandise — produced in the same country, like-characteristic and like-component goods that perform the same functions and are commercially interchangeable
The transaction must have been exported to the United States at or about the same time as the merchandise being appraised. Adjustments are made for differences in commercial level and quantity.
Derived Value (19 U.S.C. § 1401a(f)) — the final fallback when none of the prior methods can be applied. Customs value is determined using a method "reasonably adjusted" from the prior methods and consistent with the WTO Customs Valuation Agreement. Prohibited bases include:
- Selling price in the country of importation of merchandise produced in that country
- Higher of two alternative values
- Price of merchandise in the domestic market of the country of exportation
- Cost of production other than computed value
- Price for export to a country other than the U.S.
- Minimum customs values
- Arbitrary or fictitious values
In practice, derived value often resembles a flexible application of one of the earlier methods — for example, computed value using estimated rather than actual cost data, or deductive value using sales beyond the 90-day window.