Dear Ms. Sugama This is in response to your October 9, 2025, request for a binding ruling, on PB” or “importer”) regarding the proper behalf of Kumho P&B Chemicals, Inc. (“K method of appraisement for prospective entries of bagged and bulk epoxy resins manufactured in South Korea. The importer has asked that certain information submitted in connection with this ruling be treated as confidential. Inasmuch as this request conforms to the 9 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The requirements of 1 information contained within brackets in this ruling or in the attachments to the ruling request, forwarded to our office, will not be released to the public and will be withheld from published version of this ruling. FACTS KPB is a non-resident importer and manufacturer that will be importing bulk and bagged epoxy resins into the United States. KPB produces five types of epoxy resins in liquid epoxy resins; (2) solid epoxy resins; (3) solution epoxy resins; South

H354073
May 26, 2026
OT:RR:CTF:VS H354073 RRB
CATEGORY: Valuation MacKensie R. Sugama Trade Pacific, PLLC 700 Pennsylvania Ave. SE, Suite 500 Washington, DC 20003 RE: Epoxy resins; Valuation under 19 U.S.C. § 1401a; Computed Value Dear Ms. Sugama: This is in response to your October 9, 2025, request for a binding ruling, on behalf of Kumho P&B Chemicals, Inc. (“KPB” or “importer”) regarding the proper method of appraisement for prospective entries of bagged and bulk epoxy resins manufactured in South Korea. The importer has asked that certain information submitted in connection with this ruling be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets in this ruling or in the attachments to the ruling request, forwarded to our office, will not be released to the public and will be withheld from published version of this ruling. FACTS: KPB is a non-resident importer and manufacturer that will be importing bulk and bagged epoxy resins into the United States. KPB produces five types of epoxy resins in South Korea: (1) liquid epoxy resins; (2) solid epoxy resins; (3) solution epoxy resins; (4) blend epoxy; and (5) specialty epoxy resins, which include modified epoxy resins and waterborne epoxies. KPB notes that the main raw material of epoxy resins is Bisphenol-A (“BPA”), which is manufactured by KPB at its facility in South Korea. BPA is produced from phenol and acetone, which are also manufactured internally by KPB. Further, phenol and acetone are produced from a semi-finished product identified as
2 cumene, which is also produced by KPB. Cumene is produced from two other raw materials, propylene and benzene, which are purchased by KPB from unaffiliated suppliers in South Korea, along with other main inputs. KPB notes that none of the inputs are sourced from the United States while a few minor inputs are purchased from an affiliated company. Following manufacture of the epoxy resins, KPB will ship the merchandise directly to the United States, where the merchandise will stay in a third-party warehouse operated by an unrelated party. KPB explains that most imports are sold to an unrelated U.S. customer within 90 days of entry, while a small portion is sold after 90 days. KPB explains that it generally exports only one grade (i.e., a single product code) per shipment and per customs entry. Only about once per year does it import two grades or multiple types of epoxy products included with a single shipment and entry. KPB exports two types of products: (1) bagged shipments with lot numbers that are indicated, and (2) bulk products with ISO tank numbers that are indicated. However, with both types of products, neither the lot numbers nor the ISO tank numbers are assigned at the time of production. Instead, they are assigned at the time of shipment from the South Korean warehouse. In addition, rather than producing epoxy resins to order, KPB continuously produces its primary epoxy resin products and ships them to the United States for warehouse storage. KPB explains that once production of the subject merchandise at its facilities in South Korea is completed, the liquid is continuously fed into large vat storage tanks where the product is subsequently blended. When a shipment of product is made, the product is filled into an ISO tank or tank lorry directly from the vat storage tank. Consequently, KPB avers that it is not possible to trace exactly when the shipped product was produced or under which lot number it was manufactured. At the same, KPB states that it keeps detailed records of costs on a product code-specific basis, which are finalized once per month at closing. It also maintains its inventory movement ledger report by material code. KPB explains that it uses a process costing system to calculate production costs for its epoxy resins. It also calculates actual costs on a product code basis and plant-specific basis every month in the ordinary course of business. Through its cost accounting system, KPB calculates its production costs on an accumulative basis. Under this method, the cost of each production process absorbs the cost of the output of the previous process as incurred by adding it to the production cost in the current process. Accordingly, the cost of the current process then passes through to the next process in the same manner. Within this accounting system, the value of KPB’s raw materials, semi-finished goods, and finished goods inventories are calculated using a moving weighted-average method. It also applies the lower of cost or market value principle for its inventory valuation.
3 KPB notes that its above-referenced accounting system is used to prepare its financial statement data and provides the cost of goods sold (“COGS”) and inventory value in accordance with K-IFRS, which is the Korean International Financial Reporting Standards.1 KPB collects the following types of production costs, which are assigned on a product-specific basis: (1) raw materials; and (2) conversion costs, which include labor and manufacturing overhead. In determining the production costs for raw material inputs, KPB calculates the total quantity and cost of inputs consumed (including packing expenses) in the production of the merchandise and the associated prior production at the factory at the end of each month. In calculating the production conversion costs, KPB records labor and overhead costs incurred at its factories using cost centers. Cost centers are designated either as direct cost centers for manufacturing and packing processes or as indirect cost centers for supporting processes. Direct cost centers include the recording of material, labor, packing, and direct overhead costs. Costs initially collected in each indirect cost center are then periodically allocated to direct cost centers. Subsequently, KPB allocates all direct and indirect costs to the manufactured products so that the cost of manufacturing (“COM”) statement includes all costs. Through its records system, KPB rolls over materials and processing costs at each production process into the next production process. Taking all of the above into consideration, KPB will begin its computed value methodology calculation by looking at the product code that is being shipped. In support of its proposed methodology for prospective shipments, KPB submitted a sample computed value methodology spreadsheet for a separate bulk shipment and bagged shipment from April 2025, with each spreadsheet setting forth all associated costs under computed value for a particular product code and material name. With respect to the sample bulk shipment calculation, for [***] kg of product shipped in April 2025, KPB looked to its production costs from March 2025 for that product and associated material code. Based on its March 2025 production costs, KPB determined that the cost of manufacturing per kg in U.S. dollars is $[***]. KPB then applied this amount per unit to the quantity shipped in April 2025 in order to derive the total production value for the associated product code in the amount of $[***].2 Taking the production costs from March 2025, KPB then added expenses related to profit; selling, general and administrative expenses (“SG&A”); and foreign inland transportation costs. For profit and SG&A amounts in the sample computed value methodology, KPB calculated ratios from its prior FY 2024 audited financial statements, which were included with this ruling request.3 For example, for SG&A, KPB calculated a ratio of 3.56% by dividing its total SG&A expenses set forth in its financial statements by its total sales amount. To determine the profit ratio, KPB divided its total profit before income taxes by its total sales amount to derive a profit ratio of 0.26%. KPB then 1 KPB states that K-IFRS is the generally accepted accounting principles for South Korea. 2 KPB derived its production costs in US Dollars by converting the production costs from Korean Won using the exchange rate on the date of shipment of the products from the March 2025 sample. 3 The costs listed in the ?nancial statements are in Korean Won.
4 applied these profit and SG&A ratios to the March 2025 production costs. Accordingly, it determined profits in the amount of $[***] and SG&A expenses in the amount of $[***] for the sample bulk shipment. These amounts were added to the total production value of $[***] for that shipment. As part of its proposed computed value methodology for bulk shipments, KPB will calculate amounts related to its foreign inland freight expenses incurred in South Korea. Because its bulk shipments are transported from the factory and stored in ISO tanks to the port, the only foreign inland freight costs incurred are those from the factory to the port of exportation. For its bagged shipments, however, KPB will include: (1) transportation from its factory to a warehouse; and (2) transportation from the warehouse to the port of exportation. KPB explains that for bagged shipment transportation costs from its factory to the warehouse, it is unable to determine the precise transportation cost related to the product code in its sample methodology because multiple shipments and products are often transported together. Thus, it proposes to use the per-metric ton (“MT”) transportation expense charged by the logistics provider to transport goods from the factory to the warehouse. KPB provided a translated invoice issued by the transportation logistics provider to substantiate the amount charged per MT. Using this per-MT expense, it plans to multiply this amount by the shipment quantity in kilograms, and then dividing it by 1,000 to reach a per-shipment transportation expense of in Korean won. KPB will then convert this expense into U.S. dollars using the exchange rate in effect at the time of shipment, which will be added to the computed value calculation as foreign inland freight costs from the factory to the warehouse.4 KPB also states that it is unable to determine the product-specific transportation costs from the warehouse to the port of exportation because the freight logistics provider charges for multiple shipments at one time. Using its sample computed value methodology for a bulk shipment in April 2025, it identified the per-container transportation expense of [***] Korean won and multiplied this amount by the number of containers in the subject shipment. In support, KPB provided a translated invoice issued by the transportation logistics provider to substantiate the amount charged per container. Here, KPB indicates that the shipment in the April 2025 sample computed value methodology consisted of [***] containers.5 KPB then converted this expense into U.S. dollars based on the exchange rate in effect at the time of shipment. Based on this conversion, the total transportation costs from the warehouse to the port of exportation were $[***], which were added to the computed value calculation as part of the foreign inland freight costs. 4 With respect to foreign inland freight expenses from the factory to the warehouse for bagged shipments, and based on KPB’s proposed computed value methodology, we reviewed the amounts set forth in the corresponding spreadsheet. 5 KPB notes that the transportation company charges a ?at freight cost depending on the size of the container and distance traveled.
5 KPB proposes to add up each of these costs as explained above to reach a total computed value appraisement for entry purposes. Accordingly, for prospective transactions, it will begin by determining per-unit product code costs based on the product code-specific costs from the prior completed month. To these costs, KPB will then add amounts for SG&A and profit based on ratios derived from the prior year’s audited FY financial statements. Then, it will add amounts for foreign inland freight on a per-unit expense, which will be calculated based on total expenses charged by its logistics company, divided by the quantity being shipped. All of the amounts added together will result in the computed value of the subject merchandise for appraisement. For purposes of the bulk shipment computed value methodology sample submitted with this request, the total production costs, SG&A, profit, and foreign inland freight amounts added together result in a computed value of $[***]. ISSUE: What is the proper method of appraisement for the subject epoxy products? LAW AND ANALYSIS: Transaction value of imported merchandise is the “price actually paid or payable for the merchandise when sold for exportation to the United States” plus amounts for five enumerated statutory additions. See 19 U.S.C. § 1401a(b). For the imported merchandise to be appraised using the transaction value method, it must be the subject of a bona fide sale between a buyer and seller, and the sale must be for exportation to the United States. When imported merchandise cannot be appraised based on transaction value, it is appraised in accordance with the remaining methods of valuation, applied in hierarchical order. See 19 U.S.C. § 1401a(a)(1). The alternative bases of appraisement, in order of precedence, are the transaction value of identical or similar merchandise (19 U.S.C. § 1401a(c)); deductive value (19 U.S.C. § 1401a(d)); computed value (19 U.S.C. § 1401a(e)); and the fallback method (19 U.S.C. § 1401a(f)). The subject merchandise will not be sold on entry and will be stored in a warehouse. Since there is no sale for the purposes of determining transaction value, transaction value may not be used to appraise the merchandise. The next method of appraisement is the transaction value of identical or similar merchandise. See 19 U.S.C. § 1401a(c). The transaction value of identical or similar merchandise refers to a previously accepted transaction value of identical or similar merchandise that was exported at or about the same time as the merchandise being valued. KPB states that for the very limited entries where an underlying sale occurred between KPB and its customer, KPB’s customer served as the importer of record for those entries. Where KPB served as the importer of record, it did not enter into any contracts for sale for exportation at the time of entry. KPB confirmed that for all of its entries in which KPB was the importer of record, it imported the merchandise for
6 storage at a third-party warehouse until post-entry sales occurred. Thus, there are no transaction values of identical or similar merchandise available to appraise the imported merchandise. If transaction value and transaction value of identical or similar merchandise cannot be determined, then the customs value will be based upon deductive value, unless the importer has elected computed value. The importer has elected the application of computed value before deductive value. Title 19 U.S.C. § 1401a(e) provides the following regarding computed value: (1) The computed value of imported merchandise is the sum of— (A) the cost or value of the materials and the fabrication and other processing of any kind employed in the production of the imported merchandise; (B) an amount for profit and general expenses equal to that usually reflected in sales of merchandise of the same class or kind as the imported merchandise that are made by the producers in the country of exportation for export to the United States; (C) any assist, if its value is not included under subparagraph (A) or (B); and (D) the packing costs. (2) For purposes of paragraph (1)— (A) the cost or value of materials under paragraph (1)(A) shall not include the amount of any internal tax imposed by the country of exportation that is directly applicable to the materials or their disposition if the tax is remitted or refunded upon the exportation of the merchandise in the production of which the materials were used; and (B) the amount for profit and general expenses under paragraph (1)(B) shall be based upon the producer’s profits and expenses, unless the producer’s profits and expenses are inconsistent with those usually reflected in sales of merchandise of the same class or kind as the imported merchandise that are made by producers in the country of exportation for export to the United States, in which case the amount under paragraph (1)(B) shall be based on the usual profit and general expenses of such producers in such sales, as determined from sufficient information. The amount for general expenses and profit is considered as a whole. Section 152.106(c) of the CBP Regulations (19 C.F.R. § 152.106(c)) provides: Profit and general expenses. The amount for profit and general expenses will be taken as a whole. If the producer’s profit figure is low and general expenses high, those figures taken together nevertheless may be consistent with those usually reflected in sales of imported merchandise of the same class or kind. The Statement of Administrative Action (“SAA”), adopted by Congress, provides that with respect to computed value:
7 The cost or value of the materials and the fabrication and other processing of any kind employed in the production of the imported merchandise will be determined on the basis of information supplied by, or on behalf of, the producer and will be based upon the commercial accounts of the producer, if such accounts are consistent with the generally accepted accounting principles applied in the country where the goods are produced. The “amount for profit and general expenses” will be determined on the basis of information supplied by, or on behalf of, the producer and will be based upon the commercial accounts of the producer, provided that such accounts are consistent with the generally accepted accounting principles applied in the country where the goods are produced and unless the figures provided are inconsistent with those usually reflected in sales, of merchandise of the same class or kind as the imported merchandise, that are made by producers in the country of exportation for export to the United States. As explained above, when calculating the computed value of the epoxy resins, KPB will include its production costs in two categories: (1) raw material inputs; and (2) conversion costs, which include labor and manufacturing overhead. KPB will obtain these costs through its cost accounting system, which is used to prepare its financial statement data and also provides the COGS and inventory values in accordance with K-IFRS. KPB will determine its production costs for a particular shipment and product code based on the production costs for the same product and product code from the prior month. It will then apply the product-code specific per-unit cost of manufacturing to the quantity being imported to the United States in a prospective shipment. This product specific cost amount generated from the data in KPB’s cost accounting system captures raw material, packing and processing costs. KPB will then add its profit and SG&A amounts to the total production value for the subject shipment. As explained above, these amounts will be determined based on ratios calculated from the previous year’s audited financial statements as applied to the total production value. KPB will also include foreign inland freight charges from the factory to the warehouse (for bagged shipments) and from the warehouse to the port of exportation (for bagged and bulk shipments) in the manner set forth above based on the amounts charged by its logistics provider. As all costs will be accounted for under the costs of materials and production, no assists will be involved or separately required as additions in the calculation of the computed value. Moreover, all packing costs will be included in the product specific cost amounts generated from KPB’s cost accounting system as recorded in direct cost centers. To demonstrate how it intends to appraise prospective shipments of epoxy resins using computed value, KPB provided documentation in support of a sample computed value calculation using data from an April 2025 shipment of bagged and bulk merchandise. While the production costs, SG&A and profit amounts and other amounts
8 associated with computed value will differ in any given prospective shipment, we are satisfied with the documentation provided to substantiate the sample computed value calculation for the sample shipments from April 2025. Therefore, based on the facts provided and computed value calculation steps illustrated in the sample calculation, it is likely that appraisement under computed value as set forth in your ruling request is proper. Title 19, C.F.R. § 141.88 states: When the Center director determines that information as to computed value is necessary in the appraisement of any class or kind of merchandise, he shall so notify the importer, and thereafter invoices of such merchandise shall contain a verified statement by the manufacturer or producer of computed value as defined in § 402(e) Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(e)). Therefore, KPB must be prepared to provide to CBP upon request the documentation supporting the computed value method of appraisement for each prospective transaction. HOLDING: Based on the facts submitted, the subject epoxy resins may be appraised under computed value pursuant to 19 U.S.C. § 1401a(e), provided the importer is prepared to present CBP with documentation to support appraisement under this valuation method. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by [CBP] field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
9 A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner Chief, Valuation and Special Programs Branch