Internal Advice concerning royalty payments for veterinary products; royalty or license fees; proceeds of subsequent resale

HQ W545896 June 23, 1999 RR:IT:VA W545896 KCC CATEGORY: Valuation Port Director U.S. Customs Service 2701 Rockcreek Parkway, Suite 202 North Kansas City, Missouri 64116 Attn: Ms. Linda Erickson, Senior Import Specialist RE: Internal Advice concerning royalty payments for veterinary products; royalty or license fees; proceeds of subsequent resale Dear Director: This is in response to an internal advice request, received by this office on February 1, 1995, made by counsel on behalf of Miles Inc., concerning the appraisement of two chemical products used in the manufacture of veterinary products. The chemical products in question were previously ruled upon with respect to their appraisement by Customs in Headquarters Ruling Letter ("HRL") 543114 dated May 3, 1984, and HRL 543497 June 25, 1985. In view of recent decisions concerning royalties, your office encouraged Bayer to seek internal advice to determine whether the previous Customs rulings are still applicable. Effective April 1, 1995, the requester changed its name from Miles Inc. to the Bayer Corporation. A meeting was held at our office with counsel and representatives from Bayer to discuss this matter. Counsel has made two subsequent submissions. All the information submitted by Counsel at the meeting and in subsequent submissions was taken into consideration in reaching this decision. We regret the delay in replying. As requested by Counsel, the proprietary information furnished in connection with this Internal Advice request will be treated as confidential pursuant to §177.2(b)(7), Customs Regulations (19 CFR §177.2(b)(7)), and 5 U.S.C. §552. Documents containing such information will not be released to the public. FACTS: This decision concerns royalty payments based on the sale of two veterinary products, Droncit® and Tiguvon®, in the United States. Bayer buys and imports the active ingredient, praziquantel and methylthiophenyl compound, to produce these products from its German based parent corporation, Bayer AG ("AG"). Praziqµantel-Droncit®- Droncit® is a trademark owned by AG for an anthelmintic drug used in veterinary medicine. In 1976, AG and E. Merck ("Merck") entered into an agreement ("the Merck Agreement") whereby the two companies would combine their research, testing and production capabilities to produce final products with application to veterinary medicine, animal hygiene and animal feed supplies. §6.01 of the Merck Agreement grants AG the exclusive right to sell these products in its name and under its trademark. One of the products that Merck and AG developed is called praziquantel, which is the active ingredient of Droncit®. §7 of the Merck Agreement provides that AG pay a license fee to Merck based on net proceeds as defined in the Merck Agreement. If Merck manufactures the praziquantel, the license fee is in the amount of a fixed percentage. If AG or its distribution organizations manufacturer the praziquantel, then AG must pay a slightly greater a license fee based on the net proceeds as defined in the Merck Agreement. Additionally, if AG grants a sub-license pursuant to §6.01 of the Merck Agreement, then AG must pay Merck the same license fee which AG would have to pay to Merck, if AG performed the business on its own according to the sub-license. See, §1.03 of the Merck Agreement. In its July 16, 1997, submission, Counsel specifically states that praziquantel and the process for its preparation are patented. In addition, praziquantel may also be used in the preparation of other drugs. The importer also claims that Droncit® is not patented. In January 1981, AG and Bayer entered into an agreement regarding the manufacture and sale of Droncit® in the United States ("Droncit Agreement"). In §2.01 of the Droncit Agreement, AG agreed to supply Bayer with praziquantel in accordance with the provisions of a separate supply agreement between Bayer and AG. The praziquantel is produced by Merck. In a letter dated March 20, 1996, Counsel states that such a supply agreement cannot be found, and apparently has never existed. In its June 25, 1996 submission, Counsel states that it believes there is no formal contract that directly or indirectly requires Bayer to purchase the subject praziquantel only from AG, and that Bayer is contractually free to purchase the chemical from any source. In practice, however, Bayer has purchased the praziquantel only from AG through recurring purchase orders. Samples of the purchase orders were provided to this office. Under §2.02 of the Droncit Agreement, AG also granted Bayer a royalty bearing non­ exclusive license to make and/or have made the licensed composition, Droncit®, using the compound, praziquantel, and AG's know-how, and to use and sell Droncit® in the designated territory under AG's trademark. AG will also furnish Bayer, its know-how including future know-how. See, §5.03 of the Droncit Agreement. For these rights, Bayer agreed to pay AG a fixed percentage royalty based on the net sales of Droncit® in the designated territory. See, §3.01 of the Droncit Agreement. Information on how to produce Droncit® is provided on confidential Product Formula Sheet. The manufacturing procedures set forth the ingredients by percentages and directions for further processing. This information is highly confidential and represents valuable know-how including manufacturing know-how, formulation know-how, and FDA registration know-how. Counsel states that if the manufacturers were to deviate even slightly from the specific percentages and other requirements of the sheet, the final product would not be covered by the FDA registration, and could not be legally sold in the United States. Counsel notes that because Droncit® is not patented, another party may reproduce it by any legal means, but any reproduced version of the drug, may not use AG's trademark without a license. In HRL 543497, Customs determined that under the Droncit Agreement the sale of the praziquantel did not trigger the payment of the royalty fee because it was not due until after the importer sold the finished product in the United States under the name Droncit®. The ruling also pointed out that the Droncit Agreement permitted the importer to obtain praziquantel from other sources, or to manufacture the chemical, but even if the praziquantel came from a source other than AG, a royalty would still be paid to AG based on the importer's United States sales of finished product. Consequently, Customs concluded that the royalties paid to AG were not a condition of the sale of the imported merchandise and did not come within the terms of §402(b)(1)(D) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 ''TAA", 19 U.S.C. §1401a). Methylthiophenyl-Tiguyon®- Tiguvon® is the registered trademark for an insecticidal veterinary medicine also owned by AG. Neither this insecticidal medicine nor any of its ingredients are patented. Tiguvon® may be replicated by other parties so long as AG's proprietary formulation and manufacturing process are not utilized, and the trademark Tiguvon® is not used. On January 1, 1982, AG and Bayer entered into an agreement for the production and sale of certain drugs in the veterinary health care which AG had developed ("the Tiguvon Agreement"). Pursuant to §2.01 of the Tiguvon Agreement, AG granted to Bayer a royalty bearing non-exclusive license to use AG's know-how to make, have made, use, and sell certain licensed compositions, including Tiguvon®, in the territory. In §2.02 of the Tiguvon Agreement, AG also granted to Bayer a license to use its trademarks for Tiguvon®. §5 of the Tiguvon Agreement provided that AG would furnish know-how to Bayer, which included future medical know-how and future technical know-how as it became available to AG. In return for these rights, Bayer agreed to pay AG a fixed percentage royalty on net sales of Tiguvon® as defined in the Tiguvon Agreement. Bayer purchases and imports a methylthiophenyl compound from AG. As previously noted, the compound is not patented. The methylthiophenyl compound which forms the basis for Tiguvon® is subject to further processing in the United States. Information on how to produce Tiguvon® is provided on a confidential Product Formula Sheet which specifies a proprietary formulation and a set of directions without which the trademarked product cannot be produced. These formulations represent valuable know-how, which has been transferred from AG to Bayer and enables Bayer to make, use and sell Tiguvon® in the territory. In HRL 543114, Customs held that the royalties for Tiguvon® were not included in the price actually paid or payable for the merchandise when sold for export to the United States. Additionally, Customs concluded that the royalties were added to the price actually paid or payable as royalties pursuant to §402(b)(l)(D) of the TAA. Customs found that the royalties were not a condition of sale of the imported merchandise for export to the United States. Customs determined that the royalties were made for products marketed in the United States under various trademarks and patents, using the imported products as active ingredients. ISSUE: I. Whether the royalty payments paid by Bayer to AG are included in the transaction value of the imported merchandise as royalties pursuant to §402(b)(l)(D) of the TAA. II. Whether the royalty payments paid by Bayer to AG are included in the transaction value of the imported merchandise as proceeds of a any subsequent resale, disposal or use pursuant to §402(b)(1)(E) of the TAA. LAW AND ANALYSIS: Merchandise imported into the United States is appraised in accordance with §402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. §1401a). The preferred method of appraisement is transaction value, which is defined as the ''price actually paid or payable for merchandise when sold for exportation to the United States," plus certain enumerated additions. §402(b)(1) of the TAA provides for five additions to the price actually paid or payable. Two of the statutory additions to this price are found in paragraphs (b)(1)(D) and (E) which provide for the addition of: (D) any royalty or license fee related to the imported merchandise that the buyer is required to pay, directly or indirectly, as a condition of the sale of the imported merchandise for exportation to the United States; and (E) the proceeds of any subsequent resale, disposal or use of the imported merchandise that accrue, directly or indirectly, to the seller. Imported merchandise is appraised under transaction value only if the buyer and seller are not related, or if related, the transaction value is deemed to be acceptable. In this instance, the buyer (i.e., Bayer) and seller (i.e., AG) of the merchandise are related parties pursuant to §402(g)(l) of the TAA. §402(b)(2)(B) of the TAA provides that transaction value between related parties is acceptable only if an examination of the circumstances of sale indicates that the relationship between the parties did not influence the price actually paid or payable, or the transaction value of the imported merchandise closely approximates the transaction value of identical or similar merchandise in sales to unrelated buyers in the U.S. or the deductive or computed value for identical or similar merchandise. This ruling does not address the acceptability of transaction value. We assume for purposes of this ruling that transaction value is the proper method of appraisement. The "price actually paid or payable" is defined in §402(b)(4)(A) of the TAA as the "total payment (whether direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise...) made, or to be made, for the imported merchandise by the buyer to, or for the benefit of, the seller." There is a rebuttable presumption that all payments made by a buyer to a seller, or a party related to the seller, are part of the price actually paid or payable for the imported merchandise. See, HRL 545663 dated July 14, 1995. This position is based on the meaning of the term "price actually paid or payable" as addressed in Generra Sportswear Co. v. United States, 8 CAFC 132, 905 F. 2d 377 (1990). In Generra, the issue before the court was whether quota charges paid to the seller on behalf of the buyer were part of the price actually paid or payable for the imported goods. In reversing the decision of the lower court, the appeals court held that the term "total payment" is all-inclusive and that as long as the quota payment was made to the seller in exchange for merchandise sold for export to the United States, the payment properly may be included in transaction value, even if the payment represents something other than the per se value of the goods." The court also explained that Congress did not intend for Customs to engage in extensive fact-finding to determine whether separate charges, all resulting in payments to the seller in connection with the purchase of imported merchandise, are for the merchandise or for something else. In the present case, the subject payments are paid by the buyer to the licensor, who is also the seller of the imported merchandise. Thus, there is a rebuttable presumption that these payments are part of the price actually paid or payable. This presumption can be rebutted by evidence that clearly established that the royalty payments are completely unrelated to the imported merchandise. Although an analysis of the royalty payments could proceed as to whether they constitute part of the price actually paid or payable, it is our belief that facts better lend themselves to a royalties analysis. Based on the detailed licensed agreements and presented facts concerning the royalty payments, our analysis will proceed as to whether the royalty payments are properly added to the price actually paid or payable as royalties or license fees pursuant to §402(b)(1)(D) of the TAA. Royalties: With regard to royalties and license fees, the Statement of Administrative Action ("SAA"), adopted by Congress with the passage of the TAA, provides: Additions for royalties and license fees will be limited to those that the buyer is required to pay directly or indirectly, as a condition of sale of the imported merchandise for exportation to the United States. In this regard, royalties and license fees for patents covering processes to manufacture the imported merchandise will generally be dutiable, where as royalties and license fees paid to third parties for use, in the United States, of copyrights and trademarks related to the imported merchandise, will generally be considered as selling expenses of the buyer and therefore will not be dutiable. However, the dutiable status of royalties and license fees paid by the buyer must be determined on a case-by-case basis and will ultimately depend on: (i) whether the buyer was required to pay them as a condition of sale of the imported merchandise for exportation to the United States; and (ii) to whom and under what circumstances they were paid. For example, if the buyer pays a third Party for the right to use, in the United States, a trademark or copyright relating to the imported merchandise, and such payment was not a condition of the sale of the merchandise for exportation to the United States, such payment will not be added to the price actually paid or payable. However, if such payment was made by the buyer as a condition of sale of the merchandise for exportation to the United States, an addition will be made. As a further example, an addition will be made for any royalty or license fee paid by the buyer to the seller, unless the buyer can establish that such payment is distinct from the price actually paid or payable for the imported merchandise, and was not a condition of the sale of the imported merchandise for export to the United States. SAA; H.R. Doc. No. 153, Pt II, 96 Cong., 1st Sess., (1979), reprinted in, Department of the Treasury, Customs Valuation under the Trade Agreements Act of 1979 (October 1981) at 48-49. The question of whether royalty payments are added to the price actually paid or payable in determining transaction value was analyzed in a General Notice, Dutiability of Royalty Payments, 27 Cust. Bull. 12 (February 10, 1993) (herein referred to as the "General Notice"). In the General Notice, Customs indicated that several questions must be answered in order to determine whether a royalty payment is related to imported merchandise and thus required as a condition of sale. As set forth in the notice, the questions are: (1) was the imported merchandise manufactured under the patent? (2) was the royalty involved in the production or sale of the imported merchandise? (3) could the importer buy the product without paying the fee? Affirmative responses to factors one and two and a negative response to factor three would indicate that the payments were a condition of sale and, therefore, added to the price actually paid or payable as royalty payments. The General Notice includes a review of HRL 544436 (C.S.D. 91-6) dated February 4, 1991, commonly known as the "Hasbro ruling." This analysis set forth in the General Notice is applicable to entries of imported merchandise on or after May 11, 1993. Prior to Customs' issuance of the General Notice, a major factor for determining that royalties were not included in the price actually paid or payable under the "royalties" provision, was that the royalty payments were calculated on the basis of sales that occurred subsequent to the importation of the merchandise. See, HRL 544129 dated August 31, 1988; HRL 544061 dated May 27, 1988; and HRL 542844 dated June 17, 1982. However, Customs has since concluded that the method of calculating the royalty--e.g. on the resale price of the goods--is not relevant to determining whether the royalty payment is included within transaction value. General Notice, at p.12. Instead, Customs must now look to the answers to the above three questions for assistance in determining whether the royalty fees are related to the merchandise and were a condition of sale. Although the SAA provides that determinations about the addition of royalty payments to the price actually paid or payable are to be made case-by-case, it is more likely that the royalty will be included in transaction value when the licensor and seller are related and the royalty is paid directly to the seller. Under these circumstances, payment of the royalty is more likely to be a condition of the sale for exportation of the imported merchandise than when the royalty is paid to an unrelated third party. See, HRL 545361, July 20, 1995, which held that trademark royalties are included in transaction value when paid to the seller/licensor but not when paid to a third party unrelated to the seller. In this case, the party to whom the royalties are paid is both the seller and the licensor. According to the SAA, any royalty or license fee paid to the seller is part of transaction value unless the importer can establish that it is distinct from the price actually paid or payable for the imported merchandise and that such payment was not a condition of the sale of the imported merchandise for exportation to the United States. In other words, there is a presumption that royalties paid to the seller are included in transaction value unless the importer can show otherwise. See also, HRL 544991 dated September 13, 1995. Praziquantel-Droncit®- With respect of the first question, Counsel states that praziquantel and the process for its preparation are patented. Although the imported merchandise was manufactured under patent, the Droncit Agreement at issues does not cover the patented imported product. The Droncit Agreement provides for the technical information necessary to made and/or have made Droncit® using praziquantel and AG's know-how and to use and sell Droncit® in the designated territory under AG's trademark. The patented imported praziquantel is, therefore, not covered by the Droncit Agreement. Next, we need to determine whether the royalty payments are involved in the production or sale for exportation of the imported product, praziquantel. With regard to this issue, we find HRL 544991 dated September 13, 1995, controlling. In HRL 54499, royalty payments were paid in consideration of licensed technology and technical assistance provided by the parent, seller/licensor, to the importer/buyer. The imported merchandise (parts) from the licensor/seller was used to manufacture a finished product (machines) and the royalties were based on the selling price of the finished product. In that case, an agreement between the seller/licensor and the importer/buyer effectively linked the payment of the royalties to the purchase of the imported parts. Consequently, it was determined that as the importer/buyer could not buy the imported merchandise without paying the fee, the royalties were a condition of sale and, therefore, a proper addition to the price actually paid or payable of the imported merchandise under §402(b)(1)(D) of the TAA. See, HRL 545998 dated November 13, 1996, which held that the royalties were added to the price actually paid or payable of the imported product pursuant to §402(b)(1)(D) of the TAA. In this case, not only was the imported product manufactured under patent and the royalties were paid in part for such patent rights, the Supply Agreement was conditioned upon the continued existence of the license agreement. Thus, the royalties were related to the imported merchandise and the buyer was required to pay them as a condition of the sale of the imported merchandise for exportation to the United States. See also, HRL 546159 dated July 18, 1997, which held that royalty payments or fees paid by importer to supplier are included within the transaction value of the imported merchandise as royalties in accordance with §402(b)(1)(D). In §2.02 of the Droncit Agreement, AG grants Bayer a license to make and/or have made Droncit® using praziquantel and AG's know-how to use and sell Droncit® in the territory under AG's trademark. In consideration for these rights, Bayer agrees to pay AG a royalty based on the net sales of Droncit® in the designated territory. See, §3.01 of the Droncit Agreement. The rights granted Bayer under the Droncit Agreement are for the manufacture, use and sale of Droncit®, not the imported praziquantel. However, §2.01 of the Droncit Agreement states that AG agrees to supply Bayer with the praziquantel under the provisions and conditions which are subject to a separate supply agreement. Thus, Bayer has the right to make Droncit® using praziquantel which according to §2.01 will be supplied by AG. According to Bayer, a separate supply agreement does not exist. However, Bayer has only received praziquantel from AG. The parties' actions, praziquantel supplied only from AG to Bayer, show their intent to comply with §2.01 of the Droncit Agreement. Bayer says that it was not under any obligation to purchase praziquantel from AG, but it did purchase all of its praziquantel supply from AG. Thus, Bayer's actions show its intent to carry through with the contractual terms of the Droncit Agreement. As noted above, no evidence was provided to show that the contract terms are no longer in effect. See, §1, Price Actually Paid or Payable, Praziquantel-Droncit®. Thus, it is our position that the royalty payments do pertain to the production or sale for exportation of the imported praziquantel. With regard to the third question, i.e., could the importer buy the materials without paying the royalty, Customs acknowledged that the answer goes to the heart of whether a payment is considered a condition of sale. Counsel submits that Bayer's obligation to pay the royalty is not relieved by Bayer's purchase of materials from sources other than AG. Bayer must pay the royalty based on the net sales price of Droncit® regardless of where praziquantel is sourced. However, as discussed above, pursuant to §2.01 of the Droncit Agreement and Bayer's praziquantel purchase orders, Bayer purchases all of its praziquantel supplies from AG. Thus, there is a contractual obligation for AG to supply Bayer with the active ingredient in Droncit®, praziquantel. Based on the evidence presented, the parties have been honoring §2.01 of the Droncit Agreement. Thus, it is our position that Bayer could not purchase the imported product without paying the royalty fee. Based on the above considerations, we find that the royalty payments are considered an addition to the price actually paid or payable as royalties pursuant to §402(b)(1)(D) of the TAA. The royalty payments, made in connection with Bayer's manufacture of Droncit® in the U.S., is related to the imported merchandise, praziquantel. Methylthiophenyl-Tiguvon®- With respect to the Tiguvon®, we consider the questions posed by Hasbro II and find that the answer to the first question is ''no." The imported merchandise, i.e., methylthiophenyl, used for the manufacture of Tiguvon® is not manufactured under patent. Thus, the negative response to this question suggests that this payment is not included in transaction value as a royalty. The answer to the second question is ''no." The subject payment is not involved in the production or sale of the imported product. The sale of the imported product does not involve the payment of the royalty, and Bayer is not required to purchase the imported products as part of the obligation to pay the royalty. Instead, the payment is paid for the right to use the trademark and for proprietary formula and precise directions for manufacturing the final product, Tiguvon®. The payment only becomes due if Bayer employs AG's manufacturing process and/or uses the licensed trademark. Therefore, the negative response to this question suggests that the subject payments are not included in transaction value as royalties under §402(b)(1)(D) of the TAA. The answer to the third question is "yes." Bayer can purchase the imported product without paying the royalty fee. According to Counsel, Bayer is contractually free to purchase the imported product from any source it wishes. There is no evidence that a supply agreement exists which obligates Bayer to purchase the imported product from AG. The subject payment is only triggered by sales of the finished product, and not by sales of the imported product. Therefore, the affirmative response to this question suggests that the subject payments are not included in transaction value as royalties under §402(b)(l)(D) of the TAA. Consequently, we find that the subject royalty payments for Tiguvon® are not a condition of sale of the imported merchandise, methylthiophenyl, and do not constitute an addition to the price actually paid or payable for the merchandise pursuant to §402(b)(1)(D) of the TAA. II Proceeds of a Subsequent resale, disposal or use: The next issue is whether the royalties constitute proceeds of a subsequent resale, disposal, or use of the imported merchandise under §402(b)(l)(E) of the TAA. The SAA addresses the addition of proceeds of subsequent resale to the price actually paid or payable as follows: Additions for the value of any part of the proceeds of any subsequent resale, disposal or use of the imported merchandise that accrue directly or indirectly to the seller, do not extend to the flow of dividends or other payments from the buyer to the seller that do not directly relate to the imported merchandise. Whether an addition will be made, must be determined on a case-by-case basis depending on the facts of each individual transaction. H.R. Doc No. 153, supra, at 49. The instant case involves the type of situation described by Congress where "certain elements called 'royalties' may fall within the scope of the language under either new section 402(b)(l)(D) or 402 (b)(2)(E) or both." See, The General Notice. The SAA states that the payments must only accrue directly or indirectly to the seller. See also, Generra Sportswear Co. v. United States, 8 CAFC 132, 905 F.2d 377 (1990). There is no dispute that the royalty fees become due upon Bayer's sale of the finished Droncit® and Tiguvon®. The amount of the royalty payments is based on the net sales as defined in both the Droncit and Tiguvon Agreements. However, the royalty fees do not arise from the resale of the imported products, praziquantel and methylthiophenyl, because, as described above, the imported products are not resold, they are manufactured into Droncit® and Tiguvon®. This manufacturing operation is not a simple assembly or finishing operation. In the case of the Droncit®, the praziquantel is mixed with three other substances under specific pressure, heat and consistency requirements. In the case of the Tiguvon®, methylthiophenyl is mixed with one other ingredient and agitated. Counsel contends that if Bayer were to deviate even slightly from the specific percentage and requirements of the Product Formula Sheets, the final products would not be covered by FDA registration and it would not be legally possible to sell the products in the United States. Since the royalty fees are partially based on the imported product and partially on other factors, the royalty fees in this situation are not statutory additions to the price actually paid or payable as proceeds of a subsequent resale, disposal or use of the imported merchandise pursuant to §402(b)(1)(E) of the TAA. HOLDING: Based on the evidence presented, the royalty fees paid by Bayer to AG pursuant to the Droncit Agreement are included in the transaction value of praziquantel as royalties pursuant to §402(b)(1)(D) of the TAA. The royalty fees made by Bayer pursuant to the Droncit Agreement are not included in the transaction value of praziquantel as proceeds of subsequent resale, disposal or use pursuant to §402(b)(1)(D)(E)of the TAA. Based on the evidence presented, the royalty fees paid by Bayer pursuant to the Tiguvon Agreement are not included in the transaction value of methylthiophenyl as royalties pursuant to §402(b)(1)(D) of the TAA. The royalty fees made by Bayer pursuant to the Tiguvon Agreement are not included in the transaction value of methylthiophenyl as proceeds of subsequent resale, disposal or use pursuant to §402(b)(1)(D)(E) of the TAA. This ruling sets forth Customs position concerning the Droncit® and Tiguvon® royalty payments based on Customs analysis of royalties as established in the General Notice entitled Dutiability of Royalty Payments, 27 Cust. Bull. 12 (February 10, 1993). HRL 543497 dated June 25, 1985, and HRL 543114 dated May 3, 1984, are still valid for Customs position concerning the Droncit® and Tiguvon® royalty payments based on Customs analysis before the effective date, May 11, 1993, of the Dutiability of Royalty Payments General Notice. Because this decision is based on additional information and evidence regarding the nature of the royalty payments and the various license and supply agreements which was not previously available for Customs' consideration, modification or revocation of HRL 543114 and HRL 543497 pursuant to §625, Tariff Act of 1930 ( 19 U.S.C. §1625), as amended by §623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat 2057, 2186 (1993), is not warranted. However, for entries on which liquidation has not become final, including pending protests, as well as future entries, appraisement is to be fixed in accordance with the foregoing. You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Thomas L. Lobred Chief, Value Branch