Reconsideration of HRL 547147; solid waste material; non-hazardous waste; fallback method; all reasonable ways and means

W547416 June 2, 2000 RR:IT:VA W547416 KCC CATEGORY: Valuation Andrew E. Mishkin, Esq. Beveridge & Diamond, P.C. 1350 I Street, N.W. Suite 700 Washington, D.C. 20005-3311 RE: Reconsideration of HRL 547147; solid waste material; non-hazardous waste; fallback method; all reasonable ways and means Dear Mr. Mishkin: This is in regard to your letter dated June 23, 1999, on behalf of Waste Management, Inc. ("WMI"), requesting reconsideration of Headquarters Ruling Letter ("HRL") 547147 dated March 23, 1999. HRL 547147 determined that the appraisement of solid waste imported into the United States for disposal was proper pursuant to §402(f) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. §1401a; "TAA"). We regret the delay in responding to your request. FACTS: As set forth in HRL 547147, WMI is a United States corporation whose subsidiaries provide services throughout North America. WMI contracts with domestic and foreign customers for the disposal of domestic and imported waste in the United States. WMI contends that the imported waste, in essence, has no commercial value in its condition as imported. Moreover, WMI asserts that the fee it charges exporters is for its services related to the disposal of the waste in the U.S. after importation. WMI states that the fee received by WMI js not a payment for the waste. As such, WMI claims that to appraise the imported waste based on the price paid for its disposal is not a reasonable tailback method.  We have fully considered the arguments presented by WMI as set forth in its request for reconsideration and our analysis is as follows.     2 ISSUE: Whether it is appropriate to appraise the imported goods under §402(f) 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 (19 U.S.C. §1401a; "TAA"). The primary method of appraisement is transaction value, defined as "the price actually paid or payable for the merchandise when sold for exportation to the United States" plus the value of certain statutorily enumerated additions thereto. When imported merchandise cannot be appraised on the basis of transaction value, it is to be appraised in accordance with the remaining methods of valuation, applied in sequential order. The alternative bases of appraisement, in order of precedence, are: the transaction value of identical merchandise (§402(c) of the TAA); the transaction value of similar merchandise (§402(c) of the TAA); deductive value (§402(d) of the TAA); and computed value (§402(e) of the TAA). If the value of imported merchandise cannot be determined under these methods, it is to be determined in accordance with §402(f) of the TAA, which is commonly known as the "fallback method". §402(f) of the TAA provides: • if the value of imported merchandise can not be determined, or otherwise used for the purposes of this Act, under subsections (b) through (e), the merchandise shall be appraised for the purposes of this Act on the basis of a value that is derived from the methods set forth in such subsections, with such methods being reasonably adjusted to the extent necessary to arrive at a value. Additionally, there are certain prohibited bases of appraisement under §402(f) of the TAA, including the selling price of merchandise produced in the United States, minimum values and arbitrary or fictitious values. Nevertheless, under §500 of the Tariff Act of 1930, as amended, which sets forth Customs' general appraisement authority, the appraising officer may: fix the final appraisement of merchandise by ascertaining or estimating the value thereof, under section 1401a of this title, by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declaration, other document to the contrary notwithstanding ...  4 in HRL 547147 and HRLs 545017 and 547061. Thus, we continue to find that by applying the tailback method, Customs would be using reasonable ways and means in appraising the imported waste at issue. Based on the information available, we find that the fallback method of appraisement as applied is neither arbitrary nor fictitious. Indeed, the basis for determining that value, the disposal fee, is the only available information which can be quantitatively documented. The payment is an amount agreed upon by the two parties to the transaction and represents the consideration for which WMI is willing to accept and process the imported waste. HOLDING: It is reasonable to apply §402(f) of the TAA and appraise the imported waste based on the disposal fee. Accordingly, HRL 547147 dated March 23, 1999, is affirmed. Sincerely, Sandra L. Bell, Director International Trade Compliance Division