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HQ 547619

June 13, 2001

VAL:RR:IT:VA 547619/547354 KDW


Port Director, Los Angeles Seaport
U.S. Customs Service
300 South Ferry Street
Terminal Island, CA 90731

Port Director, Los Angeles Airport
U.S. Customs Service
Los Angeles International Airport
11099 South La Cienega Blvd.
Los Angeles, CA 90045

Port Director, Port of New York c/o Chief, Residual Liquidation and
Protest Branch
6 World Trade Center, Room 761
New York, New York 10048-0945

RE: Application for Further Review of Protests by [*] Inc.; Protest Nos.: 270499100428, 270499101160, 270499101295, 270499101815, 2704991906, 270499102352,270499102353, 270499102354, 270498102645, 272099100121, 272099100171, 272099100172, 272099100281, 272099100342, 272099100399, 272099100475, 272099100519, 272099100813; 1001-98-105115; and Ruling Request dated January 21, 1999

Dear Port Directors:

This is in regard to the Application for Further Review of Protests filed by [*] Inc. We based our review on submissions attached to the protests at issue in addition to the letters submitted by counsel for [*] Inc. dated January 21, 1999, January 22, 2001, and February 16, 2001. In addition, we have reviewed the importer’s request for confidentiality pursuant to section 177.2(b)(7) of the Customs Regulations chapter 19, with respect to certain information submitted. Accordingly, that information has been bracketed and will be deleted from any published versions. We regret the delay in responding.

[*], Inc. imported [*] products from Japan. Most of [*] Inc.’s products were produced by its parent company, [*] Corporation of Japan ([*] JP). In addition, the related companies exchanged various services and intangibles. [*], Inc. declared a transfer price with [*] JP as the transaction value on its entry documents in 1997 and 1998.

At the end of its 1998 fiscal year, [*], Inc.’s external tax consultant examined the company’s overall financial results, and suggested that the company’s operating profit be adjusted downwards retroactively for purposes of its U.S. tax return, because the company’s operating profit fell outside its projected range. [*], Inc. reduced its profitability for the fiscal year on its income tax return using a transfer pricing adjustment that placed it within the projected range. Although, [*], Inc. made the adjustment for income tax purposes, it did not otherwise adjust its financial records or inventory records to reflect the adjustment.

[*], Inc. states that it protests the liquidations of the entries in question based on a ruling request made prior to addressing the issue of whether the adjustment would require it to amend the transfer price reported to customs. The protest form states that [*], Inc. contemplates adjusting its transfer price for tax purposes and that it has not determined whether the adjustment is required for Customs as the reason for protest. However, [*], Inc fails to state an objection to any final decision taken by Customs or any alternative action. The protests are deficient in that they fail to set forth distinctly and specifically the nature of [*], Inc.’s objection and reason’s therefore. We find that the fixing of the final appraisement value pursuant to 19 U.S.C. § 1500 is consistent with that entered by [*], Inc. [*], Inc. does not dispute this appraisement. Thus, we find the liquidation at the final appraised value was proper.

As the request for ruling dated January 21, 1999, addresses the same issues raised on protest here, and concerns liquidated entries, we hereby administratively close that file based on this decision.


The merchandise was properly appraised, therefore, these protests are DENIED.

These protests should be administered as set forth above. In accordance with §3A(11)(b), Customs Directive 099 3550-065, dated August 4, 1993, this decision should be mailed by your office to the protestant no later than sixty days from the date of this letter. Any reliquidation of the entries in accordance with this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the letter the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS, and to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels. Sincerely,
Virginia L. Brown
Chief, Value Branch

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