CBTPA Extended and First Sale Rule Delayed

On May 22, Congress overrode President Bush's veto of H.R. 2419. Two specific provisions related to imports include the extension of CBTPA benefits and delayed implementation of revisions to CBP’s first sale rule.

Originally scheduled for expiration on September 30, 2008, the provisions of the Caribbean Basin Trade Partnership Act (CBTPA) have been extended until September 30, 2010.

Congress expressed that CBP should not implement changes to the current usage for the first sale rule prior to January 1, 2011 and created a requirement for collecting and analyzing information about first stale transactions, as well as consulting with House Ways and Means and Senate Finance before taking action. For one year, beginning 90 days after enactment, importers will be required to provide declaration with each entry submitted to CBP providing information on whether the importer has used the first-sale methodology in declaring transaction value for the entry. The data will be analyzed and reported to Congress. So, importers have a couple of years some time to analyze their current transactions and plan for alternatives in the event CBP is able to make those changes to the first sale calculations and importers taking advantage of CBTPA benefits have two more years to enjoy the reduced and free duty provisions.