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Duty Mitigation


What is First Sale?


First Sale for Export (FSFE) is a duty reduction program designed to reduce the dutiable value of eligible products imported into the United States.

In a normal supply chain, an importer pays duty on the value of goods purchased from a middleman (vendor) which includes the middleman's markup. This transaction is known as the 'second sale'. Using the First Sale principle, the importer can declare the goods to Customs using the 'first sale', which is the transaction between the manufacturer and the middleman (vendor), which excludes the middleman's markup, thereby lowering the customs value of the goods and the amount of duties payable. In other words, First Sale for Export establishes the dutiable value based on the transaction between the manufacturer (factory) and the middleman (vendor) instead of between the middleman and the Importer.

Who is a Candidate for First Sale?
Any importer of record (IOR) bringing goods into the U.S. using a 'multi-tiered' transaction model may be eligible for First Sale valuation. ('Multi-tiered' is just a way to describe a transaction with more than one party, in this case the Importer, the Middleman, and the Manufacturer.)

Ideal circumstances also include:

  • Medium to High Duty Rates
  • Medium to High Middleman Markup
  • High FOB Volumes
  • Cooperative Relationship between Middleman & Importer

Tradewin's Approach
Tradewin's valuation experts have prepared an integrated methodology designed to assure the proper application of this valuable duty reduction method. Our unique approach covers the full range of issues that have previously caused importers to shy away from First Sale Appraisement. Our methodology includes a thorough review of the client's import activity to identify First Sale opportunities, an introduction of the program to our client's supply chain partners, and preparation of case studies specifically designed to address the importer's unique circumstances. This process is designed to meet all of CBP's stringent reasonable care requirements.

We specifically address the four points required to claim First Sale:

  1. Bona Fide Sale
  2. Arm's Length
  3. Clearly Destined for Export
  4. All Costs Declared

Client Examples
Utilizing the First Sale for Export program, Tradewin has successfully recovered more than $40 million in duties spent for a well-known Fortune 500 apparel company. That number continues to grow as we steadily expand the program to include more eligible vendors. But, you don't have to have millions of dollars in imports to benefit from this program. Smaller importers can also save money with First Sale – just ask the importer who recovered $495,000 in duties paid last year!

Please contact your local Tradewin representative to learn more.