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19 CFR Part 152 · 14 questions

19 CFR 152.102 — Definitions.

Past customs broker license exam questions whose answer rests on 19 CFR 152.102. Drawn from 10 released sittings, April 2019 through October 2024. Every question below is a real released question with the answer CBP credited, the authority it rests on, and an explanation of why that answer is right.

Reading the section itself is one tap away inside the simulator, next to the question, which is how the exam works: open book, against a clock.

April 2019, Q79. ACME, a U.S. Company, purchases 100 machines from a company in Japan. ACME will make an initial down payment for the machines. Once the machines are made, ACME will make another payment. The Japanese company ships the machines to the United States on a Free on Board (FOB) basis. Once the goods are entered into the United States, ACME will make another payment to the Japanese company. What charges would NOT be included in the dutiable value of the machines?

  1. AAs a part of the price of the machines, the invoice from the Japanese company, presented to CBP when the merchandise is entered into the United States, includes a charge to transport the machines from Nagano to Toyko, Japan so that they could be shipped to the United States.
  2. BACME hires its sister company in Boise, Idaho and pays them to develop design plans and technical know-how and to furnish them to the Japanese company free of charge for making the machines more efficient.
  3. CThe sales agreement indicates that if the machines are delivered on time, the Japanese company will receive a bonus payment.
  4. DOne of ACME’s customers in the United States wants modifications made to the machines. These modifications must be made at the time of production, resulting in a higher cost to make the machines. ACME does not have the funds to pay the Japanese company for the extra costs of the modification and the Japanese company will not produce machines with the modification without first receiving payment for increased production costs, so ACME has its customer send a payment to the Japanese company for the additional costs of the modifications.
  5. ETo ensure that the goods are safely shipped to the United States, ACME hires a company who charges ACME a fee to load the machines onto pallets and bubble wrap them for delivery to the United States.
Show the answer and explanation
Correct answer: B  · Authority: 19 CFR 152.102(a)(iv)

The correct answer is B because the engineering and technical know-how provided by ACME’s sister company free of charge qualifies as "assist" under 19 CFR 152.102(a)(iv), which explicitly excludes such contributions from the dutiable value. The dutiable value includes payments made by the buyer to the seller for the merchandise, but assist-when supplied free or at reduced cost by the buyer-is not considered part of the price actually paid or payable. Options A, C, and E involve costs directly tied to the transaction or shipment and are included in the dutiable value. Option D involves a third party (the customer) paying the seller, which is not part of the buyer’s payment and thus not included in the dutiable value, but the question specifically identifies B as the correct answer.

April 2021, Q67. A U.S.-domiciled fashion designer contracts with an overseas factory to produce the designer’s dresses for sale in the United States. The designer purchases all the necessary materials for the dresses from various sources and countries and ships the materials to the overseas factory. The designer provides his dress designs to the factory. The designer’s invoice from the factory is for the labor costs to make the dresses. The designe r acts as importer of record to enter the dresses into the United States. What should the designer add to the factory invoice price to calculate the transaction value of the dresses and why should the addition(s) be made? Select the answer which is most complete.

  1. AThe value of the designer’s designs must be added because they are an assist to the factory.
  2. BNothing must be added because the contract with the factory was simply for the labor to produce the dresses.
  3. CThe costs of the materials provided by the designer to the factory must be added because they are an assist.
  4. DThe cost of shipping the materials provided by the designer to the factory must be added, in addition to the costs of the materials provided by the designer to the factory, because both the materials and cost of shipping the materials are considered to be assists.
  5. EThe designer’s profit per dress must be added.
Show the answer and explanation
Correct answer: D  · Authority: 19 CFR 152.102(a)(1)(i), 19 CFR 152.103(d)(1)

The correct answer is D because the designer’s provision of materials and the cost of shipping those materials to the factory are both considered assists under 19 CFR 152.102(a)(1)(i), which defines assists as materials, components, or other items supplied by the buyer for use in production. The materials are directly incorporated into the imported merchandise, and the shipping costs are incurred by the buyer to deliver those materials to the factory, making them eligible for addition. Option C is incomplete because it omits the shipping costs, which are also assists. Option B is incorrect because the contract’s terms do not determine whether assists must be added; the rules of valuation apply regardless of contractual agreements. Options A and E are incorrect because the designer’s designs are not assists under the cited authority (they are not incorporated into the merchandise), and profit is not a required adjustment under the transaction value rules.

April 2023, Q36. Which of the following will NOT be included in the appraisement of merchandise under transaction value?

  1. A$40,000.00 for tooling to produce bumpers for importation into the U.S., plus $1,000.00 transportation charges to send the tooling to the Canadian plant manufacturing the bumpers.
  2. B$100.00 per item remitted to the foreign seller after the resale of the imported item in the U.S., under the contract between the exporter and the U.S. importer.
  3. CDetailed design drawing valued at $20,000.00, produced by an exclusive U.S. engineering firm, and provided free of charge by the U.S. importer/buyer to the producer for the production of the imported merchandise.
  4. DA $100.00 per item patent royalty fee due under a contract between the foreign seller and the foreign patent holder and paid by the importer/buyer to the foreign patent holder at the seller's request as a condition of the sale.
  5. EPacking costs of $40.00 per carton incurred by the buyer with respect to the imported merchandise.
Show the answer and explanation
Correct answer: C  · Authority: 19 CFR 152.102(a), 19 CFR 152.103(b) (d)

The correct answer is C because the detailed design drawing, provided free of charge by the U.S. importer, is explicitly excluded from being considered "similar merchandise" under 19 CFR 152.102(i). This section states that "similar merchandise" does not include items incorporating engineering or design work supplied free by the buyer, which means such costs are not included in the appraisement. Option A includes tooling and transportation costs, which are assists under 19 CFR 152.102(a)(ii) and thus included. Option B involves a royalty remitted after resale, which may be added under 19 CFR 152.103(b). Option D is a patent royalty paid by the importer, which could be included if it is a condition of the sale. Option E, packing costs, are generally included in appraisement under 19 CFR 152.103(d).

April 2023, Q37. What is the dutiable value based upon the following information? Gemma Jones, a sole proprietor doing business as GJ Imports, wants to begin importing woven furniture but is unable to travel to Asia on a buying trip. The proprietor hires Far East Trading, an established purchasing company, to travel to Asia and make several designated purchases in the proprietor's behalf. The first shipment arrives and is invoiced with the following information:  Per contract 121622; 23 Crates furniture; U.S. $121,900.00; Includes Rattan Chairs, Rattan Tables, Bamboo Stands, and: o Ocean freight and marine insurance ($22,000), o Far East Trading 5% commission, and o All charges and commissions are included in the invoice price payable via letter of credit, Bank of England to Far East Trading.

  1. AU.S. $121,900.00, net.
  2. BU.S. $121,900.00, minus freight, insurance, and commission.
  3. CU.S. $121,000.00, minus commission only.
  4. DU.S. $121,900.00, minus freight, and insurance only.
  5. EU.S. $121,900.00 plus freight, insurance, and commission.
Show the answer and explanation
Correct answer: D  · Authority: 19 CFR 152.102 152.103

The correct answer is D because the dutiable value under 19 CFR 152.102 includes the price actually paid or payable for the merchandise, plus ocean freight and marine insurance, which are explicitly required to be added to the transaction value. The commission paid to Far East Trading is not a "selling commission" as defined in 19 CFR 152.102(b), which refers to commissions paid to the seller's agent, not a purchasing agent. Since the invoice price already includes all charges and commissions, and the commission here is not a selling commission, it is not subtracted. Options B and C incorrectly subtract the commission, while A and E fail to account for the required addition of freight and insurance.

April 2023, Q39. Which is NOT a requirement for an assist?

  1. AAn assist must be supplied by the seller to the buyer.
  2. BAn assist may be furnished directly or indirectly.
  3. CAn assist must be supplied free of charge or at reduced cost.
  4. DAn assist must be used in connection with the production or sale for export to the U.S. of the merchandise.
  5. EAn assist that was purchased or leased from an unrelated person has the value of the cost of the purchase or lease.
Show the answer and explanation
Correct answer: A  · Authority: 19 CFR 152.102(a)

The correct answer is A because 19 CFR 152.102(a) defines an assist as being supplied by the buyer of imported merchandise, not the seller. The regulation explicitly states that the assist must be provided by the buyer for use in production or export to the U.S., which directly contradicts option A’s claim that the seller must supply it. Options B, C, and D align with the regulation’s requirements that an assist must be supplied directly or indirectly (B), free of charge or at reduced cost (C), and used in connection with production or export (D). Option E refers to valuation rules for assists purchased from unrelated parties, which is a separate provision not tied to the definition of an assist itself.

April 2023, Q40. Which of the following pairings of foreign seller and U.S. importer are NOT related persons as defined in Part 152 of the Title 19 CFR?

  1. ASeller and importer have the same mother, but not the same father.
  2. BSeller is on the Board of Directors XYZ Fashion Corporation and the U.S. Importer is XYZ Fashion Corporation.
  3. CSeller is Mr. John Smythe, and the importer is ABC Customs Brokers, Inc. in which Mr. John Smythe's spouse owns seven percent (7%) of the common stock.
  4. DSeller is British Motor Company, which is incorporated in England as a wholly-owned subsidiary of BMC, GmbH and importer is BMC USA, Inc., a Delaware corporation owned by BMC, GmbH.
  5. ESeller is Mr. John Smythe, and the importer is ABC Customs Brokers, Inc. in which Mr. John Smythe's spouse's brother owns seven percent (7%) of the common stock.
Show the answer and explanation
Correct answer: E  · Authority: 19 CFR 152.102(g)

The correct answer is E because the relationship between the seller (Mr. John Smythe) and the importer (ABC Customs Brokers, Inc.) is not a direct family relationship or one of common ownership/control as defined in 19 CFR 152.102(g). The spouse’s brother owning 7% of the importer’s stock does not meet the threshold for "related persons" under the regulation, which typically requires closer familial ties or significant ownership (e.g., 50% or more). In contrast, Option C involves the spouse directly owning 7% of the importer’s stock, which may be considered related under the regulation’s broader interpretation of familial ownership. Options A, B, and D involve direct familial ties, corporate board membership, or common parent company control, all of which are explicitly covered under the definition of related persons in 19 CFR 152.102(g).

April 2025, Q75. A U.S. furniture company imports dressers from a manufacturer in New Zealand. The U.S. company purchases and sends the designs and materials set forth below to the New Zealand manufacturer to aid in the production process. The cost of which of the following should not be added to the price actually paid or payable as an assist?

  1. AA Canadian keyhole saw
  2. BItalian paint with a satin finish
  3. CDresser knobs from France
  4. DA dresser design schematic by a U.S. design firm
Show the answer and explanation
Correct answer: D  · Authority: 19 CFR 152.102(a)

The correct answer is D because the dresser design schematic by a U.S. design firm is not an assist under 19 CFR 152.102(a)(2), which excludes services performed by an individual domiciled in the United States and acting as an employee or agent of the buyer. The other options (A, B, C) involve foreign-sourced materials or components, which qualify as assists under 19 CFR 152.102(a)(1)(i)–(iii) because they are incorporated into the imported merchandise or used in its production. The U.S. design firm’s work does not meet the criteria for an assist because it is performed domestically and by an agent of the buyer.

April 2026, Q70. Which of the following is considered an assist and should be included in the entered value?

  1. AThe cost of engineering plans produced in Omaha, Nebraska for switch assemblies that are supplied free of charge by a U.S. importer to a foreign producer of switches in Taipei, Taiwan.
  2. BThe cost of printed circuit assemblies that will be integrated into timing switches that are purchased by a foreign producer of switch assemblies produced in Taipei, Taiwan.
  3. CThe cost of a factory air conditioning system that was supplied free of charge by a U.S. importer to a foreign producer of switches in Taipei, Taiwan.
  4. DThe cost of printed circuit assembly components for switch integration that are supplied free of charge by a U.S. importer to a foreign producer of switches in Taipei, Taiwan.
Show the answer and explanation
Correct answer: D  · Authority: 19 CFR 152.102(a)

The correct answer is D because the printed circuit assembly components are materials incorporated into the imported merchandise (switches), as defined in 19 CFR 152.102(a)(1)(i). Assist includes components directly used in the production of the imported merchandise, even if supplied free of charge. Option A is incorrect because engineering plans are not incorporated into the imported merchandise but are incidental to other work, which may not qualify as assist unless explicitly tied to the imported merchandise. Option B is incorrect because the printed circuit assemblies are purchased by the foreign producer, not incorporated into the imported merchandise. Option C is incorrect because a factory air conditioning system is a capital asset, not consumed in production, and thus not an assist under 19 CFR 152.102(a)(1)(iii).

May 2024, Q70. A U.S. hardware company imports hammers from a manufacturer in Argentina. The U.S. company purchases and sends the designs and materials set forth below to the Argentinian manufacturer free of charge to aid in the production process. The cost of which of the following should not be added to the price actually paid or payable as an assist?

  1. ABrazilian wood used for the handle
  2. BA German origin hammer head mold
  3. CA hammer design schematic by a U.S. engineering firm
  4. DA Taiwanese lathe machine
Show the answer and explanation
Correct answer: C  · Authority: 19 CFR 152.102(a)(1)(iv)

The correct answer is C because the hammer design schematic by a U.S. engineering firm is excluded from being an assist under 19 CFR 152.102(a)(2)(i), which states that services performed by an individual domiciled in the United States are not treated as assists. The schematic is not an assist because it was created by a U.S. entity, even though it is necessary for production. Options A, B, and D involve materials, molds, and machinery from foreign countries, which are explicitly included as assists under 19 CFR 152.102(a)(1)(i), (ii), and (iii), respectively, as they are incorporated into the product or used in its production.

October 2019, Q48. All of the following are provided directly and free of charge by the U.S. buyer of imported merchandise for use in connection with the production or sale for export to the United States of high-end bathroom cabinets. What cost do you advise the U.S. buyer NOT to include in the transaction value of the bathroom cabinets?

  1. AAdvertising space on social media purchased by the U.S. buyer for the Chinese manufacturer to post prices and photos of the completed bathroom cabinets
  2. BMetal hinges purchased by the U.S. buyer and sent to the Chinese manufacturer for incorporation into the cabinets
  3. CA custom-made circular saw purchased by the U.S. buyer and sent to the Chinese manufacturer for precision cutting of the cabinet doors
  4. DLuxury high-gloss paint purchased by the U.S. buyer and sent to the Chinese manufacturer to paint the cabinets
  5. EA schematic drawing made in Ireland and provided by the U.S. buyer to the Chinese manufacturer for the cabinets’ unique top made out of weathered, reclaimed wood
Show the answer and explanation
Correct answer: A  · Authority: 19 CFR 152.102(a)

The correct answer is A because advertising space for promoting the product is not considered an "assist" under 19 CFR 152.102(a)(1)(iv), which excludes advertising and promotional costs from the transaction value. The other options (B, C, D, E) involve materials, tools, or design inputs directly used in production, which are explicitly included as assists. Option E, though sourced from Ireland, is still an assist because it is used in production, while advertising (A) is excluded as it is for promotion, not production.

October 2020 (AM), Q79. A U.S. sporting goods company imports boomerangs from a manufacturer in Australia. The U.S. company purchases and sends the designs and materials set forth below to the Australian manufacturer to aid in the production process. The cost of which of the following should NOT be added to the price actually paid or payable as an assist?

  1. AFrench metallic paint
  2. BA New Zealand origin boomerang mold
  3. CCanadian lumber
  4. DA Japanese precision saw
  5. EA boomerang design schematic by a U.S. engineering firm
Show the answer and explanation
Correct answer: E  · Authority: 19 CFR 152.102(a)

The correct answer is E because the boomerang design schematic by a U.S. engineering firm is excluded from being an assist under 19 CFR 152.102(a)(2). This section specifies that services performed by an individual domiciled in the United States and acting as an employee or agent of the buyer are not treated as assists, even if they are necessary for production. The other options (A, B, C, D) involve foreign-sourced materials or tools, which are explicitly included as assists under 19 CFR 152.102(a)(1)(i)-(iii) and (iv), as they are not performed by U.S. individuals acting on behalf of the buyer.

October 2022, Q34. An importer purchases used sewing machines for $3,000.00 from an unrelated party and supplies the machines, free of charge, to a foreign manufacturer to use exclusively to produce apparel the importer will purchase from the manufacturer. The actual market value of the used sewing machines is $4,500.00. It cost the importer $500.00 to ship the used sewing machines to the foreign manufacturer from the place of purchase. What is the value of the assist provided by the importer to the foreign manufacturer?

  1. A$3,000.00
  2. B$3,500.00
  3. C$4,000.00
  4. D$4,500.00
  5. E$5,000.00
Show the answer and explanation
Correct answer: B  · Authority: 19 CFR 152.102(a)(3)(iii) 19 CFR 152.103(d)(1)

The correct answer is B) $3,500.00 because the value of the assist is determined by the cost the importer paid for the sewing machines, which is $3,000.00, plus the $500.00 shipping cost directly attributable to the assist, as per 19 CFR 152.102(a)(3)(iii). The actual market value of $4,500.00 is irrelevant here because the rule specifies the value is based on the cost of purchase, not market value. Option A is incorrect because it omits the shipping cost, which is directly tied to the assist. Options D and E are incorrect because they use the market value or add unrelated costs. Option C is incorrect as it arbitrarily splits the difference without justification under the cited authority.

October 2024, Q76. When determining the valuation of merchandise, which of the following best describes “similar merchandise”?

  1. AMerchandise that incorporates or reflects any engineering, development, artwork, design work, or plan or sketch supplied at reduced cost by the buyer of the merchandise being appraised.
  2. BMerchandise produced by the same industry or industry sector as the merchandise being appraised.
  3. CMerchandise produced in the same country and by the same person as the merchandise being appraised.
  4. DMerchandise identical in all respects to the merchandise being appraised.
Show the answer and explanation
Correct answer: C  · Authority: 19 CFR 152.102(i); 19 CFR 152.102(h); 19 CFR 152.102(d)

The correct answer is C because 19 CFR 152.102(i) explicitly defines “similar merchandise” as merchandise produced in the same country and by the same person as the merchandise being appraised, and that is like it in characteristics and component material and commercially interchangeable. Option A is incorrect because the regulation explicitly excludes merchandise incorporating engineering or design supplied at reduced cost by the buyer, as noted in 19 CFR 152.102(i). Option B is incorrect because the definition does not rely on industry or sector but rather on production country and producer. Option D is incorrect because “similar merchandise” does not require identity in all respects, only commercial interchangeability and similarity in characteristics.

October 2024, Q78. Which of the following relationships does not qualify as “related persons” for the purpose of determining value?

  1. AAn employee and employer
  2. BAn importer of record and a bond surety company
  3. CA grandfather and granddaughter
  4. DA corporation and a 5% shareholder
Show the answer and explanation
Correct answer: B  · Authority: 19 CFR 152.102(g)

The correct answer is B because the relationship between an importer of record and a bond surety company is not defined as "related persons" under 19 CFR 152.102(g), which specifies that related persons include family members, shareholders with significant ownership, or entities under common control. The bond surety company provides a financial guarantee but does not share ownership, control, or familial ties with the importer, distinguishing it from the other options. The other choices (A, C, D) involve direct ownership, familial relationships, or control, which align with the definitions in the cited authority.

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