Glock Says CBP Illegally Overvalued Its Imports Upon Liquidation

Pistol maker Glock sued the U.S. at the Court of International Trade Jan. 16, saying CBP, upon liquidation of Glock’s imports, erroneously failed to deduct Glock’s royalty payments from the imports’ value calculation (Glock v. U.S., CIT # 23-00046).

Glock brought its complaint to CIT contesting CBP’s liquidation of its 2021 entries of imported pistol parts kits that the company intended to assemble and sell domestically.

When liquidating a 2021 entry of Glock pistol part kits that Glock intended to assemble and sell domestically, CBP determined that royalty payments Glock paid to its trademark holder Value PS were dutiable as costs of production, the importer said. Glock challenged that in its complaint, saying that it entered the products with royalties listed as “general expenses,” and the royalties should have been deducted from the overall value of the products.

“CBP’s appraisement of the subject merchandise was erroneous because there is no legal basis to include the royalty payment in the dutiable value of the entered Kits and Glock Inc. is entitled to a refund equal to the excess duties paid,” Glock said.

It also alleged CBP was wrong to substitute its own cost valuation methodology for the one Glock provided. Glock’s methodology was in accordance with generally accepted accounting principles, meaning that CBP was required by law to accept it, the company said. CBP, however, used its own “erroneous methodology” that improperly classified the royalties as production costs.

Glock asked CIT to overrule CBP and order the agency to refund the excess duties Glock paid.