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Case STudy: Courts Trading Ltd Imports goods from a related Manufacturer in the country of exportation (United States). The sales contract states that the terms of sale are FOB (U.S.A.), with the title and risk of loss passing to Courts Trading Ltd when the goods leave the Manufacturers warehouse in the United States. The freight bill indicates that the importer pays for the transportation cost. The insurance documents indicate that if the goods are lost or damaged in transit, Courts Trading Ltd bears the loss.
The goods are maintained in inventory at a public warehouse in the country of importation from three days to several weeks, or longer, to fill existing orders to ultimate purchasers in Jamaica. Courts Trading ltd states that separate bank accounts, books and records are maintained in the United States for the two companies. Courts Trading Ltd has submitted their financial record which shows that it pays its own bills from its account, is responsible for its own payables and receivable, and enters into contracts on its own behalf. The financial records also indicate that the related Manufacturer supplies administrative services to the Importer and subsequently bills the importer for those services. The financial statement of the importer acknowledges these expenses.
The importer informs you that it employs a national sale manager. Additionally, the Importer employs regional representatives' throughout the country of importation who are available to receive purchase orders on behalf of the Importer. The purchase orders received by the sales representatives are called into the Importer's administrative office in the country of exportation.
Questions:
1.Does a sale exist between Courts Trading Ltd and the related manufacturer for purposes of transaction value?
2. How did you arrive at your answer ? Give reasons
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