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Risks and Penalties

What you should know about the revised Tomato Suspension Agreement

In addition, specialty tomatoes that are packed will have a higher reference price than those that are loose.          

For “other than specialty” tomatoes, the SA distinguishes between tomatoes grown in an “open field and adapted environment” and those grown in a “controlled environment.”  

A “controlled environment” is a “fully-enclosed permanent aluminum or fixed steel structure clad in glass, impermeable plastic, or polycarbonate using automated irrigation and climate control, including heating and ventilation capabilities, in an artificial medium using hydroponic methods.” 

This is very similar to the Certified Greenhouse Farmers Standard (although without the integrated pest management support and the restrictions on herbicides and soil fumigants), and is a narrower concept than a “greenhouse” for Customs purposes.  

“Open field and adapted environment” tomatoes would include open field tomatoes as well as tomatoes grown in greenhouses that do not meet the strict definition of a “controlled environment.”

Importers must correctly classify tomatoes for Customs purposes, which requires detailed information about their production, but should also identify the correct SA category to ensure the price paid or payable complies with the agreement. 

Valuation and Pricing

The essential purpose of the SA is to increase the price of Mexican tomatoes imported into the United States, and the SA establishes reference prices for the four distinct categories of tomatoes described above, as well as seasonal variations for each. 

In addition to the classification challenges the SA categories poses for some importers, the agreement also creates Customs valuation issues to which importers must pay close attention. 

For Customs purposes, the importer must declare the price actually paid or payable to the supplier, and the SA requires the price be at or above the established minimum reference price. 

The commercial invoice must accurately describe the tomatoes being imported, including the manner in which they were grown, if relevant, and accurately reflect the price paid or payable for each category.  The importer should also confirm this price meets or exceeds the established reference price.

In summary, the importer of record must have detailed knowledge of the tomatoes in each entry to correctly classify the tomatoes for Customs purposes, and to confirm that the declared value is at or above the reference price established by the SA for each type of tomato. 

Just as importers have been penalized for classifying merchandise on the basis of the lowest duty rate, tomato importers may be tempted to use the SA category with the lowest reference price.  Penalties under Customs law and the SA are intended to discourage such conduct, and violations may be identified through the SA’s monitoring system as well as CBP’s own activity.

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