GlossaryEN1 min readUpdated: Jul 1, 2026

First Sale Rule

As of July 2026.

Quick Answer

Last updated: 1 July 2026Published: 24 June 2026

Source: U.S. CAFC, Nissho Iwai American Corp. v. United States (1992); 19 U.S.C. § 1401a, 19 CFR § 152.103; U.S. CBP, First Sale Declaration (cbp.gov); Last Sale Valuation Act (S., Cassidy/Whitehouse, eingebracht 11.02.2026); KPMG/Akin Gump Trade Alerts (2026). Stand: Juni 2026.

Category

Incoterms 2020 Simulator: Who bears costs & risk?

Reading time

1 min

Words

252

Mentioned in

–

Definition & Explanation

As of July 2026. The First Sale Rule lets U.S. importers base the customs value not on the last sale (middleman → U.S. buyer) but on an earlier, bona fide sale higher up the supply chain (e.g. manufacturer → middleman). Because prices typically accrue margins on the way to export, the lower first-sale price reduces the declared customs value and thus the duty owed — a key mitigation tool given high U.S. ad valorem tariffs. It is especially relevant for the still-active Section 232 tariffs (steel, aluminum, copper), which since 6 April 2026 apply to the full customs value rather than only the metal content, and for the Section 122 import surcharge (10%; an announced increase to 15% was never implemented by legal order) that replaced the IEEPA/reciprocal tariffs struck down by the U.S. Supreme Court in February 2026. The legal basis is Nissho Iwai American Corp. v. United States (Federal Circuit, 1992) on transaction value under 19 U.S.C. § 1401a / the Trade Agreements Act of 1979 (19 CFR § 152.103). First sale is accepted only where three conditions are met: (1) a bona fide sale, (2) negotiated at arm's length, and (3) goods clearly destined for the United States — a complete paper trail (purchase orders, invoices) is mandatory; CBP requires a First Sale Declaration and applies strict scrutiny. The "Last Sale Valuation Act," introduced on 11 February 2026 by Senators Cassidy and Whitehouse, could abolish the rule. Not to be confused with the de minimis rule or a surcharge.

Next steps

Matching tools and partners

Calculate customs valueWork out import duties and customs valueOpen Compare IncotermsClarify duties, cost and riskOpen Find HS codeDetermine the tariff number for customsOpen Find a matching partnerFreight forwarders and logistics partners worldwideOpen

Related Terms

You might also be interested in these terms

De-minimis Rule

The de minimis rule exempts low-value shipments from customs duties and import VAT: consignments whose declared goods value falls …

Learn more

Evidence of origin

Evidence of origin is the umbrella term for the documents by which an importer demonstrates to customs where goods come from. Whic…

Learn more

Transfer of Risk

Transfer of risk defines the precise moment at which the buyer assumes liability for loss, damage, or deterioration of goods – reg…

Learn more

Incoterms® Risk Transfer Points

Freight forwarders, cargo insurers, and trade lawyers rely on Incoterms® risk transfer points to establish precisely who held the …

Learn more

Subheading Jump HS-6 (CTSH)

When a customs broker is checking whether a finished product can claim preferential origin despite using non-originating inputs, o…

Learn more

Carriage and Insurance Paid to (CIP)

Exporters and freight forwarders turn to CIP (Carriage and Insurance Paid to) when they need to provide the buyer with both prepai…

Learn more

⚖️ ICC Incoterms 2020

Incoterms 2020 Simulator: Who bears costs & risk?

Analyze all 11 Incoterms 2020: cost matrix, risk timeline, insurance gap detector and customs responsibility – free, no login required.

Incoterms Simulator →

Tariffs

US tariffs 2026: rates, dates, context

Curated hub on Section 301/122 and current US tariff changes — with sources.

Open tariff hub

Logistics knowledge straight to your inbox

Free · No password · Never a paywall. Weekly top news and facts from logistics.

First Sale Rule

Next steps

Related Terms

De-minimis Rule

Evidence of origin

Transfer of Risk

Incoterms® Risk Transfer Points

Subheading Jump HS-6 (CTSH)

Carriage and Insurance Paid to (CIP)

Incoterms 2020 Simulator: Who bears costs & risk?

US tariffs 2026: rates, dates, context

Logistics knowledge straight to your inbox

Community Questions & Answers