Any royalty or license fee required by the buyer when exporting to the U.S. must:

When determining the proper treatment of royalties or license fees in the context of exporting to the United States, it is essential to understand how these payments relate to the transaction value of the merchandise. The correct approach is to include any royalty or license fee in the entered value of the merchandise.

This is because royalties and license fees are considered part of the cost of acquiring the goods if they are a condition of sale, meaning that the buyer must pay them to use the goods being imported. By including these fees in the entered value, customs can ensure that the total value reflects the complete cost to the buyer, thus leading to more accurate duties being assessed upon importation.

The rationale behind this requirement is to maintain fairness and transparency in customs valuation, preventing undervaluation of goods by excluding components like royalties that directly relate to the cost of using the imported product.

This practice aligns with the principles outlined in the customs valuation regulations set forth by the World Trade Organization (WTO), ensuring that all costs that are necessary for the buyer to obtain the goods are captured in the customs declaration.