Fair Market Value in International Countries

This post and the linked Q&A from 2019 got me thinking about how Fair Market Value (FMV) applies to international teams. I’ve bolded some text for emphasis.

What if the price “any” team would have to pay varies by country. For example, the Limelight 2.

Limelight 2 price from their three American Vendors: $400 USD
Limelight 2 price from their one Canadian Vendor: $700 CAD = $527.88 USD (1 CAD = 0.75411763 USD on 12/6/19)

What is the FMV for the Limelight 2 for a Canadian team? $400 or $527.88?
Does it matter that some Canadian teams are able to order from the US while others are not because of their proximity to the border?
Should import duties and brokerage be accounted for?
If the FMV for the Limelight 2 for Canadian teams is $527.88, is the Limelight 2 not legal for use by Canadian teams?

My hope (and expectation) is that the FMV of a product is universal for all teams, despite increased prices in certain countries, and that in this specific example it would be $400, but I’m curious what others think.

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In Israel the problem is even more serious; prices are usually about twice the American price…

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If the “official interpretation” is anything other than this, the BOM system is more broken than I initially thought.

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Good thread. So I’ll throw one more thing in here. When you are talking about international prices, there are fluctuations with currency valuations between markets and we do live in a world where those fluctuations can be quite dramatic - in fact, certain large companies actually use this to their advantage quite regularly, as do commodity traders.

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Lets combine these into a totally ridiculous interpretation of the rule… Why base it on a team’s country of origin and not the event’s time and location? A Canadian team coming to a US event could easily get a Limelight delivered to their hotel without worrying about international duties or anything like that. If the exchange rate changes, it might be legal at a week-one Canadian event, but not a week 3.

Some rules just don’t translate well once you lose a US-centric view and look at it from a global program view.

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It shouldn’t, because those teams should be declaring the import and paying taxes/duties on the limelight when they bring it over the border :wink:

Should taxes/duties be included in the BOM?

Even when you include the taxes and duties, there’s still $75.88 USD price difference between purchasing a Limelight in the US and bringing it across the border versus purchasing it from a Canadian vendor. ($452 USD vs $527.88)

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This could be problematic even for a U.S. team.

What happens when the price of a part changes during the season. It’s possible a team buys a COTS part at a certain price at the start of the season and end up with a total robot cost of right under $5000. If the price of the part increases week 3, is the team breaking the rule by using the old price? Obviously teams can’t be expected to constantly update their BOM every time prices change. So, when are teams supposed to “freeze” their prices?

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Great question. 2019’s Q&A says that potentially that team could be breaking the rule.

(Expand the linked post to see the Q&A question)

This portion was this discussion was answered by the 2020 Manual

The Fair Market Value is the cost of the item itself and does not include any duties, taxes, tariffs, shipping, or other costs that may vary by locality.

And this was answered by the Q&A today:

Teams may use any exchange rate that occurred between the time they purchase the item and the day of the event.

I asked the following question based on this thread today:

What if the Fair Market Value of a product varies by country. A fictional example from “Naboo”:
Prod X price from a US Vendor: $400 USD
Prod X price from a Naboo Vendor: $688 NBD = $529 USD

What is the FMV for Prod X for a Naboo team? $400 or $529?
Does it matter that some Naboo teams are able to order from the US while others are not because of their proximity to the border?
If the FMV for Prod X for Naboo teams is $529, is this product now illegal for Naboo teams due to the $500 limit?

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I prefer Freedonia and Wakanda. More favorable exchange rates.

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Teams in Texas would have to pay sales taxes on purchases from VEX but not on purchases from AndyMark. It would be the reverse for Indiana teams.

But too many characters (Edit: letters/numbers. Black Panther had an ideal number of characters in the movie. Battle Rhinos included) . Plus, Wakanda is the most technologically advanced country on the planet. They would have solved the BOM a while ago.

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Am I misunderstanding you?

Think it’s “this portion of” not “was”.

If BOM rules had any basis in reality or logic, this may follow the (unsettling) ruling of Q98. This would only further discrepancy in the messaging and policy of the BOM. I was originally rather pro-CAW, but FIRST isn’t making it easy to support this practice.

The Q&A entry has been answered:

There is no requirement for teams to list the FMV of an item as the price they paid. Per the Blue Box below R13, teams do not need to include “other costs that may vary by locality” and therefore may list a cost from a VENDOR that would not provide a part to their locality (i.e. the “generally available to all FRC teams” clause is not intended to imply that a team may not use a price from a VENDOR that will only ship to limited localities.)

This is a logical and common sense answer. International teams should pay attention to this ruling and do some Googling to make sure they’re listing the lowest possible FMV for COTS parts and not the local FMV. This is especially important since there’s a substantial international markup with some of the common FRC suppliers.

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