Ruben v Federated States of Micronesia [2008] FMSC 21; 15 FSM Intrm. 508 (Pon. 2008) (6 February 2008)

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HERSIN RUBEN and MORIA RUBEN, individually
and d/b/a MORIA'S STORE,
Plaintiffs,

FEDERATED STATES OF MICRONESIA,
and its DEPARTMENT OF FINANCE AND ADMINISTRATION,
through its Secretary NICK ANDON,
Defendants.
__________________________________________

For the Plaintiffs: Stephen V. Finnen, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendants: Johnson Asher, Esq.
FSM Assistant Attorney General
P.O. Box PS-105
Palikir, Pohnpei FM 96941

A court must deny a motion for summary judgment unless it finds there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The court must view the facts presented and inferences made in the light most favorable to the non-moving party. The burden of showing a lack of triable issues of fact rests with the moving party. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 513 (Pon. 2008).

When the moving party has made out a prima facie case that there are no triable issues of fact and that it is entitled to summary judgment as a matter of law, the non-moving party then has the burden to show by competent evidence that there is a triable material issue of fact. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 513 (Pon. 2008).

A person adversely affected or aggrieved by agency action is entitled to judicial review thereof in the FSM Supreme Court. The reviewing court shall hold unlawful and set aside agency actions and decisions found to be: 1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; 2) contrary to constitutional right, power, privilege, or immunity; 3) in excess of statutory jurisdiction, authority, or limitations, or a denial of legal rights; 4) without substantial compliance with the procedures required by law; or 5) unwarranted by the facts. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 513 (Pon. 2008).

The Customs Act of 1996 gives the FSM the authority to investigate and perform post-audits of declared CIF values after the release of the goods. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 514 (Pon. 2008).

An importer has the responsibility of fully and accurately declaring the value of all dutiable goods. The amount of penalties for understating the value of the imported goods depends on who discovers the understatement and the timing of the discovery in relation to the release of the goods. If the FSM discovers the understatement before the release of the goods, a 100% penalty applies. A 100% penalty also applies if the importer or owner discovers and reports the understatement within 10 days of the release of the goods. A 200% penalty applies in all other cases of understatement. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 514 (Pon. 2008).

While the statute is not explicit, instances where a 200% penalty will apply include when the importer or owner discovers and reports the understatement more than 10 days after the release of the goods and when the FSM discovers the understatement anytime after the release of the goods. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 514 (Pon. 2008).

The FSM is within its statutory authority to conduct a post-audit investigation after the goods have been released. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 514 (Pon. 2008).

Without knowing what specific evidence the agency considered and relied upon and on which it based its agency action, the FSM Supreme Court cannot determine whether the administrative action was supported by sufficient evidence or whether the agency action was unwarranted by the facts. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 514-15 (Pon. 2008).

When a second rescheduling gave the importers and any third-party witnesses more than 30 days to make travel and other arrangements to appear at the hearing and was done with the express agreement of the importers' counsel, the importers were provided sufficient opportunity to present their case and the FSM's refusal to reschedule the hearing for a third time was not arbitrary, capricious, or an abuse of discretion. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 515 (Pon. 2008).

Appraisement is just one of the valuation methods set forth in Section 223; there are several other preferred methods for arriving at an equivalent CIF price when the CIF price cannot be reasonably determined. For instance, an equivalent CIF price can be established through the value of identical goods at the CIF location. Only when all other preferable methods fail to render an equivalent CIF price does the statute permit the use of appraisement to arrive at the CIF price. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 516 (Pon. 2008).

An agency action must be set aside when the action was without substantial compliance with the procedures required by law. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 516 (Pon. 2008).

When a letter does not set forth the agency's required findings of fact, it does not qualify as a full written statement of the hearing officer's findings of fact and his decision, and in the absence of a full written statement of findings of fact and an explanation of how the hearing officer arrived at his decision, the court has no reasonable basis upon which to review the agency action. Because the agency failed to substantially comply with the procedural requirement, the court will set aside its administrative action. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 517 (Pon. 2008).

Although a hearing officer has the discretion to decide which recording method to use  stenographic or recording machine  the hearing officer does not have the discretion to altogether fail to make a record of the hearing and its failure to substantially comply with this procedural requirement is yet another reason an agency action must be set aside. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 517 (Pon. 2008).

When an agency failed to substantially comply with the procedures required by law through the hearing officer's failure to prepare a full written statement of his findings of fact and his decision and the agency's failure to make a record of the hearing proceedings, either stenographically or by recording machine, the court will set aside the agency order. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 517 (Pon. 2008).

When there are discrepancies in the evidence, which result in a dispute of material facts, the court will decline an invitation to conduct a de novo review and conclude the matter by summary judgment. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 517 (Pon. 2008).

Under the common law rule known as the doctrine of primary jurisdiction, courts may remand matters to administrative bodies that are familiar with the regulated activity at issue. Courts apply the doctrine of primary jurisdiction in the hope that by remanding matters to an administrative body, the administrative determination will obviate the need for further court action or will make possible a more informed and precise determination by the court. Ruben v. FSM, [2008] FMSC 21; 15 FSM Intrm. 508, 518 (Pon. 2008).

This matter came before the Court on the motion for summary judgment of plaintiffs Hersin and Moria Ruben, individually and dba Moria's Store ("plaintiffs" or "Importers"), filed on September 25, 2006 and supplemented on October 12, 20076. As permitted by the Court's May 3, 2007 order, defendants Federated States of Micronesia and its Department of Finance and Administration, through its Secretary Nick Andon, (collectively, "FSM") filed their response on May 15, 2007. Plaintiffs filed their reply on May 25, 2007.

For the reasons that follow, the Court (1) sets aside the administrative action of the FSM, which ordered plaintiffs to pay $59,088.57 in unpaid taxes and penalties, and (2) remands this matter to the FSM Department of Finance and Administration for further administrative proceedings consistent with this order.

Plaintiffs are wholesalers and retailers who import and sell a wide variety of products, including beer. (Plaintiffs shall hereinafter be referred to as "Importers.") Importers have been long term customers of Ambros, Inc. ("Ambros"), a wholesaler based in Guam. During 2003, Importers purchased beer from Ambros on at least seven occasions. The prices contained in the invoices for the seven shipments at issue were as follows:

Invoice	Date	Amount

7001	3-21-03	$11,965.04
7016	4-15-03	$11,965.00
7027	5-1-03	$11,965.00
7053	5-22-03	$12,533.04
7078	6-10-03	$12,533.04
7100	7-24-03	$12,560.36
7210	12-4-03	$11,965.04

Upon payment of the duty on the declared amount, the FSM Customs and Tax Administration ("FSM") cleared and released the shipments of beer. (These shipments of beer shall hereinafter be referred to as the "Goods.")

Around mid-2003 FSM undertook an investigation of the declared price on the Goods. By letter June 17, 2003 Ambros sent FSM copies of invoices 7016, 7027, 7053, and 7078. Ambros's June 17, 2003 letter stated that the enclosed invoices accurately reflected the price of the product as well as the cost of freight.

The copy of invoice 7078 enclosed in Ambros's June 17th letter contained references to outstanding balances from past invoices, including for invoices 7016, 7027, and 7053.[1] The outstanding balances referenced in invoice 7078 greatly exceeded the prices contained in the invoices themselves, as follows:

Invoice	Price in Invoice	Price Per Invoice 7078
7016	$11,965.00	$24,473.04
7027	$11,965.00	$24,473.04
7053	$12,533.04	$24,473.04

Despite the internal inconsistency between the invoices, Ambros sent FSM another letter dated July 1, 2003 in which Ambros again stated that the invoices contained the correct prices. Ambros' letter did not explain the discrepancies between the outstanding balances in invoice 7078 and the prices contained in invoices 7016, 7027, and 7053. According to the affidavit of John Uwas, Assistant Secretary of Customs, the prices contained in the invoices at issue also grossly undervalued the CIF price of beer when compared to invoices from Ambros for other businesses within the FSM.

FSM sent a letter dated February 26, 2004 to Importers explaining that FSM had conducted a post audit regarding the declared price of the Goods. FSM claimed that the post audit had revealed beyond doubt that the authenticity of the invoices was suspect and that Importers had grossly understated the CIF price of the Goods. FSM further indicated that, consistent with the provisions of FSM Title 54, Section 223, FSM had arrived at a CIF value for the Goods by taking the value for identical good supplied by Ambros. The value arrived at by FSM was $23,473.04 for each of the seven shipments. FSM demanded payment by Importers of unpaid taxes of $19,696.19, plus penalties of $39,392.38 (assessed at 200%), for a total of $59,088.57.

Importers filed a protest with FSM through their attorney by letter dated April 5, 2004. An administrative hearing was scheduled in Pohnpei for April 30, 2004. By letter dated April 30, 2004, Importers' counsel requested that the hearing be rescheduled because Importers had not received notice of the April 30, 2004 hearing. By letter dated April 30, 2004, FSM rescheduled the hearing to May 7, 2004. By letter dated May 5, 2004, Importers' counsel informed FSM that Importers, who resided in Chuuk, would not be available on May 7th and requested that the hearing be tentatively rescheduled for May 25, 2004. FSM by letter dated May 6, 2004 that its representative had already traveled to Pohnpei for the May 7th hearing and that rescheduling to May 25, 2004 was inconvenient. The hearing went forward on May 7th, with Importers' counsel present but without the attendance of Importers. According FSM's June 7, 2004 letter, at the May 7, 2004 hearing FSM presented documentary evidence and testimony and Importers' counsel had the opportunity to conduct cross-examination. By mutual agreement, the hearing was then continued to June 7, 2004 to provide Importers the opportunity to testify and present other evidence. By letter dated June 7, 2004, Importers stated that they would be unable to attend the June 7, 2004 hearing and requested a continuance until June 11, 2004. Importers also explained that they intended to bring a representative from Ambros to offer testimony regarding the pricing of the shipments.

By letter dated June 7, 2004, FSM declined to reschedule the hearing. FSM's June 7th letter also informed Importers that "Based on the May 7, Preliminary Hearing, I have made my final decision regarding the claim against Moria's Store. I have determined that your clients are liable for the unpaid customs charges and hereby order payment of duties, penalties and interest totaling $59,008.57, to the Division of Customs and Tax Administration." FSM did not offer any other written explanation for the basis of its decision. Importers filed the present action on June 22, 2004.

A court must deny a motion for summary judgment unless it finds there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Nahnken of Nett v. United States, [1996] FMSC 9; 7 FSM Intrm. 581, 586 (App. 1996). The court must view the facts presented and inferences made in the light most favorable to the non-moving party. Id. The burden of showing a lack of triable issues of fact rests with the moving party. Adams v. Etscheit, [1994] FMSC 52; 6 FSM Intrm. 580, 582 (App. 1982). When the moving party has made out a prima facie case that there are no triable issues of fact and that it is entitled to summary judgment as a matter of law, the non-moving party then has the burden to show by competent evidence that there is a triable material issue of fact. Nanpei v. Kihara, [1995] FMSC 49; 7 FSM Intrm. 319, 325 (App. 1995).

By their motion for summary judgment, Importers ask the Court to (1) set aside the agency action by FSM for several reasons, discussed in greater detail below, and (2) that the Court should conduct a de novo review of the evidence presented to the Court, without remanding for further administrative proceedings, and conclude that Importers do not owe any additional taxes or penalties to FSM. Defendants contend that summary judgment is not appropriate because genuine issues of material fact exist regarding the authenticity of the seven invoices and the alleged price paid for the Goods. Defendants ask the Court to either dismiss the complaint or, in the alternative, to remand back to FSM for another hearing. For the reasons that follow, the Court sets aside the agency action and remands this matter to FSM for further administrative proceedings consistent with this order.

Importers have sought review in this Court of FSM's administrative action pursuant to Section 111(2) of Title 17 of the FSM Code, which states, "A person adversely affected or aggrieved by agency action is entitled to judicial review thereof in the Supreme Court of the Federated States of Micronesia." In support of their request that this Court set aside FSM's administrative action, Importers rely on 17 F.S.M.C. 111(3)(b), which states:

[The reviewing Court shall] hold unlawful and set aside agency actions and decisions found to be:

Importers contend that FSM's administrative action must be set aside because (1) FSM does not have statutory authority to claim unpaid or underpaid taxes once the goods in question have been cleared and released by FSM inspectors; (2) FSM's administrative action was not supported by sufficient evidence; (3) FSM's refusal to continue the hearing from June 7, 2004 to June 11, 2004 to allow Importers and their third party witness to testify was arbitrary, capricious, and an abuse of discretion; and (4) the equitable doctrine of laches prevents FSM from arriving at a CIF value for the Goods after they had been released and then sold by Importers, which effectively precluded the appraisement of the Goods. Each of these contentions will be discussed in turn.

First, the Customs Act of 1996, 54 F.S.M.C. 211 et seq., gives FSM the authority to investigate and perform post-audits of declared CIF values after the release of the goods. This authority is evident in Section 227(1) of Title 54, which states:

The following penalties and interest shall be separate from and in addition to the criminal penalties imposed elsewhere in this chapter. It is the duty of an imporoer to know and declare, fully and accurately, the types, quantities, and values of all dutiable goods which he or she imports, and civil penalties and interest may not be avoided through lacknowledge, however innocent cent such lack of knowledge may be.

Section 227 places on the importer the responsibility of fully and accurately declaring the value of all dutiable goods. The amount of penalties for understating the value of the imported goods depends on who discovers the understatement and the timing of the discovery in relation to the release of the goods. If FSM discovers the understatement before the release of the goods, a penalty of 100% applies. 54 F.S.M.C. 227(1)(a). A 100% penalty also applies if the importer or owner discovers and reports the understatement within 10 days of the release of the goods. 54 F.S.M.C. 227(1)(b). A penalty of 200% applies in all other cases of understatement. 54 F.S.M.C. 227(1)(c). While the statute is not explicit, instances where 200% will apply include where the importer or owner discovers and reports the understatement more than 10 days after the release of the goods and where FSM discovers the understatement anytime after the release of the goods. In the present case, the alleged understatement was discovered after the release of the Goods and FSM applied a 200% penalty. FSM was within its statutory authority to conduct a post-audit investigation after the Goods had been released.

The Court also declines to set aside FSM's administrative action on the ground that it was not supported by sufficient evidence. As discussed in greater detail below, it is not clear from the administrative record what evidence FSM considered in reaching its decision. FSM's June 7, 2004 letter, in which it assessed the allegedly outstanding taxes and penalties, did not contain a statement of FSM's findings of fact or otherwise set forth the basis for its action. Neither party has presented any evidence of a recording or transcript of the administrative proceedings below. Without knowing what specific evidence FSM considered and relied upon which it based its agency action, this Court cannot determine whether the FSM's administrative action was supported by sufficient evidence or whether the agency action was "unwarranted by the facts." 17 F.S.M.C. 111(3)(b)(v).

Importers next argue that FSM's refusal to continue the hearing from June 7, 2004 to June 11, 2004 to allow Importers and their third-party witness to testify was arbitrary, capricious, and an abuse of discretion. However, the undisputed facts indicate that FSM twice rescheduled the hearing to accommodate Importers  once from April 30, 2004 to May 7, 2004 and again from May 7, 2004 to June 7, 2004. The latter rescheduling gave Importers and any third-party witnesses more than 30 days to make travel and other arrangements to appear at the hearing and was done with the express agreement of Importers' counsel. FSM provided Importers sufficient opportunity to present their case and FSM's refusal to reschedule the hearing for a third time was not arbitrary, capricious, or an abuse of discretion.

Importers finally contend that FSM's revaluing the Goods after they had been cleared and released to Importers and subsequently sold by them violated the equitable doctrine of laches. Importers' argument is based on their reading of 54 F.S.M.C. 223.[2]

Importers contend it was fundamentally unfair, and a violation of the doctrine of laches, for FSM to revalue the Goods after they had been sold to the public because such sale made it impossible to arrive at a CIF price by appraisement, which is one of the valuation methods enumerated in Section 223. The Court does not agree.

What Importers' argument fails to consider is that appraisement is just one of the valuation methods set forth in Section 223; there are several other preferred methods for arriving at an equivalent CIF price where the CIF price cannot be reasonably determined under subsection (2). For example, subsection (3)(b) requires that an equivalent CIF price be established through "the value of identical goods at the CIF location." Only when all other preferable methods fail to render an equivalent CIF price does the statute permit the use of appraisement to arrive at the CIF price. Because the Court does not have the benefit of a full written statement of FSM's findings of fact, an explanation of FSM's decision, or a transcript or recording of the administrative hearing, the Court cannot determine whether an appraisement was necessary in this case, or whether the CIF price of the Goods could have been determined using the CIF price of identical goods at the CIF location. Accordingly, the Court declines to set aside FSM's administrative action on the basis of laches.

While the Court declines to set aside FSM's administrative action for the reasons put forth by Importers, FSM's action must be set aside nonetheless due to FSM's failure to substantially comply with the procedures set forth in the Administrative Procedures Act (the "APA"). See 17 F.S.M.C. 101 et seq. An agency action must be set aside under 17 F.S.M.C. 111(3)(b)(iv) where the action was "without substantial compliance with the procedures required by law." Section 108(2) of the APA requires that administrative hearings "be conducted and orders made . . . in accce wict section 109n 109 of this chapter." 17 F.S.M.C. 108.[3] Thus, FSM's action, which resulted from the hearing conducted by Fust b aside if the hearing was without substantial coml complianpliance with the procedures set forth in section 109 of Title 17. FSM failed to substantially comply with these procedures, and, therefore, FSM's administrative action must be set aside.

The APA requires, among other things, that "Within 15 days after the conclusion of a hearing, the hearing officer shall prepare a full written statement of his findings of fact and his decision." 17 F.S.M.C. 109(6). FSM failed to comply with this requirement. While FSM prepared a letter dated June 7, 2004 informing Importers of FSM's order that Importers pay additional duties and associated penalties, the June 7th letter did not set forth FSM's findings of fact. Indeed, the only explanation for FSM's administrative action is the statement in its June 7th letter that the administrative action was "Based on the May 7, Preliminary Hearing." This does not qualify as a "full written statement of [the hearing officer's] findings of fact and his decision." In the absence of a full written statement of findings of fact and an explanation of how the hearing officer arrived at his decision, this Court has no reasonable basis upon which to review FSM's action. Because FSM failed to substantially comply with this procedural requirement, the Court sets aside FSM's administrative action.

The APA also requires that the administrative hearing be recorded stenographically or by recording machine. 17 F.S.M.C. 109(5) ("At the discretion of the hearing officer, evidence may be taken stenographically or by recording machine.") Neither party has made reference to either a transcript or recording of the administrative hearing, and for purposes of the present motion, the Court assumes that none exists. While the hearing officer has the discretion to decide which method to use  stenographic or recording machine  the hearing officer does not have the discretion to altogether fail to make a record of the hearing. FSM's failure to substantially comply with this procedural requirement is yet another reason FSM's action must be set aside.

FSM failed to substantially comply with the procedures required by law through the hearing officer's failure to prepare a full written statement of his findings of fact and his decision and FSM's failure to make a record of the hearing proceedings, either stenographically or by recording machine. Accordingly, the Court sets aside FSM's order requiring payment of additional duties and associated penalties and interest.

Importers request that upon setting aside FSM's administrative action, this Court conduct a de novo review of the evidence and conclude that the CIF prices contained in the invoices at issue were the CIF prices actually paid by Importers such that no additional taxes or penalties are owing. The Court declines Importers' request.

As defendants point out in their opposition, a genuine issue of material fact exists regarding the authenticity of the invoices. The invoices themselves reveal internal inconsistencies. Invoice 7078 contains references to outstanding balances from invoices 7016, 7027, and 7053. The outstanding balances referenced in invoice 7078 was $24,473.04 for each prior invoice. This price greatly exceeds the declared price contained in the prior invoices. Upon rejecting the CIF price declared by Importers, FSM used a CIF price of $23,473.04 per shipment to calculate the additional taxes and penalties owing. While FSM's June 7, 2004 letter containing its administrative decision did not explain how FSM arrived at a CIF price of $23,473.04 per shipment, the Court observes that the price used by FSM in calculated unpaid taxes and penalties is less than the price per shipment referenced in invoice 7078 for the shipments represented by invoices 7016, 7027, and 7053.

In light of the discrepancies in the evidence, which result in a dispute of material facts, the Court declines Importers' invitation to conclude by summary judgment that the CIF prices declared to FSM by Importers were in fact the CIF prices paid by Importers.

Under the common law rule known as the doctrine of primary jurisdiction, which was recognized by this Court in Etpison v. Perman, [1984] FMSC 3; 1 FSM Intrm. 405, 429-30 (Pon. 1984), courts may remand matters to administrative bodies that are familiar with the regulated activity at issue. Courts apply the doctrine of primary jurisdiction in the hope that by remanding matters to an administrative body, the administrative determination will obviate the need for further court action or will make possible a more informed and precise determination by the court.

Consistent with the doctrine of primary jurisdiction, the Court remands this matter to the FSM Department of Finance and Administration for administrative proceedings consistent with this order. Specifically, FSM is instructed to conduct a new hearing on whether Importers understated the amount of duty owing on the Goods as represented by invoices 7001, 7016, 7027, 7053, 7078, 7100, and 7210. The administrative hearing shall be conducted in accordance with the procedures set forth in 17 F.S.M.C. 109, including, but not limited to, the requirement of recording the proceedings either stenographically or by recording machine and the requirement of issuing a full written statement of the hearing officer's findings of fact and his decision. The administrative proceedings shall be concluded no later than July 1, 2008.

For the foregoing reasons, the Court (1) sets aside FSM's June 7, 2004 administrative action ordering Importers to pay additional duties and associated penalties and (2) remands this matter to the FSM Department of Finance and Administration for further administrative proceedings consistent herewith. The administrative proceedings shall be concluded no later than July 1, 2008. The proceedings in this Court shall be held in abeyance pending completion of the administrative proceedings. A status conference will be held in this Court on July 16, 2008 at 10:00 a.m.

^[1]The copy of invoice 7078 enclosed in Ambros’ June 17, 2003 letter is the same as the copy attached as Exhibit A-5 to the affidavit of Hersin Ruben.
^[2]Section 223 states:

(1) For purposes of determining the basis of import duties levied by this subchapter, the term "ad valorem" shall mean the CIF price of the subject item.

(2) If the Customs officer can reasonably determine the CIF price of imported goods, the import duty shall be payable on the CIF price.

(3) If the Customs officer cannot reasonably determine the CIF price of imported goods, the value for payment of duty shall be determined by the first of the following methods which is reasonably available to the Customs officer:

(a) FOB price plus actual insurance, freight, and other charges from the FOB location to the CIF location;

(c) The value of identical goods at an earlier point plus actual insurance, freight, and other charges from that point to the CIF location.

(4) If the Customs officer cannot determine the CIF price or its equivalent through one of the foregoing methods, the value for payment of duty shall be determined by the appraisement, the cost of which shall be borne by the owner.

(5) No deduction of any kind shall be allowed from the CIF amount because of any special or sample discount, or on account of any other consideration by which a special reduction in price has been or might be obtained.

(6) Where there is a relationship between the buyer and seller of imported goods the consignee may be required to provide reasonable proof that the relationship did not influence the price paid or payable for the Goods.

(a) To demonstrate the acceptability of the price paid or payable for the Goods, the consignee shall supply to Customs details of:

(i) The way in which the buyer and seller organize their commercial relationship;

(iii) The price of identical merchandise, or similar merchandise, in sales to unrelated buyers in the FSM.

(b) Where Customs officials determine that the relationship has influenced the price paid or payable the CIF shall be determined by appraisement, the cost of which shall be borne by the owner.

(7) If the value of imported goods is stated in a currency other than that of the FSM, then the basis of the import tax of such goods shall be calculated according to the ruling rate of exchange at the date of export of the Goods.
^[3]17 F.S.M.C. 108(2) states in its entirety:

Hearings shall be conducted and orders shall be made in accordance with section 109 of this chapter; provided, however, that in the event and to the extent that any other law establishes another procedure for administrative review of the particular matter the provisions of such other law shall be controlling."