Opinion
Tsoucalas, Judge:Plaintiff challenges the United States Customs Service’s (Customs) appraisement of several entries of merchandise from the People’s Republic of China (PRC), the Philippines and Hong Kong. Pier 1 Imports, Inc., plaintiff, the importer of record and ultimate consignee of the involved merchandise, claims that the charges for "buying commissions” and "handling statement charges” in the appraised value are bona fide buying commissions properly excludable from the dutiable value of the subject merchandise. Customs maintains that Oseo Limited (Oseo), the entity paid the commissions and charges, was not a bona fide buying agent but the seller and/or selling agent of the merchandise. It is agreed that the proper basis of appraisal is transaction value under § 402(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1401a(b) (1982). *162Thus, the sole issue presented is whether a bona fide agency relationship existed between plaintiff and Oseo.
Trial
At the trial of this action, three wittnesses testified on behalf of plaintiff: David Walker, the Manager of Replenishment (inventory control) for Pier 1 Imports; Raul A. Quadros, Pier l’s Director of International Transportation; and Marvin J. Girouard, Pier l’s Senior Vice President of Merchandising. Defendant produced Janis Seal, Supervisor, Customs, Los Angeles District.
Mr. Walker testified that his principal responsibilities at Pier 1 entailed managing the store replenishment system and reorders for basic stock merchandise. His testimony primarily focused on the flow of payments involving Oseo and merchandise originating from the PRC, the Philippines and Hong Kong. He further stated that he handled the pertinent documentation relating to these transactions, i.e., shipping and letter of credit documents.
Mr. Walker advanced that plaintiffs representatives traveled to the PRC, ordered goods, and instructed sellers to ship the merchandise to Oseo in Hong Kong. Plaintiff paid for the goods, he added, by opening letters of credit in favor of Oseo, either at sight or deferred at plaintiffs option, which Oseo used to open its own letters of credit to pay the manufacturers. He further testified that plaintiff would reimburse Oseo for banking charges, out-of-pocket expenses, and repacking charges in connection with these transactions.
On the shipments prepaid by Oseo, Mr. Walker submitted that Oseo charged plaintiff interest, and that the deferred payment option also applied to freight prepayments. He stated that plaintiff chose delayed payment financing on six of twenty shipments from the PRC, the one shipment from Hong Kong, and none of the Philippines transactions. Trial Transcript at 11 [hereinafter Tr. at-]. He further testified that Osco’s commissions were based on 6% of invoice price for f.o.b. contracts and 4% of invoice price for c.i.f. contracts, and plaintiff decided whether the shipment was to be f.o.b. or c.i.f.
Concerning plaintiffs purchases from the Philippines and Hong Kong, Mr. Walker stated that Oseo received only service commissions, and no handling or out-of-pocket charges.
Raul A. Quadros testified that he was responsible for the shipments routed through Hong Kong to the United States. He declared that he negotiated the freight rates with the shipping lines on behalf of Pier 1 for the present 22 shipments. He also claimed that Os-eo followed plaintiffs instructions with respect to the shipment of the goods through shipping and routing guidelines attached to each purchase order and accompanying letter of credit.
Mr. Quadros further testified that plaintiff could have bought directly from the PRC suppliers, but chose instead to use Oseo as a buying agent.
*163Marvin J. Girouard testified that he was in charge of setting the budgets and buying for plaintiff. He testified that he traveled to the PRC accompanied by Oseo, and purchased the merchandise directly at the Canton Fair by meeting with representatives of the respective provinces and discussing price, delivery dates, packaging, quality and quantity. On reorders, he stated that plaintiff would telex Oseo, and ask them to contact the PRC provinces which sold the particular product of interest and obtain quotations on price, delivery, and packing; plaintiff would then telex Oseo to confirm the particulars.
On the Philippines and Hong Kong transactions, Mr. Girouard stated that plaintiffs buyers dealt directly with the manufacturers or manufacturers’ representatives, in the presence of Oseo. He also stated that reorders were made directly to the suppliers, with a copy sent to Oseo.
Mr. Girouard additionally set forth plaintiffs justification for the structural difference between the PRC purchases and purchases from the Philippines and Hong Kong: when plaintiff bought goods from the PRC, they were purchased from several different provinces; therefore, it was in plaintiffs economic self-interest to consolidate the goods in Hong Kong before shipment to the United States.
Defendant’s sole witness was Janis Seal, the import specialist for the involved entries, who testified that her duties included appraising, classifying, and enforcing the applicable rules and regulations with respect to imported merchandise as well as conducting importer interviews. She testified that the criteria upon which she determines if one is a buying agent are as follows:
if there was a bond filed, [a] buying agency agreement filed with U.S. Customs, if it was carried through, whether the agent was acting as an independent seller or whether he was working solely for the benefit of the importer and during this course, did he make any profits, get rebates, discounts which did he [sic] not pass onto the importer * * * whether he purchased more merchandise than was ordered [by the importer]; by warehousing it, the excess quantity, whether the importer could refuse shipments thereby stockpiling this merchandise in the agent’s warehouse * * * the amount of control and discretion the agent had in the form of purchasing and payment of the merchandise.
Tr. at 288-99.
As to the importations involved here, Ms. Seal testified that Pier 1 had been importing from Oseo, goods manfactured in the PRC, shipped through Hong Kong and then ultimately to the United States. She observed that when plaintiff submitted Osco’s invoices to Customs in f.o.b. terms, Osco’s commission was itemized in the cost breakdown. But when subsequent invoices did not contain a breakdown of f.o.b. charges, she claims to have questioned plaintiff as to whether commissions were still included in the invoice price, *164and to have received no response when she requested invoices that itemized the f.o.b. charges. She also explained that Oseo was listed as the seller on the Special Customs Invoices, that all documentation filed pointed to Oseo being the selling agent, and that it was not sufficient, by itself, that an importer traveled to the PRC to order merchandise with its representative. Moreover, she stated that the invoices from the PRC listed Oseo as the only entity, with no mention of Pier 1, and it appeared to her from the documents that Oseo was buying for its own account and reselling the merchandise as an independent seller.
Discussion
Bona fide buying commissions paid to an agent are not a proper element of dutiable value. Rosenthal-Netter, Inc. v. United States, 12 CIT 77, 78, 679 F. Supp. 21, 23 (1988), aff'd, No. 88-1294 (Fed. Cir. Nov. 10, 1988). Plaintiff has the burden of proving that a bona fide agency relationship exists and if plaintiff does not clearly establish that relationship, then it is not one of agency. Id. In deciding whether a bona fide agency relationship exists, the Court must examine all the relevant factors, id., and "each case is governed by its own particular facts.” J.C. Penney Purchasing Corp. v. United States, 80 Cust. Ct. 84, 95, C.D. 4741, 451 F. Supp. 973, 983 (1978); United States v. Nelson Bead Co., 42 CCPA 175, 183, C.A.D. 590 (1955). No single factor is determinative; however, the primary consideration is the "right of the principal to control the agent’s conduct with respect to the matters entrusted to him.” 80 Cust. Ct. at 95, 451 F. Supp. at 983; Rosenthal-Netter, 12 CIT at 79, 679 F. Supp. at 23.
An examination of the record reveals that plaintiff controlled the purchasing process. It was plaintiffs responsibility to select the merchandise, determine quantity, negotiate the f.o.b. purchase price, and negotiate delivery from the PRC suppliers. See Plaintiffs Exhibit 24 at ¶2.1 Oseo, consequently, retained minimal discretion in purchasing the subject merchandise, understanding its role to be one where
the selection, quantity and negotiation of FOB price and delivery of merchandise from suppliers within the agreed geographical territories is entirely in the hands and control of the Pier 1 buyers.
Plaintiffs Exhibit 25 (telex of May 20,1980 at ¶3) (emphasis added). Control over the purchasing process is strong evidence that an agency relationship exists. See Rosenthal-Netter 12 CIT at 80, 679 *165F. Supp. at 24; J.C. Penney, 80 Cust. Ct. at 95-96, 451 F. Supp. at 983.
Additionally, in performing these functions, plaintiffs buyers and representatives traveled to the PRC conjointly with Oseo, where they negotiated with the factories and set up purchase terms for the merchandise. See Tr. at 29, 288-90; Plaintiffs Collective Exhibit 2. This court accords significance to an importer who actually visits and participates in negotiations with the factories. J.C. Penney, 80 Cust. Ct. at 96, 451 F. Supp. at 984.
The manner of payment also illustrates a facet of plaintiffs control. Plaintiff would issue a master letter of credit for each purchase order, payable to Oseo either at sight or deferred at plaintiffs option and Oseo would then set up a back-to-back letter of credit between itself and the PRC manufacturer invoiced in the exact amount of plaintiffs purchase order and letter of credit. This arrangement demonstrates that Oseo purchased the subject merchandise only at the direction of plaintiff, conforming with plaintiffs orders. When an intermediary "can only place an order with a factory after * * * receiving] such instructions from an importer [it] is further evidence of the existence of a buying agency.” Id.
It is important to note the distinction between the manner of payment employed by the importer in Rosenthal-Netter, where the intermediary retained the discretion to deduct its commission, handling charges, freight charges, and banking costs from master letters of credit, as opposed to the manner of payment employed in the instant situation. See 12 CIT at 80-81, 679 F. Supp. at 24-25. Here, plaintiff invoiced charges separately and paid for them separately, thereby exercising greater control over Oseo.
Plaintiff also had the option of purchasing directly from the manufacturers.2 "The fact that an importer has an opportunity to purchase merchandise directly, without being required to seek the assistance of an intervening party, has been held to support the existence of an agency relationship.” J. C. Penney, 80 Cust. Ct. at 96, 451 F. Supp. at 984.
The shipping and handling of merchandise was also controlled by plaintiff. Defendant denies plaintiff controlled shipping, and refers to the passage in the Agreement which states that "[t]he selection of shipping lines shall be the exclusive prerogative of OSCO.” Plaintiffs Exhibit 24 at ¶3.3 However, the evidence adduced at trial indicates otherwise. See Plaintiffs Exhibits 14-17, 23; Tr. at 152-75. Plaintiff directed Oseo, by the use of routing guidelines attached to *166purchase orders and letters of credit, to use its preferred carrier choice or other viable alternatives pending unavailability of the preferred choice. See, e.g., Plaintiffs Exhibit 1; Tr. at 22-24, 152. The correspondence between Oseo and plaintiff also reveals that Os-eo responded primarily to plaintiffs instruction with respect to shipping: in one telex plaintiff instructed Oseo to "[p]lease make sure suppliers produce merchandise accordingly for utilization, per usual strict quality control inspection measures before loading.” Plaintiffs Exhibit 15 (telex of Aug. 19, 1981). Oseo replied that it "will act accordingly.” Id. In another telex, Oseo responded that it was "awaiting plaintiffs new instructions” regarding which shipping line to use. Plaintiffs Exhibit 14 (telex received May 27, 1981).
Plaintiff has put forth clear and convincing proof that Oseo operated within the admit of its control. However, "control is but one aspect of an agency relationship.” Rosenthal-Netter, 12 CIT at 81, 679 F. Supp. at 25. The Restatement (Second) of Agency § 14K (1958) terms an agent as one who "is to act primarily for the benefit of the other and not for himself.” The relationship in the instant action comports with the principle enunciated in the Restatement, as exemplified in a telex where Oseo explicitly stated that
[it] is not a competitor but an adjunct and a partner of Pier 1 whose primary role is to service and protect [Pier 1’s] interest by sourcing and assisting Pier 1 buyers in obtaining and shipping quality merchandise at the lowest price * * *.
Plaintiffs Exhibit 25 (telex of May 20, 1980 at ¶3) (emphasis added).
The record demonstrates that Oseo did not buy on its own account, but bought on behalf of plaintiff after receiving purchase orders. Plaintiff neither negotiated nor bought from Oseo. Oseo operated as an intermediary through which plaintiff made purchases "from any vendors in the agreed countries.” Id. at ¶1. Oseo had no financial interest in any of the manufacturers,4 and the commissions Oseo received did not inure to the benefit of the manufacturers: factors which, if present, would have contradicted the agency relationship. See J. C. Penney, 80 Cust. Ct. at 97, 451 F. Supp. at 984.
Defendant refers to The Customs Report of Investigation containing Mr. Girouard’s statement, which ostensibly exposed Oseo as trading on its own account. Specifically, Mr. Girouard stated the following: that Oseo had purchased goods outright and resold them to Pier 1; that there were additional profits to Oseo through cash rebates not reflected on the invoices; that the price Oseo sold to Pier 1 was original "cost” plus a service fee; and that the reduction in price to Oseo effected a cash surplus between the original cost to *167Pier 1 and the amount Oseo actually paid. These events transpired presumably when Oseo made bulk purchases. For support of this position, defendant also refers to language in the Agreement which states that "merchandise purchased by OSCO pursuant to this Agreement shall be repurchased from OSCO by PIER 1.” Plaintiffs Exhibit 24 at ¶2. However, the "purchases” and "repurchases” are not indicative of independent selling by Oseo; but reflect the structure plaintiff established to purchase from the PRC. While it is true that Oseo "purchased” merchandise from the PRC, it was not until plaintiff ordered the merchandise, and forwarded the funds necessary for acquisition that Oseo actually purchased the goods. Consequently, Oseo operated only at the bequest of plaintiff, not autonomously. See 80 Cust. Ct. at 100 n.ll, 451 F. Supp. at 986-87 n.ll.
Furthermore, it does not detract from an agency, as defendant asserts, that plaintiff neither checked the amount paid to the PRC nor possessed any documentation of what Oseo paid. See id. at 102, 451 F. Supp. at 987.
Defendant additionally claims that the official papers of the involved entries establish a buyer-seller relationship. All the entry papers in the present action including the Special Customs Invoices referred to Oseo as the seller of the merchandise, and to Pier 1 as the buyer. None of the entry papers listed the PRC manufacturers as sellers. Plaintiff had the opportunity to inspect these documents, but made no corrections, and attested to their accuracy when submitted to Customs.
Where the official papers accompanying an entry unequivocally set out a relationship between two parties which is subsequently disclaimed by them, this court has looked askance at such later allegations in the absence of clear and convincing proof that the statements made at the time of entry were erroneous.
Globemaster Midwest, Inc. v. United States, 67 Cust. Ct. 539, 545, R.D. 11758, 337 F. Supp. 465, 470 (1971) (quoting United States v. Manhattan Novelty Corp., 63 Cust. Ct. 699, 704, A.R.D. 263 (1969)) (emphasis added); see also Rosenthal-Netter, 12 CIT at 82, 679 F. Supp. at 25; New Trends Inc. v. United States, 10 CIT 637, 642-43, 645 F. Supp. at 957, 961 (1986).
However, whether the relationship is one of buyer-seller or agent-principal "is to be determined by the substance of the transaction — not by the labels the parties attach to it.” Dorf Int’l, Inc. v. United States, 61 Cust. Ct. 604, 610, A.R.D. 245, 291 F. Supp. 690, 694 (1968) (citing Mecham On Agency (2d ed.) § 47). In Dorf, the court found that "the agreement in question, while cast in terms of a buyer and seller relation, was in reality a principal-agent relationship between the contracting parties,” id., despite the agent being "clothed in the garb of an 'independent contractor’ ” in the agreement. Id. at 611, 291 F. Supp. at 695. The Court here, likewise, finds that the substance of this transaction supports the conclusion *168that Oseo operated as plaintiffs buying agent regardless of the terminology employed.
Moreover, the risk of loss of the goods was not on Oseo. "It is uncharacteristic of an agency relationship to allow the intermediary to bear the risk for damaged, lost, or defective merchandise.” Rosen-thal-Netter, 12 CIT at 83, 679 F. Supp. at 26. In this instance, Oseo was liable only for its own negligence. Paragraph 7 of the Osco-Pier 1 agreement states that
OSCO shall not be liable for any short or erroneous shipments or for defective or damaged goods from the Peoples Republic of China or other countries in situations where the goods have already been packed for shipment by the supplier without representatives of OSCO being present during such packing.
OSCO is also not responsible for damage to shipments in transit or to delays incurred by the shipping lines.
Plaintiffs Exhibit 24 at ¶7. The testimony at trial, which the Court accepts, and the evidence in the record makes clear that Oseo did not bear the risk of loss for the merchandise, only for its own negligence, which does not bear on the agency relationship. See Tr. at 203-05.
The terminology in the correspondence between plaintiff and Os-eo in doing business is confusing,5 but lends itself to an interpretation which indicates plaintiffs hands-on control over Osco’s behavior. Plaintiff monitored and took an active part in procuring the merchandise from the PRC, often giving Oseo direction on the proper course of action. See, e.g., Plaintiffs Exhibits 4-6, 23-26.
In regard to the Philippines and Hong Kong transactions, the Court concludes that Oseo functioned in the capacity of a buying agent as well. Despite not receiving handling or out-of-pocket charges, it is clear that Oseo, pursuant to the Agreement, assisted plaintiff and operated at plaintiffs instruction.
Conclusion
Although the record is not clear on all points and is sometimes contradictory, viewed as a whole the Court finds that there is sufficient evidence to support its finding that Oseo operated as plaintiffs bona fide buying agent in Hong Kong. Therefore, the commissions and handling statement charges paid to Oseo are not properly part of the dutiable value of the subject merchandise under transaction value, 19 U.S.C. § 1401a(b).
The paragraph reads as follows:
SELECTION, PURCHASE AND SALE OF MERCHANDISE. The selection, quantity and negotiation of the FOB purchase price and delivery of merchandise from suppliers in the Peoples Republic of China and the other countries specified herein, to be purchased by OSCO and/or its nominees, shall be the exclusive prerogative and responsibility of the representatives of PIER 1. It is understood that the merchandise purchased by OSCO pursuant to this Agreement shall be repurchased from OSCO by PIER 1.
Mr. Quadros explained that in 1977, one or two shipments involving Oseo were made directly from the PRC to plaintiff via a feeder ship from China to Japan and then a mother ship from Japan to the United States. He said this practice was discontinued because it had been found to be inconvenient, expensive and that he could not receive satisfactory information pertaining to the shipments. Tr. at 154-55.
Additionally, defendant refers to certain correspondence between plaintiff and Oseo as evidence of Oseo not complying with plaintiffs choice of carrier. See Plaintiffs Exhibit 23. The correspondence, however, indicates that plaintiff actively monitored Oseo and sought to minimize its cost and losses by seeking Osco’s compliance with its carrier choices.
Osco received rebates from the manufacturers in the PRC. Defendant’s Exhibit E at 2; Tr. at 128-30. However, rebates which are routinely granted to intermediaries do not defeat an agency relationship, especially when the rebates were not part of the transaction between plaintiff and sellers and do "not controvert the fact that the * * * commission * * * was a buying commission not part of dutiable value.” United States v. Knit Wits (Wiley), 62 Cust. Ct. 1008, 1014, A.R.D. 251, 296 F. Supp. 949, 954 (1969) (citing Lollytogs, Ltd. v. United States, 55 Cust. Ct. 608, Reap. Dec. 11073 (1965)); see also United States v. Alfred Kohlberg, Inc. 27 CCPA 223, C.A.D. 88 (1940).
Sales confirmations between the PRC and Oseo listed Oseo as the purchaser and did not mention Pier 1 at all. A factor which indicates an agency relationship is when the factories are aware that plaintiff and not the alleged agent is the purchaser. J.C. Penney, 80 Cust. Ct. at 96, 451 F. Supp. at 983. Additionally, all of the purchase orders listed Oseo as the seller and all of the invoices stated that the merchandise was "sold to” Pier 1. See Plaintiffs Exhibits 1-2.