EU Webinar Series: Customs Valuation. Jasper Helder, Partner (Amsterdam) Jennifer Revis, Senior Associate (London) Thursday 26 April 2012

Transcription

1 EU Webinar Series: Customs Valuation Jasper Helder, Partner (Amsterdam) Jennifer Revis, Senior Associate (London) Thursday 26 April 2012

2 Agenda The basics Valuation methods First sale Assists/ cost sharing arrangements Royalties/ licence fees Related party transactions Case studies Top tips 2012 Baker & McKenzie 2

3 The basics 2012 Baker & McKenzie 3

4 Basic Rule The customs value of imported goods shall be the transaction value, that is, the price actually paid or payable for the goods when sold for export to the customs territory of the Community, adjusted, where necessary, in accordance with Articles 32 and 33 Art. 29(1) CC Transaction value preferred to other methods of valuation where there is a sale and certain requirements are met, including: buyer and seller are not related and, if they are, the transaction value is still acceptable 2012 Baker & McKenzie 4

5 Where do the rules originate from? Based on WTO Valuation Agreement WCO Technical Committee publishes WCO Valuation Compendium Where can I find the rules? EC Customs Code (CC) (Reg 2913/92, Article 28-36) Implementing Provisions to Customs Code (IPCC) (Reg 2454/93, Article a and Annexes 23-29) EC Compendium of Customs Valuation Guidance - HMRC Notice Baker & McKenzie 5

6 What items should be added? Additions to the price actually paid or payable (where not already included in the price): (Article 32 CC) (i) commissions and brokerage (exc. buying comm.) (ii) cost of containers / packing (iii) materials, components, tools, dies, engineering, development, plans, sketches etc ( assists ) supplied by buyer to seller free of charge or at a reduced cost (iv) royalties and licence fees - condition of sale (v) proceeds of subsequent sale accruing to seller (vi) delivery costs i.e. transport/insurance/loading and handling charges to the place of introduction into the EU 2012 Baker & McKenzie 6

7 What items can be left out? Not added to price actually paid or payable where shown separately on invoice: (Article 33 CC) (i) (ii) transport after arrival at place of introduction in EU charge for construction, maintenance etc. after importation (iii) interests under financing arrangement (iv) charges for right to reproduce in EU (v) buying commission (vi) import duties Retrospective repayment claims possible 2012 Baker & McKenzie 7

8 Buying commission Fees paid by importer to agent for services representing him in purchase of imported goods (e.g. find suppliers, inspect goods, arrange insurance/transportation etc.) Can be left out of customs value so long as it is shown separately from price (note, must be included in VAT value) HMRC may ask for evidence of buying agency arrangement (e.g. contract, invoice) to ensure that it is a genuine agency agreement Overland Footwear judgment (C-468/03) 2012 Baker & McKenzie 8

9 Apportioning transport costs Can deduct EU transport costs where they are included in total freight charge if freight is charged separately and is distinguished APPORTION value after EU border Sea: can use rate in books or rates advertised by shipping line/ carrier Rail/ road: use reasonable means e.g. distance Air: % of air transport costs on airway bill to be included in customs value is set out in Annex 25 of IPCC (e.g. New York 70%; Switzerland 5%; Tunisia 33%); CHIEF automatically apportions this if air freight costs are entered into correct box on entry declaration 2012 Baker & McKenzie 9

10 Valuation declarations & general valuation statement (GVS) Post April 2008 No requirement to complete valuation declaration unless HMRC requests this (generally will be for import declarations examined post importation audit) GVS only required if using Method 1 & first/earlier sale Complete form C109A Generally valid for 3 years Enter details in box 44 of entry declaration 2012 Baker & McKenzie 10

11 Currency conversion Must convert to any foreign currency amount to be taken into account in arriving at customs value If contract of sale specifies fixed rate of exchange, then use that rate If not, use HMRC s rate of exchange published at time of entry into free circulation 2012 Baker & McKenzie 11

12 Value for VAT purposes Customs value + Customs duty payable on importation + Excise duty or other duties payable on importation + Incidental expenses up to first destination in the UK (transport / packing / insurance / commission) 2012 Baker & McKenzie 12

13 Example Facts Goods purchased on ex-works terms Freight from seller s factory in Hong Kong to port in Hong Kong USD 50 Freight from Hong Kong to Birmingham USD 700 Freight charge from Southampton to Birmingham USD 60 Invoice to be paid in ; transport company & buyer have agreed fixed rate of exchange 2012 Baker & McKenzie 13

14 Valuation methods 2012 Baker & McKenzie 14

15 Valuation methods 6 methods: Method 1: transaction value Method 2: value of identical goods Method 3: value of similar goods Method 4: equivalent selling price in EU Method 5: (interchangeable with method 4) cost of production of goods Method 6: fallback 2012 Baker & McKenzie 15

16 Method 1 (transaction value) Applies to over 90% of imports Price actually paid or payable for goods when sold for export to the customs territory of the EU (with possible adjustments) = total payment made or to be made by buyer to seller Price review after import/ retrospective price adjustments mean invoice price is provisional 2 OPTIONS: Place duty on deposit/ goods released under security arrangements ; or Formal agreement with customs for periodic review/ reconciliation 2012 Baker & McKenzie 16

17 Method 2 (identical goods) Based on customs value of identical goods exported to EU at or about same time as goods to be valued Identical = goods produced in same country as those being valued; same in all respects except for minor differences in appearance (physical characteristics, quality & reputation) May use sales at different commercial level and different quantities but adjust accordingly if this affects price (e.g. quantity/wholesale discounts) Evidence (e.g. invoice) 2012 Baker & McKenzie 17

18 Method 3 (similar goods) Similar = differ in some respects to goods being valued but (i) are produced in same country; (ii) can carry out same tasks; & (iii) are commercially interchangeable Same conditions apply as for Method Baker & McKenzie 18

19 Method 4 (equivalent selling price in EU) Also referred to as deductive method; does not have to be used before Method 5 Based on unit price at which the imported / identical / similar goods are sold in EU, in the condition as imported, to customers unrelated to seller at or about time of importation of goods to be valued (Method 4(a)) Based on unit price of actual sales of imported goods that take place up to 90 days after importation (Method 4(b)) Unit price must relate to greatest aggregate quantity at time of entry Deductions (profit, general expenses, transport/insurance within EU, EU customs duties/ taxes) Need evidence e.g. sales invoice, price list and details of deductions based on trader s accounts 2012 Baker & McKenzie 19

20 Method 5 (cost of production of goods) Based on cost of production of goods Difficult method so rarely used in practice Usually can only be used where the importer and supplier are related Customs value is a built up value based on (i) cost or value of materials / processing (ii) amount for producer s profit & general expense; plus (iii) cost of transport, insurance and loading or handling to border of EU Need evidence based on producers accounts 2012 Baker & McKenzie 20

21 Method 6 (fallback) Adapt Methods 1 to 5 to fit unusual circumstances e.g. Methods 2 or 3 transaction value for goods produced in country other than country of export Method 4(b) extend 90 days limit Free of charge goods: if you can t use methods 1 to 5, could base customs value on price would have paid if you had bought goods (e.g. supplier s export price list) Used goods: if you can t use methods 1 to 5, value of goods when acquired less loss of value for usage Rented/ leased goods: cash price is often artificially high. If you can t use methods 1 to 5, multiply annual rental/ leasing cost by expected economic life of goods. Where costs includes interest, formula given by HMRC Baker & McKenzie 21

22 Example Facts Company A established in a 3 rd country has a branch B in EU through which it sells IT accessories to unrelated buyers in EU B has no separate legal identity B does not buy the IT goods but on receiving them from A, B enters them into free circulation and stores them at its premises Customs value for identical or similar goods sold for export to the EU cannot be established B claims that the customs value should be determined under Method 4 and that its actual profit and general expenses may be deducted from the selling price. Is this correct? 2012 Baker & McKenzie 22

23 First sale 2012 Baker & McKenzie 23

24 First sale: current rules Article 147(1) IPCC (...) In the case of successive sales before valuation, only the last sale, which led to the introduction of the goods into the customs territory of the Community, or a sale taking place in the customs territory of the Community before entry for free circulation of the goods shall constitute such indication. Where a price is declared which relates to a sale taking place before the last sale on the basis of which the goods were introduced into the customs territory of the Community, it must be demonstrated to the satisfaction of the customs authorities that this sale of goods took place for export to the customs territory in question. First sale for export to EU can be used as customs value of good keeps customs value low Generally can only be used for intercompany transactions as only related company can obtain necessary information 2012 Baker & McKenzie 24

25 Requirements for first sale First sale must: occur prior to import into EU clearly be for export to EU e.g. Goods manufactured according to EU specifications Goods manufactured specifically for EU buyer Goods ordered from intermediary are shipped directly from manufacturer 2012 Baker & McKenzie 25

26 First sale - MCCIP update Latest version of Implementing Provisions to Modernised Customs Code ( MCCIP ): version 3 dated 28 November 2011 Art : In the case of successive sales, the transaction value is determined on the basis of the last sale in the international commercial chain before the goods are brought into the customs territory of the Community Motion for European Parliament resolution dated 25 November 2011, calling for first sale to be retained 2012 Baker & McKenzie 26

27 Assists/ cost sharing arrangements 2012 Baker & McKenzie 27

28 Article 32 (1)(b) CC assists the value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or payable: (i) materials, components, parts and similar items incorporated in the imported goods, (ii) tools, dies, moulds and similar items used in the production of the imported goods, (iii) materials consumed in the production of the imported goods, (iv) engineering, development, artwork, design work, and plans and sketches undertaken elsewhere than in the Community and necessary for the production of the imported goods 2012 Baker & McKenzie 28

29 How to reconcile customs value Assists are potentially dutiable need to consider: how to apportion their value to imports; and/or best method to adjust customs value Where importer is part of group of companies, not unusual for parent company to seek to recover R&D costs through cost sharing arrangement Consider what benefit importer receives in exchange for payment Not all elements are necessarily dutiable (e.g. merchandising, sourcing) 2012 Baker & McKenzie 29

30 How to reconcile customs value Apportionment Apportionment can get very complicated, but possible savings opportunities... What types of costs are dutiable? (Article 32 CC) Exclude costs incurred in EU Only costs relating to goods imported into the EU are dutiable Apportionment is permitted based on the generally accepted accounting principles of the importing country (e.g. quantity imported vs. worldwide production) How do you make adjustments to customs value (in the UK)? Add uplift to transaction value for each entry; or Make retrospective adjustments to customs value (consider prior agreement with HMRC) 2012 Baker & McKenzie 30

31 Royalties/licence fees 2012 Baker & McKenzie 31

32 Article 32(1)(c) CC Royalties & licence fees Royalties and licence fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable must be added to the customs value in order to be dutiable, royalty/licence fee must: relate to imported goods; & constitute a condition of sale of those goods 2012 Baker & McKenzie 32

33 When are royalties/ licence fees dutiable? Even if sales contract does not explicitly require buyer to make these payments, it can be an implicit condition of sale if buyer were not able to buy goods from seller without this payment Country of residence of recipient of payment is irrelevant Where you pay royalty/licence fee to seller of goods imported highly likely that it is dutiable Where you pay royalty/licence fee to a third party look at facts carefully. Is it a condition of sale? 2012 Baker & McKenzie 33

34 What constitutes a condition of sale? Royalty/licence fee payable to third party will be dutiable where the seller or person related to him requires the buyer to make that payment (Article 160 of IPCC) Person related to the seller will be (Article 143 IPCC): corporate relationship (i.e. company which is part of the same group as seller) contractual or other relationship where some element of control 2012 Baker & McKenzie 34

35 Concept of control Commentary No. 11 of Customs Code Committee (Jan. 2007) sets out some examples of factors to be taken into account 2012 Baker & McKenzie 35

36 Concept of control (cont d) Licensor charges Royalties Export of the manufactured goods to the EU Examples of controls of the Licensor upon the Manufacturer on: sourcing of materials and components used in the manufacturing process, characteristics of the goods and technology used, clients of the Manufacturer for the goods exported, selling price of the exported goods, Manufacturer s accounting records Baker & McKenzie 36

37 Concept of control (cont d) A combination of such indicators, which go beyond purely quality control checks by the licensor, demonstrates that a relationship of control exists and hence the payment of the royalty would be a condition of sale Certain indicators carry more weight and show more strongly than others that the licensor exercises restraint or direction over the manufacturer/seller Where possible, avoid written records setting out control exercised by 3 rd party licensor over manufacturer 2012 Baker & McKenzie 37

38 How to reconcile customs value Similar issues to assists (apportionment etc.) Remember that not all royalty/ licence fee payment is necessarily dutiable (e.g. 7% royalty may be specified as representing 3% for patent rights, 2% for marketing knowhow and 2% for trade mark usage) 2012 Baker & McKenzie 38

39 Royalties - MCCIP update Article of Version 3 of draft MCCIP: New criteria for adding royalties to customs value Royalties and licence fees are related to the imported goods where in particular, the rights transferred under the licence or royalties agreement are embodied in the goods. The method of calculation of the amount of the royalty or licence fee is not the decisive factor. Royalties/ licence fees are a condition of sale if a) the seller or person related to the seller requires the buyer to make this payment; b) the payment by the buyer is made to satisfy an obligation of the seller, in accordance with contractual obligations; or c) the goods cannot be sold to, or purchased by the buyer without payment of the royalties or license fees to a licensor. (NEW CONDITION) 2012 Baker & McKenzie 39

40 WCO Commentary 25.1 on 3 rd party royalties & licence fees Adopted in April 2011 relate to the goods being valued = incorporate the IP and/or are manufactured using the IP covered by the licence e.g. incorporate the trademark for which the licence fee/ royalty is paid condition of sale = where the buyer is unable to purchase the imported goods without paying the royalty or licence fee. Need to review all facts including linkages between the sales and licence agreements List of factors to take into account 2012 Baker & McKenzie 40

41 Related party transactions 2012 Baker & McKenzie 41

42 Customs issues to consider Two main issues: 1. What is value of imported goods? Can you use TP price? 2. How do post transaction TP adjustments impact customs valuation? 2012 Baker & McKenzie 42

43 Can you use TP price for customs valuation? Generally, customs value between related parties is the transaction value (i.e. TP price) provided relationship has not affected price i.e. arm s length price What is meant by related? (Article 143 IPCC) Customs authorities in importing country may assess whether transaction value is acceptable Note, post transaction TP adjustments may impact customs value 2012 Baker & McKenzie 43

44 Retrospective adjustments to customs value (UK) Security arrangements or individual arrangement with HMRC Voluntary disclosure (avoid penalties) Retrospective price increase pay additional duties and VAT (blanket adjustment possible) Retrospective price decrease refund? Yes, where appropriate evidence VAT considerations 2012 Baker & McKenzie 44

45 Other Member States - Should TP adjustments be disclosed to customs authorities? - In most Member States, this is required where prices are adjusted upwards (note, failure to disclose this will be considered to be fraud in some countries, such as Germany) - Procedure for amending entries can very time consuming: may involve manually amending past entries - Advance pricing agreements may be available - Not all Member States will be prepared to issue refund of overpaid duties (unless provisional entries are made) 2012 Baker & McKenzie 45

46 Case studies 2012 Baker & McKenzie 46

47 Example 1 Transport and associated costs Chinese manufacturer sells microchips to UK importer on FOB (Freight on Board) Hong Kong terms (value GBP 10,000) Goods transported from Chengdu to Hong Kong (GBP 200) Loading costs at Hong Kong (GBP 50) Goods shipped by sea to Singapore (GBP 550) Goods then shipped by air to Heathrow airport (GBP 1000) Goods imported at Heathrow airport and transported by road to UK importer in Birmingham (GBP 75) Buying commission (GBP 50) Insurance (annual premium of 400) 2012 Baker & McKenzie 47

48 Example 1 (2) What is the customs valuation of the microchips? What additional costs should be added to the price of the goods to make up the customs value? Transport outside the EU, but not inside (including apportionment of flight from Singapore to Heathrow) Insurance as this is an annual premium, you can apportion a suitable value to this particular import Buying commission excluded What costs can be deducted from the customs value? Must be shown separately on the invoice and consistent with Incoterms 2012 Baker & McKenzie 48

49 Example 1 (3) Goods transported from Chengdu to Hong Kong (GBP 200) No Loading costs at Hong Kong (GBP 50) No Goods shipped by sea to Singapore (GBP 550) Yes Goods then shipped by air to Heathrow airport (GBP 1000) Yes (70% only - section 46, HMRC Notice 252) Goods imported at Heathrow airport and transported by road to UK importer in Birmingham (GBP 75) No Insurance Yes - include apportioned cost: Annual set premium: GBP 400 Total value of imports in previous 12 months: GBP 250, /250,000 x 100 = 0.16 This percentage can be used to calculate the insurance costs for individual imports made during the following 12 months Buying commission (GBP 50) No Total customs value: 10, = GBP 11, Baker & McKenzie 49

50 Example 2 Transport Mizunyo Electronics (Japan) sells portable radios to UK importer on FOB Tokyo terms Goods shipped by sea from Tokyo to Seattle and then by air from Seattle to Heathrow airport Total freight charge from Tokyo to Heathrow is GBP 2,000; no breakdown of the charges for the sea and air journeys is available Goods imported at Heathrow airport Goods transported by rail to Bristol (GBP 100) 2012 Baker & McKenzie 50

51 Example 2 (2) As no breakdown of the freight charge is available, for practical convenience the air transport cost is used Apportioned cost of freight is 83% of GBP 2,000 (section 46, HMRC Notice 252) = GBP 1,660 Do not include transport costs within EU Customs value 19, ,660 = GBP 20, Baker & McKenzie 51

52 Example 3 Transport Marrakech Leather Co. sells handbags to UK importer on CIF (Cost, Insurance and Freight) Birmingham terms Goods imported at Avonmouth Invoice price is GBP 1,600 Seller states that the amount included in the invoice price for transport from Avonmouth to Birmingham is GBP Baker & McKenzie 52

53 Example 3 (2) Invoice includes transport to Birmingham, which is beyond the place of introduction but is not separately charged Because shown separately on invoice, we can deduct GBP 50 from the invoice price for post-introduction transport (alternatively, if not separately shown, could use apportionment method) Customs value: 1, = GBP 1,550 Where these transport costs are not itemised or evidence of these costs cannot be produced to HMRC, the basis for customs value is GBP 1, Baker & McKenzie 53

54 Example 4 Toll manufacturing Materials EUR 14,000 Toll Manufacturer EUR 2,500 UK EUR 25,000 Buyer End Customer Processing fee: EUR 2,500 Materials: EUR 14,000 Total value: EUR 16,500 Raw materials provided by UK buyer free of charge to the manufacturer Duty payable on processing fee and materials (i.e. EUR 16,500) 2012 Baker & McKenzie 54

55 Example 5 Successive Sales OEM (Malaysia) Sale 1 75 Parent (Singapore) Sale EU distributor EU retailer Physical delivery Both Sale 1 and Sale 2 could constitute a sale for export Using Sale 1, the amount used for customs purposes is 25% lower (and excludes the parent s costs and margin) 2012 Baker & McKenzie 55

56 Example 6 Assists China Steel Co products: EUR 50,000 UK Construct Ltd Mould (EUR 25,000, makes 100,000 products) China Steel Co. manufactures steel products for UK Construct Ltd using a mould provided by UK Construct Ltd UK Construct Ltd provides the mould free of charge The mould is valued at EUR 25,000 and can be used to make 100,000 products China Steel Co. produces the first batch of 5,000 products and supplies these to UK Construct Ltd on CIF Southampton terms Applicable duty rate is 5% 2012 Baker & McKenzie 56

57 Example 6 (2) China Steel Co. 5,000 products: EUR 50,000 UK Construct Ltd Mould (EUR 25,000, makes 100,000 products) Value of the mould must be reflected in the value declared for customs purposes when imported to the UK Three options: Pay duty on products + one-off payment for total value of mould 50, % = EUR 3,750 Provides for certainty (particularly for accountancy purposes) Pay duty on products + apportioned value of mould (paid in respect of each import transaction) 50,000 + (25,000/100,000 x 5% = EUR 2, Benefit from flexibility (e.g., if you move the mould to another supplier) Pay duty on products + agree in advance with HMRC to reconcile apportioned value of mould on an annual basis 2012 Baker & McKenzie 57

58 Example 7 - Royalties UK importer agrees to pay a US licensor for the right to use their registered trademark Trademark is woven into shirts purchased by the UK importer from a vendor in Hong Kong Hong Kong vendor will provide 1,000 shirts per week to UK importer over 12 week period The importer will coordinate delivery of the shirts to their domestic retail outlets The licensor is not related to the vendor Under the terms of the agreement between UK importer and licensor, a royalty payment of GBP 5 will be made for every shirt sold into the UK that bears the licensor s trademark No indication is provided in the documentation relevant to either the sale or the royalty agreement that the vendor will stop shipping shirts to the UK importer if the royalty payment is not made 2012 Baker & McKenzie 58

59 Example 7 (2) The royalty payment is not to be added to the price paid or payable for the shirts imported from Hong Kong The payment is a royalty payment and is in respect of the goods, but is not a condition of sale, as the consequence of the failure to make payment is not explicitly identified in the documentation The UK importer purchases goods from the Hong Kong vendor and pays the royalty to the US licensor If the licensor and the vendor were related, the payment would be a condition of sale where either of these entities requires the importer to make that payment 2012 Baker & McKenzie 59

60 Example 8 R&D costs Brazilian Subsidiary Payment towards Group s R&D costs product flows payment Machinery + Components + designs Indian Manufacturer US Parent Co. Responsible for research, development, brands etc. payment product flows Payment towards Group s R&D costs UK Subsidiary 2012 Baker & McKenzie 60

61 Example 8 (2) How do we go about including the R&D costs/machinery in the customs valuation of an individual product imported by UK subsidiary? What benefit does UK subsidiary obtain for its R&D payment? Remember that not all of the elements are necessarily dutiable (e.g. marketing costs) US parent co. is also supplying assists to India manufacturing co. assists used in the production of the imported goods and so value needs to be attributed to them for customs purposes 2012 Baker & McKenzie 61

62 Example 9 Transfer pricing adjustments HC Inc. (US) EUR 100,000 A B HC Ltd (UK) HealthCo Limited (a UK company) imports pharmaceutical products into the UK from its direct US parent, HealthCo Inc. Total value of imports at the time of importation is EUR 100,000 Applicable duty rate is 10% At the end of the financial year, HealthCo Inc. determines the margins its global subsidiaries should be making Two alternatives: A: HealthCo Limited s margin is lowered and it pays an additional EUR 20,000 to HealthCo Inc. B: HealthCo Limited s margin is raised and it receives EUR 20,000 credit 2012 Baker & McKenzie 62

63 Example 9 (2) Firstly, are the transfer prices valid? What transfer pricing method is used? Are the changes retrospective? A: HealthCo Limited s margin is lowered and it pays an additional EUR 20,000 to HealthCo Inc. Duty payable is 10% of 120,000 = EUR 12,000 Potential voluntary disclosure to HMRC in respect of additional EUR 2,000 and any additional VAT B: HealthCo Limited s margin is raised and it receives EUR 20,000 credit Duty payable is 10% of 80,000 = EUR 8,000 Potential overpayment claim HMRC likely to require a line-by-line adjustment illustration and evidence of transfer pricing agreements in force at time of import NB: Import VAT consequences? 2012 Baker & McKenzie 63

64 Top tips 2012 Baker & McKenzie 64

65 Top tips Assessing customs valuation can be difficult; it is a key area for audits to focus on - don t rely on your customs broker! Royalties and assists are often missed out, and can have a very significant effect on valuation Be careful of year-end transfer pricing adjustments and their implications for customs valuation Consider Incoterms carefully are transport, insurance costs etc. included in the price? who is responsible for making customs declaration? 2012 Baker & McKenzie 65

66 EU Webinar Series Customs Valuation Jasper Helder & Jennifer Revis Baker & McKenzie LLP Baker & McKenzie LLP is a limited liability partnership registered in England and Wales with registered number OC A list of members' names is open to inspection at its registered office and principal place of business, 100 New Bridge Street, London EC4V 6JA. Baker & McKenzie LLP is authorised and regulated by the Solicitors Regulation Authority of England and Wales. Further information regarding the regulatory position is available at Baker & McKenzie LLP is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the terminology commonly used in professional service organisations, reference to a "partner" means a person who is a member, partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm.