BSAD486 ch12

General rules of interpretation

GRI Found at the beginning of the terrace schedule. It is a set of six rules for classifying goods The first step in determining the dutiable status of an article is determining it's tariff classification using .....

Composite goods

Goods made of different materials

Common and commercial

Terms used to describe an article in the schedule are interpreted according to their .... .. ... meaning unless a different scientific meaning is more applicable

Informal entry

Commercial or personal purchases with value less than $2500 maybe cleared through this process As of 2016 shipments valued at $800 or less may be imported by any one person on any one day without the payment of duties

Specific Tariff rate

Is the fixed charge per unit of the imported goods

Crimes of customs fraud

The law provide a maximum sentence of two years imprisonment, a fine, or both for each violation and forfeiture of the goods that were subject of the fraud. Anyone who knowingly and willingly with the intent to divide the United States or secretly smuggles or attempt to smuggle goes into the country without customs clearance can receive up to a 20 year prison sentence

Preferential rules of origin

those applicable to goods traded within a free trade area or customs union, or that receive preferential tariff treatment under trade preference programs for developing countries

Payment of duties

If import duties are assessed on the goods, the importer most deposit estimated duties with customs at the time of filing the entry documents or the entry summary form. The duties must be in an amount determined by customs, pending a final calculation of the amount actually owed.

Foreign trade zones

In the United States operate under a license from the US foreign trade zone board and according to regulations of the board and of US customs and border protection. The zones must be within a 60 mile radius of a US port of entry

Compound Tariff rates

Is a combination of both ad valorem and a specific rates

Drawback

Is a refund of duties already paid on imported goods when the goods or other goods manufactured from the original goods are reexported or destroyed

Manufacturing drawback

Is a refund of duties and taxes paid on merchandise that is imported, subject to manufacture or production, and then exported within five years

Negligent violation

Is one in which the importer fails to use reasonable care, scale, and competence to ensure that all customs documents and statements are materially correct and have all laws complied with

Commercial invoice

Is required for all shipments intended for sale or commercial use in the United States. The invoice must provide all permanent information about the shipment in English and be signed by the seller

Country of origin

Is that country from within imported article it said to have originated according to specific roles, known as rolls of origin.

Liquidation

Is the final computation and assessment of the applicable duty on entered goods by customs This makes the entry complete if customs except the century it is submitted on the importers documents and occurs immediately.

Tariff engineering

The process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purpose of obtaining a lower rate of duty. An article is to be classified according to its condition at the time it is imported This allows importers to enter their goods at any step in the manufacturing process in order to obtain a lower rate of duty

Production assists

These are goods, services, or intellectual property provided free or at a reduced price, (to a foreign producer by an importer) for use in producing merchandise for import into the United States. The value of an assist must be included in transaction value when the goods are imported into the United States.

Formal injury

This is when goods have officially entered the United States They have only been entered when the following requirements have been met: 1. The goods have arrived at a US port of entry 2. The goods are not of any type that is not permitted entry or form of embargoed country 3. Delivery is authorized by customs after inspection and release 4. Estimated duties have been paid or customs bond posted

Essential character

Two or more headings or subheadings each describe only certain materials or components in composite goods, the article must be classified under the heading that describes the material or components that give the article it's ... It means "main component"

Customs offices

.. .. are located at the ports of entry, including major seaports, airports, inland ports, and border crossings

Custom and tariff laws

... .. .. .. Are administered and enforced by the US bureau of customs and border protection, and agency within the department of homeland security

Customs

... responsibilities are to stop terrorist and terrorist weapons as well as illegal drugs and drug traffickers from entering the United States; to assess and collect the tariff revenue of the United States; and to enforce the customs and immigration laws at the border

Federal trade commission

...'s Rules apply to all claims, including those on product catalogs, packaging, and all forms of advertising. Second while the US customs and forces the trade and tariff laws, this commissions statutory authority is to prevent misleading or deceptive claims or practices

Binding ruling

Also called a ruling letter, represents the official position of customs with respect to the specific transaction for which it was issued. It is binding on customs personnel until revoked.

HTSUS

Divides products into several thousand Tariff classifications, ranging from basic commodities and agricultural products to manufactured goods.

Article substantially transformed

If an article is not wholly the growth product or manufacture of one country but has been produced in multiple countries in the country of origin is that country where the article last underwent a substantial transformation into a new and different article of commerce. This occurs when the original article loses its identity as such and is transformed into a new and different article of commerce having a new name, character, or use different from that of the original item.

Harmonized Tariff schedule of the United States

the classification of goods used to determine tariffs on specific products imported into the United States It is a Tariff schedule created in 1989 and maintained by the international trade commission ITC

Domestic or regional value content test

A type of value added test This requires that some minimum percentage of the value of materials and direct processing operations be performed in a country in order for it to have originated there 35% minimum

Ad Valorem Tariff

A value that is based on the value of the imported products

Aggravating and mitigating circumstances

Aggravating factors include withholding evidence, providing misleading information, prior improper shipments, and illegal trans shipments to hide the actual country of origin. Mitigating factors include erroneous advice from a customs official, cooperating with the investigation, bringing the error to customers attention and voluntarily paying the duty or a prior good shipment record

Dutiable value

Also called the customs value, of goods entered into any country must be reported by the importer of record to national customs authorities at the time of entry

Protesting liquidations

An importer that wants to dispute a liquidation made by customs may file a protest with customs within 90 days at the port where the goods were entered. Customs has 30 days to respond in cases where the goods have been denied entry; otherwise it has two years to act.

Bureau of customs and border protection

Has broad powers to establish regulations, carry out investigations and impose penalties. The basic enforcement and civil penalty provisions of customs laws are found in title 19 section 1592 of the US code

Rule of relative specificity

Specifies the essential or main character of the product in its heading. If an article can be classified under two or more headings or subheadings it must be classified under the one that most specifically describes the article with the greatest degree of accuracy and certainty

WTO agreement on the rules of origin 1995

Standardized and simplified rules of origin.

Tariff shift rule

States that the country of origin is the last country in which all inputs (raw materials, component parts) into the finished article underwent a required change in tariff of classification.

Required documentation

When goods are entered the country, the entry documents must be filed within five days. Documents necessary are as followed: 1. An entry manifest or merchandise release form 2. US customs entry summary form 3. Proof of the right to make entry 4. The commercial invoice obtained from the seller 5. Packaging slips to identify the contents of cartons 6. Other documents required by special regulations

Preferential rules of origin

Are found in the trade agreement or tariff program that creates the preference, and so the rules can differ from program to program. In order to qualify for trade preference, an item imported into the US must be wholly obtained from the country qualifying for a trade preference

Foreign trade zones

Are legally defined sites— warehouses and manufacturing facilities — operated pursuant to legislation and under government license, that are legally outside the customs territory of the country they're in

Rules of origin

Are the legal rules used to determine the country of origin of imported products

Non-preferential rules of origin

Are those applicable to imports from developed countries that receive normal Tariff treatment or that have normal trade relations

Dutiable status

Of goods refers to the legal status of imported goods at the time of entry for purposes of compliance with the tariff and custom laws. Determined by three factors: 1. The classification and numerical coding of the article 2. The customs value of the article 3. The country of origin of the article First step in determining this status of an item is to locate it in the tariff schedule of the country of import

Non-preferential rules of origin in the US

The general rule applicable to most non-preferential trade is that the country of origin of an article imported into the United States is the country in which the article was wholly obtained. Wholly obtained means that it was wholly the growth product or manufacture of one country. There can be only one country of origin for customs purposes

Statute of limitations

The government is barred from bringing any action to collect an import duty after five years from the date of the violation involving negligence or gross negligence or five years from the date of discovery of a violation involving fraud.