Int Bus Law Test 5
Giving Incorrect Descriptions of Products
1. The Product They Are Actually Trying to Import is Illegal, So They Describe The Product Inaccurately to Portray It As a Different Product That Is Legal 2. The Product They Are Actually Trying to Import Has a Higher Tariff, So They Describe the Product Inaccurately to Portray It As a Product That Has a Lower Tariff Rate
After Determining Country of Origin:
Can Now Determine How Much Tariffs Will Be
example of tarriff shift rule:
China makes wooden handles. China sends wooden handles to Canada. Canada drills holes in wooden handles and adds bristles. The finished product changed in Canada. It went from the tariff classification of "wooden handles" and shifted to a tariff classification of "wooden hairbrushes." So the country of origin is Canada, not China.
tarriff schedule
Classifications Are Found In a
example:
Import chocolate .Tariff rate for "bars of chocolate" is 13.5% Tariff rate for "liquid chocolate" is 2.9%.
Customs Union Countries MUST
Impose a Specific Tariff Rate On All Countries Outside Their Customs Union
substantial transformation example:
Japan makes wooden handles .Japan sends them to China. China drills holes in the wooden handles and adds bristles to make it into a hairbrush. China sends those hairbrushes to the U.S. A substantial transformation happened in China. (So China is origin country)
customs fraud
`involves civil and criminal violations when a person knowingly makes false information to Customs about imported goods or actual people when entering or attempting to enter the U.S.
Will Receive Preferential Tariff Treatment if:
a) low tarriffs b) no tarriffs at all
The Bureau of Industry and Security (BIS)
advances U.S.'s national security by ensuring effective export control.
The Federal Trade Commission (FTC)'s Marking Rules
apply primarily to the use of goods made in the U.S.A.
short supply controls
apply to certain foodstuffs, medicines, basic metals, or natural resources.
weapons of mass destruction
are chemical, biological, or radioactive weapons capable of causing widespread death and destruction.
controlled items
are items or services with military applications or items that significantly affect our national interests.
Unfair or Deceptive Trade Practices
are representations, omissions, or practices that misleads a consumer.
antidumping duties
are special import tariffs assessed in addition to the normal tariffs already imposed on those particular goods, for the purpose of offsetting the unfairly low price of dumped goods.
rules of origin
are the legal rules used to determine the country of origin of imported products.
Preferential Rules of Origin
are 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.
Non-Preferential Rules of Origin
are those applicable to imports of developed countries that will receive normal tariff treatment.
national security controls
are used to prohibit the export of goods or technology that would make a significant contribution to another country's military that would be detrimental to the U.S.'s national security.
free trade area
consists of two or more countries that are a party to a free trade agreement that reduces or eliminates tariffs on goods and removes trade barriers.
foreign policy controls
ensure that the U.S. is not giving items to repressive governments so those repressive governments can use those items against their own people.
developed country
generally has a high per capita income, has a higher standing of living, and are in later stages of industrialization.
developing country
generally has lower per capita income, lower standard of living, higher foreign debt, more rapid population growth, and a history of greater state control over their economy.
is a list of persons whose export privileges have been denied or revoked.:
i. Civil Fines of $250,000 Per Each Violation ii. Criminal Action of Going to Prison Up to 20 Years iii. Lost Export Privileges
Categories of Controlled Items in Commerce Control List:
i. Nuclear Materials and Equipment ii. Microorganisms and Toxins iii. Electronic Data iv. Certain Telecommunications v. Information Regarding Security vi. Sensors and Lasers vii. Aerospace and Propulsion
Preferential Rules of Origin Tests:
i. Tariff-Shift Rule Test (The product transforms from one tariff classification to another) ii. Regional Value Contest Test (A country changed this product a certain amount (in a percentage) to become the country of origin.)
Non-Preferential Rules of Origin Tests:
i. Wholly-Obtained Rule Test (The product was grown/made entirely in one country) ii. Substantial Transformation Test (The product transforms from one type of product to another.)
qualified claim
is one that indicates that the product was partially made or processed in the U.S.
export license
is required for each export of a controlled item.
country of origin
is that country from which an imported good is said to have originated according to specific legal rules called the rules of origin.
ommission
is the act of excluding or leaving out something.
export
is the act of shipping controlled items out of the U.S. OR the transfer of controlled items or technology to a foreign national, whether they are located inside or outside the U.S.
essential characters
is the attribute which strongly marks and serves to distinguish what an article is.
tarriffs law
is the body of laws and regulations that determines the tariff or "dutiable" status of goods and the rate of duty.
U.S. Bureau of Customs and Border Protection
is the customs regulatory authority in the U.S.
importing
is the entering of goods into the customs territory of a country.
wholly obtained rule
is the general rule applicable to most non-preferential trade where the country of origin of an article imported into the U.S. is the country in which the article was wholly obtained.
end user
is the individual receiving the controlled item or technology.
ultimate purchaser
is the last person in the U.S. that receives an article in the form in which it was imported.
customs
is the place at a port or airport where officials check incoming goods, travelers, and luggage.
transactional value
is the price actually paid for the merchandise when sold for exports in the U.S.
customs value
is the transactional value of the goods.
processing
is to perform a series of mechanical or chemical operations in order to change something.
fraud =
lie
negligible
means a very small amount.
virtually all
means almost entirely.
wholly obtained
means that it was wholly the growth, product, or manufacture of one country.
conspicuous
means to attract attention or notice.
ultimate
means to happen at the end of a process; final.
substantial transformation
occurs when the original article/good loses its identify as such and is transformed into a new and different article of commerce having a "a new name, character, or use" different from the original item.
dutiable status
of goods is the legal status of the imported goods at the time of entry.
trade preferences
preferential tariff treatment, to developing countries to help further their social and economic developments
The Transactional Value =
purchase price
formal entry
refers to the administrative process required to import goods into the customs territory of a country.
The U.S. Customs Marking Rules
require that the country of origin of every article of foreign origin imported into the U.S. must be permanently marked in English in a conspicuous place.
Regional Value Content Test
requires some minimum percentage of the value of a finished article to be added in a country in order for it to have "originated" there.
classification by essential character
states that if an imported good is made up two or more different materials, that could be classified under different tariff schedules (with different tariff rates), then the imported good will be classified under the tariff schedule that describes the materials that give the article its essential character. (Ex: bath curtain set)
tarriff shift rule
states that the country of origin is the last country in which all "inputs" (raw materials, component parts, etc.) in the finished product underwent a defined change in tariff classification.
Harmonized Commodity Description and Coding System
uses standardized terminology to classify goods.
Entry Process:
1. Determining Whether Restrictions Apply to the Shipment Like: a)embargos b) inspection certificates c) prohibited item 2. Determine What Tariffs Are Due 3. If Product Is Not Restricted and Tariffs Are Paid, Product Has Cleared Customs and Can Enter
Penalties For Committing Customs Fraud
1. Fines 2. Seizure of Goods 3. 2 Years in Prison
Purposes for Determining Country of Origin
A. Determines the Normal Tariff Rates On That Particular Country B. Whether That Country Is Supposed to Have Antidumping Tariffs On It
Customs' Responsibilities:
A. To Stop Terrorists From Entering the Country B. To Stop Terrorist Weapons from Entering the Country C. To Stop Illegal Drugs From Entering the Country D. Enforce Immigration Laws at the Borders E. Assess and Collect Tariffs
If We're Dealing with Developed Countries: Will Use Non-Preferential Rules of Origin Using One of Two Tests:
A. Wholly-Obtained Test B. Substantial Transformation Test
significant amount
is large enough to be important or affect a situation to a noticeable degree.
customs value =
Dutiable Value
Tariff/Duty Rate =
How Much The Tax Is
example of regional value content test:
The U.S. has a preference program for Caribbean countries. These Caribbean countries are considered beneficiary developing countries. This preference programs requires that at least 35% of the makeup of that product was done with Caribbean products, then it will pass the regional value test and receive preferential tariff treatment.
A Free Trade Area Can Impose
Whatever Tariff Rates They Want On Countries Outside Their Free Trade Area
ports of entry
include major seaports, airports, and border crossings.
tarriff schedule
includes classifications of all items and, next to the classicization's, the tariff rates for each item.
customs law
includes tariff law and the regulatory control over goods and people as they cross international borders.
materials
involves all raw materials needed for the manufacturing of a product.
tarriffs law
is a Specific Subset of Customs Law
The United States-Mexico-Canada Agreement (USCMA)
is a free trade agreement between the United States, Mexico, and Canada, and it replaced the North American Free Trade Act (NAFTA).
customs territory
is a geographic territory with uniform customs regulations.
customs unit
is a group of countries that have agreed to charge the same import tariffs as each other and allow free trade between themselves.
export control
is a law or regulation that governs the licensing of certain goods and technology exported from the U.S. or "transferred" in some way to non-U.S. citizens.
Commerce Control List
is a list of categories and product groups used to determine whether an export license is needed.
entity list
is a list of entities or organizations engaged in the proliferation of weapons of mass destruction.
Specially Designated Nationals and Blocked Persons List
is a list of individuals and organizations that represent countries known to be involved with terrorism and drug trafficking.
denied persons list
is a list of persons whose export privileges have been denied or revoked.
tarriff classification
is a method of categorizing different types or kinds of goods based on uniform descriptive terminology according to their name, use, and physical characteristics.
proliferation
is a rapid increase in numbers.
component part
is a small part that can be considered separate from the whole.
foreign national
is an individual who is neither a U.S. citizen nor a permanent legal resident of the U.S.
embargo
is an official ban on trade with a particular country.
deceptive
is giving an appearance or impression different from the true one; misleading.