chapter 12
in bond
meaning that hte payments of duties are supsended until the goods are relased for sale or use in the US
reasonable care
means more than simply being carefule
formal entry
the admin process required to import goods into the customs terrirotyr of a country
tariff law
the body of laws and regs that determines the tariff or 'dutiable'' status of goods and the rate of duty
US bureau of customs and border protection
the cusoms regulatory authority in the US...called 'customs'
importing
the entering of goods into the customs territory of a country
liquidation
the final computation and assessment of the applicable duty on entered goods by customs...this 'closes the book' making the entry complete
ultimate purchaser
the last person in US who receives an article in the form in which it was imported
prior disclosure
voluntarily report own possible violations of the customs laws...allows penalties to be limited
negligent violation
when the importer failes to use reaseonable care, skill, and competence to ensure that all customs documents and statements are materially correct and all laws are complied
ports of entry
where customs offices are located...major sepaorts, airports, inland ports, and border crossings
tariff schedule
where to find classifications of tariff, national and official
canada border services agency
administers the customs tariff, which is the canadaian version of the harmonized schedule
deemed liquiedation
goods are dutied at the rate accepted on the entry summary form, happens if an entry not liquidated within one year
production assists aka dutiable assists
goods, services, or intellectual property furnished by the importer to a foreign producer, free or at a reduced rpice, for use in producing merch for import and sale in the US
principal use
that use to which articles of the class and kind being imported are usually put and which is greater than any other single use of the article
dutiable value aka customs value
the transaction value of the goods
preferntial 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
informal entry
used for personal and 'low value' commercial shipments valued at $2500 or less. is the process of clearing them
general rules of interpretation
used to classify the goods, found at the front of the tariff schedules
regional value content test
type of value added test...requries that some minimum % of the value of a finished article be added in a country in order for it to have 'originated' there
entry process
all commercial shipments must go thru this, supervised by nat'l customs authorities , referred to as "clearing customs"
foreign trade zones /ftzs
are legally defined sites within a country that are subject to speical customs procedures
non preferential rules of origin
are those applicable to imports from developed countries that receive normal tariff treatment
customs broker
authorized agent, licensed by federal law, to acto for and on behalf of importers in making entry of goods. more than 90% of all entries are made by customs brokers
customs law
broader than tariff law, includes tariff law, extends to other areas of regulatory control over goods and people as they cross int'l borders
2 general types of rules of origin
1. non preferential rules of origin 2. preferential rules origin
3 factors used to determine dutiable status
1.classification and coding of the article 2.customs value of the article 3.country of origin of the article
US Customs uses a 2 pronged aporach to enforcement of the customs laws
1.enforced compliance 2.informed compliance
2 key laws in US that require imports to be labeled with the country of origin
1.marking rules of customs 2.federal trade commission rules
drawback
a refund of duties already paid on imported goods when the goods are re exported or destroyed
compound tariff rate
combination of both ad valorem and specific rates
country of origin
counrty from which an imported article is said to have originated according to specific legal rules known as rules of origin
same condition drawback
drawback of duties paid on imported goods that are reexporte din the same condition as they were imported, provided they were not significantly altered
customs fraud
far more serious than negliegence, exists where there is clear and convincing evidence that the importer knowingly made a materially false statemnt or omission while entering or attempting to enter goods into the US
national imports specialists
field import spec can seek advice from this
rule of relative specificity
found in GRI, states that where an article could be classified under more than one heading, it must be classified under the one that most specifically, narrowly, describes the article with the greatest degree of accuracy and certainty
field import specialists
make inital determinations as to the entry of goods
value added test
has the substantial transformation resulted in an increase in value?
essential character
if an article is made of 2+ materials, gri requires use this to classify
gross negligence
importer commits this if there is clear and convincing evidence that the act or omission was done with actual knowledge or reckless disregard for the relevant facts and with disregard for the importer's obligations under the law
int'l trade commission
in US, maintains tariff schedule
rejected merchandise drawback
is allowed for imported merch that was shipped without consent, is defective, or does not conform to specifications or to samples
rules of origin
legal rules used to determine the country of origin of imported products
manufacturing drawback
most common type of drawback in US...designed to encourage US manufactrueres to export
substantial transformation
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'
substitution drawback
of duties paid on imported goods may be rec'd by a us firm that imports goods and then exports other goods of the 'same kind a quality'
qualified claim
one that indicates that the product was partially made or processed in the US
transaction value
price actually paid or payable for the merch when sold for export to the uS, plus the following amounts if not included in the pruchas price: 1.packing and container 2.selling commission paid by the buyer 3.vlaue of any 'assist' as defined below 4.any royalty or license fee that the buyer is required to pay as a condition of sale 5.proceeds of any subsequent resale of the merch that accrues to the seller
informed compliance
refers to 'softer' mechanism designed to place the burden of voluntary complaince on importers
enforced compliance
refers to the active investigation of customs violations and the prosecution of violators
material
refers to the identity, quality, value, source, or country of origin of the merch, or if it affects the rate of duty charged or the item's right to be imported into the US
dutiable status
refers to the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws. determined by 3 factors
binding ruling aka ruling letter
represents the official postion of customs with respect to the specific transaction for which it was issued
commercial invoice
required for all shipments intended for sale or commercial use in the US
notice of adjustment
sent to importer when customs at the port of entry determines that add'l duties are owed
specific tariff rate
specified amount per unit of weight or measure
tariff shift rule
states that the country of origin is the last country in which all 'inputs' into the finished article underwent a defined change in tariff classification
ad valorem tariff rate
tariffs are based on _____, specific, or compound rates. it's the most common one. based on a % of the value of the articles imported
tariff engineering
process of modifying or engineering a product prior to importation for the purposes of obtaining a lower rate of duty
wholly obtained
means that it was wholly the growth, product, or manufacture of one country
tariff classification
method of categorizing different types or kinds of goods based on a uniform descriptive nomenclature or terminology, according to their tariff name, use, or physical characteristics.