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.