Int. Business Law Ch. 12

Marketing and Labeling Imports

1. U.S. customs Marketing Rules 2. Federal Trade Commissions (FTC)

Each country has one that has the classification and next to classification the tariff rate for that item

Based off Harmonized commodity description and coding system : international convention

Tariff Law

Body of Laws and Regulations that determine the tariff or the dutiable status of goods and rate of duty.

Main way to classify goods

Classification by essential character

If customs denies formal entry importer can have court review

Court review is in the Court of International Trade: Federal Court in NY

Any Due Tariffs on Goods

Custom Agents must know (determine) if a tariff is due and how much

Rules of Origin

In the United States and most developed countries there are 2 rules. 1. Non-Preferential 2. Prefential

Customs Law

Includes Tariff Law and Regulatory Control over Goods and people as they cross international borders

Area of Customs Law

Includes tariffs law and the regulatory control over goods and people as they cross international borders

Rules of Origin

Legal rules used to determine the country of origin

Dutiable Status of Goods

Legal status of the imported goods at the time of entry

North American Trade Agreement

Lower tariffs for member countries

Tariff Classification

Method of categorizing different types or kinds of goods based on uniform descriptive terminology according to their name, use, or physical characteristics *listed in tariff schedule*

Penalties and Enforcement of Fraud ; Civil and Federal

Most common false statement involve incorrect descriptions and misstatements about country of origin. - Amounts to Customs Fraud

Federal Trade Commission (FTC)

Primarily to goods made in the United States - Prevent unfair/deceptive trade practices

Country of Origin (C.O.O)

The country where goods last underwent a substantial transformation into a new or different good.

Preferential

Those applicable to goods traded within a free trade area or customs union or that receives preferential tariff treatment, under trade preference programs for developing countries. - Free Trade Area o North American Free Trade Agreement

Non - Preferential

Those applicable to imports of developed countries that will receive normal tariff treatment - Wholly Obtained Rule - Substantial Transformation Test

Dutiable value

Transactional value of the goods

How goods enter Via Customs

U.S. Bureau of Customs and Border Protection - Within the department of Homeland Security

Customs

U.S. Bureau of Customs and Border Protection ; Agency is customs regulatory authority

General System of Preferences (GSP)

U.S. aids in economy of certain developing countries, by allowing products to enter U.S. at reduced rates or no rate at all (tariff free) o Beneficiary of Developing Countries: Benefit from tariff treatments

Wholly Obtained Rule

Wholly the growth product or manufacturer of one country

Geographic Districts

Within customs have offices located at port of entry to the U.S. any major sea port, airport, or major border crossing

Transactional Value

being the price actually paid for the merchandise when sold for export in the U.S.

Officially entered the U.S. when

1. Arrive at port of entry 2. Permitted 3. Authorized Delivery of Goods 4. Tariffs have been paid

Dutiable Status of Goods Categories

1. Classification and Coding of the Goods 2. Customs Value of Goods 3. Country of Origin of the Goods

Purpose of Entry Process

1. See if any restrictions apply 2. Any Due Tariffs on Goods

Free Trade Area

2 or more countries that are a party to a free trade agreement that reduces or eliminates tariffs on goods and removes trade barriers

U.S. customs Marketing Rules

All imported goods sold in the United States must be permanently marked in English in a conspicuous place - Ultimate Purchaser

Classification and Coding of the Goods

Determines what's being imported - Tariff Classification

U.S. Bureau of Customs and Border Protection

Duties are to stop terrorists and illegal importation, assess and collect tariffs,

See if any restrictions apply

Embargos against importing country

Importing

Entering of goods into the customs territory of a country

Classification by essential Character

If an imported good is made up of 2 or more different materials that can have different tariff rates - imported good will be classified under the tariff schedule that describes the materials that give the article its essential character

Inputs

Raw material or component parts

Formal Entry

Refers to administrative process required to import goods into the customs territory of a country

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.

Tariff Shift Rule

States that the country of origin is the last country in which all inputs into the finished product underwent a defined change in tariff classification

Substantial Transformation Test

Substantial transformation occurs when 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 original item-- -- Wooden handle --> Hairbrush

Test in Free Trade Areas and Developing Countries

Tariff Shift Rule & Regional Value content Test

Developing Countries

U.S. grants trade preferences (Preferential Tariff Treatment)

Ultimate Purchaser

Understands where the good came from ; last person in U.S. receives in imported form.

Customs Value of good

What the good being imported is worth - Also called dutiable value - Has to be reported by imported country

Customs Fraud

When an importer knowingly made a false statement when entering or attempting to enter the goods into the U.S. - Fines, Government seizes goods, and importer can get up to 2 years in prison

Country of Origin of Goods

Where goods come from - that country from which an imported good is said to have originated according to specific legal rules called the Rules of Origin