LEGL 4900 Chapter 12
domestic or regional content value test
common preferential rule of origin; 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
prior disclosure
Congress has enacted a statute to encourage importers to voluntarily report their own possible violations of the customs laws; if an importer realizes and admits to a mistake and informs Customs of a possible violation before learning they are being investigated, the penalties are limited
civil customs fraud
far more serious than negligence; this exists where there is clear and convincing evidence that the importer knowingly made a materially false statement or omission while entering or attempting to enter goods into the US
General Rules of Interpretation (GRIs)
found at the beginning of the tariff schedule; used in the first step in determining the dutiable status of an article
rule of relative specificity
if an article can be classified under 2+ headings or subheadings, it must be classified under the one that most narrowly describes the article with the greatest degree of accuracy and certainty
informed compliance
the "softer" mechanisms designed to place the burden of voluntary compliance on importers
enforced compliance
the active investigation of customs violations and the prosecution of violators
essential character
the article must be classified under the heading that describes the material or components that makes up the article
country of origin
the country from which an imported article is said to have originated according to specific rules, known as rules of origin
tariff-shift rule
the country of origin is the last country in which all "inputs" into thee finished article underwent a required change in tariff classification
liquidation
the final computation and assessment of applicable duties on entered goods by Customs
rules of origin
the legal rules used to determine the country of origin of imported products
manufacturing drawback
the most common drawback in the US which is designed to encourage US manufacturers to export
principal use
the ordinary use to which articles of the same class and kind as those being imported are usually put and which is greater than any other single use of the article
transaction value
the price actually paid or payable for goods when sold for export
notice of adjustment
when Customs at the port of entry determines that additional duties are owed, they must send this to the importer
rejected merchandise drawback
allowed for imported merchandise that was shipped without consent, or does not conform to specifications or to samples
binding ruling
A determination, made by U.S. Customs, and only applicable to the United States, that classifies a specific product and assigns it a tariff rate before the goods are imported. The ruling is binding on U.S. Customs, which means that it cannot "change its mind" after the product is imported.
same-condition drawback
A drawback of duties paid on imported goods that are re-exported in the "same condition" as they were imported, provided they were not significantly altered.
customs broker
An authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods.
global supply chain
an integrated international network of logistics, communications, finance, and trade relations designed to take a product from inception through production and delivery to customers
preferential rules of origin
applicable to goods traded within a free trade area or customs union, goods imported from countries that receive special tariff treatment pursuant to a trade agreement, or goods imported under a trade preference programs for developing countries
composite goods
articles made of different materials or components
compound tariff rate
combination of both ad valorem and specific rates
formal entry
refers to the administrative process required to import goods into the customs territory of a country
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
commercial invoice
required for all shipments intended for sale or commercial use in the US
dutiable value
Customs value of goods entered into any country - must be reported by the importer-of-record to national customs authorities at time of entry
substitution drawback
Duties paid on imported goods may be received by a U.S. firm that imports goods and then exports other goods of the "same kind and quality "
drawback
a refund of duties already paid on imported goods when the goods are reexported or destroyed
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" different from that of the original item
non-preferential rules of origin
Those applicable to imports of DEVELOPED countries that will receive normal tariff treatment.
contract manufacturing
a business arrangement in which the production of goods is contracted or outsourced by one firm to a manufacturing firm, often overseas
tariff schedule
a listing of specific items, coded numerically and described by name or use
foreign trade zones (FTZs)
legally defined sites operated pursuant to legislation and under government license, that are legally outside the customs territory of the country they are in
informal entry
personal and commercial shipments valued at $2500 or less may be cleared this way