BSAD486 ch12
General rules of interpretation
GRI Found at the beginning of the terrace schedule. It is a set of six rules for classifying goods The first step in determining the dutiable status of an article is determining it's tariff classification using .....
Composite goods
Goods made of different materials
Common and commercial
Terms used to describe an article in the schedule are interpreted according to their .... .. ... meaning unless a different scientific meaning is more applicable
Informal entry
Commercial or personal purchases with value less than $2500 maybe cleared through this process As of 2016 shipments valued at $800 or less may be imported by any one person on any one day without the payment of duties
Specific Tariff rate
Is the fixed charge per unit of the imported goods
Crimes of customs fraud
The law provide a maximum sentence of two years imprisonment, a fine, or both for each violation and forfeiture of the goods that were subject of the fraud. Anyone who knowingly and willingly with the intent to divide the United States or secretly smuggles or attempt to smuggle goes into the country without customs clearance can receive up to a 20 year prison sentence
Preferential 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
Payment of duties
If import duties are assessed on the goods, the importer most deposit estimated duties with customs at the time of filing the entry documents or the entry summary form. The duties must be in an amount determined by customs, pending a final calculation of the amount actually owed.
Foreign trade zones
In the United States operate under a license from the US foreign trade zone board and according to regulations of the board and of US customs and border protection. The zones must be within a 60 mile radius of a US port of entry
Compound Tariff rates
Is a combination of both ad valorem and a specific rates
Drawback
Is a refund of duties already paid on imported goods when the goods or other goods manufactured from the original goods are reexported or destroyed
Manufacturing drawback
Is a refund of duties and taxes paid on merchandise that is imported, subject to manufacture or production, and then exported within five years
Negligent violation
Is one in which the importer fails to use reasonable care, scale, and competence to ensure that all customs documents and statements are materially correct and have all laws complied with
Commercial invoice
Is required for all shipments intended for sale or commercial use in the United States. The invoice must provide all permanent information about the shipment in English and be signed by the seller
Country of origin
Is that country from within imported article it said to have originated according to specific roles, known as rolls of origin.
Liquidation
Is the final computation and assessment of the applicable duty on entered goods by customs This makes the entry complete if customs except the century it is submitted on the importers documents and occurs immediately.
Tariff engineering
The process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purpose of obtaining a lower rate of duty. An article is to be classified according to its condition at the time it is imported This allows importers to enter their goods at any step in the manufacturing process in order to obtain a lower rate of duty
Production assists
These are goods, services, or intellectual property provided free or at a reduced price, (to a foreign producer by an importer) for use in producing merchandise for import into the United States. The value of an assist must be included in transaction value when the goods are imported into the United States.
Formal injury
This is when goods have officially entered the United States They have only been entered when the following requirements have been met: 1. The goods have arrived at a US port of entry 2. The goods are not of any type that is not permitted entry or form of embargoed country 3. Delivery is authorized by customs after inspection and release 4. Estimated duties have been paid or customs bond posted
Essential character
Two or more headings or subheadings each describe only certain materials or components in composite goods, the article must be classified under the heading that describes the material or components that give the article it's ... It means "main component"
Customs offices
.. .. are located at the ports of entry, including major seaports, airports, inland ports, and border crossings
Custom and tariff laws
... .. .. .. Are administered and enforced by the US bureau of customs and border protection, and agency within the department of homeland security
Customs
... responsibilities are to stop terrorist and terrorist weapons as well as illegal drugs and drug traffickers from entering the United States; to assess and collect the tariff revenue of the United States; and to enforce the customs and immigration laws at the border
Federal trade commission
...'s Rules apply to all claims, including those on product catalogs, packaging, and all forms of advertising. Second while the US customs and forces the trade and tariff laws, this commissions statutory authority is to prevent misleading or deceptive claims or practices
Binding ruling
Also called a ruling letter, represents the official position of customs with respect to the specific transaction for which it was issued. It is binding on customs personnel until revoked.
HTSUS
Divides products into several thousand Tariff classifications, ranging from basic commodities and agricultural products to manufactured goods.
Article substantially transformed
If an article is not wholly the growth product or manufacture of one country but has been produced in multiple countries in the country of origin is that country where the article last underwent a substantial transformation into a new and different article of commerce. This 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.
Harmonized Tariff schedule of the United States
the classification of goods used to determine tariffs on specific products imported into the United States It is a Tariff schedule created in 1989 and maintained by the international trade commission ITC
Domestic or regional value content test
A type of value added test This 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 35% minimum
Ad Valorem Tariff
A value that is based on the value of the imported products
Aggravating and mitigating circumstances
Aggravating factors include withholding evidence, providing misleading information, prior improper shipments, and illegal trans shipments to hide the actual country of origin. Mitigating factors include erroneous advice from a customs official, cooperating with the investigation, bringing the error to customers attention and voluntarily paying the duty or a prior good shipment record
Dutiable value
Also called the customs value, of goods entered into any country must be reported by the importer of record to national customs authorities at the time of entry
Protesting liquidations
An importer that wants to dispute a liquidation made by customs may file a protest with customs within 90 days at the port where the goods were entered. Customs has 30 days to respond in cases where the goods have been denied entry; otherwise it has two years to act.
Bureau of customs and border protection
Has broad powers to establish regulations, carry out investigations and impose penalties. The basic enforcement and civil penalty provisions of customs laws are found in title 19 section 1592 of the US code
Rule of relative specificity
Specifies the essential or main character of the product in its heading. If an article can be classified under two or more headings or subheadings it must be classified under the one that most specifically describes the article with the greatest degree of accuracy and certainty
WTO agreement on the rules of origin 1995
Standardized and simplified rules of origin.
Tariff shift rule
States that the country of origin is the last country in which all inputs (raw materials, component parts) into the finished article underwent a required change in tariff of classification.
Required documentation
When goods are entered the country, the entry documents must be filed within five days. Documents necessary are as followed: 1. An entry manifest or merchandise release form 2. US customs entry summary form 3. Proof of the right to make entry 4. The commercial invoice obtained from the seller 5. Packaging slips to identify the contents of cartons 6. Other documents required by special regulations
Preferential rules of origin
Are found in the trade agreement or tariff program that creates the preference, and so the rules can differ from program to program. In order to qualify for trade preference, an item imported into the US must be wholly obtained from the country qualifying for a trade preference
Foreign trade zones
Are legally defined sites— warehouses and manufacturing facilities — operated pursuant to legislation and under government license, that are legally outside the customs territory of the country they're in
Rules of origin
Are the legal rules used to determine the country of origin of imported products
Non-preferential rules of origin
Are those applicable to imports from developed countries that receive normal Tariff treatment or that have normal trade relations
Dutiable status
Of goods refers to the legal status of imported goods at the time of entry for purposes of compliance with the tariff and custom laws. Determined by three factors: 1. The classification and numerical coding of the article 2. The customs value of the article 3. The country of origin of the article First step in determining this status of an item is to locate it in the tariff schedule of the country of import
Non-preferential rules of origin in the US
The general rule applicable to most non-preferential trade is that the country of origin of an article imported into the United States is the country in which the article was wholly obtained. Wholly obtained means that it was wholly the growth product or manufacture of one country. There can be only one country of origin for customs purposes
Statute of limitations
The government is barred from bringing any action to collect an import duty after five years from the date of the violation involving negligence or gross negligence or five years from the date of discovery of a violation involving fraud.