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.