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