LEGL4900 Chapter 12
entry process
customs authorities determine whether any import prohibitions or restrictions apply to the goods, whether the goods are subject to any other laws or regulations affecting their entry, and whether any tariffs or import duties are due
essential character
If 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 blended together
manufacturing drawback
a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture or production, and then exported within five years. designed to encourage US manufacturers to export
production assists
goods, services, or intellectual property furnished by the importer to a foreign producer, free or at a reduced price, for use in producing merchandise for import and sale in the US
civil customs fraud
a violation 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
rule of relative specificity
if an article can be classified under two or more headings or subheadings, it must be classified under the one that most specifically-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
formal entry
the administrative process required to import goods into the customs territory of a country
importing
the entering of goods into the customs territory of a country or the receipt of services from a foreign provider
liquidation
the final computation and assessment of the applicable duty on entered goods by customs
ultimate purchaser
the last person in the US who receives an article in the form in which it was imported
dutiable status
the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws
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 plus packaging, commission, royalty, and assistance costs
General Rules of Interpretation (GRIs)
the six international rules designed to help you understand and properly apply the Harmonized System categories. The additional U.S. rules of interpretation apply to 8-digit U.S. subheadings.
preferential rules of origin
those 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 program for developing countries
notice of adjustment
when Customs at the port of entry determines that additional duties are owed, this is sent to the importer
prior disclosure
when importers voluntarily report their own possible violations of the customs laws
rejected merchandise drawback
allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples. merchandise returned to US customs within 3 years and either destroyed or reexported
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.
commercial invoice
A statement prepared by the seller of merchandise addressed to the buyer showing a detailed listing and description of merchandise sold, including prices and terms. required for all shipments intended for sale or commercial use in the US
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 relationships designed to take a product from inception through production and delivery to customers
port of entry
any place when customs or immigration authorities permit the entry of goods or people
composite goods
articles made of different materials or components
compound tariff rate
combination of both ad valorem and specific rates
tariff engineering
process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purposes of obtaining a lower rate of duty
binding ruling
represents the official position of Customs with respect to the specific transaction for which it was issued (importers may request this prior to shipment if there is possible disagreement on how an item will be classifies)
specific tariff rate
specified dollar amount per piece, or 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 required change in tariff classification
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 "
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
drawback
a refund of duties already paid on imported goods when the goods are reexported or destroyed
domestic/regional value content test
Requires 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
ad valorem tariff rate
Tariff based on a percentage of the value of the articles imported
country of origin
The country from which an imported article is said to have originated according to specific rules, known as rules of origin
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
rules of origin
legal rules used to determine the country of origin of imported products
foreign trade zone
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 are in
informal entry
personal and commercial shipments valued at $2500 or less may be cleared through informal entry
