importing into the united states - green worldwide shipping

A GUIDE FORCOMMERCIAL IMPORTERS

importing into the united

states

table of contentsClassification and Value..........................................................................................................42 Classification--LiquidationClassification.....................................................................42 ConversionofCurrency................................................................................................45 TransactionValue..........................................................................................................46 Limitations........................................................................................................................50 TransactionValue--IdenticalorSimilarMerchandise................................................52 OtherBases:DeductiveandComputedValue.........................................................54 RulesofOrigin.................................................................................................................60Marking......................................................................................................................................60 CountryofOriginMarking.............................................................................................60 SpecialMarkingRequirements.....................................................................................61 UserFees.........................................................................................................................65Special Requirements..............................................................................................................66 Prohibitions,Restrictions,OtherAgencyRequirements.............................................66 ImportQuotas................................................................................................................67Fraud..........................................................................................................................................68Foreign Trade Zones.................................................................................................................70

Preface.......................................................................................................................................4U.S Customs and Border Protection........................................................................................6 Mission..............................................................................................................................6 FieldOperationsOffices................................................................................................7 PortsofEntry....................................................................................................................7Suggestions to the Exporter for Faster Clearance of Merchandise....................................8Entry of Goods............................................................................................................................9 EntryProcess...................................................................................................................9RighttoMakeEntry......................................................................................................10 ExaminationofGoodsandEntryDocuments..........................................................11 EntrySummaryDocumentation.................................................................................11 UnenteredGoods.........................................................................................................12 TransportationofMerchandiseinBond....................................................................13 EntrybyImporter..........................................................................................................13 EntriesMadebyOthers...............................................................................................14 PowerofAttorney........................................................................................................15 ExaminationofGoodsandEntryDocuments..........................................................16 ExcessGoods&Shortages..........................................................................................17 DamageorDeterioration...........................................................................................18Informed Compliance............................................................................................................18 Definition........................................................................................................................18 ReasonableCareChecklists.......................................................................................19 GeneralQuestionsforallTransactions......................................................................19 QuestionsbyTopic.......................................................................................................20 MerchandiseDescription&TariffClassification.............................................20 Valuation............................................................................................................21 CountryofOrigin/Marking/Quota..................................................................22 IntellectualPropertyRights..............................................................................23 Miscellaneous....................................................................................................24 ComplianceAssessment/ComplianceMeasurement............................................24Invoices....................................................................................................................................26 CommercialInvoice....................................................................................................28 SpecificRequirements.................................................................................................30 OtherInvoices..............................................................................................................30 FrequentErrorsinInvoicing..........................................................................................31Assessment of Duty................................................................................................................33 DutiableStatusofGoodsRatesofDuty...................................................................33 ContainersorHolders..................................................................................................35TemporaryFreeImports.............................................................................................35 ClassesofGoods..........................................................................................................36 NorthAmericanFreeTradeAgreement(NAFTA)....................................................39 AntidumpingandCountervailingDuties..................................................................40 Drawback---RefundsofDuties..................................................................................40

prefaceunderconsiderationandcanoccuratanytime.Quotalimitationsoncommoditiesarealsosubjecttochange.Therefore,reliancesolelyontheinformationinthisbookmaynotmeetthe“reasonablecare”standardrequiredofimporters.

WeurgeinterestedpartiestocontacttheirnearestGreenWorldwidebranchforinformationonspecificissuesorquestions.

On March 1, 2003, U.S. Customs and Border Protection, or CBP, was born as an agency of the Department of Homeland Security, merging

functions of the former Customs Service, Immigration and Naturalization Service, Border Patrol, and Animal and Plant Health Inspection Service.

Many changes took place in preparation for this merger and many have occurred since in order to safeguard U.S. borders against high-

risk cargo, contraband, and unsafe imports. We encourage you to visit the website, www.cbp.gov, for the latest information on specific laws,

regulations or procedures that may affect your import transactions. ******

ThiseditionofImporting Into the United StatescontainsmaterialpursuanttotheTradeActof2002andtheCustomsModernizationAct(TitleVIoftheNorthAmericanFreeTradeAgreementImplementationAct),commonlyreferredtoastheModAct.

TheCustomsModernizationAct(TitleVIoftheNorthAmericanFreeTradeAgreementImplementationAct[P.L.103-182,107Stat.2057])becameeffectiveDecember8,1993.ItsprovisionshavefundamentallyalteredtherelationshipbetweenimportersandCBPbyshiftingtotheimporter,thelegalresponsibilityfordeclaringthevalue,classification,andrateofdutyapplicabletoenteredmerchandise.

AprominentfeatureoftheModActisarelationshipbetweenCBPandimportersthatischaracterizedbyinformedcompliance.AkeycomponentofinformedcomplianceisthesharedresponsibilitybetweenCBPandtheimportcommunity,whereinCBPcommunicatesitsrequirementstotheimporter,andtheimporter,inturn,usesreasonablecaretoassurethatCBPisprovidedwithaccurateandtimelydatapertainingtohisorherimportations.

Importing Into the United States provideswide-ranginginformationabouttheimportingprocessandimportrequirements.Wehavemadeeveryefforttoincludeessentialrequirements,butitisnotpossibleforabookthissizetocoverallimportlawsandregulations.Also,thispublicationdoesnotsupersedeormodifyanyprovisionofthoselawsandregulations.Legislativeandadministrativechangesarealways

6 7

u.s. customs & border protectionMission BeforeSeptember11,2001,themajorresponsibilityoftheformerU.S.CustomsServicewastoadministertheTariffActof1930,asamended.WhenCustomssubsequentlymergedwithotherborderenforcementagenciestobecomeU.S.CustomsandBorderProtection,CBP’sprioritymissionbecamehomelandsecurity:detecting,deterringandpreventingterroristsandtheirweaponsfromenteringtheUnitedStates.

ThismissionfitsideallywithCBP’slong-establishedresponsibilitiesforprotectingandfacilitatinginternationaltrade.CBPretainsitstraditionalenterpriseofprotectingthenation’srevenuebyassessingandcollectingduties,taxesandfeesincidenttointernationaltrafficandtrade.Further,byprovidingproceduralguidancetotheimportcommunity,CBPenhancesandincreasescompliancewithdomesticandinternationalcustomslawsandregulations.CBPthushelpsimportersassurethattheirshipmentsarefreefromterroristorothermaliciousinterference,tampering,orcorruptionofcontainersorcommodities.

Today,CBPisthenation’spremiereborderenforcementagency,anditaccomplishesthisnewmandateinpartbyexecutingtheresponsibilitiesforwhichithasalwaysbeenknown:controlling,regulating,andfacilitatingthemovementofcarriers,people,andcommoditiesbetweentheUnitedStatesandothernations;protectingtheAmericanconsumerandtheenvironmentagainsttheintroductionofhazardous,toxicornoxiousproductsintotheUnitedStates;protectingdomesticindustryandlaboragainstunfairforeigncompetition;anddetecting,interdicting,andinvestigatingsmugglingandotherillegalpracticesaimedatillegallyenteringnarcotics,drugs,contrabandorotherprohibitedarticlesintotheUnitedStates.

CBPisalsoresponsiblefordetecting,interdicting,andinvestigatingfraudulentactivitiesintendedtoavoidthepaymentofduties,taxesandfees,oractivitiesmeanttoevadethelegalrequirementsofinternationaltrafficandtrade;andfordetecting,interdicting,andinvestigatingillegalinternationaltraffickinginarms,munitions,currency,andactsofterrorismatU.S.portsofentry.

Field Operations Offices CustomsBorderPatroloperatesthroughafield-officestructurethatconsistsof20FieldOperationsofficesaroundtheUnitedStates.Thesefieldofficesprovidemanagerialoversightandoperationalassistanceto324portsofentryaroundthenationand14preclearanceofficesinCanadaandtheCaribbean.

Establishedaccordingtogeographicregion,FieldOperationsofficesarethemeansbywhichCBPHeadquartersdistributeskeypoliciesandprocedurestoCBPofficersandimportingstaffaroundthecountry.Eachfieldofficesupervisesacertainnumberofserviceorareaports,whicharelarger,full-serviceportswithstaffsubdivisionsdesignatedtohandlecommercialtransactions,aswellassmallerportsofentrythathandlelesstraffic.

FieldOperationsofficesprovideguidancetotheportsundertheirgeographicjurisdictiontoensurethedisseminationandimplementationofCBPguidelines,policiesandprocedures.Importtransactionsareconductedatserviceports,areaports,andportsofentry,sotheselocationswillbeofprimaryinteresttothetradecommunity.CBPisalsoresponsibleforadministeringthecustomslawsoftheUnitedStatesVirginIslands.

Ports of Entry Portsofentryconductthedaily,port-specificoperationslikeclearingcargo,collectingdutiesandothermoniesassociatedwithimports,andprocessingpassengersarrivingfromabroad.Portpersonnelarethefaceattheborderfornearlyallcargocarriers

8 9Importing into the United States: a guide for commercial importers

andpeopleenteringtheUnitedStates.PortsofentryarethelevelatwhichCBPenforcesimportandexportlawsandregulationsandimplementsimmigrationpoliciesandprograms.PortofficersalsoperformagriculturalinspectionstoprotecttheUSAfrompotentialcarriersofanimalandplantpestsordiseasesthatcouldcauseseriousdamagetoAmerica’scrops,livestock,pets,andtheenvironment.Foradetailedlistingofportsofentry,pleasereferto:http://www.cbp.gov/xp/cgov/toolbox/ports/.

suggestions to exporters for faster clearance of merchandiseTips1. Includeallinformationrequiredonyourcustoms

invoices.2. Prepareyourinvoicescarefully.Typethemclearly.

Allowsufficientspacebetweenlines.Keepthedatawithineachcolumn.

3. Makesurethatyourinvoicescontaintheinformationthatwouldbeshownonawell-preparedpackinglist.

4. Markandnumbereachpackagesoitcanbeidentifiedwiththecorrespondingmarksandnumbersappearingonyourinvoice.

5. Showadetaileddescriptiononyourinvoiceofeachitemofmerchandisecontainedineachindividualpackage.

6. Markyourgoodslegiblyandconspicuouslywiththecountryoforiginunlesstheyarespecificallyexemptedfromcountry-of-originmarkingrequirements,andwithsuchothermarkingasisrequiredbythemarkinglawsoftheUnitedStates.

7. ComplywiththeprovisionsofanyspeciallawsoftheUnitedStatesthatmayapplytoyourgoods,suchaslawsrelatingtofood,drugs,cosmetics,alcoholicbeverages,radioactivematerials,andothers.

8. Observetheinstructionscloselywithrespecttoinvoicing,packaging,marking,labeling,etc.,senttoyoubyyourcustomerintheUnitedStates.Heorshehasprobablymadeacarefulcheckoftherequirementsthatwillhavetobemetwhenyourmerchandisearrives.

9. WorkwithCBPtodeveloppackingstandardsforyourcommodities.

entry of goodsEntry Process WhenashipmentreachestheUnitedStates,theimporterofrecord(i.e.,theowner,purchaser,orlicensedcustomsbrokerdesignatedbytheowner,purchaser,orconsignee)willfileentrydocumentsforthegoodswiththeportdirectoratthegoods’portofentry.Importedgoodsarenotlegallyentereduntilaftertheshipmenthasarrivedwithintheportofentry,deliveryofthemerchandisehasbeenauthorizedbyCBP,andestimateddutieshavebeenpaid.Itistheimporterofrecord’sresponsibilitytoarrangeforexaminationandreleaseofthegoods.

Goodsmaybeenteredforconsumption,enteredforwarehouseattheportofarrival,ortheymaybetransportedin-bondtoanotherportofentryandenteredthereunderthesameconditionsasattheportofarrival.Arrangementsfortransportingthemerchandisein-bondtoanin-landportmaybemadebytheconsigneeorbyacustomsbrokerorbyanyotherpersonwithaninterestinthegoodsforthatpurpose.Unlessyourmerchandisearrivesdirectlyattheportwhereyouwishtoenterit,youmaybechargedadditionalfeesbythecarrierfortransportationtothatportunlessotherarrangementshavebeenmade.Undersomecircumstances,yourgoodsmaybereleasedthroughyourlocalportofentry,eveniftheyarriveatadifferentU.S.portfromaforeigncountry.Priortothegoods’arrival,arrangementsforentrymustbemadeattheCBPportofentrywhereyouintendtofileyourdutiesanddocumentation.

10 11

Importing into the United States: a guide for commercial importers

Evidence Of Right To Make Entry Goodsmayonlybeenteredbytheirowner,purchaser,oralicensedcustomsbroker.Whenthegoodsareconsigned“toorder,”thebilloflading,properlyendorsedbytheconsignor,mayserveasevidenceoftherighttomakeentry.Anairwaybillmaybeusedformerchandisearrivingbyair.

Inmostinstances,entryismadebyapersonorfirmcertifiedbythecarrierbringingthegoodstotheportofentry.Thisentity(i.e.,thepersonorfirmcertified)isconsideredthe“owner”ofthegoodsforcustomspurposes.

Thedocumentissuedbythecarrierforthispurposeisknownasa“Carrier’sCertificate.”Incertaincircumstances,entrymaybemadebymeansofaduplicatebillofladingorashippingreceipt.Whenthegoodsarenotimportedbyacommoncarrier,possessionofthegoodsbytheimporteratthetimeofarrivalshallbedeemedsufficientevidenceoftherighttomakeentry.

Entry For Consumption Enteringmerchandiseisatwo-partprocessconsistingof:(1)filingthedocumentsnecessarytodeterminewhethermerchandisemaybereleasedfromCBPcustody,and(2)filingthedocumentsthatcontaininformationfordutyassessmentandstatisticalpurposes.BothoftheseprocessescanbeaccomplishedelectronicallyviatheAutomatedBrokerInterface(ABI)programoftheAutomatedCommercialSystem(ACS).

Entry Documents Within15calendardaysofthedatethatashipmentarrivesataU.S.portofentry,entrydocumentsmustbefiledatalocationspecifiedbytheportdirector.Thesedocumentsare:

• EntryManifestorApplicationandSpecialPermitforImmediateDeliveryorotherformofmerchandisereleaserequiredbytheportdirector,

• Evidenceofrighttomakeentry,

• Commercialinvoiceoraproformainvoicewhenthecommercialinvoicecannotbeproduced,

• Packinglists,ifappropriate,• Otherdocumentsnecessarytodetermine

merchandiseadmissibility.• IfthegoodsaretobereleasedfromCBPcustody

atthetimeofentry,anentrysummaryforconsumptionmustbefiledandestimateddutiesdepositedattheportofentrywithin10workingdaysofthegoods’entry.

Surety TheentrymustbeaccompaniedbyevidencethatabondhasbeenpostedwithCBPtocoveranypotentialduties,taxes,andchargesthatmayaccrue.BondsmaybesecuredthrougharesidentU.S.suretycompany,butmaybepostedintheformofUnitedStatescurrencyorcertainUnitedStatesgovernmentobligations.Intheeventthatacustomsbrokerisemployedforthepurposeofmakingentry,thebrokermaypermittheuseofhisbondtoprovidetherequiredcoverage.

Entry Summary Documentation Followingpresentationoftheentry,theshipmentmaybeexamined,orexaminationmaybewaived.Theshipmentisthenreleasedifnolegalorregulatoryviolationshaveoccurred.Entrysummarydocumentationisfiledandestimateddutiesaredepositedwithin10workingdaysoftheentryofthemerchandiseatadesignatedcustomhouse.Entrysummarydocumentationconsistsof:

• Returnoftheentrypackagetotheimporter,broker,orhisauthorizedagentaftermerchandiseispermittedrelease,

• Entrysummary,• Otherinvoicesanddocumentsnecessaryto

assessduties,collectstatistics,ordeterminethatallimportrequirementshavebeensatisfied.ThispaperdocumentationcanbereducedoreliminatedbyusingfeaturesoftheABI.

12 13

greenworldwide.com

Unentered Goods Ifnoentryhasbeenfiledforthegoodsattheportofentry,orattheportofdestinationforin-bondshipments,within15calendardaysaftertheirarrival,thegoodsmaybeplacedinageneral-orderwarehouseattheimporter’sriskandexpense.Ifthegoodsarenotenteredwithinsixmonthsfromthedateofimportation,theycanbesoldatpublicauctionordestroyed.Perishablegoods,however,andgoodssubjecttodepreciationandexplosivesubstancesmaybesoldsooner.

Storagecharges,expensesofsales,internalrevenueorothertaxes,duties,fees,andamountsforthesatisfactionofliensmustbetakenoutofthemoneyobtainedfromthesaleoftheunenteredgoods.Claimsforthesurplusproceedsofsalemaybefiledwiththeportdirectoratwhoseinstructionthemerchandisewassenttosale.Anyclaimforsuchproceedsmustbefiledwithin10daysofsaleandsupportedwithanoriginalbilloflading.Aphotostaticcopyorcertifiedcopyofthebillofladingmaybeusedifonlypartofashipmentisinvolvedinthesale.Carriers,notportdirectors,arerequiredtonotifyabondedwarehouseofunenteredmerchandise.Oncenotified,thebondedwarehouseoperator/managershallarrangefortheunenteredmerchandisetobetransportedtohisorherpremisesforstorageattheconsignee’sriskandexpense.Ifthegoodsaresubjecttointernalrevenuetaxes,butwillnotbringenoughtopaythetaxesifsoldatpublicauction,theyaresubjecttodestruction.

Transportation Of Merchandise In Bond NotallmerchandiseimportedintotheUnitedStatesandintendedfordomesticcommerceisenteredattheportwhereitarrives.TheimportermayprefertoenterthegoodsatadifferentlocationintheUnitedStates,inwhichcasethemerchandisewillhavetobefurthertransportedtothatlocation.InordertoprotectUnitedStatesrevenueinthesecases,themerchandisemusttravelinabondedstatusfromtheportofarrivaltotheintendedportofentry.ThisprocessisreferredtoastravelingunderImmediateTransportationproceduresandisaccomplishedbytheexecutionofCBPForm

7512.Themerchandiseisthenplacedwithacarrierwhoacceptsitunderitsbondfortransportationtotheintendeddestination,wherethenormalmerchandiseentryprocesswilloccur.

Entry By Importer MerchandisearrivingintheUnitedStatesbycommercialcarriermustbeenteredbytheowner,purchaser,hisorherauthorizedregularemployee,orbythelicensedcustomsbrokerdesignatedbytheowner,purchaser,orconsignee.U.S.CBPofficersandemployeesarenotauthorizedtoactasagentsforimportersorforwardersofimportedmerchandise,althoughtheymaygiveallreasonableadviceandassistancetoinexperiencedimporters.

CustomsbrokersaretheonlypersonswhoareauthorizedbythetarifflawsoftheUnitedStatestoactasagentsforimportersinthetransactionoftheircustomsbusiness.CustomsbrokersareprivateindividualsorfirmslicensedbyCBPtoprepareandfilethenecessarycustomsentries,arrangeforthepaymentofdutiesfounddue,takestepstoeffectthereleaseofthegoodsinCBPcustody,andotherwiserepresenttheirprincipalsincustomsmatters.Thefeeschargedfortheseservicesmayvaryaccordingtothecustomsbrokerandtheextentofservicesperformed.

Everyentrymustbesupportedbyoneoftheformsofevidenceoftherighttomakeentry.Whenacustomsbrokermakesentry,aCBPpowerofattorneyismadeinthenameofthecustomsbroker.Thispowerofattorneyisgivenbythepersonorfirmforwhomthecustomsbrokerisactingasagent.Ordinarily,theauthorityofanemployeetomakeentryforhisorheremployerisestablishedmostsatisfactorilybyaCBPpowerofattorney.

Entries Made By Others Entryofgoodsmaybemadebyanonresidentindividualorpartnership,orbyaforeigncorporationthroughaU.S.agentorrepresentativeoftheexporter,amemberofthepartnership,oranofficerofthecorporation.

14 15

ThesuretyonanyCBPbondrequiredfromanonresidentindividualororganizationmustbeincorporatedintheUnitedStates.Inaddition,aforeigncorporationinwhosenamemerchandiseisenteredmusthavearesidentagentinthestatewheretheportofentryislocatedwhoisauthorizedtoacceptserviceofprocessontheforeigncorporation’sbehalf.

AlicensedcustomsbrokernamedinaCBPpowerofattorneymaymakeentryonbehalfoftheexporterorhisrepresentative.Theowner’sdeclarationmadebyanonresidentindividualororganizationwhichthecustomsbrokermayrequestmustbesupportedbyasuretybondprovidingforthepaymentofincreasedoradditionaldutiesfounddue.Anowner’sdeclarationexecutedinaforeigncountryisacceptable,butitmustbeexecutedbeforeanotarypublicandbearthenotary’sseal.NotariespublicwillbefoundinallAmericanembassiesaroundtheworldandinmostofthelargerconsulates.

Power Of Attorney Anonresidentindividual,partnership,orforeigncorporationmayissueapowerofattorneytoaregularemployee,customsbroker,partner,orcorporationofficertoactintheUnitedStatesforthenonresidentemployer.AnypersonnamedinapowerofattorneymustbearesidentoftheUnitedStateswhohasbeenauthorizedtoacceptserviceofprocessonbehalfofthepersonororganizationissuingthepowerofattorney.Thepowerofattorneytoacceptserviceofprocessbecomesirrevocablewithrespecttocustomstransactionsdulyundertaken.EithertheapplicableCBPformoradocumentusingthesamelanguageastheformisacceptable.Referencestoactsthattheissuerhasnotauthorizedtheagenttoperformmaybedeletedfromtheformoromittedfromthedocument.ApowerofattorneyfromaforeigncorporationmustbesupportedbythefollowingdocumentsortheirequivalentwhenforeignlaworpracticediffersfromthatintheUnitedStates:

• Acertificatefromtheproperpublicofficerofthecountryshowingthelegalexistenceofthecorporation,unlessthefactofincorporationissogenerallyknownastobeamatterofcommonknowledge.

• Acopyofthatpartofthecharterorarticlesofincorporationwhichshowsthescopeofthecorporation’sbusinessanditsgoverningbody.

• Acopyofthedocumentorpartthereofbywhichthepersonsigningthepowerofattorneyderiveshisauthority,suchasaprovisionofthecharterorarticlesofincorporation,acopyoftheresolution,minutesoftheboardofdirectors’meeting,orotherdocumentbywhichthegoverningbodyconferredthisauthority.Inthiscase,acopyisrequiredofthebylawsorotherdocumentgivingthegoverningboardtheauthoritytodesignateotherstoappointagentsorattorney.

AnonresidentindividualorpartnershiporaforeigncorporationmayissueapowerofattorneytoauthorizethepersonsorfirmsnamedinthepowerofattorneytoissuelikepowersofattorneytootherqualifiedresidentsoftheUnitedStatesandtoempowertheresidentstowhomsuchpowersofattorneyareissuedtoacceptserviceofprocessonbehalfofthenonresidentindividualororganizations.Apowerofattorneyissuedbyapartnershipmustbelimitedtoaperiodnottoexceedtwoyearsfromthedateofexecutionandshallstatethenamesofallmembersofthepartnership.Onememberofapartnershipmayexecuteapowerofattorneyforthetransactionofcustomsbusinessofthepartnership.Whenanewfirmisformedbyachangeofmembership,thepriorfirm’spowerofattorneyisnolongereffectiveforanycustomspurpose.Thenewfirmwillberequiredtoissueanewpowerofattorneyforthetransactionofitscustomsbusiness.Allotherpowersofattorneymaybegrantedforanunlimitedperiod.


Examination Of Goods And Entry Documents Examinationofgoodsanddocumentsisnecessarytodetermine,amongotherthings:

• Thevalueofthegoodsforcustomspurposesandtheirdutiablestatus,

• Whetherthegoodsmustbemarkedwiththeircountryoforiginorrequirespecialmarkingorlabeling.Ifso,whethertheyaremarkedinthemannerrequired,

• Whethertheshipmentcontainsprohibitedarticles,• Whetherthegoodsarecorrectlyinvoiced,• Whetherthegoodsareinexcessoftheinvoiced

quantitiesorashortageexists,• Whethertheshipmentcontainsillegalnarcotics.

Priortothegoods’release,theportdirectorwilldesignaterepresentativequantitiesforexaminationbyCBPofficersunderconditionsthatwillsafeguardthegoods.Somekindsofgoodsmustbeexaminedtodeterminewhethertheymeetspecialrequirementsofthelaw.Forexample,foodandbeveragesunfitforhumanconsumptionwouldnotmeettherequirementsoftheFoodandDrugAdministration.

OneoftheprimarymethodsofsmugglingnarcoticsintotheUnitedStatesisincargoshipments.DrugsmugglerswillplacenarcoticsinsidealegitimatecargoshipmentorcontainertoberetrieveduponarrivalintheUnitedStates.Becausesmugglersuseanymeanspossibletohidenarcotics,allaspectsoftheshipmentareexamined,includingcontainer,pallets,boxes,andproduct.Onlythroughintensiveinspectioncannarcoticsbediscovered.

Textilesandtextileproductsareconsideredtrade-sensitiveandassuchmaybesubjecttoahigherpercentageofexaminationsthanothercommodities.CBPofficerswillascertainthequantityofgoodsimported,makingallowancesforshortagesunderspecifiedconditionsandassessingdutyonanyexcess.TheinvoicemaystatethequantitiesintheweightsandmeasuresofthecountryfromwhichthegoodsareshippedorintheweightsandmeasuresoftheUnited

States,buttheentrymuststatethequantitiesinmetricterms.

Excess Goods And Shortages Inordertofacilitatedutyallowancesforgoodsthatdonotarriveandtodeterminewhetherexcessgoodsarecontainedintheshipment,theimporter(orforeignexporter)isadvisedtopackthegoodsinanorderlyfashion;properlymarkandnumberthepackagesinwhichthegoodsarecontained;listeachpackage’scontentsontheinvoice;andplacemarksandnumbersontheinvoicesthatcorrespondtothosepackages.

IftheCBPofficerfindsanypackagethatcontainsanarticlenotspecifiedontheinvoice,andthereisreasontobelievethearticlewasomittedfromtheinvoicebyfraud,grossnegligence,negligenceonthepartoftheseller,shipper,owner,oragent,amonetarypenaltymaybeimposed,orinsomecases,themerchandisemaybeseizedorforfeited.

If,duringtheexaminationofanypackagethathasbeendesignatedforexamination,theCBPofficerfindsadeficiencyinquantity,weightormeasure,heorshewillmakeadutyallowanceforthedeficiency.Anallowanceindutymaybemadeforthosepackagesnotdesignatedaslongastheimporternotifiestheportdirectoroftheshortagebeforeliquidationoftheentrybecomesfinalandestablishestotheportdirector’ssatisfactionthatthemissinggoodswerenotdelivered.

Damage Or Deterioration GoodsthattheCBPofficerfindstobeentirelywithoutcommercialvalueatthetimeofarrivalintheUnitedStatesbecauseofdamageordeteriorationaretreatedasa“nonimportation.”Nodutiesareassessedonthesegoods.Whendamageordeteriorationispresentwithrespecttopartoftheshipmentonly,allowanceindutiesisnotmadeunlesstheimportersegregates,underCBPsupervision,thedamagedordeterioratedpartfromtheremainderoftheshipment.Whentheshipmentconsistsoffruits,vegetables,or

18 19


otherperishablemerchandise,allowanceindutiescannotbemadeunlesstheimporter,within96hoursofunloadingthemerchandiseandbeforeithasbeenremovedfromthepier,filesanapplicationforanallowancewiththeportdirector.Allowanceorreductionofdutyforpartialdamageorlossasaresultofrustordiscolorationisprecludedbylawonshipmentsconsistingofanyarticlepartiallyorwhollymanufacturedofironorsteel,oranymanufactureofironorsteel.

informed complianceDefinition InformedcomplianceisasharedresponsibilitybetweenCBPandtheimportcommunitywhereinCBPeffectivelycommunicatesitsrequirementstothetrade,andthepeopleandbusinessessubjecttothoserequirementsconducttheirregulatedactivitiesinaccordancewithU.S.lawsandregulations.Akeycomponentofinformedcomplianceisthattheimporterisexpectedtoexercisereasonablecareinhisorherimportingoperations.

Informedcompliancebenefitsbothparties:Whenvoluntarycomplianceisachieved,CBPresourcesneednotbeexpendedonredundantexaminationsorentryreviewsfortheimporter’scargofoundtobedependablycompliant.Fromthetradeperspective,whenvoluntarycomplianceisattained,compliantimportersarelesslikelytohavetheirshipmentsexaminedortheirentriesreviewed.

Reasonable Care Checklists Reasonablecareisanexplicitresponsibilityonthepartoftheimporter.Despiteitsseeminglysimpleconnotation,thetermreasonablecaredefieseasyexplanationbecausethefactsandcircumstancessurroundingeveryimporttransactiondiffer,fromtheexperienceoftheimportertothenatureoftheimportedarticles.Consequently,neitherCBPnortheimportingcommunitycandevelopareasonablecarechecklistcapableofcoveringeveryimporttransaction.

CBPrecommendsthattheimportcommunityexaminethelistofquestionsbelow.Thesequestionsmaysuggestmethodsthatimportersmayfindusefulinavoidingcomplianceproblemsandinmeetingtheresponsibilitiesofreasonablecare.

ThesequestionsareintendedtopromotecompliancewithCBPlawsandregulations,butbeawarethatthelistisadvisory,notexhaustive.Thechecklistisintendedasaguideandhasnolegal,bindingorprecedentialeffectonCBPortheimportingcommunity.

Thequestionsapplywhethertheimporterofrecordconductsthetransactions(s)him-orherself,orwhethertheimporterhiresotherstodoit.

General Questions for All Transactions: 1. Ifyouhavenotretainedanexpert(e.g.,

lawyer,customsbroker,accountant,orcustomsconsultant)toassistyouincomplyingwithCBPrequirements,doyouhaveaccesstotheCBPRegulations(Title19oftheCodeofFederalRegulations),theHarmonizedTariffScheduleoftheUnitedStates(generallyreferredtoastheHarmonizedTariffSchedule),andCBPBulletinandDecisions?(AllthreeareavailablefromtheSuperintendentofDocuments,Tel.202.512.1800.)DoyouhaveaccesstotheCBPWebsiteatwww.cbp.gov,orotherresearchservicethatprovidestheinformationtohelpyouestablishreliableproceduresandfacilitatecompliancewithCBPlawandregulations?

2. Hasaresponsible,knowledgeableindividualwithinyourorganizationreviewedyourCBPdocumentationtoassurethatitisfull,completeandaccurate?Ifthedocumentationwaspreparedoutsideyourorganization,doyouhaveareliablemethodtoassurethatyoureceivecopiesoftheinformationsubmittedtoCBP,thatitisreviewedforaccuracy,andthatCBPisapprisedofneededcorrectionsinatimelyfashion?

20 21

greenworldwide.com

3. IfyouuseanexperttohelpyoucomplywithCBPrequirements,haveyoudiscussedyourimportationsinadvancewiththatperson,andhaveyouprovidedhimorherwithcomplete,accurateinformationabouttheimporttransaction(s)?

4. AreidenticaltransactionsormerchandisehandleddifferentlyatdifferentportsorCBPofficeswithinthesameport?Ifso,haveyoubroughtthisfacttoCBPofficials’attention?

Questions by Topic: Merchandise Description & Tariff Classification Basic Question: Do you know what you ordered, where it was made, and what it is made of?

1. Haveyouprovidedacomplete,accuratedescriptionofyourmerchandisetoCBPinaccordancewith19U.S.C.1481?

2. HaveyouprovidedCBPwiththecorrecttariffclassificationofyourmerchandiseinaccordancewith19U.S.C.1484?

3. HaveyouobtainedaCBPrulingregardingthedescriptionofyourmerchandiseoritstariffclassification?Ifso,haveyoufollowedtherulingandapprisedappropriateCBPofficialsofthosefacts(i.e.,oftherulingandyourcompliancewithit)?

4. Wheremerchandisedescriptionortariffclassificationinformationisnotimmediatelyavailable,haveyouestablishedareliableprocedureforobtainingitandprovidingittoCBP?

5. HaveyouparticipatedinaCBPclassificationofyourmerchandiseinordertogetitproperlydescribedandclassified?

6. Haveyouconsultedthetariffschedules,CBPinformedcompliancepublications,courtcasesorCBPrulingstohelpyouproperlydescribeandclassifythemerchandise?

7. Haveyouconsultedwithanexpert(e.g.,lawyer,customsbroker,accountant,customsconsultant)toassistinthedescriptionand/orclassificationofthemerchandise?

8. Ifyouareclaimingaconditionallyfreeorspecialtariffclassificationorprovisionforyourmerchandise

(e.g.,GSP,HTSItem9802,NAFTA),howhaveyouverifiedthatthemerchandisequalifiesforsuchstatus?Doyouhavethedocumentationnecessarytosupporttheclaim?IfmakingaNAFTApreferenceclaim,doyouhaveaNAFTAcertificateoforigininyourpossession?

9. Isthenatureofyourmerchandisesuchthatalaboratoryanalysisorotherspecializedprocedureisadvisedforproperdescriptionandclassification?

Valuation Basic Questions: Do you know the “price actually paid or payable” for your merchandise? Do you know the terms of sale? Whether there will be rebates, tie-ins, indirect costs, additional payments? Whether “assists” were provided or commissions or royalties paid? Are amounts actual or estimated? Are you and the supplier “related parties”?

1. HaveyouprovidedCBPwithaproperdeclaredvalueforyourmerchandiseinaccordancewith19U.S.C.1484and19U.S.C.1401a?

2. HaveyouobtainedaCBPrulingregardingvaluationofthemerchandise(see19CFRPart177)?Canyouestablishthatyoufollowedtherulingreliably?HaveyoubroughtthosefactstotheattentionofCBP?

3. HaveyouconsultedtheCBPvaluationlawsandregulations,CBPValuationEncyclopedia,CBPinformedcompliancepublications,courtcasesandCBPrulingstoassistyouinvaluingmerchandise?

4. Ifyoupurchasedthemerchandisefroma“related”seller,haveyoureportedthatfactuponentry?HaveyouassuredthatthevaluereportedtoCBPmeetsoneofthe“relatedparty”tests?

5. Haveyouassuredthatalllegallyrequiredcostsorpaymentsassociatedwiththeimportedmerchandise(assists,commissions,indirectpaymentsorrebates,royalties,etc.)havebeenreportedtoCBP?

6. Ifyouaredeclaringavaluebaseduponatransactioninwhichyouwere/arenotthebuyer,haveyousubstantiatedthatthetransactionisabonafide“saleatarm’slength”andthatthe

22 23merchandisewasclearlydestinedtotheUnitedStatesatthetimeofsale?

7. Ifyouareclaimingaconditionallyfreeorspecialtariffclassificationorprovisionforyourmerchandise(GSP,HTSItem9802,NAFTA),haveyoureportedtherequiredvalueinformationandobtainedthedocumentationnecessarytosupporttheclaim?

8. Haveyouproducedtherequiredentrydocumentationandsupportinginformation?

Country of Origin/Marking/Quota Basic Question: Have you ascertained the correct country of origin for the imported merchandise?

1. HaveyoureportedthecorrectcountryoforiginonCBPentrydocuments?

2. Haveyouassuredthatthemerchandiseisproperlymarkeduponentrywiththecorrectcountryoforigin(ifrequired)inaccordancewith19U.S.C.1304andanyotherapplicablespecialmarkingrequirements(watches,gold,textilelabeling,etc)?

3. HaveyouobtainedaCBPrulingregardingthepropermarkingandcountryoforiginofthemerchandise?Ifso,haveyoufollowedtherulingandbroughtthatfacttotheattentionofCBP?

4. Haveyouconsultedwithacustomsexpertregardingthecorrectcountry-of-origin/propermarkingofyourmerchandise?

5. HaveyouapprisedyourforeignsupplierofCBPcountry-of-originmarkingrequirementspriortoimportationofyourmerchandise?

6. IfyouareclaimingachangeintheoriginofthemerchandiseorclaimingthatthegoodsareofU.S.origin,haveyoutakenrequiredmeasurestosubstantiateyourclaim(e.g.,doyouhaveU.S.millingcertificatesormanufacturers’affidavitsattestingtoproductionintheUnitedStates)?

7. Ifimportingtextilesorapparel,haveyouascertainedthecorrectcountryoforigininaccordancewith19U.S.C.3592(Section334,P.L.103-465)andassuredyourselfthatnoillegaltransshipmentorfalseorfraudulentpracticeswereinvolved?

8. Doyouknowhowyourgoodsaremade,fromraw

materialstofinishedgoods,bywhomandwhere?9. Haveyouensuredthatthequotacategoryis

correct?

Intellectual Property Rights Basic Question: Have you determined whether your merchandise or its packaging use any trademarks or copyrighted material or are patented? If so, can you establish that you have a legal right to import those items into and/or use them in the United States? 1. Ifyouareimportinggoodsorpackagingbearing

atrademarkregisteredintheUnitedStates,haveyouestablishedthatitisgenuineandnotrestrictedfromimportationunderthe“gray-market”orparallel-importrequirementsofUnitedStateslaw(see198CFR133.21),orthatyouhavepermissionfromthetrademarkholdertoimportthemerchandise?

2. Ifyouareimportinggoodsorpackagingthatcontainregisteredcopyrightedmaterial,haveyouestablishedthatthismaterialisauthorizedandgenuine?Ifyouareimportingsoundrecordingsofliveperformances,weretherecordingsauthorized?

3. IsyourmerchandisesubjecttoanInternationalTradeCommissionorcourt-orderedexclusionorder?

4. Canyouproducetherequiredentrydocumentationandsupportinginformation?

Miscellaneous 1. Haveyouassuredthatyourmerchandisecomplies

withotheragencies’requirements(e.g.,FDA,EPA,DOT,CPSC,FTC,Agriculture,etc.)andobtainedlicensesorpermits,ifrequired,fromthem?

2. AreyourgoodssubjecttoaCommerceDepartmentdumpingorcountervailing-dutyinvestigationordetermination?Ifso,haveyoucompliedwithCBPreportingrequirementsofthisfact(e.g.,19CFR141.61)?

3. Isyourmerchandisesubjecttoquota/visarequirements?Ifso,haveyouprovidedacorrect


visaforthegoodsuponentry?4. Haveyouassuredthatyouhavetherighttomake

entryundertheCBPRegulations?5. HaveyoufiledthecorrecttypeofCBPentry(e.g.,

TIB,T&E,consumptionentry,mailentry)?

Compliance Assessment/Compliance Measurement Ofprimaryinteresttothetradecommunityisthecomplianceassessment,whichisthesystematicevaluationofanimporter’ssystemssupportinghisorherCBP-relatedoperations.Theassessmentincludestestingimportandfinancialtransactions,reviewingtheadequacyoftheimporter’sinternalcontrols,anddeterminingtheimporter’scompliancelevelsinkeyareas.Complianceassessmentsareconductedinaccordancewith19U.S.C.1509.

TheassessmentisconductedbyaninterdisciplinaryteamcomposedofaCBPauditor,importspecialist,accountmanager,industryexpert,andpossiblyotherCBPspecialists(attorneys,inspectors,scientists).Thecomplianceassessmentutilizesprofessionallyacceptedstatisticalsamplingandauditingtechniquestoreviewselectedimporttransactionsfromthecompany’spreviousfiscalyear.

Complianceassessmentswillevaluatethecompany’sapplicablecustomsoperationssuchas:• Recordkeeping,• Merchandiseclassification/tradestatistics,• Merchandisequantities,• Antidumping/countervailingdutyoperations,• Quotaconformity,• Merchandisevalue,• Warehouseorforeigntradezoneoperations,• Merchandisetransshipment,• Specialtradeprograms(GSP,CBI,others).

CompaniesfoundincompliancewithCBPlawsandregulationswillgetareportstatingthatfact.Companieswhosesystemsaredeterminedtobenoncompliantwillalsogetareportandwillbeasked

toformulate,incooperationwithCBPadvisors,acomplianceimprovementplanspecifyingcorrectiveactionsthecompanywilltaketoincreasecompliancelevels.SeriousviolationsoflaworregulationmayresultinCBPreferringthecompanyforaformalinvestigationorotherenforcementactions.

Bylaw,CBPisrequiredtoprovidetheimporterwithadvancenoticeofanintendedassessmentandanestimateofitsduration.Importersareentitledtoanentryconference,duringwhichtheassessment’spurposewillbeexplainedanditsdurationprovided.UsinginformationfromCBPdatabasesaboutthecompanyortheimporter’sindustry,thecomplianceassessmentteammayhavepreparedquestionnairesseekingspecificinformationabouttheimporter’sinternalprocedures.Thesequestionnaireswillbedistributedattheentryconference.

Uponcompletionoftheassessment,CBPwillscheduleaclosingconference,atwhichitspreliminaryfindingswillbeexplained.Aclosingconferencemaynotbescheduledforcompaniesfoundtohaveseriousenforcementissues.Ifnoenforcementactionistaken,CBPwillprovidethecompanywithawrittenreportoftheassessment’sresults.

TheImporterAudit/ComplianceAssessmentTeamKit(alsocalledtheCATKit),whichprovidesextensivedetailsoftheassessmentprocedure.ComplianceMeasurementistheprimarytoolCBPusestoassesstheaccuracyofport-of-entrytransactionsandtodeterminethecompliancerateforallcommercialimportations.Byusingstatisticalsamplingmethods,avalidcompliancelevelforallcommercialimportationscanbeobtained.OneofCBP’sgoalsistoassurethatatleast99percentoftheimportrevenueslegallyowedtheUnitedStatesgovernmentarecollected.Cargoissampledforcompliancewithinternationaltradelawsattheportofentry,atthetimeofentryintotheUnitedStates.Importersshouldbeawarethatmisclassificationofmerchandise,amongotherviolations,willbedetectedthroughthecompliancemeasurementprocess.

26 27


invoicesCommercial Invoice Acommercialinvoice,signedbythesellerorshipper,orhisagent,isacceptableforCBPpurposesifitispreparedinaccordancewithSection141.86through141.89oftheCBPRegulations,andinthemannercustomaryforacommercialtransactioninvolvinggoodsofthekindcoveredbytheinvoice.ImportersandbrokersparticipatingintheAutomatedBrokerInterfacemayelecttotransmitinvoicedataviatheAutomatedInvoiceInterfaceorEDIFACTandeliminatethepaperdocument.Theinvoicemustprovidethefollowinginformation,asrequiredbytheTariffAct:• Theportofentrytowhichthemerchandiseis

destined,• Ifmerchandiseissoldoragreedtobesold,the

time,place,andnamesofbuyerandseller;ifconsigned,thetimeandoriginofshipment,andnamesofshipperandreceiver,

• Adetaileddescriptionofthemerchandise,includingthenamebywhicheachitemisknown,thegradeorquality,andthemarks,numbers,andsymbolsunderwhichitissoldbythesellerormanufacturertothetradeinthecountryofexportation,togetherwiththemarksandnumbersofthepackagesinwhichthemerchandiseispacked,

• Thequantitiesinweightsandmeasures,• Ifsoldoragreedtobesold,thepurchasepriceof

eachiteminthecurrencyofthesale,• Ifthemerchandiseisshippedforconsignment,

thevalueofeachiteminthecurrencyinwhichthetransactionsareusuallymade,or,intheabsenceofsuchvalue,thepriceinsuchcurrencythatthemanufacturer,seller,shipper,orownerwouldhavereceived,orwaswillingtoreceive,forsuchmerchandiseifsoldintheordinarycourseoftradeandintheusualwholesalequantitiesinthecountryofexportation,

• Thekindofcurrency,• Allchargesuponthemerchandise,itemizedby

nameandamountincludingfreight,insurance,

commission,cases,containers,coverings,andcostofpacking;and,ifnotincludedabove,allcharges,costs,andexpensesincurredinbringingthemerchandisefromalongsidethecarrierattheportofexportationinthecountryofexportationandplacingitalongsidethecarrieratthefirstU.S.portofentry.Thecostofpacking,cases,containers,andinlandfreighttotheportofexportationneednotbeitemizedbyamountifincludedintheinvoicepriceandsoidentified.Wheretherequiredinformationdoesnotappearontheinvoiceasoriginallyprepared,itshallbeshownonanattachmenttotheinvoice,

• Allrebates,drawbacks,andbounties,separatelyitemized,allowedupontheexportationofthemerchandise,

• Thecountryoforigin,• Allgoodsorservicesfurnishedfortheproduction

ofthemerchandisenotincludedintheinvoiceprice.

• Ifthemerchandiseonthedocumentsissoldwhileintransit,theoriginalinvoicereflectingthistransactionandtheresaleinvoiceorastatementofsaleshowingthepricepaidforeachitembythepurchasershallbefiledaspartoftheentry,entrysummary,orwithdrawaldocumentation.

TheinvoiceandallattachmentsmustbeintheEnglishlanguage,orshallbeaccompaniedbyanaccurateEnglishtranslation.

Eachinvoiceshallstateinadequatedetailwhatmerchandiseiscontainedineachindividualpackage.Iftheinvoiceorentrydoesnotdisclosetheweight,gauge,ormeasureofthemerchandisenecessarytoascertainduties,theimporterofrecordshallpayexpensesincurredtoobtainthisinformationpriortothereleaseofthemerchandisefromCBPcustody.Eachinvoiceshallsetforthindetail,foreachclassorkindofmerchandise,everydiscountfromthelistorotherbasepricethathasbeenormaybeallowedinfixingeachpurchasepriceorvalue.

28 29

greenworldwide.com

Whenmorethanoneinvoiceisincludedinthesameentry,eachinvoicewithitsattachmentsshallbenumberedconsecutivelybytheimporteronthebottomofthefaceofeachpage,beginningwithnumber1.Ifaninvoiceismorethantwopages,beginwithnumber1forthefirstpageofthefirstinvoiceandcontinueinasingleseriesofnumbersthroughalltheinvoicesandattachmentsincludedinoneentry.Ifanentrycoversoneinvoiceofonepageandasecondinvoiceoftwopages,thenumberingatthebottomofthepageshallbeasfollows:Inv.1,p.1;Inv.2,p.2;Inv.2,p.3,etc.

Anyinformationrequiredonaninvoicemaybesetfortheitherontheinvoiceorontheattachment.

Specific Requirements 1. Separate Invoice Required for Each Shipment. Not

morethanonedistinctshipmentfromoneconsignortooneconsigneebyonecommercialcarriershallbeincludedonthesameinvoice.

2. Assembled Shipments.Merchandiseassembledforshipmenttothesameconsigneebyonecommercialcarriermaybeincludedinoneinvoice.Theoriginalbillsorinvoicescoveringthemerchandiseshowingtheactualpricepaidoragreedtobepaid,shouldbeattachedtotheinvoice.

3. Installment Shipments.Installmentsofashipmentcoveredbyasingleorderorcontractandshippedfromoneconsignortooneconsigneemaybeincludedinoneinvoiceiftheinstallmentsarriveattheportofentrybyanymeansoftransportationwithinaperiodnottoexceed10consecutivedays.

Theinvoiceshouldbepreparedinthesamemannerasinvoicescoveringsingleshipmentsandshouldincludeanyadditionalinformationthatmayberequiredfortheparticularclassofgoodsconcerned.Ifitispracticaltodoso,theinvoiceshouldshowthequantities,values,andotherinvoicedatawithrespecttoeachinstallment,andtheidentificationoftheimportingconveyanceinwhicheachinstallmentwasshipped.

4. Production “Assist.”Theinvoiceshouldindicatewhethertheproductionofmerchandiseinvolvedcostsfor“assists”(e.g.,dies,molds,tooling,printingplates,artwork,engineeringwork,designanddevelopment,financialassistance,etc.)thatarenotincludedintheinvoiceprice.Ifassistswereinvolved,statetheirvalue,ifknown,andbywhomsupplied.Weretheysuppliedwithoutcost,oronarentalbasis,orweretheyinvoicedseparately?Ifthelatter,attachacopyoftheinvoice.

WheneverCBPrequiresinformationonthecostofproductionofgoodsforcustomsvaluation,theimporterwillbenotifiedbytheportdirector.Thereafter,invoicescoveringshipmentsofsuchgoodsmustcontainastatementonthecostofproductionbythemanufacturerorproducer.

5. Additional Information Required.Specialinformationmayberequiredoncertaingoodsorclassesofgoodsinadditiontotheinformationnormallyrequiredontheinvoice.AlthoughtheUnitedStatesimporterusuallyadvisestheexporterofthesespecialsituations.

6. Rates of Exchange. Ingeneral,norate(s)ofexchangemaybeusedtoconvertforeigncurrencyforcustomspurposesotherthantherate(s)proclaimedorcertifiedin31U.S.C.5151.FormerchandiseimportedfromacountryhavingacurrencyforwhichtwoormoreratesofexchangehavebeencertifiedbytheFederalReserveBankofNewYork,theinvoicewillshowtheexchangerateorratesusedinconvertingtheUnitedStatesdollarsreceivedforthemerchandiseintotheforeigncurrencyandthepercentageofeachrateiftwoormoreratesareused.Ifarateorcombinationofratesusedtopaycosts,charges,orexpensesisdifferentfromthoseusedtopayforthemerchandise,statethatrateorcombinationofratesseparately.Whendollarshavenotbeenconvertedatthetimetheinvoiceisprepared,statethatfactontheinvoice,inwhichcasetheinvoiceshallalsostatetherateorcombinationofratesatwhichthedollarswillbeconverted,orthatitisnot

30 31knownwhatrateorrateswillbeused.Ratesofexchangearenotrequiredformerchandise.

Other Invoices Pro Forma Invoice Iftherequiredcommercialinvoiceisnotfiledatthetimethemerchandiseisentered,astatementintheformofaninvoice(aproformainvoice)mustbefiledbytheimporteratthetimeofentry.Abondisgivenforproductionoftherequiredinvoicenotlaterthan120daysfromthedateoftheentrysummary,orentryifthereisnoentrysummary.Iftheinvoiceisneededforstatisticalpurposes,itmustgenerallybeproducedwithin50daysfromthedateonwhichtheentrysummaryisrequiredtobefiled.

Theexportershouldbearinmindthatunlessheorsheforwardstherequiredinvoiceintime,theAmericanimporterwillincuraliabilityunderhisbondforfailuretofiletheinvoicewiththeportdirectorofCBPbeforethe120-dayperiodexpires.

Althoughaproformainvoiceisnotpreparedbytheexporter,itisofinteresttoexportersasitgivesageneralideaofthekindofinformationneededforentrypurposes.AproformainvoiceindicateswhattheimportermayfindnecessarytofurnishCBPofficersatthetimeaformalentryisfiledforacommercialshipment,ifaproperlypreparedCBPorcommercialinvoiceisnotavailableatthetimethegoodsareentered.Anacceptableformatforaproformainvoiceisreproducedintheappendix.Someoftheadditionalinformationspecifiedforthecommoditiesundersection141.89oftheCBPRegulationsmaynotberequiredwhenentryismadeonaproformainvoice.However,theproformainvoicemustcontainsufficientdataforexamination,classification,andappraisementpurposes.

Frequent Errors In Invoicing ForeignsellersorshippersmustexercisecareinpreparinginvoicesandotherdocumentsusedtoentergoodsintothecommerceoftheUnitedStates

inorderfortheirimporterstoavoiddifficulties,delays,orpossiblyevenpenalsanctions.Eachdocumentmustcontainallinformationrequiredbylaworregulations,andeverystatementoffactcontainedinthedocumentsmustbetrueandaccurate.AnyinaccurateormisleadingstatementoffactinadocumentpresentedtoaCBPofficerinconnectionwithanentry,ortheomissionfromthedocumentofrequiredinformation,mayresultindelaysinmerchandiserelease,thedetentionofthegoods,oraclaimagainsttheimporterfordomesticvalue.Eventhoughtheinaccuracyoromissionwasunintentional,theimportermayberequiredtoestablishthatheexercisedduediligenceandwasnotnegligent.

Itisparticularlyimportantthatallstatementsrelatingtomerchandisedescription,priceorvalue,andamountsofdiscounts,charges,andcommissionsbetruthfullyandaccuratelysetforth.Itisalsoimportantthattheinvoicessetforththetruenameoftheactualsellerandpurchaserofthegoods,inthecaseofpurchasedgoods,orthetruenameoftheactualconsignorandconsigneewhenthegoodsareshippedotherwisethaninpursuanceofapurchase.Itisimportant,too,thattheinvoiceotherwisereflecttherealnatureofthetransactionpursuanttowhichthegoodswereshippedtotheUnitedStates.ThefundamentalruleisthatboththeshipperandimportermustfurnishCBPofficerswithallpertinentinformationwithrespecttoeachimporttransactiontoassistCBPofficersindeterminingthetariffstatusofthegoods.Examplesofomissionsandinaccuraciestobeavoidedare:• Theshipperassumesthatacommission,royalty,

orotherchargeagainstthegoodsisaso-called“nondutiable”itemandomitsitfromtheinvoice.

• AforeignshipperwhopurchasesgoodsandsellsthemtoaUnitedStatesimporteratadeliveredpriceshowsontheinvoicethecostofthegoodstohiminsteadofthedeliveredprice.

• AforeignshippermanufacturesgoodspartlywiththeuseofmaterialssuppliedbytheUnitedStatesimporter,butinvoicesthegoodsattheactualcosttothemanufacturerwithoutincludingthe


valueofthematerialssuppliedbytheimporter.• Theforeignmanufacturershipsreplacementgoods

tohiscustomerintheUnitedStatesandinvoicesthegoodsatthenetpricewithoutshowingthefullpricelesstheallowancefordefectivegoodspreviouslyshippedandreturned.

• Aforeignshipperwhosellsgoodsatlistprice,lessadiscount,invoicesthematthenetprice,andfailstoshowthediscount.

• Aforeignshippersellsgoodsatadeliveredpricebutinvoicesthematapricef.o.b.theplaceofshipmentandomitsthesubsequentcharges.

• Aforeignshipperindicatesintheinvoicethattheimporteristhepurchaser,whereasheisinfacteitheranagentwhoisreceivingacommissionforsellingthegoodsorapartywhowillreceivepartoftheproceedsofthesaleofthegoodssoldforthejointaccountoftheshipperandconsignee.

• Invoicedescriptionsarevague,listingonlypartsofnumbers,truncatedorcodeddescriptions,orlumpingvariousarticlestogetherasonewhenseveraldistinctitemsareincluded.

assessment of dutiesDutiable Status Of Goods Rates Of Duty AllgoodsimportedintotheUnitedStatesaresubjecttodutyorduty-freeentryinaccordancewiththeirclassificationundertheapplicableitemsintheHarmonizedTariffScheduleoftheUnitedStates.Anannotatedloose-leafeditionofthetariffschedulemaybepurchasedfromtheU.S.GovernmentPrintingOffice,Washington,DC20402.

Whengoodsaredutiable,advalorem,specific,orcompoundratesmaybeassessed.Anadvaloremrate,isapercentageofthevalueofthemerchandise,suchasfivepercentadvalorem.Aspecificrateisaspecifiedamountperunitofweightorotherquantity,suchas5.9centsperdozen.Acompoundrateisacombinationofbothanadvaloremrateandaspecificrate,suchas0.7centsperkiloplus10percentadvalorem.

Free of Duty or Dutiable Ratesofdutyforimportedmerchandisemayvarydependinguponthecountryoforigin.Mostmerchandiseisdutiableunderthemost-favored-nation—nowreferredtoasnormaltraderelations—ratesintheGeneralcolumnundercolumn1ofthetariffschedule.Merchandisefromcountriestowhichtheserateshavenotbeenextendedisdutiableatthefullor“statutory”ratesincolumn2ofthetariffschedule.

Freeratesareprovidedformanysubheadingsincolumns1and2ofthetariffschedule.Duty-freestatusisalsoavailableundervariousconditionalexemptionswhicharereflectedintheSpecialcolumnundercolumn1ofthetariffschedule.Itistheimporter’sburdentoshoweligibilityforaconditionalexemptionfromduty.

OneofthemorefrequentlyappliedexemptionsfromdutyoccursundertheGeneralizedSystemofPreferences(GSP).GSP-eligiblemerchandisequalifiesforduty-freeentrywhenitisfromabeneficiarydevelopingcountryandmeetsotherrequirements.OtherexemptionsarefoundunderthesubheadingsinChapter98ofthetariffschedule.Thesesubheadingsinclude,amongotherprovisions,certainpersonalexemptions,exemptionsforarticlesforscientificorotherinstitutionalpurposes,andexemptionsforreturnedAmericangoods.

Liability For Duties ThereisnoprovisionunderwhichU.S.dutiesortaxesmaybeprepaidinaforeigncountrybeforeexportationtotheUnitedStates.Thisistrueevenforgiftssentbymail.Intheusualcase,liabilityforthepaymentofdutybecomesfixedatthetimeanentryforconsumptionorforwarehouseisfiledwithCBP.Theobligationforpaymentisuponthepersonorfirminwhosenametheentryisfiled.Whengoodshavebeenenteredforwarehouse,liabilityforpayingdutiesmaybetransferredtoanypersonwhopurchasesthegoodsanddesirestowithdrawtheminhisorherownname.

34 35


Payingacustomsbrokerwillnotrelievetheimporterofhisorherliabilityforcustomscharges(duties,taxes,andotherdebtsowedCBP)shouldthosechargesnotbepaidbythebroker.Therefore,iftheimporterpaysthebrokerbycheck,heorsheshouldgivethebrokeraseparatecheck,madepayableto“U.S.CustomsandBorderProtection”forthosecustomscharges,whichthebrokerwillthendelivertoCBP.

Iftheentryismadeinthenameofacustomsbroker,thebrokermayobtainrelieffromstatutoryliabilityforthepaymentofincreasedoradditionaldutiesfounddueif(1)theactualownerofgoodsisnamed,and(2)theowner’sdeclarationwherebytheowneragreestopaytheadditionaldutyandtheowner’sbondarebothfiledbythebrokerwiththeportdirectorwithin90daysofthedateofentry.

Containers or Holders CBPdesignatessuchitemsasliftvans,cargovans,shippingtanks,palletsandcertainarticlesusedtoshipgoodsinternationallyasinstrumentsofinternationaltraffic.Solongasthisdesignationapplies,thesearticlesarenotsubjecttoentryordutywhentheyarrive,whethertheyareloadedorempty.OtherclassesofmerchandisecontainersmayalsobedesignatedasinstrumentsofinternationaltrafficuponapplicationtotheCommissionerofCBPforsuchadesignation.Ifanyarticlesodesignatedisdivertedtodomesticuse,however,itmustbeenteredanddutypaid,ifapplicable.

Containersspeciallyshapedorfittedtocontainaspecificarticleorsetofarticles,suitableforlongtermuseandenteredwiththearticlesforwhichtheyareintended,areclassifiablewiththeaccompanyingarticlesiftheyareofakindnormallysoldtherewith.Examplesofsuchcontainersare:cameracases,musicalinstrumentcases,guncases,drawinginstrumentcases,andnecklacecases.Thisruledoesnotapplytocontainersthatgivetheimportationasawholeitsessentialcharacter.

Subjecttotheaboverule,packingmaterialsandpackingcontainersenteredwithgoodspackedinthemareclassifiedwiththesegoodsiftheyareofakindnormallyusedforpackingsuchgoods.However,thisdoesnotapplytopackingmaterialsorcontainersthatareclearlysuitableforrepetitiveuse.

Temporary Free ImportTemporary Importation Under Bond (TIB) Goodsofthetypesenumeratedbelow,whennotimportedforsaleorforsaleonapproval,maybeadmittedintotheUnitedStatesunderbond,withoutthepaymentofduty,forexportationwithinoneyearfromthedateofimportation.Generally,theamountofthebondisdoubletheestimatedduties.Theone-yearperiodforexportationmay,uponapplicationtotheportdirector,beextendedforoneormorefurtherperiodswhich,whenaddedtotheinitialoneyear,shallnotexceedatotalofthreeyears.Thereisanexceptioninthecaseofarticlescoveredinitem14:theperiodofthebondmaynotexceedsixmonthsandmaynotbeextended.MerchandiseenteredunderTIBmustbeexportedordestroyedbeforeexpirationofthebondperiod,oranyextension,toavoidassessmentofliquidateddamagesintheamountofthebond.AllgoodsenteredunderTIBaresubjecttoquotacompliance.

Classes Of Goods 1. Merchandisetoberepaired,altered,or

processed(includingprocesseswhichresultinanarticlebeingmanufacturedorproducedintheUnitedStates),providedthatthefollowingconditionsaremet:

2. ThemerchandisewillnotbeprocessedintoanarticlemanufacturedorproducedintheUnitedStatesifthearticleis:

• Alcohol,distilledspirits,wine,beer,oranydilutionormixtureofthese,Perfumeorothercommoditycontainingethylalcohol,whetherdenaturedornot,

• Aproductofwheat.• Ifmerchandiseisprocessedandresultsinan

36 37

greenworldwide.com

articlebeingmanufacturedorproducedintheUnitedStatesotherthanthosedescribedabove:

• AcompleteaccountingwillbemadetoCBPforallarticles,wastes,andirrecoverablelossesresultingfromtheprocessing,and

• AllarticleswillbeexportedordestroyedunderCBPsupervisionwithinthebondedperiod.Valuablewastemustalsobeexportedorsodestroyedunlessduty,ifapplicable,ispaid.

3. Modelsofwomen’swearingapparelimportedbymanufacturersforusesolelyasmodelsintheirownestablishments;thesearticlesrequirequotacompliance.

4. Articlesimportedbyillustratorsandphotographersforusesolelyasmodelsintheirownestablishmentstoillustratecatalogs,pamphlets,oradvertisingmatter.

5. Samplessolelyforuseintakingordersformerchandise;thesesamplesrequirequotacompliance.

6. Articlessolelyforexaminationwithaviewtoreproductionorforexaminationandreproduction(exceptphotoengravedprintingplatesforexaminationandreproduction);andmotion-pictureadvertisingfilms.

7. Articlesintendedsolelyfortesting,experimental,orreviewpurposes,includingplans,specifications,drawings,blueprints,photographs,andarticlesforuseinconnectionwithexperimentsorforstudy.Ifarticlesunderthiscategoryaredestroyedinconnectionwiththeexperimentorstudy,proofofsuchdestructionmustbepresentedtosatisfytheobligationunderthebondtoexportthearticles.

8. Automobiles,motorcycles,bicycles,airplanes,airships,balloons,boats,racingshells,andsimilarvehiclesandcraft,andtheusualequipmentoftheforegoing,ifbroughttemporarilyintotheUnitedStatesbynonresidentsforthepurposeoftakingpartinracesorotherspecificcontests.Portdirectorsmaydefertheexactionofabondforaperiodnottoexceed90daysafterthedateofimportationforvehiclesandcrafttotakepartinracesorotherspecificcontestsforotherthanmoneypurposes.Ifthevehicleorcraftisnotexportedorthebondis

notgivenwithintheperiodofsuchdeferment,thevehicleorcraftshallbesubjecttoforfeiture.

9. LocomotivesandotherrailroadequipmentbroughttemporarilyintotheUnitedStatesforuseinclearingobstructions,fightingfires,ormakingemergencyrepairsonrailroadswithintheUnitedStatesorforuseintransportationotherwisethanininternationaltrafficwhentheSecretaryoftheTreasuryfindsthatthetemporaryuseofforeignrailroadequipmentisnecessarytomeetanemergency.Importerscanexpediteapprovalofarequestfortemporaryimportationtomeetanemergencybyincludingevidenceoftheexistenceoftheemergency,suchasnewsreports.

10. Containersforcompressedgases,filledorempty,andcontainersorotherarticlesusedforcoveringorholdingmerchandise(includingpersonalorhouseholdeffects)duringtransportationandsuitableforreuseforthatpurpose.

11. Professionalequipment,toolsoftrade,repaircomponentsforequipmentortoolsadmittedunderthisitem,andcampingequipmentimportedbyorfornonresidentsforthenonresident’susewhilesojourningtemporarilyintheUnitedStates.

12. Articlesofspecialdesignfortemporaryuseexclusivelyinconnectionwiththemanufactureorproductionofarticlesforexport.

13. AnimalsandpoultrybroughtintotheUnitedStatesforthepurposeofbreeding,exhibition,orcompetitionforprizes,andtheusualequipmenttherefor.

14. Worksoffreefinearts,drawings,engravings,photographicpictures,andphilosophicalandscientificapparatusbroughtintotheUnitedStatesbyprofessionalartists,lecturers,orscientistsarrivingfromabroadforusebythemforexhibitionandinillustration,promotion,andencouragementofart,scienceorindustryintheUnitedStates.

15. Automobiles,automobilechassis,automobilebodies,cutawayportionsofanyoftheforegoing,andpartsforanyoftheforegoing,finished,unfinished,orcutaway,whenintendedsolelyforshowpurposes.ThesearticlesmaybeadmittedonlyonconditionthattheSecretaryoftheTreasury

38 39hasfoundthattheforeigncountryfromwhichthearticleswereimportedallowsorwillallowsubstantiallyreciprocalprivilegeswithrespecttosimilarexportstothatcountryfromtheUnitedStates.IftheSecretaryfindsthataforeigncountryhasdiscontinuedorwilldiscontinuetheallowanceofsuchprivileges,theprivilegesunderthisitemshallnotapplythereaftertoimportsfromthatcountry.

The North American Free Trade Agreement (NAFTA) TheprovisionsoftheNorthAmericanFreeTradeAgreement(NAFTA)wereadoptedbytheUnitedStateswithenactmentoftheNorthAmericanFreeTradeAgreementImplementationActof1993(107Stat.2057,P.L.103-182).NineteenCodeofFederalRegulation(19CFR)Parts10,12,123,134,162,174,177,and178wereamended,andnewparts102and181oftheCBPRegulationsweredevelopedtoimplementNAFTA’sdutyprovisions.

NAFTAphasedouttariffsonalmostall“originating”goodstradedbetweenCanadaandtheUnitedStatesbyJanuary1,2003,andprovidesforanadditional5-yearphase-outperiodoncertainsensitivecommoditiestradedbetweenMexicoandtheUnitedStates.

Article401ofNAFTAeliminatesbothtariffsandthemerchandiseprocessingfeesforgoodsthat“originate.”TransshippinggoodsthroughMexicoorCanadathatweremadeinanothercountry,orperformingonlyminorprocessingorpackagingoperationsontheminNorthAmerica,willnotinvokepreferentialNAFTAdutyrates.

Theterm“originate”meansthosegoodsthatmeettherequirementsofNAFTAArticle401.Article401defines“originate”infourways:1. Goodswhollyobtainedorproducedentirelyinthe

NAFTAregion(thesecontainnoforeigninputs);2. GoodsproducedentirelyintheNAFTAregion

exclusivelyfromoriginatingmaterials(these

containforeignmaterialsthathavebeenpreviouslymanufacturedintooriginatingmaterials);

3. GoodsmeetinganAnnex401specificruleoforiginsuchasaprescribedchangeintariffclassification,regionalvaluecontentrequirement;andinextremelylimitedinstances,

4. Unassembledgoodsandgoodsclassifiedwiththeirparts,whichdonotmeetthetariff-shiftrulebutcontain60percentregionalvaluecontentusingthetransaction-valuemethod,or50percentusingthenet-costmethod.

Antidumping And Countervailing Duties Antidumping(AD)andcountervailing(CVD)dutiesareadditionaldutiesthatmaybeassessedonimportedgoodsintendedforsaleintheUnitedStatesatabnormallylowprices.TheselowpricesaretheresultofunfairforeigntradepracticesthatgivesomeimportsanunearnedadvantageovercompetingU.S.goods.DumpingisthepracticeoftryingtosellproductsintheUnitedStatesatlowerpricesthanthosesameproductswouldbringintheproducer’shomemarket.DumpingalsoincludestryingtosellaproductintheUnitedStatesatapricelowerthanitcosttomanufacturethatitem.Subsidizingisthepracticebysomegovernmentsofprovidingfinancialassistancetoreducemanufacturers’costsinproducing,manufacturingorexportingparticularcommodities.Countervailingdutiesmaybeassessedto“leveltheplayingfield”betweendomesticandsubsidizedimportedgoods.However,tomeetthecriteriaforassessingantidumpingorcountervailingduties,theimportedmerchandisemust,inadditiontobeingsubsidizedorsoldatlessthanfairvalue,alsoinjureaU.S.industry.

TheDepartmentofCommerce,theInternationalTradeCommission(ITC),andU.S.CustomsandBorderProtectioneachhavearoleinadministeringandenforcingantidumpingandcountervailingdutylaws.TheCommerceDepartmentisresponsibleforthegeneraladministrationoftheselaws.Commerce


determineswhetherthemerchandiseisbeingsoldatlessthanfairvalue,whetherithasbeensubsidized,andwhatpercentagerateofdutywillbeassessed.TheITCdetermineswhethertheproductposesaninjury3toaparticularU.S.industry.CBPassessestheactualduties--theamount--basedupontheratesetbytheCommerceDepartmentoncetheITChasdeterminedthattheimportinjuresaparticularindustry.

Drawback—Refunds Of Duties Drawbackisarefundofmonies-customsduties,certaininternalrevenuetaxesandotherfees-thatwerelawfullycollectedatthetimeofimportation.TheContinentalCongressestablisheddrawbackin1789tocreatejobsinthenewUnitedStatesandtoencouragemanufacturingandexporting.

Fordrawbacktobepaid,theimportedmerchandisemustbeexportedordestroyedunderCBPsupervisionafterimportation.

Types Of Drawback AlthoughSection1313,Title19,oftheUnitedStatesCodeprovidesforseveraltypesofdrawback,therearethreeprimarytypesofdrawbackofinteresttomostimporters:• Manufacturingdrawback,• Unused-merchandisedrawback,or• Rejected-merchandisedrawback.Manufacturingdrawbackisarefundofdutiespaidonimportedmerchandisespecificallydesignatedforuseinmanufacturingarticlesthataresubsequentlyexportedordestroyed.Forexample:two-inchspeakersareimportedandareincorporatedintoacertainmodelclockradio.Thespeakersthemselvesarenotaltered,justusedintheproductionofanewanddifferentarticle.

Manufacturingoperationstoproducethenewanddifferentarticlemusttakeplacewithinthreeyearsreceiptbythemanufacturerorproducerofthemerchandise.Thedrawbackproductmustbeexportedordestroyedwithinfiveyearsfromthedateofimportation.Drawbackcanbepaidon

merchandiseusedtomanufactureorproduceadifferentarticleifitwasnotthemerchandiseimportedbutiscommerciallyinterchangeable,i.e.,ofthesamekindandquality,orifitfallsunderthesameeight-digitHarmonizedTariffSchedulenumberasthemerchandisetowhichitiscompared,andthepartyclaimingdrawbackhashadpossessionofitforthreeyears.Thisiscalled“substitution.”

Unused-merchandisedrawbackisarefundofanyduty,tax,oreligiblefeespaidonimportedmerchandisethatisexportedordestroyedwithoutundergoinganymanufacturingoperationsandthatisneverusedintheUnitedStates.Theimportedmerchandisemustbeexportedwithinthreeyearsofthedateitwasimported.

Rejected-merchandisedrawbackisrefundofdutiesonimportedmerchandisethatisexportedordestroyedbecauseit:• Didnotconformtosampleorspecifications,• Wasshippedwithouttheconsignee’sconsent,or• Wasdefectiveattimeofimportation.

classification & valueClassification—Liquidation Classification Classification,and,whenadvaloremratesofdutyareapplicable,appraisement,arethetwomostimportantfactorsaffectingdutiablestatus.Classificationandvaluation,whetherornottheyarepertinentbecauseanadvaloremrateofdutyapplies,mustbeprovidedbycommercialimporterswhenanentryisfiled.Inaddition,classificationsunderthestatisticalsuffixesofthetariffschedulesmustalsobefurnishedeventhoughthisinformationisnotpertinenttodutiablestatus.

Accordingly,classificationisinitiallytheresponsibilityofanimporter,customsbrokerorotherpersonpreparingtheentrypapers.Section637oftheCustomsModernizationActimposestherequirementthatimportersexercisereasonablecarewhenclassifyingandappraisingmerchandise.

42 43


FamiliaritywiththeorganizationoftheHarmonizedTariffScheduleoftheUnitedStatesfacilitatestheclassificationprocess.Thetariffscheduleisdividedintovarioussectionsandchaptersdealingseparatelywithmerchandiseinbroadproductcategories.Thesecategoriescoveranimalproducts,vegetableproducts,productsofvariousbasicmaterialssuchaswood,textiles,plastics,rubber,andsteelandothermetalproductsinvariousstagesofmanufacture,forexample.Othersectionsencompasschemicals,machineryandelectricalequipment,andotherspecifiedornon-enumeratedproducts.Thelastsection,SectionXXII,coverscertainexceptionsfromdutyandspecialstatutoryprovisions.

InSectionsIthroughXXI,productsareclassifiable(1)underitemsordescriptionswhichnamethem,knownasaneonomineprovision;(2)underprovisionsofgeneraldescription;(3)underprovisionswhichidentifythembycomponentmaterial;or(4)underprovisionswhichencompassmerchandiseinaccordancewithitsactualorprincipaluse.Whentwoormoreprovisionsseemtocoverthesamemerchandise,theprevailingprovisionisdeterminedinaccordancewiththelegalnotesandtheGeneralRulesofInterpretationforthetariffschedule.AlsoapplicablearetariffclassificationprinciplescontainedinadministrativeprecedentsorinthecaselawoftheU.S.CourtofInternationalTrade(formerlytheU.S.CustomsCourt)ortheU.S.CourtofAppealsfortheFederalCircuit(formerlytheU.S.CourtofCustomsandPatentAppeals).

Liquidation CBPofficersattheportofentryorotherofficialsactingonbehalfoftheportdirectorreviewselectedclassificationsandvaluations,aswellasotherrequiredimportinformation,forcorrectnessorasaproperbasisforappraisement,aswellasforagreementofthesubmitteddatawiththemerchandiseactuallyimported.Theentrysummaryanddocumentationmaybeacceptedassubmittedwithoutanychanges.Inthissituation,theentryisliquidatedasentered.Liquidationisthepointat

whichCBP’sascertainmentoftherateandamountofdutybecomesfinalformostpurposes.Liquidationisaccomplishedbypostinganoticeonapublicbulletinboardatthecustomhouse.However,animportermayreceiveanadvancenoticeonCBPForm4333A“CourtesyNotice”statingwhenandinwhatamountdutywillbeliquidated.Thisformisnottheliquidation,andprotestrightsdonotaccrueuntilthenoticeisposted.Timelimitsforprotestingdonotstartuntilthedateofposting,andaprotestcannotbefiledbeforeliquidationisposted.

CBPmaydeterminethatanentrycannotbeliquidatedasenteredforonereasonoranother.Forexample,thetariffclassificationmaynotbecorrectormaynotbeacceptablebecauseitisnotconsistentwithestablishedanduniformclassificationpractice.Ifthechangerequiredbythisdeterminationresultsinarateofdutymorefavorabletoanimporter,theentryisliquidatedaccordinglyandarefundisauthorizedfortheapplicableamountofthedepositedestimatedduties.Ontheotherhand,achangemaybenecessarywhichimposesahigherrateofduty.Forexample,aclaimforanexemptionfromdutyunderafree-rateprovisionorunderaconditionalexemptionmaybefoundtobeinsufficientforlackoftherequiredsupportingdocumentation.Inthissituation,theimporterwillbegivenanadvancenoticeoftheproposeddutyrateincreaseandanopportunitytovalidatetheclaimforafreerateormorefavorablerateofduty.

Iftheimporterdoesnotrespondtothenotice,oriftheresponseisfoundtobewithoutmerit,entryisliquidatedinaccordancewiththeentryascorrected,andtheimporterisbilledfortheadditionalduty.Theportmayfindthattheimporter’sresponseraisesissuesofsuchcomplexitythatresolutioniswarrantedbyaCBPHeadquartersdecisionthroughtheinternaladviceprocedure.InternaladvicefromCBPHeadquartersmayberequestedbylocalCBPofficersontheirowninitiativeorinresponsetoarequestbytheimporter.

44 45

greenworldwide.com

Protests Afterliquidation,animportermaystillpursue,onCBPForm19(19CFR174),anyclaimsforanadjustmentorrefund,forentriesfiledbefore12-18-06,byfilingaprotestwithin90daysafterliquidation.Theprotestperiodhasbeenextendedto180daysforentriesfiledonorafter12-18-06.InordertoapplyforaHeadquartersruling,arequestforfurtherreviewmustbefiledwiththeprotest.ThesameForm19canbeusedforthispurpose.Iffiledseparately,applicationforfurtherreviewmuststillbefiledwithin90daysofliquidation.However,ifarulingonthequestionhaspreviouslybeenissuedinresponsetoarequestforadecisiononaprospectivetransactionorarequestforinternaladvice,furtherreviewwillordinarilybedenied.Ifaprotestisdenied,animporterhastherighttolitigatethematterbyfilingasummonswiththeU.S.CourtofInternationalTradewithin180daysafterdenialoftheprotest.Therulesofthecourtandotherapplicablestatutesandprecedentsdeterminethecourseofcustomslitigation.

WhileCBP’sascertainmentofdutiablestatusisfinalformostpurposesatthetimeofliquidation,aliquidationisnotfinaluntilanyprotestwhichhasbeenfiledagainstithasbeendecided.Similarly,theadministrativedecisionissuedonaprotestisnotfinaluntilanylitigationfiledagainstithasbecomefinal.

Entriesmustbeliquidatedwithinoneyearofthedateofentryunlesstheliquidationneedstobeextendedforanotherone-yearperiodnottoexceedatotaloffouryearsfromthedateofentry.CBPwillsuspendliquidationofanentrywhenrequiredbystatuteorcourtorder.Asuspensionwillremainineffectuntiltheissueisresolved.Notificationsofextensionsandsuspensionsaregiventoimporters,suretycompanies,andcustomsbrokerswhoarepartiestothetransaction.

Conversion of Currency Theconversionofforeigncurrencyforcustomspurposesmustbemadeinaccordancewiththeprovisionsof31U.S.C.5151.ThissectionstatesthatCBP

istouseratesofexchangedeterminedandcertifiedbytheFederalReserveBankofNewYork.ThesecertifiedratesarebasedontheNewYorkmarketbuyingratesfortheforeigncurrenciesinvolved.

Theratescertifiedonthefirstbusinessdayofeachcalendarquarterareusedthroughoutthequarterexceptondayswhenfluctuationsoffivepercentormoreoccur,inwhichcasetheactualcertifiedratesforthosedaysareused.Forinfrequentlyusedcurrencies,theFederalReserveBankofNewYorkcertifiesratesofexchangesuponrequestbyCBP.Theratescertifiedareonlyforthecurrenciesanddatesrequested.

ForCBPpurposes,thedateofexportationofthegoodsisthedateusedtodeterminetheapplicablecertifiedrateofexchange.Thisremainstrueeventhoughadifferentratemayhavebeenusedinpaymentofthegoods.InformationastotheapplicablerateofexchangeinconvertingcurrencyforcustomspurposesinthecaseofagivenshipmentmaybeobtainedfromaCBPportdirector.

Entry FilerTheentryfilerisresponsibleforusingreasonablecaretovalueimportedmerchandiseandprovideanyotherinformationnecessarytoenabletheCBPofficertoproperlyassessthedutyanddeterminewhetheranyotherapplicablelegalrequirementismet.TheCBPofficeristhenresponsibleforfixingthevalueoftheimportedmerchandise.ThevaluationprovisionsoftheTariffActof1930arefoundinsection402,asamendedbytheTradeAgreementsActof1979.Pertinentportionsarereproducedintheappendix.

Generally,thecustomsvalueofallmerchandiseexportedtotheUnitedStateswillbethetransactionvalueforthegoods.Ifthetransactionvaluecannotbeused,thencertainsecondarybasesareconsidered.Thesecondarybasesofvalue,listedinorderofprecedenceforuse,are:• Transactionvalueofidenticalmerchandise,• Transactionvalueofsimilarmerchandise,• Deductivevalue,

46 47• Computedvalue.

Theorderofprecedenceofthelasttwovaluescanbereversediftheimportersorequestsinwritingatthetimeoffilingtheentry.

Transaction ValueThetransactionvalueofimportedmerchandiseisthepriceactuallypaidorpayableforthemerchandisewhensoldforexportationtotheUnitedStates,plusamountsforthefollowingitemsiftheyarenotincludedintheprice:• Thepackingcostsincurredbythebuyer,• Anysellingcommissionincurredbythebuyer,• Thevalueofanyassist,• Anyroyaltyorlicensefeethatthebuyerisrequired

topayasaconditionofthesale,• Theproceeds,accruingtotheseller,ofany

subsequentresale,disposal,oruseoftheimportedmerchandise.

Theamountsfortheaboveitemsareaddedonlytotheextentthateachisnotincludedinthepriceactuallypaidorpayableandinformationisavailabletoestablishtheaccuracyoftheamount.Ifsufficientinformationisnotavailable,thenthetransactionvaluecannotbedeterminedandthenextbasisofvalue,inorderofprecedence,mustbeconsideredforappraisement.Adiscussionoftheseaddeditemsfollows:• Packingcostsconsistofthecostincurredbythe

buyerforallcontainersandcoveringsofwhatevernatureandforthelaborandmaterialsusedinpackingtheimportedmerchandisesothatitisreadyforexport.

Anysellingcommissionincurredbythebuyerwithrespecttotheimportedmerchandiseconstitutespartofthetransactionvalue.Buyingcommissionsdonot.

Asellingcommissionmeansanycommissionpaidtotheseller’sagent,whoisrelatedtoorcontrolledby,orworksfororonbehalfof,themanufacturerortheseller.

Theapportionedvalueofanyassistconstitutespartofthetransactionvalueoftheimportedmerchandise.Firstthevalueoftheassistisdetermined;thenthevalueisproratedtotheimportedmerchandise.

Anassistisanyoftheitemslistedbelowthatthebuyerofimportedmerchandiseprovidesdirectlyorindirectly,freeofchargeoratareducedcost,foruseintheproductionorsaleofmerchandiseforexporttotheUnitedStates.• Materials,components,parts,andsimilaritems

incorporatedintheimportedmerchandise,• Tools,dies,molds,andsimilaritemsusedin

producingtheimportedmerchandise,• Merchandiseconsumedinproducingthe

importedmerchandise,• Engineering,development,artwork,designwork,

andplansandsketchesthatareundertakenoutsidetheUnitedStates.“Engineering...,”willnotbetreatedasanassistiftheserviceorworkis:

• PerformedbyapersondomiciledwithintheUnitedStates,

• Performedwhilethatpersonisactingasanemployeeoragentofthebuyeroftheimportedmerchandise,and

• Incidentaltootherengineering,development,artwork,designwork,orplansorsketchesundertakenwithintheUnitedStates.Indeterminingthevalueofanassist,thefollowingrulesapply:

• Thevalueiseither:(a)thecostofacquiringtheassist,ifacquiredbytheimporterfromanunrelatedseller,or(b)thecostoftheassist,ifproducedbytheimporterorapersonrelatedtotheimporter.

• Thevalueincludesthecostoftransportingtheassisttotheplaceofproduction.

• Thevalueofassistsusedinproducingtheimportedmerchandiseisadjustedtoreflectuse,repairs,modifications,orotherfactorsaffectingthevalueoftheassists.Assistsofthistypeincludesuchitemsastools,dies,andmolds.Forexample,iftheimporterpreviouslyusedtheassist,regardless


ofwhetherheacquiredorproducedit,theoriginalcostofacquisitionorofproductionmustbedecreasedtoreflecttheuse.Alternatively,repairsandmodificationsmayresultinthevalueoftheassisthavingtobeadjustedupward.

• Incaseofengineering,development,artwork,designwork,andplansandsketchesundertakenelsewherethanintheUnitedStates,thevalueis:1. Thecostofobtainingcopiesoftheassist,ifthe

assistisavailableinthepublicdomain,2. Thecostofthepurchaseorlease,iftheassistwas

boughtorleasedbythebuyerfromanunrelatedperson,

3. ThevalueaddedoutsidetheUnitedStates,iftheassistwasreproducedintheUnitedStatesandoneormoreforeigncountries.

Sofaraspossible,thebuyer’scommercialrecordsystemwillbeusedtodeterminethevalueofanassist,especiallysuchassistsasengineering,development,artwork,designwork,andplansandsketchesundertakenelsewherethanintheUnitedStates.

Havingdeterminedthevalueofanassist,thenextstepistoproratethatvaluetotheimportedmerchandise.Theapportionmentisdoneinareasonablemannerappropriatetothecircumstancesandinaccordancewithgenerallyacceptedaccountingprinciples.Bythelatterismeantanygenerallyrecognizedconsensusorsubstantialauthoritativesupportregardingtherecordingandmeasuringofassetsandliabilitiesandchanges,thedisclosingofinformation,andthepreparingoffinancialstatements.

RoyaltyorlicensefeesthatabuyermustpaydirectlyorindirectlyasaconditionofthesaleoftheimportedmerchandiseforexportationtotheUnitedStateswillbeincludedinthetransactionvalue.Ultimately,whetheraroyaltyorlicensefeeisdutiablewilldependonwhetherthebuyerhadtopayitasaconditionofthesaleandtowhomandunderwhatcircumstancesitwaspaid.Thedutiablestatuswillhavetobedecidedonacase-by-casebasis.

ChargesfortherighttoreproducetheimportedgoodsintheUnitedStatesarenotdutiable.Thisrightappliesonlytothefollowingtypesofmerchandise:• Originalsorcopiesofartisticorscientificworks,• Originalsorcopiesofmodelsandindustrial

drawings,• Modelmachinesandprototypes,• Plantandanimalspecies.

Anyproceedsresultingfromthesubsequentresale,disposal,oruseoftheimportedmerchandisethataccrue,directlyorindirectly,totheselleraredutiable.Theseproceedsareaddedtothepriceactuallypaidorpayableifnototherwiseincluded.

Thepriceactuallypaidorpayablefortheimportedmerchandiseisthetotalpayment,excludinginternationalfreight,insurance,andotherc.i.f.charges,thatthebuyermakestotheseller.Thispaymentmaybedirectorindirect.Someexamplesofanindirectpaymentarewhenthebuyersettlesallorpartofadebtowedbytheseller,orwhenthesellerreducesthepriceonacurrentimportationtosettleadebtheowesthebuyer.Suchindirectpaymentsarepartofthetransactionvalue.However,ifabuyerperformsanactivityonhisownaccount,otherthanthosethatmaybeincludedinthetransactionvalue,thentheactivityisnotconsideredanindirectpaymenttothesellerandisnotpartofthetransactionvalue.Thisapplieseventhoughthebuyer’sactivitymightberegardedasbenefitingtheseller;forexample,advertising.

Exclusions Theamountstobeexcludedfromtransactionvalueareasfollows:•Thecost,charges,orexpensesincurredfortransportation,insurance,andrelatedservicesincidenttotheinternationalshipmentofthegoodsfromthecountryofexportationtotheplaceofimportationintheUnitedStates.•Anyreasonablecostorchargesincurredfor:1.Constructing,erecting,assembling,maintaining,orprovidingtechnicalassistancewithrespecttothe

50 51


goodsafterimportationintotheUnitedStates,or;2.Transportingthegoodsafterimportation.

•Thecustomsdutiesandotherfederaltaxes,includinganyfederalexcisetax,forwhichsellersintheUnitedStatesareordinarilyliable.

NOTE:Foreigninlandfreightandrelatedchargesinbullet,aswellasbullets2and3above,mustbeidentifiedseparately.

Limitations Thetransactionvalueofimportedmerchandiseistheappraisedvalueofthatmerchandise,providedcertainlimitationsdonotexist.Ifanyoftheselimitationsarepresent,thentransactionvaluecannotbeusedastheappraisedvalue,andthenextbasisofvaluewillbeconsidered.Thelimitationscanbedividedintofourgroups:• Restrictionsonthedispositionoruseofthe

merchandise,• Conditionsforwhichavaluecannotbe

determined,• Proceedsofanysubsequentresale,disposal

oruseofthemerchandise,accruingtotheseller,forwhichanappropriateadjustmenttotransactionvaluecannotbemade,

• Related-partytransactionswherethetransactionvalueisnotacceptable.Theterm“acceptable”meansthattherelationshipbetweenthebuyerandsellerdidnotinfluencethepriceactuallypaidorpayable.Examiningthecircumstancesofthesalewillhelpmakethisdetermination.

Alternatively,“acceptable”canalsomeanthatthetransactionvalueoftheimportedmerchandisecloselyapproximatesoneofthefollowingtestvalues,providedthesevaluesrelatetomerchandiseexportedtotheUnitedStatesatoraboutthesametimeastheimportedmerchandise:• Thetransactionvalueofidenticalmerchandiseor

ofsimilarmerchandiseinsalestounrelatedbuyersintheUnitedStates,

• Thedeductivevalueorcomputedvalueforidenticalmerchandiseorsimilarmerchandise.Thetestvaluesareusedforcomparisononly,

theydonotformasubstitutebasisofvaluation.Indeterminingwhetherthetransactionvalueisclosetooneoftheforegoingtestvalues,anadjustmentismadeifthesalesinvolveddifferin:

• Commerciallevels,• Quantitylevels,• Thecosts,commission,values,fees,andproceeds

addedtothetransactionvalue(pricepaid)ifnotincludedintheprice,

• Thecostsincurredbythesellerinsalesinwhichheandthebuyerarenotrelatedthatarenotincurredbythesellerinsalesinwhichheandthebuyerarerelated.

Asstated,thetestvaluesarealternativestoanexaminationofthecircumstancesofthesale.Ifoneofthetestvaluesismet,itisnotnecessarytoexaminethecircumstancesofthesaletodetermineiftherelationshipinfluencedtheprice.

Transaction Value Of Identical Or Similar Merchandise Whenthetransactionvaluecannotbedetermined,thenanattemptwillbemadetoappraisetheimportedgoodsunderthetransactionvalueofidenticalmerchandisemethod.Ifmerchandiseidenticaltotheimportedgoodscannotbefoundoranacceptabletransactionvalueforsuchmerchandisedoesnotexist,thenthenextappraisementmethodisthetransactionvalueofsimilarmerchandise.Inebithercasethevalueusedwouldbeapreviouslyacceptedcustomsvalue.

TheidenticalorsimilarmerchandisemusthavebeenexportedtotheUnitedStatesatoraboutthesametimethatthemerchandisebeingappraisedisexportedtotheUnitedStates.

Thetransactionvalueofidenticalorsimilarmerchandisemustbebasedonsalesofidenticalorsimilarmerchandise,asapplicable,atthesamecommerciallevelandinsubstantiallythesamequantityasthesaleofthemerchandisebeingappraised.Ifnosuchsaleexists,thensalesateitheradifferentcommerciallevelorindifferentquantities,

52 53

greenworldwide.com

orboth,canbeusedbutmustbeadjustedtotakeaccountofanysuchdifference.Anyadjustmentmustbebasedonsufficientinformation,thatis,informationestablishingthereasonablenessandaccuracyoftheadjustment.

Theterm“identicalmerchandise”meansmerchandisethatis:• Identicalinallrespectstothemerchandisebeing

appraised,• Producedinthesamecountryasthemerchandise

beingappraised,• Producedbythesamepersonasthemerchandise

beingappraised.

Ifmerchandisemeetingallthreecriteriacannotbefound,thenidenticalmerchandiseismerchandisesatisfyingthefirsttwocriteriabutproducedbyadifferentpersonthantheproducerofmerchandisebeingappraised.

NOTE: Merchandisecanbeidenticaltothemerchandisebeingappraisedandstillshowminordifferencesinappearance.• Exclusion:Identicalmerchandisedoesnot

includemerchandisethatincorporatesorreflectsengineering,development,artwork,designwork,orplansandsketchesprovidedfreeoratreducedcostbythebuyerandundertakenintheUnitedStatesTheterm“similarmerchandise”meansmerchandisethatis:

• Producedinthesamecountryandbythesamepersonasthemerchandisebeingappraised,

• Likethemerchandisebeingappraisedincharacteristicsandcomponentmaterials,Commerciallyinterchangeablewiththemerchandisebeingappraised.Ifmerchandisemeetingtheforegoingcriteriacannotbefound,thensimilarmerchandiseismerchandisehavingthesamecountryofproduction,likecharacteristicsandcomponentmaterials,andcommercialinterchangeabilitybutproducedbyadifferentperson.

• Indeterminingwhethergoodsaresimilar,someofthefactorstobeconsideredarethequalityof

thegoods,theirreputation,andexistenceofatrademark.

• Exclusion:Similarmerchandisedoesnotincludemerchandisethatincorporatesorreflectsengineering,development,artwork,designwork,andplansandsketchesprovidedfreeoratreducedcosttothebuyerandundertakenintheUnitedStates.

Itispossiblethattwoormoretransactionvaluesforidenticalorsimilarmerchandise,asapplicable,willbedetermined.Insuchacasethelowestvaluewillbeusedastheappraisedvalueoftheimportedmerchandise.

Other Bases: Deductive And Computed Value Deductive Value Ifthetransactionvalueofimportedmerchandise,ofidenticalmerchandise,orofsimilarmerchandisecannotbedetermined,thendeductivevalueisthenextbasisofappraisement.Thismethodisusedunlesstheimporterdesignatescomputedvalueasthepreferredappraisementmethod.Ifcomputedvaluewaschosenandsubsequentlydeterminednottoexistforcustomsvaluationpurposes,thenthebasisofappraisementrevertstodeductivevalue.

Basically,deductivevalueistheresalepriceintheUnitedStatesafterimportationofthegoods,withdeductionsforcertainitems.Indiscussingdeductivevalue,theterm“merchandiseconcerned”isused.Thetermmeansthemerchandisebeingappraised,identicalmerchandise,orsimilarmerchandise.Generally,thedeductivevalueiscalculatedbystartingwithaunitpriceandmakingcertainadditionstoanddeductionsfromthatprice.

Unit Price.Oneofthreepricesconstitutestheunitpriceindeductivevalue.ThepriceuseddependsonwhenandinwhatconditionthemerchandiseconcernedissoldintheUnitedStates.1. Time and Condition:Themerchandiseissoldin

theconditionasimportedatoraboutthedateofimportationofthemerchandisebeingappraised.

54 55Price: Thepriceusedistheunitpriceatwhichthegreatestaggregatequantityofthemerchandiseconcernedissoldatoraboutthedateofimportation.

2. Time and Condition:Themerchandiseconcernedissoldintheconditionasimportedbutnotsoldatoraboutthedateofimportationofthemerchandisebeingappraised.

Price:Thepriceusedistheunitpriceatwhichthegreatestaggregatequantityofthemerchandiseconcernedissoldafterthedateofimportationofthemerchandisebeingappraisedbutbeforethecloseofthe90thdayafterthedateofimportation.3. Time and Condition:Themerchandiseconcerned

isnotsoldintheconditionasimportedandnotsoldbeforethecloseofthe90thdayafterthedateofimportationofthemerchandisebeingappraised.

Price: Thepriceusedistheunitpriceatwhichthegreatestaggregatequantityofthemerchandisebeingappraised,afterfurtherprocessing,issoldbeforethe180thdayafterthedateofimportation.

Thisthirdpriceisalsoknownasthe“furtherprocessingprice”or“superdeductive.”

Theimporterhastheoptiontoaskthatdeductivevaluebebasedonthefurtherprocessingprice.

Underthesuperdeductivemethodthemerchandiseconcernedisnotsoldintheconditionasimportedandnotsoldbeforethecloseofthe90thdayafterthedateofimportation,butissoldbeforethe180thdayafterthedateofimportation.

Underthismethod,anamountequaltothevalueofthefurtherprocessingmustbedeductedfromtheunitpriceindeterminingdeductivevalue.Theamountsodeductedmustbebasedonobjectiveandquantifiabledataconcerningthecostofsuchworkaswellasanyspoilage,wasteorscrapderivedfromthatwork.Itemssuchasacceptedindustryformulas,methodsofconstruction,andindustrypracticescouldbeusedasabasisforcalculatingtheamounttobededucted.

Generally,thesuperdeductivemethodcannotbeusedifthefurtherprocessingdestroystheidentityofthegoods.Suchsituationswillbedecidedonacase-by-casebasisforthefollowingreasons:• Sometimes,eventhoughtheidentityofthegoods

islost,thevalueaddedbytheprocessingcanbedeterminedaccuratelywithoutunreasonabledifficultyforimportersorforCBP.

• Insomecases,theimportedgoodsstillkeeptheiridentityafterprocessingbutformonlyaminorpartofthegoodssoldintheUnitedStates.Insuchcases,usingthesuperdeductivemethodtovaluetheimportedgoodswillnotbejustified.

Thesuperdeductivemethodcannotbeusedifthemerchandiseconcernedissoldintheconditionasimportedbeforethecloseofthe90thdayafterthedateofimportationofthemerchandisebeingappraised.

Additions. Packingcostsforthemerchandiseconcernedareaddedtothepriceusedfordeductivevalue,providedthesecostshavenototherwisebeenincluded.Thesecostsareaddedregardlessofwhethertheimporterorthebuyerincursthecost.“Packingcosts”meansthecostof:• Allcontainersandcoveringsofwhatevernature,

and• Packing,whetherforlaborormaterials,usedin

placingthemerchandiseincondition,packedreadyforshipmenttotheUnitedStates.

Deductions. Certainitemsarenotpartofdeductivevalueandmustbedeductedfromtheunitprice.Theseitemsareasfollows:• Commissionsorprofitandgeneralexpenses.Any

commissionusuallypaidoragreedtobepaid,ortheadditionusuallymadeforprofitandgeneralexpenses,applicabletosalesintheUnitedStatesofimportedmerchandisethatisofthesameclassorkindasthemerchandiseconcerned,regardlessofthecountryofexportation.

•Transportation/insurancecosts.


(a)TheactualandassociatedcostsoftransportationandinsuranceincurredwithrespecttointernationalshipmentsconcernedfromthecountryofexportationtotheUnitedStates,and(b)TheusualandassociatedcostsoftransportationandinsuranceincurredwithrespecttoshipmentsofsuchmerchandisefromtheplaceofimportationtotheplaceofdeliveryintheUnitedStates,providedthesecostsarenotincludedasageneralexpenseundertheprecedingitem1.• •Customsduties/federaltaxes.Thecustoms

dutiesandotherfederaltaxespayableonthemerchandiseconcernedbecauseofitsimportationplusanyfederalexcisetaxon,ormeasuredbythevalueof,suchmerchandiseforwhichsellersintheUnitedStatesareordinarilyliable.

• Valueoffurtherprocessing.Thevalueaddedbyprocessingthemerchandiseafterimportation,providedthatsufficientinformationexistsconcerningthecostofprocessing.Thepricedeterminedfordeductivevalueisreducedbythevalueoffurtherprocessingonlyifthethirdunitprice(thesuperdeductive)isusedasdeductivevalue.

Forpurposesofdeterminingthedeductivevalueofimportedmerchandise,anysaletoapersonwhosuppliesanyassistforuseinconnectionwiththeproductionorsaleforexportofthemerchandiseshallbedisregarded.

Computed Value Thenextbasisofappraisementiscomputedvalue.Ifcustomsvaluationcannotbebasedonanyofthevaluespreviouslydiscussed,thencomputedvalueisconsidered.

Thisvalueisalsotheonetheimportercanselecttoprecededeductivevalueasabasisofappraisement.

Computedvalueconsistsofthesumofthefollowingitems:• Thecostorvalueofthematerials,fabrication,and

otherprocessingusedinproducingtheimportedmerchandise,

• Profitandgeneralexpenses,• Anyassist,ifnotincludedinbullets1and2,• Packingcosts.

Materials, Fabrication, and Other Processing. Thecostorvalueofthematerials,fabrication,andotherprocessingofanykindusedinproducingtheimportedmerchandiseisbasedon(a)informationprovidedbyoronbehalfoftheproducer,and(b)thecommercialaccountsoftheproduceriftheaccountsareconsistentwithgenerallyacceptedaccountingprinciplesappliedinthecountryofproductionofthegoods.

NOTE:Ifthecountryofexportationimposesaninternaltaxonthematerialsortheirdispositionandrefundsthetaxwhenmerchandiseproducedfromthematerialsisexported,thentheamountoftheinternaltaxisnotincludedaspartofthecostorvalueofthematerials.

Profit and General Expenses • Theamountisdeterminedbyinformationsupplied

bytheproducerandisbasedonhisorhercommercialaccounts,providedsuchaccountsareconsistentwithgenerallyacceptedaccountingprinciplesinthecountryofproduction.

• Theproducer’sprofitandgeneralexpensesmustbeconsistentwiththoseusuallyreflectedinsalesofgoodsofthesameclassorkindastheimportedmerchandisethataremadebyproducersinthecountryofexportationforexporttotheUnitedStates.Iftheyarenotconsistent,thentheamountforprofitandgeneralexpensesisbasedontheusualprofitandgeneralexpensesofsuchproducers.

• Theamountforprofitandgeneralexpensesistakenasawhole.

Basically,aproducer’sprofitcouldbelowandhisorhergeneralexpenseshigh,sothatthetotalamountisconsistentwiththatusuallyreflectedinsalesofgoodsofthesameclassorkind.Insuchasituation,aproducer’sactualprofitfigures,eveniflow,willbeusedprovidedheorshehasvalidcommercialreasonstojustifythemandthepricingpolicyreflectsusualpricing

58 59


policiesintheindustryconcerned.

Undercomputedvalue,“merchandiseofthesameclassandkind”mustbeimportedfromthesamecountryasthemerchandisebeingappraisedandmustbewithinagrouporrangeofgoodsproducedbyaparticularindustryorindustrysector.Whethercertainmerchandiseisofthesameclassorkindasothermerchandisewillbedeterminedonacase-by-casebasis.

Indeterminingusualprofitandgeneralexpenses,salesforexporttotheUnitedStatesofthenarrowestgrouporrangeofmerchandisethatincludesthemerchandisebeingappraisedwillbeexamined,providingthenecessaryinformationcanbeobtained.

Ifthevalueofanassistusedinproducingthemerchandiseisnotincludedaspartoftheproducer’smaterials,fabrication,otherprocessing,orgeneralexpenses,thentheproratedvalueoftheassistwillbeincludedincomputedvalue.Itisimportantthatthevalueoftheassistnotbeincludedelsewherebecausenocomponentofcomputedvalueshouldbecountedmorethanonceindeterminingcomputedvalue.

NOTE: Thevalueofanyengineering,development,artwork,designwork,andplansandsketchesundertakenintheUnitedStatesisincludedincomputedvalueonlytotheextentthatsuchvaluehasbeenchargedtotheproducer.

Thecostofallcontainersandcoveringsofwhatevernature,andofpacking,whetherforlaborormaterial,usedinplacingmerchandiseinconditionandpackedreadyforshipmenttotheUnitedStatesisincludedincomputedvalue.

Value If Other Values Cannot Be Determined Ifnoneofthepreviousfivevaluescanbeusedtoappraisetheimportedmerchandise,thenthe

customsvaluemustbebasedonavaluederivedfromoneofthefivepreviousmethods,reasonablyadjustedasnecessary.Thevaluesodeterminedshouldbebased,tothegreatestextentpossible,onpreviouslydeterminedvalues.Someexamplesofhowtheothermethodscanbereasonablyadjustedare:IdenticalMerchandise(orSimilarMerchandise):1. Therequirementthattheidenticalmerchandise

(orsimilarmerchandise)shouldbeexportedatoraboutthesametimeasthemerchandisebeingappraisedcouldbeflexiblyinterpreted.

2. Identicalimportedmerchandise(orsimilarimportedmerchandise)producedinacountryotherthanthecountryofexportationofthemerchandisebeingappraisedcouldbethebasisforcustomsvaluation.

3. Customsvaluesofidenticalimportedmerchandise(orsimilarimportedmerchandise)alreadydeterminedonthebasisofdeductivevalueandcomputedvaluecouldbeused.

Deductive Method:The90-dayrequirementmaybeadministeredflexibly(19CFR152.107(c)).

Rules of Origin TheoriginofmerchandisethatisimportedintothecustomsterritoryoftheUnitedStatescanaffecttherateofduty,entitlementforspecialprograms,admissibility,quota,anti-dumpingorcountervailingduties,procurementbygovernmentagenciesandmarkingrequirements.Inordertodetermineaproduct’scountryoforigin,theimportershouldconsulttheapplicablerulesoforigin.Therearetwobasictypesofrulesoforigin:non-preferentialandpreferential.Non-preferentialrulesgenerallyapplyintheabsenceofbilateralormultilateraltradeagreements.PreferentialrulesareappliedtomerchandisetodetermineitseligibilityforspecialtreatmentundervarioustradeagreementsorspeciallegislationsuchastheGeneralizedSystemofPreferences(GSP),theNorthAmericanFreeTradeAgreement,ortheAfricanGrowthandOpportunityAct.Therearealsorulesoforiginfortextileandapparelarticles;theseareprovidedforbystatute.

60 61

greenworldwide.com

markingCountry-Of-Origin Marking U.S.customslawsrequirethateacharticleproducedabroadandimportedintotheUnitedStatesbemarkedwiththeEnglishnameofthecountryoforigintoindicatetotheultimatepurchaserintheUnitedStateswhatcountrythearticlewasmanufacturedorproducedin.Theselawsalsorequirethatmarkingbelocatedinaconspicuousplaceaslegibly,indeliblyandpermanentlyasthenatureofthearticlepermits.Articlesthatareotherwisespecificallyexemptedfromindividualmarkingarealsoanexceptiontothisrule.Theseexceptionsarediscussedbelow.

Marking Required Ifthearticle--oritscontainer,whenthecontainerandnotthearticlemustbemarked--isnotproperlymarkedatthetimeofimportation,amarkingdutyequalto10percentofthearticle’scustomsvaluewillbeassessedunlessthearticleisexported,destroyedorproperlymarkedunderCBPsupervisionbeforetheentryisliquidated.

Althoughitmaynotbepossibletoidentifytheultimatepurchaserineverytransaction,broadlystated,the“ultimatepurchaser”maybedefinedasthelastpersonintheUnitedStateswhowillreceivethearticleintheforminwhichitwasimported.Generallyspeaking,whenanarticleisimportedintoandusedintheUnitedStatestomanufactureanotherarticlewithadifferentname,characterorusagethantheimportedarticle,themanufactureristheultimatepurchaser.Ifanarticleistobesoldatretailinitsimportedform,theretailcustomeristheultimatepurchaser.Apersonwhosubjectsanimportedarticletoaprocessthatresultsinthearticle’ssubstantialtransformationistheultimatepurchaser,butifthatprocessisonlyminorandleavestheidentityoftheimportedarticleintact,theprocessorofthearticlewillnotberegardedastheultimatepurchaser.

Whenanarticleoritscontainerisrequiredtobemarkedwiththecountryoforigin,themarkingisconsideredsufficientlypermanentifitwillremainonthearticleorcontaineruntilitreachestheultimatepurchaser.Whenanimportedarticleisnormallycombinedwithanotherarticleafterimportationbutbeforedeliverytotheultimatepurchaser,andtheimportedarticle’scountryoforiginislocatedsothatitisvisibleaftercombining,themarkingmustinclude,inadditiontothecountryoforigin,wordsorsymbolsclearlyshowingthattheoriginindicatedisthatoftheimportedarticle,andnotofanyotherarticlewithwhichithasbeencombined.Forexample,ifmarkedbottles,drums,orothercontainersareimportedemptytobefilledintheUnitedStates,theyshallbemarkedwithsuchwordsas“Bottle(ordrumorcontainer)madein(nameofcountry).”Labelsandsimilararticlesmarkedsothatthenameofthearticle’scountryoforiginisvisibleafteritisaffixedtoanotherarticleinthiscountryshallbemarkedwithadditionaldescriptivewordssuchas“labelmade(orprinted)in(nameofcountry)”orwordsofequivalentmeaning.

Incaseswherethewords“UnitedStates”or“American”ortheletters“U.S.A.”oranyvariationofsuchwordsorletters,orthenameofanycityorlocalityintheUnitedStates,orthenameofanyforeigncountryorlocalityinwhichthearticlewasnotmanufacturedorproduced,appearonanimportedarticleorcontainer,andthosewords,letters,ornamesmaymisleadordeceivetheultimatepurchaseraboutthearticle’sactualcountryoftheorigin,thereshallalsoappear,legibly,permanentlyandincloseproximitytosuchwords,lettersorname,thenameofthecountryoforiginprecededby“madein,”“productof,”orotherwordsofsimilarmeaning.

IfmarkedarticlesaretoberepackedintheUnitedStatesafterreleasefromCBPcustody,importersmustcertifyonentrythattheywillnotobscurethemarkingonproperlymarkedarticlesifthearticleisrepacked,orthattheywillmarktherepackedcontainer.Ifanimporterdoesnotrepack,butresellstoarepacker,

62 63theimportermustnotifytherepackeraboutmarkingrequirements.Failuretocomplywiththesecertificationrequirementsmaysubjectimporterstopenaltiesand/oradditionalduties.

Marking Not Required Thefollowingarticlesandclassesorkindsofarticlesarenotrequiredtobemarkedtoindicatecountryoforigin,i.e.,thecountryinwhichtheyweregrown,manufactured,orproduced.However,theoutermostcontainersinwhichthesearticlesordinarilyreachtheultimatepurchaserintheUnitedStatesmustbemarkedtoindicatetheEnglishnameofthecountryoforiginofthearticles.

UnlessanarticlebeingshippedtotheUnitedStatesisspecificallynamedintheforegoinglist,itwouldbeadvisableforanexportertoobtainadvicefromCBPbeforeconcludingthatitisexemptedfrommarking.IfarticlesontheforegoinglistarerepackedintheUnitedStates,thenewpackagesmustbelabeledtoindicatethecountryoforiginofthearticlestheycontain.Importersmustcertifyonentrythatiftheyrepackage,theywillproperlymarktherepackagedcontainers.Iftheydonotpackage,butreselltorepackagers,theymustnotifyrepackagersaboutthesemarkingrequirements.Failuretocomplywiththesecertificationrequirementsmaysubjectimporterstopenaltiesandmarkingduties.

Other Exceptions Thefollowingclassesofarticlesarealsoexemptfromcountry-of-originmarking.(Theusualcontainerinwhichoneofthesearticlesisimportedwillalsobeexemptfrommarking.)• Anarticleimportedforusebytheimporterand

notintendedforsaleinitsimportedoranyotherform.

• AnarticletobeprocessedintheUnitedStatesbytheimporterorforhisaccountotherthanforthepurposeofconcealingtheoriginofthearticleandinsuchmannerthatanymarkoforiginwouldnecessarilybeobliterated,destroyed,orpermanentlyconcealed.

• AnarticlethattheultimatepurchaserintheUnitedStates,byreasonofthearticle’scharacterorthecircumstancesofitsimportation,mustnecessarilyknowthecountryoforigineventhoughthearticleisnotmarkedtoindicateit.TheclearestapplicationofthisexemptioniswhenthecontractbetweentheultimatepurchaserintheUnitedStatesandthesupplierabroadinsuresthattheorderwillbefilledonlywitharticlesgrown,manufactured,orproducedinanamedcountry.Thefollowingclassesofarticlesarealsoexemptfrommarkingtoindicatecountryoforigin:

• Articlesincapableofbeingmarked,• Articlesthatcannotbemarkedpriortoshipment

totheUnitedStateswithoutinjury,• Articlesthatcannotbemarkedpriorto

shipmenttotheUnitedStatesexceptatacosteconomicallyprohibitiveoftheirimportation,

• Articlesforwhichmarkingofthecontainerswillreasonablyindicatetheircountryoforigin,

• Crudesubstances,• Articlesproducedmorethan20yearspriortotheir

importationintotheUnitedStates,• Articlesenteredorwithdrawnfromwarehousefor

immediateexportationorfortransportationandexportation.

• Althoughthearticlesthemselvesareexemptedfrommarkingtoindicatecountryoforigin,theoutermostcontainersinwhichtheyordinarilyreachtheultimatepurchaserintheUnitedStatesmustbemarkedtoshowthearticles’countryoforigin.

Whenmarkinganarticle’scontainerwillreasonablyindicateitscountryoforigin,thearticleitselfmaybeexemptfromsuchmarking.Thisexemptionappliesonlywhenthearticlereachestheultimatepurchaserinanunopenedcontainer.Forexample,articlesthatreachtheretailpurchaserinsealedcontainersmarkedclearlytoindicatethecountryoforiginfallwithinthisexception.Materialstobeusedinbuildingormanufacturebythebuilderormanufacturerwhowillreceivethematerialsinunopenedcasesalsofallwithintheexemption.Thefollowingarticles,aswellastheircontainers,areexemptfromcountry-of-


originmarking:•ProductsofAmericanfisheriesthatarefreeofduty,•ProductsofUnitedStatespossessions,•ProductsoftheUnitedStatesthatareexportedandreturned,•Articlesvaluedatnotmorethan$200(or$100forbonafidegifts)thatarepassedwithoutentry.

User Fees CBPuserfeeswereestablishedbytheConsolidatedOmnibusBudgetReconciliationActof1985.Thislegislationwasexpandedin1986toincludeamerchandiseprocessingfee.Alsoin1986,CongressenactedtheWaterResourcesDevelopmentAct,whichauthorizedtheCBPServicetocollectaharbormaintenancefeefortheArmyCorpsofEngineers.FurtherlegislationhasextendedtheUserFeeProgramuntil2003.

Themerchandiseprocessingfee(MPF)is0.21percentadvaloremonformally-enteredimportedmerchandise(generallyentriesvaluedover$2,000),subjecttoaminimumfeeof$25perentryandamaximumfeeof$485perentry.

EffectiveJanuary1,1994,goodsimporteddirectlyfromCanadathatqualifyunderNAFTAtobemarkedasgoodsoriginatinginCanadaareexemptfromtheMPF.ThisappliestoallMPFfees:formal,informal,manuallyprepared,orautomated.GoodsthatdonotqualifyunderNAFTAaresubjecttoallapplicableMPFs.”

Similarly,effectiveJune30,1999,goodsimporteddirectlyfromMexicoareexemptfromtheMPFifthegoodsqualifyundertheNAFTAtobemarkedasgoodsoriginatinginMexico.

Theharbormaintenancefeeisanadvaloremfeeassessedonportuseassociatedwithimports,admissionsintoforeigntradeszones,domesticshipments,andpassengertransportations.ThefeeisassessedonlyatportsthatbenefitfromtheexpenditureoffundsbytheArmyCorpsof

Engineersformaintainingandimprovingtheporttradezones.Thefeeis0.125percentofthevalueofthecargoandispaidquarterly,exceptforimports,whicharepaidatthetimeofentry.CBPdepositstheharbormaintenancefeecollectionsintotheHarborMaintenanceTrustFund.Thefundsaremadeavailable,subjecttoappropriation,totheArmyCorpsofEngineersfortheimprovementandmaintenanceofUnitedStatesportsandharbors.

special requriementsProhibitions, Restrictions, Other Agency Requirements TheimportationofcertainclassesofmerchandisemaybeprohibitedorrestrictedtoprotecttheeconomyandsecurityoftheUnitedStates,tosafeguardconsumerhealthandwell-being,andtopreservedomesticplantandanimallife.Somecommoditiesarealsosubjecttoanimportquotaorarestraintunderbilateraltradeagreementsandarrangements.

InadditiontoCBPrequirements,manyoftheseprohibitionsandrestrictionsonimportationsaresubjecttothelawsandregulationsadministeredbyotherUnitedStatesgovernmentagencieswithwhichCBPcooperatesinenforcement.Theselawsandregulationsmay,forexample,prohibitentry;limitentrytocertainports;restrictrouting,storage,oruse;orrequiretreatment,labeling,orprocessingasaconditionofrelease.CBPclearanceisgivenonlyifthesevariousadditionalrequirementsaremet.Thisappliestoalltypesofimportations,includingthosemadebymailandthoseplacedinforeigntradezones.

TheforeignexportershouldmakecertainthattheUnitedStatesimporterhasbeenprovidedwithproperinformationsotheimportercan:•Submitthenecessaryinformationconcerningpacking,labeling,etc.,and•MakenecessaryarrangementsforentryofthemerchandiseintotheUnitedStates.Itisimpracticaltolisteachspecificarticle;however,

66 67


variousclassesofarticlesarediscussedlaterinthissection.ForeignexportersandU.S.importersshouldconsulttheagencymentionedfordetailedinformationandguidance,aswellasforanychangestothelawsandregulationsunderwhichthecommoditiesarecontrolled.Addresses,phonenumbers,andWebsitesfortheseagenciesarelistedintheappendix.

Import Quotas Animportquotaisaquantitycontrolonimportedmerchandiseforacertainperiodoftime.Quotasareestablishedbylegislation,bydirectives,andbyproclamationsissuedundertheauthoritycontainedinspecificlegislation.ThemajorityofimportquotasareadministeredbyCBP.TheCommissionerofCBPcontrolstheimportationofquotamerchandisebuthasnoauthoritytochangeormodifyanyquota.

UnitedStatesimportquotasmaybedividedintotwotypes:absoluteandtariff-rate.UndertheNorthAmericanFreeTradeAgreement(NAFTA),therearetariff-preferencelevels,whichareadministeredliketariff-ratequotas.

Tariff-ratequotasprovidefortheentryofaspecifiedquantityofthequotaproductatareducedrateofdutyduringagivenperiod.Thereisnolimitationontheamountoftheproductthatmaybeenteredduringthequotaperiod,butquantitiesenteredinexcessofthequotafortheperiodaresubjecttohigherdutyrates.Inmostcases,productsofCommunist-controlledareasarenotentitledtothebenefitsoftariff-ratequotas.

Absolutequotasarequantitative,thatis,nomorethantheamountspecifiedmaybepermittedentryduringaquotaperiod.Someabsolutequotasareglobal,whileothersareallocatedtospecifiedforeigncountries.

Importsinexcessofaspecifiedquotamaybeheldfortheopeningofthenextquotaperiodby

placingitinaforeigntradezoneorbyenteringitforwarehouse,oritmaybeexportedordestroyedunderCBPsupervision.TheusualCBPproceduresgenerallyapplicabletootherimportsapplywithrespecttocommoditiessubjecttoquotalimitations.

Thequotastatusofacommoditysubjecttoatariff-ratequotacannotbedeterminedinadvanceofitsentry.Thequotaratesofdutyareordinarilyassessedonsuchcommoditiesenteredfromthebeginningofthequotaperioduntilsuchtimeintheperiodasitisdeterminedthatimportsarenearingthequotalevel.CBPportdirectorsaretheninstructedtorequirethedepositofestimateddutiesattheover-quotadutyrateandtoreportthetimeofofficialpresentationofeachentry.Afinaldeterminationisthenmadeofthedateandtimewhenaquotaisfilled,andallportdirectorsareadvisedaccordingly.

Someoftheabsolutequotasareinvariablyfilledatorshortlyaftertheopeningofthequotaperiod.EachofthesequotasisthereforeofficiallyopenedatnoonEasternStandardTime,ortheequivalentinothertimezones,onthedesignatedeffectivedate.Whenthetotalquantityfortheseentriesfiledattheopeningofthequotaperiodexceedsthequota,themerchandiseisreleasedonaproratabasis,theproratabeingtheratiobetweenthequotaquantityandthetotalquantityofferedforentry.Thisassuresanequitabledistributionofthequota.

Merchandiseisnotregardedaspresentedforpurposesofdeterminingquotapriorityuntilanentrysummaryorwithdrawalfromwarehouseforconsumptionhasbeensubmittedinproperformandthemerchandiseislocatedwithintheportlimits.

68 69

greenworldwide.com

fraudCivil and Criminal Enforcement Provisions Section592oftheTariffActof1930,asamended(19U.S.C.1592),generallyprovidesthatpersonsshallbesubjecttoamonetarypenaltyiftheyenter,introduceorattempttoenterorintroducemerchandiseintothecommerceoftheUnitedStatesbyfraud,grossnegligenceornegligence;byusingmaterialandfalseelectronicallytransmitteddata;writtenororalstatement;orbydocument,act,ormaterialomission.Inlimitedcircumstances,themerchandiseofsuchindividualsmaybeseizedtoinsurepaymentofthepenaltyandforfeitedifthepenaltyisnotpaid.

CBPhasappliedthecivilfraudstatuteincaseswhereindividualsandcompaniesintheUnitedStatesandabroadhavenegligently,grossnegligently,orintentionallyprovidedfalseinformationconcerningimportationsintotheUnitedStates.IndividualspresentingfalseinformationtoCBPofficersmayalsobeliableforsanctionsunderacriminalfraudstatute.Title18,UnitedStatesCode,Section542,providesamaximumoftwoyears’imprisonment,afine,orboth,foreachviolationinvolvingafraudulentimportationorattemptedimportation.AlthoughCongressinitiallyenactedthecivilandcriminalfraudstatutestodiscourageindividualsfromevadingpaymentoflawfuldutiesowedtotheUnitedStates,theselawsapplytodayregardlessofwhethertheUnitedStatesisdeprivedoflawfulduties.

UnderSection596oftheTariffActof1930,asamended(19U.S.C.1595a(c)),CBPisrequiredtoseizeandforfeitallmerchandisethatisstolen,smuggled,orclandestinelyimportedorintroduced.CBPisalsorequiredtoseizeandforfeitcontrolledsubstances,certaincontrabandarticles,andplasticexplosivesthatdonotcontainadetectionagent.

Merchandisemayalsobeseizedandforfeitedif:• Itsimportationisrestrictedorprohibitedbecauseof

alawrelatingtohealth,safetyorconservation;

• Themerchandiseislackingafederallicenserequiredfortheimportation;

• Themerchandiseorpackagingisinviolationofcopyright,trademark,tradename,ortradedressprotections;

• Themerchandiseisintentionallyorrepetitivelymarkedinviolationofcountryoforiginmarkingrequirements;or

• Theimportedmerchandiseissubjecttoquantitativerestrictionsrequiringavisaorsimilardocumentfromaforeigngovernment,andthedocumentpresentedwiththeentryiscounterfeit.

Federallawsrelatingtocriminalactivitiescommonlyknownasmoneylaundering(e.g.,18U.S.C.1956)createdcriminalandcivilprovisionsthat,alongwithfinesandimprisonment,enablethegovernmenttoprosecutepersonsfor,andseizeandforfeitpropertyinvolvedinortraceableto,suchviolations.Criminalpenaltiesincludefinesofnotmorethan$500,000ortwicethevalueoftheproperty,funds,ormonetaryinstrumentsinvolvedintheviolation,whicheverisgreater,orimprisonmentfornotmorethantwentyyears,orboth.Thereisalsoacivilpenaltyofnotmorethan$10,000orthevalueoftheproperty,fundsormonetaryinstrumentsinvolvedintheviolation,whicheverisgreater.

SpecialagentsfromU.S.ImmigrationandCustomsEnforcement,whooperatethroughouttheUnitedStatesandintheworld’smajortradingcenters,enforcethecriminalfraud,civilfraud,andmoneylaunderingstatutes.SuspectedorknownviolationsofanylawsthatinvolveimportingmerchandiseintotheUnitedStatescanbereportedtoll-freeandanonymouslybycalling1-800-BEALERT(1.800.232.5378).Rewardsareapplicableinmanyinstancesofreportingfraud.

70 71

foreign-trade zonesForeign-Trade Zones Foreign-tradezonesaresecureareaslegallyoutsidethecustomsterritoryoftheUnitedStates.Theirpurposeistoattractandpromoteinternationaltradeandcommerce.Subzonesarespecial-purposefacilitiesforcompaniesthatcannotoperateeffectivelyatpubliczonesites.Foreign-tradezonesareusuallylocatedinornearCBPportsofentry,industrialparksorterminalwarehousefacilities.Thesezonesmustbewithin60milesor90minutes’drivingtimefromtheportofentrylimits,whilesubzoneshavenolimitandarelocatedinthezoneuser’sprivatefacility.

TheForeign-TradeZonesBoard,whichisundertheDepartmentofCommerce,authorizesoperationswithinthesezonesbasedupondemonstratingthattheintendedoperationsarelegalandnotdetrimentaltothepublicinterest.CreatedbytheForeign-TradeZonesActof1934,theBoardreviewsandapprovesapplicationstoestablish,operateandmaintainforeign-tradezones.

CBPisresponsibleforactivatingforeign-tradezones,securingthem,controllingdutiablemerchandisemovinginandoutofthem,protectingandcollectingtherevenue,assuringthatthereisnoevasionorviolationofU.S.lawsandregulationsgoverningimportedandexportedmerchandise,andassuringthatthezonesprogramisfreefromterroristactivity.Itisimportanttonotethatalthoughforeign-tradezonesaretreatedasbeingoutsidethecustomsterritoryoftheUnitedStatesfortariffandentrypurposes,allotherfederallaws⎯theFederalFood,Drug,andCosmeticAct,forexample⎯areapplicabletoproductsandestablishmentswithinthesezones.

ForeignexportersplanningtoopenorexpandnewAmericanoutletsmayforwardtheirgoodstoaforeign-tradezoneintheUnitedStatestobeheld

foranunlimitedperiodwhileawaitingafavorablemarketintheUnitedStatesornearbycountries.Duringthistime,theirgoodswillnotbesubjecttoCBPentryrequirements,paymentofduty,taxorbond.

BOTTOM LINE,

we speak freight.ISN’T TIME TO START MOVING

FREIGHT FORWARD?

G R E E N W O R L D W I D E S H I P P I N GI S A T E C H N O L O G Y - F O R W A R D

PROV IDER OF IN TERNAT IONALSUPPLY CHA IN SERV ICES .

EMPOWER INGOUR FRE IGHTEXPERTS TO POWER YOUR FRE IGHT .

PR IVATE LY -OWNED ,TO BE E F FECT IVELY MANAGED .