Increase in Dept. of Commerce Penalties

On December 11, 2008, the Department of Commerce (DOC) issued a final rule in the Federal Register adjusting certain civil monetary penalties under their jurisdiction. These adjustments were made to adjust for inflation and only apply to violations occurring after the effective date of December 11, 2008. Some of the penalties adjusted by this final rule include the following:

BIS Fastener Quality Act – Old $27,500 to New $32,500
International Emergency Economic Powers Act violations –Old $50,000 to New $250,000

Economics & Statistics Administration
International Investment and Trade in Services Act violations (failure to furnish information) - Old $27,500 to New $32,500

International Trade Administration
U.S.-Canada FTA Protective Order violations - Old $120,000 to New $130,000

"10+2" Importer Security Filing Interim Final Rule Published

Just two days before Thanksgiving, U.S. Customs and Border Protection gave the trade something to be thankful for by publishing the interim final rule for the new Importer Security Filing in the Federal Register. The importer security filing requirements will go into effect 60 Jan. 25, 2009, with enforcement to begin one year later. Due to concerns about the costs of collecting the huge amount of data, reporting requirements and the changes necessary to adjust to the new rules, CBP will show restraint in enforcing the rule for 12 months after implementation so long as importers are making satisfactory progress toward compliance and demonstrating a good faith effort to comply.

The "10+2" rule requires importers to submit 10 pieces of data 24 hours prior to loading at a foreign port, and ocean carriers to provide two pieces of information about the status of containers under their control.

Although the interim final rule includes some changes to the rule originally proposed by CBP, such as allowing some flexibility on the filing deadlines for two of the 10 importer elements, most of the other requirements remain unchanged.

Changes

• CBP is allowing flexibility in what importers report in six data elements: manufacturer, consolidator, stuffing location, country of origin, tariff commodity number, and the “ship to” party.

• The container stuffing location and consolidator's name should be provided as early as possible, but will be accepted up until the 24-hour pre-loading deadline.

• Breakbulk cargo is no longer included in vessel stow plans.

• Compliance penalties were changed from the value of the merchandise to $5,000 per violation.

• Provisions were included for creating an importer security filing bond.


Basic Requirements

Importers, or their agents, must transmit an Importer Security Filing to CBP, for cargo other than foreign cargo remaining on board (FROB), no later than 24 hours before cargo is laden aboard a vessel destined to the United States.

The party required to submit the Importer Security Filing is the party causing the goods to enter the limits of a port in the United States. The ISF Importer may designate an authorized agent to file the required data on the importer's behalf. A party can act as an authorized agent for purposes of filing the Importer Security Filing if that party obtains access to ABI or AMS.

The Importer Security Filing is required for each shipment, at the lowest bill of lading level, including the house bill of lading, if applicable.

The required ISF data must be transmitted via a CBP-approved electronic data interchange system. Required importer data elements must be filed through the Automated Broker Interface; carriers will file by way of the Automated Manifest System.

The 10 data elements required from importers and two from carriers are those that appeared in the proposed rule. The interim final rule requires Importer Security Filing (ISF) importers to provide the following eight data elements no later than 24 hours before the cargo is laden aboard a vessel destined to the United States:

1. Seller.
2. Buyer.
3. Importer of record number/FTZ applicant identification number.
4. Consignee number(s).
5. Manufacturer (or supplier).
6. Ship to party.
7. Country of origin.
8. Harmonized Tariff Schedule of the United States (HTSUS) number.
The ISF also includes two data elements that must be submitted "as early as possible," but no later than 24 hours prior to the ship's arrival at a U.S. port.
9. Container stuffing location.
10. Consolidator (stuffer).

Implementing a program of this magnitude will likely undergo some changes, so be sure to check the CBP web site for various helpful documents related to the security filing such as fact sheets, FAQ’s and other announcements.

Lacey Act Implementation Delayed

The statutory deadline for compliance with the declaration requirement under the Lacey Act amendments is December 15, 2008. To address the concern of both the trade and federal agencies, the USDA has proposed phased in enforcement of the Lacey Act starting around April 1, 2009. (April Fools Day!) Some importers may not be required to comply until July. The following is a proposed timeline for the implementation and enforcement.

December 15, 2008 - Paper declaration form available and accepted. No prosecution for failure to complete the form from December to end of March unless false information submitted.


April 1, 2008 – Enforcement of declaration requirement for HTS chapters 6 and 44. Electronic collection of required declaration available.


July 1, 2008 – Enforcement of declaration requirement for additional HTS chapters – 47, 48, 92, 94


Sept 2009 – Phased-in enforcement for additional HTS chapters 12, 13, 14, 45, 46, 66, 82, 93, 95, 96, and 97.

In case you’ve been busy resolving other trade issues and haven’t paid much attention to this one, remember that the Lacey Act requires submission of a declaration for a wide variety products such as live plants, lumber, paper, products containing plant material such as furniture, tools, sporting goods, printed matter, musical instruments and textiles. Importers will be required to report the species of plant/wood and country of origin. Check out the USDA web site for more information about the Lacey Act.

Check Out November Issue of AES Newsletter

Overwhelmed by the new AES requirements? Take time out to read some helpful information in the November edition of the AES Newsletter. This edition contains some useful information on the following topics:

• Impact of New Foreign Trade Regulations (FTR).


• Penalties and filing deadlines for various modes of transportation.


• AES Downtime Policy.


• Explanation of the differences between suppression and cancellation of AES filings.


• Clarification on Routed Export Transactions and responsibilities.


• Information about monthly AES compliance reports sent to filers.
  

Visit the AES web site for additional resources.

DHS Transition Team Announced

President-elect Barack Obama has named the Transition Agency Review Teams that are charged with completing a thorough review of key departments, agencies and commissions of the United States government. Reporting to Sara Sewell, Rand Beers was appointed to lead the Homeland Security team and will be assisted by Clark Ervin. Beers and Ervin will be responsible for reviewing DHS budgets, personnel and policies. It is predicted that the new administration will act cautiously with respect to Homeland Security issues.

Current DHS Secretary Michael Chertoff will leave the agency at the end of the year. Prospective candidates for Secretary of Homeland Security in the Obama administration: include:

· William J. Bratton - Chief, Los Angeles Police Department
· Jane Harman - Member, U.S. House of Representatives (D-Calif.)
· Raymond Kelly -New York City police commissioner
· Janet Napolitano - Governor of Arizona (D)

The next secretary inherits the daunting tasks of securing the nation's borders against illegal immigration, preventing the next terrorist attack on America and leading the federal response to natural disasters. In addition, he or she will be responsible for 200,000 employees and over 80 congressional oversight committees and subcommittees.

CBP Commissioner Basham is also preparing to leave office; however, no names of potential candidates have been published. Stay tuned, it’s likely names for the new commissioner will start circulating soon!

Exam Letters From CBP

Since so many of you have been asking about the letters from CBP concerning the exam, we went straight to the source at CBP. Here’s what our contact at CBP had to say:


“The answer sheet and answer key were sent by the vendor that does the scoring. The official letter is sent by HQ. The letters from HQ didn’t go out as quickly as the answer sheets, thus the confusion. The letters are on their way.”


So, for those of you who are wondering about the letters, just be patient a little longer and you’ll receive one in the mail soon!


Make the Boskage Trade News your favorite place to read about new developments concerning the Customs Broker Exam as well as new developments and useful information concerning international trade!

CBE Appeal Checklist

If you plan to appeal your CBP Exam score, it is important to follow CBP’s appeal requirements. CBP will reject the appeal if it:

• is incomplete, is untimely, or is in the wrong format


• includes any arguments written by another person


• does not provide supporting arguments


• argues for an answer the applicant did not select


• contests an incomplete erasure or insufficient marking on the applicant’s answer sheet
  

CBP will provide to the examinee written notice of the decision on the appeal. If the CBP decision on the appeal affirms the result of the examination, the examinee may request review of the decision on the appeal by writing to the Secretary of Homeland Security, or his designee, within 60 calendar days after the date of the notice of that decision. 19 CFR 111.13(f)

Save yourself some time and expense by submitting your very best arguments the first time. To help you submit an appeal that complies with CBP requirements, we’ve created the CBE Appeal Checklist. Be sure to review each item and place a check mark next to the individual requirements.

CBP Posts October Exam Results

For all of you who have been patiently (or not so patiently) waiting on the results of the October 2008 Customs Broker Exam, the results are posted on the CBP web site. Results will be mailed and should be in your mailboxes in the next 7 to 10 days. Some ports have been calling people, so you may receive a phone call.

For those of you who purchased the Boskage Study Plans that included the detailed exam commentary, we’ll be completing that information and posting it soon. Look for upcoming articles on protesting questions on the exam.

CBP Announces ISA-Product Safety Program

If you are a current ISA participant thinking about ways to improve compliance, now might be a good time to consider the Importer Self-Assessment Product Safety Pilot. In addition to receiving time on the agenda at the U.S. Customs and Border Protection Trade Symposium October 29 – 31, CBP announced in the Federal Register that they would begin a trial program to expand the Importer Self-Assessment Program to include product safety. The trial is designed to encourage companies to maintain a high-level of compliance with product safety laws and standards.

The ISA-Product Safety pilot will be conducted by CBP, CPSC and volunteer importers. Existing ISA members can apply for the product safety program and the two agencies will select a limited number of the applicants to participate. In order to participate in ISA–PS, an importer must:

· Be an active member in ISA and comply with all ISA requirements and obligations.
· Complete an ISA–PS/CPSC Questionnaire and sign an ISA–PS/CPSC Addendum.
· Agree to comply with all laws and regulations administered by CBP, as well as the CPSC
· Maintain an internal control system that ensures the integrity of product safety.
· Notify CBP of any major organizational changes that may affect the importer’s product safety controls.
· Submit an annual written notification to CBP that sets forth the importer’s ISA–PS point of contact and acknowledges that the importer continues to meet the requirements of ISA–PS.

Companies selected for the pilot program will be expected to follow a set of best practices compiled by the government. Through domestic site visits, CBP and the CPSC will verify that companies have adequate procedures and processes in place to ensure product safety throughout the supply chain.

As an incentive, the CPSC will offer increased benefits to companies that join the program. Some of these benefits include:
· Assigning a product-specific point of contact that can assist in providing product codes of recalled products for inclusion on customs entries.
· Training on product safety compliance, internal controls and agency audit procedures.
· Allowing companies to extend ISA coverage to multiple business units.
· Fewer product safety tests on goods.
· Granting "front of the line" privileges at CPSC laboratories to ISA-PS participants when product safety testing is necessary.
· Allowing products to be destroyed instead of requesting redelivery of faulty goods to CBP.
· Automatic enrollment in CPSC's Fast-Track Product Safety Recall Program.

The pilot program will be reviewed after two years to determine whether it should become permanent.

CBP Issues Frequently Asked Questions on AES Filings

U.S. Customs and Border Protection (CBP) has published two documents containing answers to frequently asked questions about AES. The first document contains general questions and answers about AES such as costs and hardware and software requirements. The second document contains specific process-oriented questions, and is designed to assist the trade community in understanding the expectations of CBP concerning the advance electronic cargo information rules for export shipments.



Click on the following links to review each FAQ.
General FAQ
Specific FTR FAQ

USITC Introduces HTS Online Reference Tool

The U.S. International Trade Commission (USITC) introduced the development of the new HTS Online Reference Tool. Managed by the USITC, the new tool will be a single source of information for importers, brokers, carriers and the government.

The HTS Online Reference Tool will provide:

• Complete legal text and notes;
• The most current U.S. tariff rates;
• Interactive access and searches;
• Direct links to classification rulings;
• Quick searches by word, word combinations or HTS number;
• Direct links to footnotes;

The system will provide access to the most current rulings. Users will be able to jump directly from a specific HTS item to the Customs Ruling Online Search System (CROSS) for determinations on product classification for that HTS item.

The tool also provides thesaurus capability and the ability to use synonyms, such as “doll” instead of “toys”. Using XML software, the ITC will be able to quickly update the HTS for changes such as Free Trade Agreements and duty rate reductions.

Look for this fantastic new tool in the first quarter of 2009.

ATPA and GSP Extended

On October 16, 2008, President Bush signed H.R. 7222 which extends benefits under the Generalized System of Preferences (GSP) for one year until December 31, 2009. The Andean Trade Preferences Act (ATPA) was extended to December 31, 2009 for Columbia and Peru and to June 30, 2009 for Bolivia and Ecuador.

Preliminary Answers for the Oct. 2008 Exam

As many people sit on pins and needles waiting to see the answers posted for the most recent Customs Broker’s Exam, our very own Wizard has taken the exam and provided a list of possible answers and related regulations where the answers were found.

We invite you to post your answers, explanations, arguments and other comments. Obviously, Boskage Commerce Publications cannot guarantee the accuracy of these answers since CBP has the one and only answer key, but the Wizard has an excellent record of achieving a score of better than 90%.

Click HERE to view a copy of the Wizard’s answers for the October 2008 Exam!

Additional commentary on the exam will be available to our students soon.

Exam Answers Coming Today

Keep refreshing, the Wizard will have answers today, along with possible protests by the end of the day!

Customs Broker Exam Study Tip 12: CBP Directives

For many years, the Customs Brokers Exam only required the use of the HTSUS and the CBP Regulations; however, in 2004, CBP expanded its scope of materials to include Customs Directives and other reference materials. These materials are important because they provide guidance on activities that brokers perform that aren’t included in the regulations. Since their inclusion, these resources have comprised 7.5% of the total questions on the exam. Because of the number of resources, it’s difficult to predict specific areas for testing. The best thing to do is to study all of it. We’ve provided the key highlights for the four most frequently tested supplemental resources.

1. Instructions for Preparation of CBP Form 7501

Although most entry summaries are completed electronically, it’s important to have a good understanding of the information contained on this document. By reading these instructions, you could complete a CBP 7501 by hand without the assistance of a computer. You should keep this document handy and review all blocks because it has been one of the most frequently tested supplemental resources since the implementation of the new CBP 7501 format in September 2005. Become very familiar with each block number, so you can easily reference it. Block 2 (Entry Type Code) and Block 31 (Net Quantity) are easy targets!



2. CD 3510-004 - Monetary Guidelines for Setting Bond Amounts

The purpose of the bond is to protect the revenue and ensure compliance. The amount of a bond is calculated using information on the bond application, the criteria in Part 113 of the CBP Regulations and the guidelines in this directive. This directive provides standardized guidelines for computed the bond amounts for all types of bonds. For the exam, it’s important to know how to calculate single entry and continuous bonds.

The first type of bond is the Activity 1, Importer or Broker Continuous Bond. The minimum amount of a bond in this category is $50,000.

For importers paying zero to $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in increments of $10,000.

For importers paying over $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in $100,000 increments.

The next type of bond is the Activity 1, Importer or Broker Single Transaction Bond. This bond is valid for one shipment and is computed in an amount not less than the total entered value of the merchandise plus all duties, taxes and fees unless the merchandise is subject to other government agency requirements such as the FDA, and all merchandise subject to quota and/or visa requirements. In these situations, the bond will be computed in an amount of at least three times the total entered value of the shipment. In addition, the district director may set the single transaction bond amount at 10 percent of the total entered value for unconditionally free merchandise, which is not subject to the previously mentioned categories.


3. CD 3550-055 - Instructions for Deriving Manufacturer/Shipper Identification

Questions involving the Manufacturer’s ID code should be some of the easiest to answer. Not only does this directive provide instructions on how to construct the code, but the information is also included in the CBP Form 7501 Instructions. Just memorize the rules for deriving the Manufacturer's ID number.

This code is commonly referred to as the MID or Manufacturer Identification Code. This technique is also known as keylining. On the broker’s exam from October 2005, a question required knowledge of the term keylining.

Customs requires the formation of a code from the name and address of the manufacturer.
The MID contains five components that are added together without spaces to create the code. The code can be up to 15 characters in length. The five components consist of the following information:

· Two letter abbreviation for the country of origin
· First three letters of the first name of the manufacturer
· First three letters of the second name of the manufacturer
· First four digits of the street address, and
· First three letters of the city name.

There are some general rules to consider.


· Ignore all punctuation
· Ignore single character initials. and
· Ignore the words “a”, “an”, “and’, “of”, and “the”.


4. 3550-067 - Entry Summary Acceptance and Rejection

Customs Directive 3550-067 provides guidelines for uniform acceptance and rejection of entry summaries. Five major areas of interest in this directive include the following:

· Collections Processing – Rejections
· Acceptance Review and Summary Processing
· Processing of Rejected Entry Summaries
· Time Limit
· Rejection Effect on Entry Summary Filing Time

This information is a little more complicated to grasp, so read each of the major areas and highlight key information.

Although we didn’t cover all of the directives and supplemental materials, they are not any less important. Remember the advice from the beginning of the article - the best thing to do is to study all of it.

We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for other useful news for international trade professionals! As soon as the Wizard obtains a copy of the test and has time to work out some preliminary answers, we’ll post them here for you to review and comment on!

Customs Broker Exam Study Tip 11: Free Trade Agreements

With the increase of free trade agreements between the U.S. and other countries, the number of questions on the CBE related to these agreements has increased. In fact, “Trade Agreements” often has its very own section of questions on the exam. Free Trade Agreements (FTA's) are international agreements made between two or more nations that relate to common trade or service issues. FTA’s reduce or eliminate all tariffs and other restrictions on substantially all the trade in goods between its member countries based on country of origin.

The information needed to answer questions about FTA’s is likely to be found in one of three places: (1) the General Notes of the HTSUS, (2) Chapters 98 an 99 of the HTSUS and (3) 19 CFR Part 10. Memorize the titles of these General Notes and skim the text to become familiar with the topics covered in each. In your review of the programs, concentrate on the basic requirements such as tariff shift, de minimis and RVC requirements. Each program has different requirements regarding allowance of the special duty treatment, and some of these programs are subject to change. Most of these programs have very detailed requirements that must be met in order to claim the duty-free status. Additionally, these programs are often difficult to understand and some have limited use in daily practice. Try not to be too overwhelmed when encountering these problems. If they appear too difficult, move and come back to them later.

Don’t overlook important terminology. Be sure to know the definitions for each of the following:

· Accumulation
· Direct Cost of Processing
· De Minimis
· Imported Directly
· Transshipment
· Regional Value Content RVC
· Tariff Shift
· Substantial Transformation

To view a list of the FTAs, the references to the HTSUS General Notes, SPI and CFR references, click HERE.

We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals!

Grace Period for AES Filing Ends September 30

Although the final rule for filing export information by AES became effective on July 2, 2008, the trade was allowed a 90-day grace period to fully implement the process. The grace period for mandatory Automated Export System (AES) implementation ends September 30, 2008. Beginning October 1, exporters will be required to use AES or AESDirect to report all shipments requiring a Shipper’s Export Declaration (SED).

Some of the highlights of these new regulations include the following.

• Elimination of the ability to submit the Shipper’s Export Declaration (Form V-7525) manually; all transactions require electronic reporting.

• More rigorous penalty provisions may be imposed per violation from $1,100 to $10,000 both civil and criminal, for the delayed filing, failure to file, false filing of export information, and/or using the AES to further any illegal activity.

• New filing deadlines by mode of transportation for reporting export information.

Anyone submitting paper after September 30, 2008 will be in violation of the FTR and subject to penalties. It is important for the trade to understand these new requirements to avoid the increased penalties and seizure of shipments. For additional information on the mandatory filing requirements, check the AES website and 73 Fed. Reg. 31548 (June 2, 2008).

New: Mandatory SNAP-R Filing

The Bureau of Industry and Security (BIS) issued a final rule requiring all export and reexport license applications, classification requests, encryption review requests, license exception notifications, and related documents be submitted via its automated Simplified Network Application Process (SNAP-R). Exemptions to the rule include Special Comprehensive Licenses (SCL) and certain situations authorized by BIS. Currently, members of the public submit these applications, requests and notifications to BIS in one of three ways: via SNAP–R, via BIS’s Electronic License Application Information Network (ELAIN), or via the paper BIS Multipurpose Application Form BIS 748–P. With the improvements made to SNAP-R, filers have the ability to include documents related to the request in the form of PDF files as “attachments” to the submission. BIS believes that exclusive use of SNAP–R will improve efficiency for all parties by reducing processing times and simplifying compliance with and administration of export controls.

This new rule takes effect for all of the above submissions on October 20, 2008. Additional information on the new filing requirements and criteria under which BIS will authorize paper submission can be found in the Federal Register, August 21, 2008.

CBE Study Tip 10: Valuation

Customs Valuation (19 CFR 152) is one of the most complex parts of the regulations. This section is one of the most frequently tested on the exam, and the questions are often long and time consuming to answer. When reading Part 152, it would be wise to read each section slowly in order to understand the complex terms discussed. Pay close attention to any examples provided because they help explain and demonstrate the complicated concepts. Highlight important areas of text. Make notes and lists in the margins. Locate the valuation questions in old exams and work through the questions. Make sure to mark each section of the regulations that was used in determining the answers.



Click HERE to view an outline of the most important valuation information found in 19 CFR 152. Read and highlight these sections in your copy of the regulations. Take this outline to the exam with you for a quick reference tool.

Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog!

Customs Broker Exam Study Tip 9: How to Use the HTSUS – Part 2

Classification is a skill that takes time to develop, but the more effort put into the process, the faster one will become more proficient. The actual process of classification is very complex, almost like reading a foreign language. It is important for both experienced and beginner to understand that the strategy for answering classification questions on the brokers exam is a little different from the process used for classifying goods for your companies on a daily basis. The basic steps discussed are similar to those used in daily transactions, but there is more to the process for those classifying goods on a regular basis. On the exam, you won’t be able to consult with experts or use the Cross Rulings Database. Remember, the average time allotted per question on the exam is three (3) minutes. In actual practice, you would likely spend more than three minutes trying to classify a product. The primary difference between classification on the exam and classification in a business situation is that the exam provides five (5) possible answers and you know that one of those answers is correct. In real life, you aren’t provided with a set of answers in which you know for certain one is correct. Another difference is that classification questions found on the exam are intentionally complicated and sometimes tricky. Thus, there is a need for a slightly different strategy for answering the questions on the exam.

1. Carefully read the question and make note of the details.
The first step in answering any classification question involves a careful, thorough reading of the question and making note of the details provided. Some of the details may be critical to answering the question correctly. Remember, exam questions have been carefully worded and may be tricky, so some of the detail may be not be necessary. You may want to highlight the details as you read the question.

2. Look up each answer and eliminate those that are clearly incorrect.
The second step for answering classification questions is to look up all the answer selections and eliminate those that are clearly incorrect. This process may be more difficult than it sounds. Classification questions are typically written in such a way that all or most of the answers appear to be correct. The best way to answer them is by a process of elimination. Consider the following example.

What is the classification of a woven nylon scarf measuring 55 cm x 50 cm?

A. 6214.30.0000
B. 6214.40.0000
C. 6213.90.1000
D. 6117.10.2030
E. 6117.10.6020

Notice that the answers are found in two different chapters, so it is likely that we will be able to eliminate one of the chapters. Indeed, we can eliminate Answers D and E easily because Chapter 61 covers knit articles and our scarf is woven.

3. Read Chapter and Section Notes
The third step is to review the Section and Chapter Notes to make sure that there is not any information there that would preclude one or more answer. Section and Chapter Notes provide valuable information about what items are specifically included and excluded as well as useful definitions. Because of the time constraints, it would be easy to skip the Notes; therefore, the writers of the Exam intentionally include questions that require the applicant’s ability to use the Notes. Remember, the Notes can be long and many of them will not be related to the classification you are checking. You must learn to scan the notes for significant headings and keywords. If you still have several potential answers at this stage, the Notes may help you make a determination between them. You should do this even if you only have one answer remaining after the elimination step. If you have eliminated all answers but one when you reach this step, and find a Note that eliminates that answer, you will have to start over to find the answer you have eliminated incorrectly. Let’s go back to the scarf.

Answer B should be eliminated because the provision is for artificial fibers and our scarf if nylon, which is a synthetic fiber. If you did not know whether nylon was artificial or synthetic, Chapter 54 and 55 covering man-made fibers would help. It would appear that Answer A is the correct selection for our scarf; however, Chapter 62 Note 7 explains that scarves that measure less than 60 cm should be classified as handkerchiefs under 6213. This is a prime example of the importance of reading the Notes. If we had overlooked the Notes assuming that 6214.30.0000 specifically describing our product was correct, we would have answered the question incorrectly.

In most situations, you will be able to answer questions using these steps; however, there may be a few questions that require an additional step involving the application of the General Notes and/or GRI. For example, a question may require you to select the appropriate duty rate. Once you’ve located the appropriate HTS number, you will select a duty rate based on the country of origin. Given the origin, you may need to check the General Notes to determine if the country is included or excluded from certain free trade agreements.

Now that you are familiar with the organization of the HTSUS and have some tips on how to answer classification questions, it’s time to practice these skills. One of the best ways to practice for the exam is to take past exams. Old exams can be found on CBP’s website. For detailed instruction on classification and related topics, check out our online courses at bcpLearning.com.

Stay tuned to the Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! The next article will cover “Valuation”. We also welcome any suggestions on topics you would like to see discussed.

Customs Broker Exam Study Tip 8: How to Use the HTSUS – Part I

In Study Tip 7, we provided some suggestions on how to read the CBP Regulations. In this article, we provide some tips on the key components and arrangement of information contained in the Harmonized Tariff Schedules of the United States (HTSUS). The next article will provide some helpful information on how to answer exam questions.

If you want to pass the Exam, no subject is more important than classification. On each test, classification accounts for 15% - 25% of all questions asked. If you are not experienced in this process or have not dedicated sufficient study to this area, your chances of success are low. The good news is that by focusing on some basic skills, developing a strategy and answering questions from previous exams, both experienced and beginning students can achieve success! To begin your study of the HTSUS, you should familiarize yourself with the key components and arrangement of information found in the HTSUS and organize your book in a way that allows you to find information quickly. The following points will assist you with these tasks.

1. Familiarize yourself with the components of the HTSUS.
The HTSUS is similar to the CFR in that it is a reference text and not the type of book that is read from page one to the end. It is important to be familiar with the major parts to know where to look for answers and what information is the most important to read.

• General Rules of Interpretation (GRI) – The GRI appear at the beginning of the HTSUS and provide the primary rules for classification.

• General Notes – Covering over 500 pages, the General Notes provide instructions on special duty programs, free trade agreements, duty rates, and other information necessary for proper classification and calculation of duties. The first three General Notes are the most likely source of Exam questions; however, you should be familiar with the topics covered by all of the notes.

• Section and Chapter Notes - Each Section and Chapter contains notes that appear at the beginning of each. Since these notes provide lists of goods specifically included or excluded from a particular section, chapter, heading or subheading and contain definitions of certain terms, it is important to read these notes when classifying imported products.

• Classification Tables - The Section and Chapter Notes are followed by pages of tariff numbers along with descriptions of the products, duty rates and any special rates associated with the tariff numbers. They also contain footnotes and quota code information that can be pertinent in classification questions.

2. Familiarize yourself with the arrangement of the HTSUS.
In the HTSUS, goods are logically arranged so they appear in headings beginning with the most basic substances, and ending with more advanced manufactured goods. This progression is found within the chapters and in the sections.

Section 11 is a good example of the progression. As indicated by the title, this section contains listings for textile and textile Articles. Chapter 50 contains silk threads, yards and fabrics and Chapter 52 covers cotton threads, yarns and fabrics. Chapters 61, 62 and 63 contain articles that are manufactured from the silk, cotton and other raw materials covered in the previous chapters. Notice how the book progresses from a basic item—in this case silk and cotton—to the products obtained from the basic item.

3. Organize your HTSUS
Similar to the hints we provided for the CFR, consider using tabs for your copy of the HTSUS. If you are looking for the chapter on cotton and you know that it's in the middle of the book, having a tab with the chapter number and cotton may enable you to locate the exact chapter more quickly. Here are a few suggestions for using tabs.

• Place tabs to designate each of the 22 Sections, or
• Place tabs to designate each of the 99 Chapters, or
• Use both Section and Chapter tabs
• Use tabs to mark the GRI and each General Note.
• Consider using different color tabs to designate different sections.

Now that you are familiar with the key components and arrangement of information in the HTSUS, it’s time to learn techniques to answer exam questions. CBE Study Tip 9 will provide suggestions to help you prepare your strategy for answering classification questions on the exam. Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog!

President Signs New Consumer Product Safety Improvement Act of 2008

On August 14, 2008, the President signed into law Public Law No. 110-314, the Consumer Product Safety Improvement Act of 2008 (H.R. 4040). Because of the widely-publicized recalls of imported toys, the new law establishes stringent safety provisions for children's products. However, the new provisions include a broad scope of products other than toys and are projected to affect manufacturers, importers and other distributors and retailers of consumer products.

The new law also contains provisions relating to the administrative functions that have been delegated to the United States Consumer Product Safety Commission ("CPSC"), enhances the authority of the CPSC to order recalls, increases the amount of the civil penalties that the CPSC may impose, and has other miscellaneous provisions.

In addition to the new safety requirements, the civil penalties for non-compliance have increased to $100,000 for each violation with a maximum cap of $15 million for a related series of violations. The criminal penalties permit larger fines, up to five years' imprisonment, and forfeiture of assets associated with a violation. Additionally, directors, officers and agents may be criminally charged even if they were not aware of the violations. To promote compliance, employees who report violations, testify or otherwise provide assistance in CPSC enforcement proceedings, or who refuse to participate in an employer's illegal conduct will receive whistleblower protection.

The provisions that are most important to importers and exporters include:

• Requirements for self-certification and testing for imported products that are subject to the CPSC rule, effective on November 12, 2008, and third-party testing and certification of certain imported children’s products with requirements for:

- Certificates furnished by the manufacturer for every imported consumer product subject to CPSC.

- Certificates from third-party testing for toys and children’s products.

- Certificates accompanying the product.

- Procedures for filing certificates electronically may be implemented.


• Prohibition of most exports of recalled, banned, hazardous or non-conforming products to other countries.

• Policies to utilize the ITDS and increase cooperation with U.S. Customs and Border Protection to prevent non-compliant products from entering the United States.

• Procedures to destroy non-conforming products that have been denied admission into the United States.


Provisions of general interest include:


• New definitions for toys and children's products.

- The definiition of "Children's toys" now includes consumer products "designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays."

- "Child care articles" are now defined as "a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething."

• Phased-in ban on lead all children’s products.

• Additional safety rules affecting toys and children's products, including permanent tracking labels, expanded warning requirements for choking hazards, and new rules for durable infant and toddler products to facilitate owner registration.

• More stringent recall procedures have been created by eliminating the right of a party recalling a product to elect whether they will offer a refund, repair or replacement for recalled products, and by permitting the CPSC to require a refund, repair and/or replacement as the CPSC determines to be in the public interest.

Since the provisions are likely to affect a vast majority of manufacturers, distributors and retailers, all parties are urged to read the new law and consult their attorneys and other experts to ensure compliance with the extensive changes.

Customs Broker Exam Study Tip 7: How to Read the CBP Regulations

From the time we were children, most of us were taught to read a book sequentially, from the first page to the last. When reading Title 19 of the Code of Federal Regulations (CBP Regulations) for the Customs Brokers Exam, you should break that rule. Yes, we really did suggest that you should not read the regulations from the beginning to the end, but that doesn’t mean that you shouldn’t read the entire book. The material contained in the regulations is very technical and often quite boring; therefore, it is not the kind of book you can read from cover-to-cover in a short time.

If you think this idea sounds crazy, pick up the book and read Part 4, containing approximately 45 pages. Only two questions from Part 4 have appeared on the last ten exams; that’s two questions in a total of 800 questions, which is less than 1% of the questions. This means you’ve just spent valuable time reading material that won’t likely be tested. On the other hand, Part 111 is one of the most frequently tested sections and it contains 15 pages. There have been 57 questions from Part 111 on the last ten exams, which means approximately 7.1% of the questions on each exam come from Part 111. Not only will you be reading information that is important for the test, but Part 111 provides requirements for customs brokers. Understanding the requirements for customs brokers is important for passing the exam and for persons who want to be brokers.

The CBP Regulations is a lengthy book, and often is difficult to read and understand; however, it is important for importers, brokers, and other parties involved in international trade to have a good understanding of this book. There are numerous reasons for reading, understanding and applying the regulations. For purposes of the exam, knowledge of the regulations reduces time spent looking for answers on exam day. CBP employees and other members of the trade community might tell you that all of the sections are equally important. This is true, but for the purposes of the exam, some sections are not as significant because they are not as heavily tested.

The key to reading the regulations is to match your reading schedule with your study plan. In most situations, this means reading the sections that are most heavily tested first and saving the sections that are rarely tested for later. For example, Week 1 of your plan may require you to read Part 111- Brokers, Part 141 – Entry of Merchandise and Part 142 - Entry Process. These three parts are included in the top five sections that have been tested on the last ten exams and make up about 16% of the total questions on each exam.

Another strategy might be to read sections that are related to each other by a common theme. For example, Parts 18, 114, 127, 132, 143, 144 and 146 contain information about types of entries and alternatives to entry. There are various strategies for reading the regulations. Use what works best for your study plan, but use your time wisely and avoid reading the book from cover-to-cover.

We would like to offer some other suggestions related to reading the regulations. First, use "tabs" to mark each part of the regulations. Colored tabs can be used to indicate more important or frequently used parts. Using tabs also makes certain parts easier to find which can be a time saver during the exam. Second, highlight important facts, which can be used later for making outlines, flash cards or other study tools. Third, make notes in the margins to help you remember certain fact or provide examples that might not be included. Fourth, memorize the titles of each part and/or associate that title with something that will remind you of the information contained in that part.

We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences.

Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals! We will discuss “How to Use the HTSUS” in the next study tip.

Last Chance To Apply For The October Exam!

The deadline for filing applications to take the October exam is just a few days away. If you are planning to take the October Broker License Exam, don’t let this important deadline pass! All exam applications and the exam fees of $200 must be received and accepted by CBP at the service port where the applicant intends to take the examination on or before the close of business Friday, September 5, 2008. Applications received after Friday, September 5, 2008 will not be accepted- NO EXCEPTIONS.

Click to print your application. Fill it out and take it over to your local CBP office today! If you are not close to an office, send it by express courier, today!

Exports Are NOT The Opposite of Imports

For importers and others who are new to exporting, the first thought might be that exporting is the opposite of importing. Thus, if a product is sent out of the country, that shipment constitutes and export. While that statement is correct, it is incomplete because an export can occur without a product leaving the U.S. territory. How does that happen?

Export is defined in the Export Administration Regulations (EAR) 734.2 (b)(1) as an actual shipment or transmission of items subject to the EAR out of the United States, or the release of technology or software subject to the EAR to a foreign national within the United States. Section 120.17 of the International Traffic in Arms Regulations (ITAR) defines export as the disclosure (including oral or visual disclosure) or transfer of technical data to a foreign person, whether in the United States or abroad. Those definitions sound simple, assuming we know what constitutes a foreign national and the “release” of technology or software.

First, let’s define foreign national or person. A foreign national is:

· Someone who is NOT a U.S. citizen or permanent resident alien (green card holder)
· A foreign corporation, business associations, partnership, trust, society or any other foreign entity or group that is not incorporated or organized to do business in the United States.
· An International Organization
· A foreign government and any agency or subdivision of foreign governments or foreign corporations
· Foreign persons in the U.S. on limited work visas or student visas

When trying to determine if someone is a foreign national, it is important to know that whether someone is a “foreign” person under the export regulations is not the same as whether the individual is in the country legally, entitled to work, a good person, etc. Checking an individual’s social security card or driver’s license will not be sufficient to make the determination.

Now that we have a better idea of what constitutes a foreign person, let’s explore what constitutes the “release” of technology and software. Release includes visual inspection by a foreign national of U.S. origin equipment and facilities, oral exchanges of information in the U.S. or abroad. Some of the typical situations in which an export “release” of technology or software could occur within the U.S. include:

· Sending an email or fax that contains technical information to a foreign person
· Talking on the phone with a foreign person
· Holding technical data discussions within earshot of foreign nationals not licensed to receive information
· Viewing information on a laptop
· Foreign national visit U.S. facilities for tours and meetings
· Trade shows, seminars and conferences
· Company Intranet
· Presentations

This concludes our brief lesson for those who are new to exporting. Knowing that an export can occur without shipping a tangible product is a very important lesson to learn early in your career in exports.

CBP Announces Annual Trade Symposium

Mark your calendars and make your reservations! On August 26, 2008, U.S. Customs and Border Protection announced its annual trade symposium will take place Wednesday October 29 through Friday October 31. The agenda for the Trade Symposium and the keynote speaker will be announced at a later date on the CBP Web site. The CBP Trade Symposium will be held at the JW Marriott, 1331 Pennsylvania Avenue, NW., Washington, DC. Hotel accommodations have been reserved at two hotels in downtown Washington, DC.

To obtain the latest information on the Symposium and to register on-line, visit the CBP Web site. The cost is $250.00 per person, and includes all Symposium activities. Persons interested in attending are encouraged to register early, as space is limited. Registration will open to the public on or about September 2, 2008. All registrations must be made online at the CBP Web site and will be confirmed with payment by credit card only.

Customs Broker Exam Study Tip 6: Taking Previous Exams

Taking past exams is an important part of any study plan. Persons studying for the Customs Broker Exam have an advantage because past exams are available for students to review. The exams provide information about the types of questions and format of the test. So, now that you have discovered this gold mine of information, what should you do with it?


1. Familiarize yourself with the test format.

It is not necessary to sit down and take a complete test of 80 questions the first time you review the exam. Take time to read a few questions and become familiar with the way the questions are constructed. Practice looking up answers in the HTSUS and Regulations. Watch out for questions containing the words “NOT”, “MAXIMUM”, “EXCEPT” and other words that appear in all capital letters and bold text. Pay close attention to the terminology. Some questions may contain answer options that appear to be the same such as 10 working days and 10 calendar days. Don’t get in a hurry and select the first answer that contains “10” in it.



Example:

Imported merchandise must be entered within _________ days after landing from the vessel, aircraft or vehicle.



A. 10 calendar days

B. 10 working days

C. 15 calendar days

D. 15 working days



The correct answer is C. Part 142.2(a)

2. Take practice exams in simulated test environment.
Do your best to recreate the actual test-taking environment and conditions. Find a quiet location to take the test without distraction and threat of interruption. Use only the written reference materials and notes allowed on the exam. Do not use any electronic device other than a battery-operated calculator. Allocate 4 hours for taking the entire test or 2 hours if taking half of the exam. The exam contains 80 questions, and the time allotted is four hours, which averages out to three minutes per question. You may take less time on some questions and more on others, but it will be impossible to finish the test if you spend 10 minutes on each question.

3. Review your results.

In addition to preparing you for the test format and testing conditions, taking practice tests as part of your study plan builds confidence and allows you to find areas that need more concentrated study. Compare your answers with the answer sheet. Review the questions you answered incorrectly and keep track of the sections of the regulations and HTSUS the correct answer comes from. If you find most of your incorrect answers come from the HTSUS, then devote more time to studying the HTSUS lessons and answering classification questions. If you find that you missed more answers from Part 152 on valuation, then spend more time studying valuation and answering valuation questions. Devoting extra time studying the topics related to the questions missed on the practice exam is a great way to improve your score on the next practice exam and the real exam.


4. Highlight all answers in the CBP Regulations.
As you review the exam questions answered, highlight the correct answers in your copy of the regulations. This will reinforce your knowledge of the regulations and the highlighted information tends to stand out on the page when you are looking for it. Even though the questions for each exam may be worded differently, the answers will still be found in the same texts. The last eleven exams contained 33 questions from Part 24. Ten of those 33 questions came from 19 CFR 24.23. Six of the 33 questions came from 24.5 and six came from 24.1. By marking the answers in those three sections, you reinforce the information in your mind and you will be more likely to spot the answer quickly when looking for it on the actual exam.Click HERE to see a sample of a highlighted page for the answers related to 24.5.

5. Answer test questions as a regular part of study.

In addition to taking practice tests, set aside some study time once or twice a week to answer questions from other exams that you are not using for the simulated practice. Since each question is allotted an average of 3 minutes, you could plan to spend 30 minutes answering 10 questions from an older exam. You could do this exercise four times a week and have completed half of one exam in a week. Alternatively, you could allot one hour and answer 20 questions at a time. If you did this four times a week, you would have completed an entire exam. This exercise will give you practice managing time. Additionally you will gain familiarity with the question, answer formats, and increase your knowledge of the materials.



Note:

When taking old exams, be alert for possible inconsistencies in the answer selections. Tariff numbers and duty rates have changed over the years. A tariff number that was listed as a possible answer on the October 2003 Exam may not be valid in 2008. When calculating the duty rates to determine an answer, you may find a slight variance because of the reduction in duty over the years. With the addition of new free trade agreements, duties have been reduced and eliminated for certain countries.



We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences.

Customs Broker Exam Study Tip 5: Time Management

Now that your study materials and workspace are organized, it is time to discuss time management. Students often feel overwhelmed by the amount of information to be learned in order to pass the exam. Some people feel like they do not have enough time to do all they want to do, so finding additional time to study for the Customs Broker Exam seems like an impossible task.

Have you ever noticed how some people seem to have a natural ability to get things done without appearing stressed out, while others are often late in completing tasks and appear to be rushed all of the time? Have you ever thought that certain people accomplish more because they don’t have to work full time, or they don’t have children or they have more money? Even if those reasons were true, it doesn’t change the fact that everyone has the same amount of time each day. The difference is in how you choose to use your time. Time cannot be bought or saved. Once time is gone, you cannot get it back. Your ability to pass the exam as well as accomplish other goals begins with how you manage your time.

What are some of the causes of time management problems? Three of the most important causes of problems related to time management are procrastination, poor planning and wasting time.

Procrastination is a tendency to avoid a harder or less pleasant task in favor of doing an easier one. Procrastination often results in added stress due to missed deadlines or last minute preparation to meet a deadline. No one needs or wants additional stress and stress is not good for our health. Visualize what will happen if you procrastinate by putting of studying for the exam. Do you see success or failure? Procrastination is not an option when you visualize success!

Poor planning is another culprit that sabotages achievement of success. You must prioritize and create schedules to accomplish the tasks necessary to accomplish your goals. Once you make up our mind to take the exam, you must create a study plan and make it a priority. Of course, most aspiring brokers have full time jobs and personal obligations; however, by creating a plan and schedule that allots specific time for study, you can ensure success by following that schedule. You can’t expect to pass the exam unless you make the effort.

Wasting time is one of the biggest problems exam students face. When too much time is spent doing things that are unproductive, you rob yourself of valuable time that could be spent studying for the exam. It may not be the activity itself that is unproductive, but the amount of time spent doing the activity that creates the problem. If you like watching television, watching one favorite show is not unproductive because it provides relaxation and a sense of well-being. However, watching several hours of television to avoid studying is unproductive. Playing a game on the computer for 15 minutes is not necessarily unproductive because it provides a break from the routine that gives your mind a rest. However, playing computer games for hours robs you of time that could have been spent studying.

What can you do to improve time management in order to pass the Customs Broker’s Exam?

The tools and methods adopted to manage time wisely will largely depend on the amount of individual’s experience with issues covered on the exam, learning styles, ability to grasp and retain new information, work schedule and other personal issues. We have provided a few suggestions below. At the end of this article, you can comment on these and provide some ideas of your own.

· Create a Calendar

Your calendar should allocate time for work, study, exercise, meals, family and personal time. Set a regular time for study. You may want to check off the items completed each day and keep track of time spent on each task.

· Identify Priorities

Prioritize tasks and create a “To Do” List. Compete the most important tasks first. If not all tasks are completed, putting off the least unimportant task isn't procrastination, it's probably good prioritization.

· Learn to Say “NO”

Explain to people that you must study to pass the test and you will be available in a few weeks. Six to eight weeks of intense study is a small commitment of time when you think about the rewards of passing the exam and the amount of free time you will have when you no longer need to study.

· Make Time For Family

Set aside special time for family each week. Remember, quality over quantity. Your family will appreciate the time you spend with them and be more understanding of your need to study when you devote special time for them.

· Set Aside Time for Exercise

Regular exercise reduces stress and promotes good health. Exercise can provide a welcome break from your studies by giving your mind a chance to relax and think of something else. Your choice of exercise can be anything from gardening, walking around the block to a game of softball or a workout at the gym.

· Limit Unproductive Activities

Reduce the amount of time spent on the phone, watching television, reading email, playing computer games, etc. There will be plenty of time for these activities when you finish the exam. Take the necessary phone calls, but do not use the phone as an excuse for not studying.

· Make Good Use of Unproductive Time

1. Waiting

At one time or another, you will find yourself waiting for something. The wait may be anywhere, from the doctor’s office or at an airport, to an unaticipated event, such as a traffic jam. Anticipate circumstances that are likely to create unavoidable delays and be sure to have your notes handy. You can make great use of that time to study. Instead of being upset because you were stuck in the airport for two hours because your plane was late, you can be excited that you were able to devote two more hours to your studies.

2. Commute

Whether it’s by train or car, most people have some type of commute to work. Use the commute time to listen to the audio lectures on CD. Turn that hour spent in a traffic jam into productive study time.

3. Lunch

Do you really need an hour to eat lunch? Consider devoting three of your lunch breaks each week to study. Treat yourself to a nice lunch out at the end of the week.

· Reward Yourself

Set daily, weekly and monthly goals. When you have achieved a goal, reward yourself. It may be as small as allowing yourself 30 minutes of television or spending 30 minutes playing a video game to something more significant such as a vacation or cruise after receiving news you passed the exam.

We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences.

Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals! We will explore “Using Previous Exams” in the next study tip.

CBP Requires Importers to Declare First Sale Information

On August 20, 2008, CBP posted CSMS #08-000163, which outlines the requirements for filing first sale information using the entry summary. Section 15422 of the 2008 Farm Bill requires the trade to provide notice to CBP when the transaction value of imported merchandise is determined on the basis of the first sale rule.

To fulfill these requirements, the required declaration is made when filing the consumption entry and is indicated by entering “F” in the miscellaneous indicator field. If the transaction is not subject to first sale valuation, then the field will remain blank. This procedure applies to all consumption entry types. For more information about the reporting requirements and procedures, contact your customs broker and/or ABI client representative.

New & Revised Informed Compliance Publications

Customs and Border Protection has been busy reviewing and updating the Informed Compliance Publications this year. Since the first quarter of 2008, one new publication was added and 12 were updated. Here’s a brief overview of the new publication along with a list of the publications that have been reviewed and updated.



New Publication:



Classification and Marking of Pipe Fittings under Heading 7307 (July 2008)
This new publication provides the definition of pipe fittings along with images and examples of the various categories of fittings. This document also provides detailed explanations of what is included and excluded from the provisions of HTS 7307, requirements for mill certificates and information about antidumping cases. This document is a must for importers of couplings, elbows, sleeves, unions and other metal fittings.

Revised and Updated Publications:
· Classification: Apparel Terminology under the HTSUS - 06/10/2008
· Classification and Quota Status of Raw Cotton Under the HTSUS - 06/10/2008
· Classification of Hats and Other Headgear Under HTSUS Heading 6505 - 06/04/2008
· Classification of Knit to Shape Apparel Garments Under HTSUS Heading 6110 - 05/16/2008
· Classification of Ribbons & Trimmings under the HTSUS - 06/12/2008
· Classification of Textile Costumes Under the HTSUS - 06/10/2008
· Gloves, Mittens & Mitts, Not Knitted or Crocheted, Under the HTSUS - 05/16/2008
· Marking Requirements for Wearing Apparel - 05/16/2008
· NAFTA for Textiles & Textile Articles - 05/16/2008
· Classification and Quota Status of Raw Cotton Under the HTSUS - 06/10/2008
· Table and Kitchen Glassware - 06/25/2008
· Classification of Textile Costumes Under the HTSUS - 06/10/2008

Tired of looking for updates? Click here to find out how you can have updated versions for all of the Informed Compliance Publications along with an extensive compilation of Customs Directives and other selected CBP information in loose-leaf and searchable CD-ROM.

Customs Broker Exam Study Tip 4: Organization

Now that you have made the decision to take the October 2008 Customs Broker Exam, it’s important to develop a study plan that guarantees your chances of success.

Some people are naturally good at organization; everything has a neat orderly place. Have you ever noticed your colleague’s desks or your neighbor’s garage? All of the books are stacked on bookshelves, all of the papers are filed away or neatly stacked, the tools are hung on a pegboard and two cars actually fit into the garage. On the other hand, you wonder how another colleague can find anything since his or her desk is covered with so many papers, books and other junk that you can’t even see a desk.

What is organization, why is it important and what can you do to become organized for the exam?



What is organization?

Organization is the systematic arrangement or assembly of objects in an orderly manner.


Why is organization important?
For the purposes of the studying for the exam, organizing your materials helps improve time management and increases your comprehension and memory. If your materials are organized, you will not waste time looking for a book or document that you need later on. Obtaining and organizing all of your materials will allow you easily access information as you need it. This organization will save time on the day of the test.


What can you do to become organized for the exam?

1. Organize Required Materials - Once you have obtained the required materials, you should organize them. You will want to be able to access each one quickly during the exam. Organizing the CBP Regulations and the HTSUS is easy, because they can be placed in binders so that you have two rather large books instead of a huge pile of loose paper. What remains are the stack of directives and the other supplementary documents required for the exam. If you haven’t purchased these materials already bound, then you may consider placing them together in a separate binder. You can include additional materials to that third binder later. It will be much easier to find information relating to the supplemental materials if they are placed together in one binder instead of having to shuffle through all of those documents stacked in a pile. In addition, placing those documents in a binder reduces the risk of one of them getting lost.

2. Label Required Materials – Consider using tabs to identify the chapters of the HTSUS. If you are looking for Chapter 61 and know that it's in the middle of the book, having a tab with the chapter number listed may help you to locate the exact chapter faster. Time is very important on the exam. We also suggest that you use tabs to mark each part of the regulations. Colored tabs can be used to indicate more important or frequently tested parts. Tabbing also makes certain parts easier to find and will save you time. Finally, you should consider using tabs on the supplemental materials you placed in the binder. As you add notes and other materials to the third binder, you will want to organize your notes so that you can easily locate them. Organizing our materials not only saves time, but it can also increase your comprehension and memory of large amounts of information.

Note: Even though you may use electronic versions of the HTSUS and CFR in your business, you must use the paper versions for the exam. It is a good idea to study using the paper versions to get used to looking up the information the same way you will on exam day.

3. Arrange Your Study Area – Remember the example of the colleague with the desk that looked like a disaster area? If that example sounds like your desk or study area, now is the time to clean it up. Don’t waste valuable study time digging through piles of paper. Get rid of the clutter in your study area and your office. If you have a desk or designated study area at home, create a special place for your study materials. If you study at the office, create a special place for your materials there too. If possible, create a study area that is comfortable and attractive. A bright cheery comfortable atmosphere will be more inviting for study than the dreaded cold gray metal desk with the uncomfortable wooden chair. Don’t get too comfortable; studying in the bed may result in sleep instead of productive study time.

4. Create a Study Schedule - Your schedule will depend on your experience and learning style. Someone who is new to importing may need to devote more time than someone who has more experience. Some students may need study that is more individual while others may prefer some group or interactive activities. Regardless of your preferences, you will be required to do a great deal of reading. Some people require more structure so that reading, tests and other assignments are provided on a regular basis. Others may prefer to create schedules that suit their schedules. Just remember that it is important to allow plenty of time for reading and taking practice tests. If you work full time and wait until two weeks before the exam to start reading the regulations, you may find yourself burned out and struggling on exam day. We’ve provided a few examples that may help you when creating your schedule:

· Consider how many weeks you plan to devote to study. If you have 16 weeks to study, then you will not need to read as much each week; however, if you only have eight weeks to study, you will need to read a little more each week.

· Divide the reading into manageable sections. You may consider reading similar sections together. For example, you might want to read and study the requirements for brokers and entry in one week. This would include Parts 111, 141 and 142. You may want to devote another week to the various types of entries and alternatives to entries.

· Determine how many practice tests you want to take and designate dates and times to take them. Students should take at least one complete 4-hour test and are encouraged to take more than one.


Now that you have placed the required exam materials in binders with tabs, arranged your study space and created a schedule, you are ready to begin your studies.



We welcome your comments on each of these articles. Share what has worked for you or what hasn’t worked so that others will benefit from your experiences.

Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals! We will explore “Time Management” in the next study tip.

ISO/PAS 17712 Container Seals Required Effective October 15

On Thursday August 7, U.S. Customs and Border Protection issued a notice in the Federal Register reminding shippers and importers that pursuant to 6 USC §944, all loaded containers arriving by vessel at a port of entry in the U.S. on or after October 15, 2008, are required to be sealed with a seal meeting the ISO/PAS 17712 standard.

The ISO/PAS 17712 standard requires that container freight seals meet or exceed certain standards for strength and durability so as to prevent accidental breakage, early deterioration (due to weather conditions, chemical action, etc.) or undetectable tampering under normal usage. ISO/PAS 17712 also requires that each seal be clearly and legibly marked with a unique identification number.

Tanks and non-standard containers, such as open top containers, that cannot accommodate a seal meeting the ISO/PAS 17712 standard are not subject to the requirement. C-TPAT members are already required to use ISO/PAS17712 approved security seals.

Containers arriving on or after October 15 without the required seal will be subject the party responsible for the violation to a civil penalty. CBP will phase in the penalty assessments for these violations. Vessel operators are reminded that they must transmit all seal numbers via the Vessel Automated Manifest System 24 hours before cargo is laden aboard a vessel at a foreign port.

Trade Enforcement Bill Introduced

On July 17, two House Ways and Means Committee members introduced a trade enforcement bill H.R. 6530 designed to promote market access for U.S. goods and services and reinforce remedies against unfair trade practices. Introduced by Committee Chairman Charles Rangel, D-N.Y., and Trade Subcommittee Chairman Sander Levin, D-Mich, the bill also calls for improved enforcement of U.S. intellectual property rights, health and safety laws and other related trade issues.

“The American public is skeptical about U.S. trade policy in part because the public does not believe that our trading partners are playing by the same rules as the United States,” Chairman Rangel said. “Our trading partners need to open their markets to U.S. exporters. They need to stop providing trade-distorting subsidies, and to stop dumping their products in our market. They need to protect intellectual property rights, and they need to ensure that their exports to the United States are safe. The Trade Enforcement Act of 2008 will help to regain confidence in U.S. trade policy." (House Committee on Ways and Means Press Release July 17, 2008)


The bill’s primary objectives are aimed at:

· Combating counterfeiting and piracy;
· Improving import safety;
· Eliminating barriers to American exports;
· Restoring and enhancing U.S. trade remedies.

The proposed bill involves participation and coordination between U.S. Customs and Border Protection (CBP), the U.S. Trade Representative (USTR), Immigration and Customs Enforcement (ICE) and the trade. The bill creates several new positions, such as the Office of Congressional Trade Enforcer and provides resources for training and technology to carry out this mission.

Due to other priorities, the shorter congressional schedule and the potential desire for government agencies and members of the trade to review and provide input, it is unlikely that the bill be approved this year. However, this effort will set the stage for trade policy discussions when the new president takes office in 2009.

Click HERE to see the entire bill.
Click HERE to see a summary of the bill.

Customs Broker Exam Study Tip 3: Using Looseleaf and Bound HTSUS and Regulations

Let’s face it; the materials necessary to study for the Customs Broker Exam are burdensome. Who wants to carry around a bunch of big heavy books? While it’s possible to use online versions while studying, we don’t recommend that you make a habit of this practice. Why? Because you cannot use the online version of the Regulations or HTSUS on the day of the exam. You will also want to make notes in your materials and highlight key words, phrases and sections. Use the online versions after you’ve passed the exam or when you need a quick answer to a client question and you have the online version readily available.

Now that we’ve determined that printed versions are best, what are the options? There are three primary options, looseleaf, paperback (perfect binding) and coil bound.

Looseleaf
The looseleaf version is bulky; however, it can be easily updated when supplements are issued quarterly for the Regs and in summer for the HTSUS. The print is larger than other versions, making it easier to read. There is also more room for making legible notes in the margin. If you use the looseleaf version, make sure you purchase a good quality binder so the pages turn easily and do not fall out of the binder.

Looseleaf editions can also be used in a publication rack, which allows them to sit open on a desk. The pages tend to turn more easily with a publication rack, and the disadvantage of bulkiness is essentially negated. This makes publication racks a popular choice for exam day.

Paperback/Perfect Binding
The Regulations produced using perfect binding resemble smaller paperback versions of the loose-leaf version (The paperback HTSUS is the same size as the looseleaf). The cover is made from heavier paper and is glued together at the spine with strong flexible glue. These books are lighter and slightly less expensive than the loose-leaf versions; however, they cannot be updated. If you are going to use the book regularly and make notes in the book, these might not be the best options. However, if you are looking for a book that is easy to carry for quick reference, then the paperback edition would be an excellent choice

Coil-Bound
Coil binding is commonly used for publications that are frequently opened so that the pages lie flat or back-to-back. Generally, binding is accomplished by punching holes along the entire length of the spine of the page and winding a wire through the holes to provide a fully flexible hinge at the spine. Coil bound versions are smaller and more lightweight than their looseleaf counterparts are (they are the same size as the perfect-bound). Coil binding is similar to looseleaf; however, the pages cannot be removed and they cannot be updated.

For persons taking the exam, we suggest that you consider the looseleaf book or a coil bound version. Both books are sturdy and the primary differences relate to the ability to update the looseleaf version versus the ease of carrying the coil bound version.

Click HERE to view the various binding options for the CBP Regulations.

Customs Broker Exam Study Tip 2: Exam Study Aids

In our first study tip, we discussed the importance of obtaining all of the required resources that are necessary to take the exam. This study tip will focus on the various study aids and materials that will help you prepare for the exam.

The percentage of people who pass the Customs Broker Exam the first time is low, ranging from 3% to 25%. While it is possible to pass the Customs Broker Exam using only the required exam materials, most people find using a variety a supplemental materials and exam study courses significantly increases their potential of passing the exam. The use of additional study materials also improves comprehension and makes better use of limited study time.

Some people learn better by actually doing a task, while others need to read the instructions or hear the instructions. Determining your style of learning and how you learn the best is the key to studying for the exam. If you do not have time to go to lectures, you may prefer correspondence or online courses. If you comprehend better by hearing the information, you may prefer audio lectures or classroom instruction. You should seriously consider the time you have to commit to studying and your learning style when selecting study courses and training materials. We have listed just a few options for using supplemental study aids and courses here.

1. Past Exams
Taking the past exams is a good way to become familiar with the format and types of questions that appear on the test. Using past exams as a study aid also helps you learn the materials, boosts confidence, shows your progress, as well as areas that need improvement.

2. DVD's and CD's
If you want the convenience of learning at your own pace CD's and DVD's allow you to study from the comfort of your home or office and may be reviewed as often as you like. CD's provide audio which is great for listening to on your daily commute. The DVD's usually simulate a classroom environment but the advantage is that you can view the lectures at your convenience rather than commute to a class.

3. Online Study Courses
For students who want the convenience of studying at their own pace, online courses provide instruction, examples, quizzes and other tools that are usually available 24/7 and anywhere you have an Internet connection.

Boskage Commerce Publications offers a variety of courses, study plans and other materials designed to fit different learning styles, experience levels and needs of students. Click HERE to view a variety of materials and courses. Consider your learning style as you review each of these options. We sincerely believe you will find that one or a combination of several that fits your needs perfectly; however, we may be able to customize plans to fit your needs. Be sure to check out the Customs Broker Exam Room Guide, a perfect resource for regular study and use on test day. This coil bound book contains all CATAIR sections, Directives and miscellaneous resources that will be tested on the upcoming exam. The Guide also contains includes quick-reference fact sheets such as Incoterms, trade program indicators, types of appraisement, acronyms, CBP fees and more.

Stay tuned to the Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! The next article will provide the pros and cons of using the loose-leaf version of the CBP Regulations. We also welcome any suggestions on topics you would like to see discussed.

Customs Broker Exam Study Tip 1: Required Exam Resources

Now that you have made the decision to take the October Customs Broker Exam, it is important develop a study plan that guarantees your chances of success. Boskage wants to help you achieve your goal of passing the exam; therefore, we are starting a series of articles to support you on your journey to success! Our first topic in this series focuses on exam resources.

The first step in your plan should be acquiring the required texts and study materials. These materials come in two categories, “required” and “study aids”. Required materials are those that students must have because questions on the exam have been selected from these sources. CBP lists the required materials in the Notice of Examination. The required materials are listed below and you should obtain them now if do not already have them. All of the required materials can be purchased from Boskage Commerce Publications.

Required Exam Resources

1. Harmonized Tariff Schedule of the United States (2008 version - Supplement 1)

2. Title 19, Code of Federal Regulations (revised as of April 1, 2007 Parts 1 to 199) (no supplements)

3. Customs and Trade Automated Interface Requirements (CATAIR)

· Appendix B - Valid Codes
· Appendix D - Metric Conversion
· Appendix E - Valid Entry Numbers
· Appendix G - Common Errors
· Appendix H - Census Warning Messages
· Appendix L - Drawback Errors
· Glossary of Terms

4. Instructions for Preparation of CBP Form 7501 (8-30-2005)

5. C-TPAT - Minimum Security Criteria for Customs Brokers (3-20-2007)

6. Submission Changes for Supplemental Information Letters and Post Entry Amendments

7. CBP Directives

· 3510-004, Monetary Guidelines for Setting Bond Amounts
· Amendment to 3510-004 for Certain Merchandise Subject to Antidumping/Countervailing Duty Cases
· 3550-055, Instructions for Deriving Manufacturer/Shipper Identification
· 3550-067, Entry Summary Acceptance and Rejection
· 3550-079A, Ultimate Consignee at time of Entry or Release
· 3560-001A, Census Interface-Processing Procedures
· 5610-002A, Standard Guidelines for the Input of Names and Addresses Into Automated Commercial System (ACS) Files

Note: The use of any versions of the listed references other than those recommended is at the applicant's own risk.

Seeing this list of resources on paper and as a stack of documents on your desk can seem quite overwhelming, but don't worry. We’ll discuss organization of your materials in an upcoming article. Stay tuned to the Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! The next article will cover the second category of exam resources, the “Exam Study Aids”. We also welcome any suggestions on topics you would like to see discussed.