Wednesday, December 30, 2009

International Trade News Summary

GSP Extended
On December 28, 2009, the President signed
H.R. 4284 , which extends duty-free treatment under the Generalized System of Preferences (GSP) Program and Andean Trade Preference (ATPA) Program for one year through December 31, 2010. In addition, several countries will be added and removed from the Generalized System of Preferences.

• Maldives has been re-designated as a beneficiary country under GSP.
• Trinidad and Tobago’s designation as a beneficiary country under GSP will terminate January 1, 2010.
• Cape Verde will be removed from the list of least-developed beneficiary countries under GSP effective Jan. 1, 2010.
• Croatia and Equatorial Guinea will lose their designation as beneficiary developing countries under effective Jan. 1, 2011.



First Sale Rule Not Heavily Used
The U.S. International Trade Commission (USITC) reports that approximately 2.4% of U.S. imports were valued using the "first sale rule" to determine transaction value of the goods. Because of CBP’s proposal to change the way import calculations are made to determine transaction value from the first sale to the last sale, the USITC was charged with conducting a review of the use of the first sale methodology. Although some of the most frequent users include textile, apparel, and footwear importers, some importers used "first sale" when no duties would be paid.

Use of the "First Sale Rule" for Customs Valuation of U.S. Import is available for review on the ITC’s web site. The ITC conducts investigations and independent analyses on specific issues, but makes no recommendations concerning policy.


CPSC – Give and Take
While some children’s products were temporarily postponed from the independent testing requirements and companies were given a little flexibility to meet the new lead requirements, the CPSC also fined a company
$1.25 Million for violating the lead paint ban. Click HERE to read more about the requirements of the Consumer Product Safety Improvement Act.

Monday, December 28, 2009

Trade Compliance New Year's Resolutions


Don't forget about our first monthly blog contest. We have already received some great responses!


Submit your New Year’s Resolutions related to trade compliance to wizard@boskage.com by 12:00 PM EST December 31, 2009.Winners will be notified via email by January 6, 2010. A list of the top answers and the names of the winners will be published in the blog on January 7, 2010.


Prizes
1st Place - $75 Amazon.com Gift Card
2nd Place - $50 Amazon.com Gift Card
3rd Place - $25 Amazon.com Gift Card

Monday, December 21, 2009

Section XVIII of the HTSUS


Thank you for joining us for our series on classification. Two weeks ago, we explored the articles contained in Section XVII of the HTSUS. Today, we will study the various commodities covered in Section XVIII of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Answer to Section XVII Question
Classify a hubcap used on a Ford Focus.
Answer: 8708.70.6045


Section XVIII covers Chapters 90 through 92, which consist of optical, photographic, measuring, medical apparatus, clocks, musical instruments, and parts of these products. Some of these goods may be subject to FDA and FCC regulations.

Chapter 90 covers a wide variety of equipment such as lenses, eyeglasses, telescopes, movie cameras, photocopiers, x-ray machines and gauges, as well as parts of these articles. Chapter 90 Note 2 provides details about how to classify "parts and accessories" for the products in this chapter. Chapter 90 contains a large number of articles, which are subject to the rigorous registration, and approval process of the FDA. Equipment with radio frequency capabilities must be accompanied by the FCC 740.

Chapter 91 covers clocks, watches, parking meters, watchbands, and other parts. Commercial invoices for products of this chapter require additional information. Additional U.S. Note 4 sets forth the special country of origin marking requirements. Generally, CBP considers the country of origin of a clock or watch to be the origin of its movement, not the country in which it was assembled. Special provisions are allowed for watches and clocks assembled in insular possessions. Classification of watches and clocks is a little more difficult than some of the other chapters.

Chapter 92 covers the importation of stringed instruments, keyboards, woodwinds, percussion, electrical instruments, music boxes and whistles. Toy instruments are excluded from this chapter.


Question:
Classify a collapsible music stand for use with a violin

Join us next week for the answer to this week’s classification question and a discussion of Section XIX of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to wizard@boskage.com

Thursday, December 17, 2009

Trade Compliance New Year's Resolutions



Welcome to our first monthly blog contest. In keeping with the spirit of the season, we invite our readers to submit their New Year’s Resolutions related to trade compliance. Remember, a resolution is a commitment made to a project designed to produce improvement or other advantageous result.

Prizes
1st Place - $75 Amazon.com Gift Card
2nd Place - $50 Amazon.com Gift Card
3rd Place - $25 Amazon.com Gift Card

Entries must be submitted to
wizard@boskage.com by 12:00 PM EST December 31, 2009.

Winners will be notified via email by January 6, 2010. A list of the top answers and the names of the winners will be published in the blog on January 7, 2010.

Wednesday, December 16, 2009

House Passes Extension for GSP & ATPA

The U.S. House of Representatives approved H.R. 4284, to extend the Generalized System of Preferences (GSP) and the Andean Trade Preference Act (ATPA) for one year, until December 31, 2010. The Senate is also expected to approve this extension before the break. The programs will expire on December 31, 2009 unless legislative action is taken.

The trade should follow these trade programs in 2010, as discussion by the House indicated that significant reform of these trade programs will be discussed in 2010.

Tuesday, December 15, 2009

Trade Terms Tuesday

Welcome to Trade Terms Tuesday! Each Tuesday, we share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports, and one for logistics/transportation. This week, we continue with the I’s.


Intermodal
The use of more than one mode of transportation for a journey. A container may be shipped by multiple modes such as ocean, rail and truck.



Intellectual Property
Term that describes inventions or other discoveries that have been registered with government authorities for the sale or use by their owner. Intellectual property rights are the ownership of the right to possess, otherwise use or dispose of products created by human ingenuity.


Intent to Deny (ITD) Letter
A letter informing the license applicant:(a) Of the reason for BIS's decision to deny a license application; and(b) That the application will be denied 45 days from the date of the ITD letter, unless the applicant provides, and BIS accepts, a reason why the application should not be denied for the stated reason.

Monday, December 14, 2009

Boskage Announces Monthly Contest


Each month Boskage Commerce Publications will post a question on the Boskage Trade News Blog, offering a prize based on the question. Deadlines for answers and prizes may vary from month-to-month. Generally, prizes will be offered for the top three answers or first three correct answers, depending on the type of question. Prizes and instructions for entering the monthly contest will be announced with each question. Boskage employees and their relatives are not eligible. Stay tuned for the first question coming on December 17th!

Friday, December 11, 2009

Trade Compliance News

10 + 2 Enforcement Begins January 26, 2010

Mark your calendars! Full enforcement of the 10 + 2 Importer Security Filing (ISF) starts on January 26. On Tuesday, at the Trade Symposium, Acting Commissioner Ahern stated that the least punitive informed compliance mechanisms such as warning letters and increased inspections for ISF violations would be used in the beginning. CBP doesn’t want to hold the cargo hostage, and they don’t necessarily want your money – they want the data. Supply the data and you get the cargo. The clock is ticking and the trade has had a year to prepare for the full implementation. It can take anywhere from 30 to 60 days to initiate the changes necessary to produce the required information, so if you haven’t started or are not actively participating, don’t delay.


New: Import Safety Commercial Targeting and Analysis Center (CTAC)

The CTAC is a new CBP facility designed to streamline and enhance federal efforts to address import safety issues. In addition to the focus on preventing terrorism and crime, another goal is to protect our citizens from unsafe products. With the increased incidents of lead based paint in toys and tainted food found in imports from China and other countries, safety of imported goods has become more important. The CTAC will be staffed by approximately 30 employees from the various participating agencies, including CBP, ICE, FDA, FSIS and CPSC.


Annual Report for Counterfeit Goods Seizures Published

Last week, U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement announced that in fiscal year 2009 they made 14,841 seizures of counterfeit and pirated goods with a total domestic value of $260.7 million. Goods from China accounted for the largest amount seized by country and footwear was the top commodity seized. Not only does the importation of counterfeit goods cause economic harm, but these goods also pose safety concerns. Three of the top ten categories of commodities seized also posed possible safety or security risks. Check out the report and various statistics online.


BIS Proposes Elimination of Most Paper Documents

On December 4, 2009, the Federal Register published a proposal by the BIS to eliminate the use of most paper documents sent to parties doing business with the agency. The documents affected by the proposed rule include:

· Export and Reexport Licenses
· Notices of denial of License Applications
· Notices of Return of a License Application without Action
· Classification Results
· License Exception AGR Notification Results
· Encryption Review Request Results.

The proposed rule would require modifications to the EAR and make changes to the recordkeeping requirements. Comments on the proposal must be received by BIS no later than February 2, 2010.

Wednesday, December 9, 2009

CBP Trade Symposium 2009 - Wednesday Update

On Tuesday afternoon, CBP kicked off the 2009 Trade Symposium for attendees in Washington and the inaugural webcast. On Tuesday, attendees heard good news that CBP will use informed compliance mechanisms such as warning letters and increased inspections for ISF violations starting on January 26, 2010. Acting Commissioner Ahern stated CBP would be using the least punitive methods when the full compliance phase begins. On Wednesday, this was repeated by Richard DiNucci. He also stated that CBP would be looking for evidence of progress in the implementation of ISF during the flexible enforcement period as one of the primary mitigating factors. CBP doesn’t want to hold the cargo hostage, and they don’t necessarily want your money – they want the data. Supply the data and you get the cargo. Instead of using the catch phrase from the movie Jerry McGuire - "show me the money" the new phrase for CBP should be "show me the data."

The first glitch for those attending by webcast came before the session on International Property Rights Enforcement. The webcast disappeared into cyberspace, so we missed the IPR and ISA presentations. The good news is that the ISA presentation is available on the CBP web site.

Fortunately, those of us attending by webcast were able to rejoin the live sessions starting with the keynote address by Jane Holl Lute. Next came a lively and informative presentation on C-TPAT. Key takeaways from this session include the following:

· The C-TPAT member’s responsibilities do not end after validation.
· One of the biggest reasons violations occur is that procedures were in place and NOT followed.
· It’s not over when the cargo crosses the border. A large number of violations occur in transit from the border to the final destination.
· Technology is great, but you must know how to use it
· The most commonly breached criteria are conveyance, container, business partner and personnel security.
· The highest contributing factor for breaches is internal conspiracy.
· The most frequent location of compromise is in transit from the border.
· For those with procedures in place, those procedures were not followed in 83% of the incidents.
· If you have procedure and they aren’t followed, CBP will suspend you.
· The presentation contained a great list of best practices for carriers.


To wind up the day, we heard about ISF from a variety of perspectives including representatives from importers, shippers, carriers, trade associations and brokers. A lot of great information was presented by each speaker. One comment about ISF recordkeeping caught the Wizard’s attention. The comment was made that there was no mention of recordkeeping in the ISF rule, but the trade should consider keeping related documentation for five years. CBP addresses this same issue in the
ISF FAQs, but uses a little stronger language to encourage maintenance of the records.

“The new regulations do not contain specific record keeping requirements other than retention of powers of attorney (see 19 CFR 149.5(c)). However, ISF parties should retain records necessary to demonstrate compliance with ISF filing requirements. In addition, the general 19 U.S.C. § 1508 recordkeeping requirements may be applicable to the ISF filer.”

One could also argue that 19 CFR 163.1 (a) and the Appendix to Part 163 imply that all records may not be specifically listed, but if they are related to an importation, they should be maintained. We’d like to hear your thoughts on maintaining records for 10+2 filings. The Wizard would maintain them. Better safe than sorry! Along with "show me the data" we can add "show me the records."

We’ll see you out in cyberspace for the last day of the symposium on Thursday. Kudos to CBP for the stellar organization for this year’s event and to the speakers for the insightful and informative presentations

Tuesday, December 8, 2009

Trade Terms Tuesday


Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports, and one for logistics/transportation. This week, we continue with the H’s.

House Air Waybill (HAWB)
The house air waybill is issued by a freight forwarder for air freight shipments.Bills of lading are contracts between the owner of the goods and the carrier. The HAWB contains all the information found on an air waybill such as description, quantity and weight. This document is a contract between the shipper and freight forwarder.

Harmonized Tariff System (HTS)
The Harmonized Tariff System (HTS) is an international system for classifying goods to determine tariffs on imported goods. At the international level, the HTS contains 22 Sections with 97 chapters. The U.S. version has two additional chapters. The sections generally cover a specific industry such as food, chemicals or machinery. Although the U.S. uses 10 digits for import transactions, the HTS is identical internationally to the first six digits. Along with the country of origin, the HTS number determines the duty rate for imported merchandise. The addition of the suffixes by the U.S. allows specific data to be transmitted to Census for analysis.

HOLD WITHOUT ACTION (HWA)
A designation placed on an export license to review the exporter’s application or shipment under consideration. License applications may be held without action only in the limited circumstances described in §750.4(b) of the EAR.

Monday, December 7, 2009

Section XVII of the HTSUS

Thank you for joining us for our series on classification. Last week, we explored the articles contained in Section XVI of the HTSUS. Today, we will study the various commodities covered in Section XVII of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Section XVI Question
Classify a hydraulic accumulator used on a forklift truck.
Answer: 8479.89.9865

See NY D83615

Section XVII covers Chapters 86 through 89 consisting of railway locomotives, vehicles, aircraft, ships, boats and parts of the foregoing articles. Pay special attention to Section Note 2, which explains that “parts” and parts and accessories for certain articles found in this section are not, classified in this section. For example, a switch used in a an airplane is a part/accessory of the plane, but is not classified as such because Section Note 2(f) states that electrical goods are not classifiable as parts to articles in this section. Section Note 3 provides guidance for classifying parts that fit into more than one heading; the principal use of the part will determine classification.

Chapter 86 covers locomotives, track fittings and fixtures and rail containers. Some articles in this chapter may require compliance with the regulations of the
Federal Railroad Administration (FRA).

Chapter 87 includes a wide variety of vehicles, including cars, fire trucks, motorcycles, bicycles and wheelchairs. Pay special attention to the definition of tractor found in Chapter Note 2. Chapter Note 4 and U.S. Note 2 provide guidelines for classification of bicycles. Products of this chapter may be required to comply with the regulations of the DOT, EPA and CPSC. New or used motor vehicles and specified parts must be accompanied by a completed
HS-7 form from the DOT. Bicycles are regulated by the CPSC. EPA regulates emission standards. Not all "parts" of vehicles are classified in Chapter 87. For example, engines used in vehicles are classified in Chapter 84.

Chapter 88 covers gliders, airplanes, spacecraft, helicopters and flight simulators. Products of this chapter may be required to comply with the regulations of the FAA and EPA.

Chapter 89 pertains to ships, yachts, pleasure boats, rafts and buoys. Chapter Note 1 provides instructions for classifying hulls and other vessels not having the essential character of any specific vessel. Products of this chapter may be required to comply with the regulations of the U.S. Coast Guard. Customs must be notified of the date of arrival of all foreign-built pleasure boats.


Question:
Classify a hubcap used on a Ford Focus.

Join us next week for the answer to this week’s classification question and a discussion of Section XVIII of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to wizard@boskage.com

Friday, December 4, 2009

Ask the Wizard: Are Gifts Duty-Free?


Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week, we had a timely question about gifts.

Question
Do I have to pay duties on gifts sent to me by relatives in France? Who pays duty for gifts that I send them?

As we enter the season of shopping and gift-giving, this is an excellent question for us to discuss. If your friends and family send gifts from foreign countries, such as France, you will be able to receive them duty free if the value of the gift does not exceed $100. If one box contains gifts for more than one person, each recipients name must be marked on the package. The outer carton or wrapping must be marked with the fair retail value and description of the contents, such as shoes, sweaters, shirts , etc.. The package should also state that the contents include gifts.

Example of correct marking of a gift package.

To: Mary Smith
123 Main Street
Anywhere, USA 10001

Contents: Gifts
Chocolate Candy $10 USD
Women’s Wool Sweater $35 USD
Ceramic Dog Figurine $15.00


Note: The duty exemption for gifts does not apply to "gifts" mailed to oneself or mail-ordered from the United States.

CBP does not collect any duty on exports; however, there may be restrictions on exporting certain articles and exporting to certain countries. Value, documentation and allowable items vary from country to country. The foreign country's government determines duty requirements for imports into their country. Contact the embassy for the recipient's country to obtain information about what goods may be sent to their country, and what their duty exemptions are for gifts. Some of the carriers also provide information about the requirements for other countries.

Now that you are equipped with
CBP requirements for imports and exports, send those packages to your friends and family overseas and sit back and wait to receive a few packages from your loved ones. The Wizard is watching the mailbox and listening for the doorbell in anticipation of the arrival of those gift packages!

Wednesday, December 2, 2009

Sleeping Giant Awakens - Has First Meal!


With so much focus and worry over the potential ISF penalties set to become effective in 2010, many importers may have forgotten about the Lacey Act. Well, the sleeping giant awakened with a ravenous appetite, which it promptly satisfied by taking a bite out of an importer in Tennessee.

Administered by the USDA’s Animal and Plant Health Inspection Service (APHIS), the Lacey Act combats trafficking in “illegal” wildlife, fish and plants. The Lacey Act requires submission of a
declaration at the time of import for a wide variety of products such as live plants, lumber, paper, products containing plant material such as furniture, tools, sporting goods, printed matter, musical instruments and textiles. Importers are required to report the species of plant/wood, value, quantity and country of origin.

The sleeping giant (U.S. Fish & Wildlife) sunk its teeth into a manufacturer in Nashville, TN for its first known meal. According to press reports, federal officials were looking for evidence that the company is using illegally harvested wood imported from Madagascar, which is prohibited under the Lacey Act. FWS agents seized wood, products, computers and electronic files. The company is known for its environmental sustainability efforts and stated that it is fully cooperating with the Fish & Wildlife officials.

Penalties for violations of the Lacey Act range from forfeiture of goods to fines of up to $500,000. If the company or individual is found to have knowingly engaged in the trade of illegally sourced wood, prison time could be imposed.

Although it is early in the investigation, this should be a wake up call for all importers concerning the importance of maintaining, reviewing and verifying the sourcing arrangements involving products regulated by the Lacey Act. The giant may be full from that first feast, but it will soon be ready for another meal. Don’t let it feast on your company. Click
HERE to learn more about the Lacey Act requirements.

Tuesday, December 1, 2009

Trade Terms Tuesday



Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the G’s.

Gantry Crane
A gantry crane lifts heavy objects by a hoist and is usually mounted on a frame or structure spanning an intervening space and often travels on rails or rubber tires. Gantry cranes are especially suited for lifting heavy objects such as ships' engines.


Gray Market Goods
Gray market goods are foreign-made articles bearing a genuine trademark or trade name identical with, or substantially indistinguishable from, one owned by a United States person or a corporation which are imported without the authorization of the U.S. holder. The marks are genuine and authorized by the trademark owner, but only for use for sale in a country other than the United States.


General Prohibitions
The General Prohibitions summarize the obligations of exporters under the EAR. Part 736 of the Export Administration Regulations lists 10 General Prohibitions describing certain exports, reexports and other conduct that are prohibited without a license or license exception.

Monday, November 30, 2009

Section XVI of the HTSUS

Thank you for joining us for our series on classification. Last week, we explored the articles contained in Section XV of the HTSUS. Today, we will study the various commodities covered in Section XVI of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Answer to Section XV Question
Classify a brass showerhead
Correct Answer: 7418.20.1000

Additional Information: NY R01416

As one of the largest sections of the HTSUS, Section XVI covers Chapters 84 and 85 consisting of machinery, mechanical appliances and electronics. This section and the two chapters it contains can be very confusing, even for experienced classification specialists. Pay close attention to the exclusions found in the Section Notes, especially 1 (g) for parts of general use.

Many of the parts for the machines classified in Chapters 84 and 85 are also specifically found in these chapters. For example, a hydraulic pump might include a solenoid valve. Should the valve be classified as a hydraulic pump part under 8413.91.9050 or as a solenoid valve under 8481.80.9005? According to GRI 1 and Section XVI Note 2(a), the valve should be classified in its respective heading even if it is a part of a pump. Products in this section, specifically Chapter 85, may require compliance with FCC guidelines.

Easily one of the largest chapters in the HTSUS, Chapter 84 covers a wide variety of machinery, equipment and parts. Articles of this chapter include engines, pumps, forklifts, hand power tools, calculators, computers, valves, bearings and other products. Certain commodities, such as bearings, require extra detail on the commercial invoice. Commodities requiring additional information are found in 19 CFR 141.89.

Chapter 85 covers a wide variety of equipment powered by or involving the use of electricity. Products include electric motors, batteries, appliances, lighting, hair dryers, telephones, radios, switches, light bulbs and miscellaneous parts. The Chapter and Statistical Notes provide explanations of various electrical products such as printed circuits, integrated circuits, transceivers and others.

Note: Significant changes were made to Chapters 84 and 85 in January 2007. If you are reviewing CBE tests or binding rulings issued prior to 2007, you may find some discrepancies in HTS numbers.

Section XVI Question
Classify a hydraulic accumulator used on a forklift truck.


Join us next week for the answer to this week’s classification question and a discussion of Section XVII of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to
wizard@boskage.com

Wednesday, November 25, 2009

Happy Thanksgiving!


The staff at Boskage Commerce Publications wishes you a Happy Thanksgiving! In keeping with the spirit of the holiday and to have a little fun, we would like to invite you to share the things you are thankful for as a trade compliance professional. We’ll start the list with a few suggestions. The Wizard will compile and post them for everyone to view next week.

Trade Compliance Professionals are thankful for:

1. A job.
2. A day off
3. Not being selected for an audit

Tuesday, November 24, 2009

Trade Terms Tuesday

Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the F’s.

Free on Board (FOB)
The Incoterm Free on Board means the seller completes his obligations when the goods have been cleared for export and have passed over the ship’s rail. The buyer is responsible for all costs and risks of loss or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term should only be used on ocean shipments; however, it is often used for other modes of transportation.

Foreign Trade Zone (FTZ)
Foreign Trade Zones are special commercial and industrial areas, in or near ports of entry where foreign and domestic merchandise, including raw materials, components and finished goods, may be brought in without being subject to payment of customs duties. Merchandise brought into these zones may be stored, sold, exhibited, repacked, assembled, sorted, graded, cleaned or otherwise manipulated prior to re-export or entry into the customs territory.


Foreign Person
A foreign person is any person resident outside the United States or subject to the jurisdiction of a country other than the United States. A "person" is any individual, branch, partnership, association, associated group, estate, trust, corporation or other organization. Specifically, a foreign person is:


· A foreign person is any natural person who is not a lawful permanent resident of the U.S.
· Foreign corporations, business associations, partnerships, trusts, societies or any other entity or group that is not incorporated or organized to do business in the United States is treated as a foreign person.
· International organizations, foreign governments and any agency or subdivision of a foreign government are treated as foreign persons.

Monday, November 23, 2009

Section XV of the HTSUS

Thank you for joining us for our series on classification. Last week, we explored the articles contained in Section XIV of the HTSUS. Today, we will study the various commodities covered in Section XV of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Section XIV Answer
Correct Answer: 7114.11.4500
See Chapter 71, Note 4(a); Section XV, Note 1(e)

Section XV covers 12 chapters containing base metals and articles of base metals. Notice that not all articles made of metal are classified in this section. For example, metal furniture is found in Chapter 94. It is important to read all of the section and chapter notes. The section notes list articles excluded from classification in these chapters. For example, Section Note 3 lists the base metals. Section Note 5 describes an alloy of base metals as being classified by the metal, which predominates by weight over each of the other metals. Pay close attention to Section Note 2, which defines parts of general use. These items are generally capable of having multiple functions not specific to any one machine and are called parts of general use. Most of the goods covered in this section do not require any special approval from other government agencies. There are some exceptions for metal articles used for food service such as metal cooking utensils. Some chapters contain articles subject to antidumping and countervailing duties.
Chapter 72 covers primary materials of iron and steel, including non-alloy and alloy steel. This chapter does not cover finished goods, which are found in Chapter 73. Some items in this chapter require special steel licensing. See http://ia.ita.doc.gov/steel/license/ for additional information concerning the steel licensing process.

Chapter 73 covers iron and steel products such as pipes, fittings, fasteners and miscellaneous articles. Some articles entered under 7301 through 7307 may require a mill analysis providing percentages by weight of the elements, such as carbon, found in the article. Articles in this chapter require special steel licensing. See
http://ia.ita.doc.gov/steel/license/ for additional information concerning the steel licensing process.

Chapter 74 covers copper articles such as plates, tubes, fasteners, pots, house wares and plumbing supplies. This chapter also includes brass and bronze articles.

Chapter 75 covers nickel and articles of nickel such as wire, tubes, fittings and miscellaneous articles.


Chapter 76 contains aluminum and articles such as plates, pipes, kitchenware, hardware and other articles.

Chapter 77 has been reserved for future use and does not currently contain any Chapter Notes or HTSUS numbers.

Chapter 78 covers lead and articles of lead such as plates, tubes, fittings and miscellaneous articles.

Chapter 79 contains zinc and articles of zinc such as sheets, tubes, fittings, gutters and miscellaneous articles

Chapter 80 covers tin and articles of tin such as plates, strips, pipes, fittings and household articles.

Chapter 81 covers base metals not specified elsewhere such as tungsten, molybdenum, magnesium, cobalt, titanium and articles made of these base metals.

Chapter 82 contains metal hand tools such as gardening tools, wrenches, hammers, cutlery, razors and scissors. With the exception of articles for use with food products regulated by the FDA, products of this chapter do not require any special licensing, permits or documentation. See 19 CFR 134 for special marking requirements for certain tools. The Statistical Notes provide guidance on proper reporting of pieces in a set. Duty on sets of 8206, 8211 and 8215 is determined by the article in the set that carries the highest duty rate.

Chapter 83 covers miscellaneous metal articles such as keys, mountings for furniture, office accessories, nameplates and caps.

Question:
Classify a brass showerhead

Join us next week for the answer to this week’s classification question and a discussion of Section XVI of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to wizard@boskage.com

Friday, November 20, 2009

Ask the Wizard: Where Can I Find Antidumping Information?



Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week, we had an interesting question about identifying goods subject to antidumping and/or countervailing duties.

Question:
How can I find out if my product is subject to antidumping and/or countervailing duties since the HTSUS does not provide this information?


Wow, this is a great question with a variety of solutions. If you are familiar with the classification process, you know that the Harmonized Tariff Schedule published by the United States International Trade Commission does not provide a list of HTS numbers that are subject to ADD or CVD cases. So, where is this information hiding? Is it some big secret? No, it is just a matter of doing a little detective work to find what you need. Brokers have the ability to obtain information by using ABI to query antidumping/countervailing duty cases by case number, International Organization for Standardization (ISO) country code or tariff number. Thus, our first option is to ask our broker to query ABI and provide a list.

The International Trade Administration and International Trade Commission have made the job easier by publishing a couple of useful lists on their websites. The lists can be accessed using either the ITA or the USITC websites. The
first list, which is actually found on the USITC website, consists of an Excel spreadsheet that contains the case numbers, order dates, products and countries. The nice thing about this list is that it is short and can be sorted to find cases by country or product. If you need more detail about a case, then the second option, published by the ITA, allows you to search by country. Click on the country and then the product to obtain more detail.

These are a few of the quick ways to find out which products require antidumping and countervailing duties. In fact, Boskage has just developed an advanced HTSUS research tool at www.bcpsource.com, which (among many other helpful tools) brings all of these antidumping elements together in an easy-to-use format. Click here to sign up for a free trial!

Although most of our processes are moving to the electronic environment, the spreadsheet is an excellent quick reference tool to get you started. There is another option; however, we would NOT recommend that you try this one. You can stick your head in the sand, pretend your product isn't subject to antidumping and wait for CBP to send you a bill. With all of the better options we provided, there is no longer any need to hide from antidumping or countervailing issues.

Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” The Wizard will be enjoying a long Thanksgiving weekend next Friday, so look for the next question and answer session on Friday December 4th.

Wednesday, November 18, 2009

Promoting U.S. Exports

In April, U.S. Trade Representative, Ron Kirk, stated that “an aggressive effort to keep trade flowing and open more markets to American goods and services absolutely must be a big part of our economic recovery here at home. To get our economy back on track, we need to increase exports.” This article shares some of the efforts to encourage exports and stimulate the economy.

Ex-Im Bank
The Export-Import Bank of the United States raised the upper limit of its small business multi-buyer export credit insurance policy from $ 5,000,000 to $7.5 million. This change is designed to allow more small businesses to export their goods and services more easily. Effective December 1, U.S. exporters designated as small businesses under Small Business Administration standards, and with annual export credit sales of $7.5 million or less, will be eligible for enhanced coverage under Ex-Im Bank’s short-term small business multi-buyer insurance policy. Click
HERE to learn more about the Ex-Im Bank and other programs launched during the past year to increase support for small business exporters trying to survive the during the current economic crisis.


U.S. Commercial Service
The U.S. Commercial Service (USCS), a division of the International Trade Administration within the U.S. Department of Commerce, provides a variety of opportunities to assist U.S. exporters sell overseas and help overseas buyers learn about U.S. exports.

· The USCS helps U.S. small and medium sized businesses grow international sales by providing:
· Online and customized market research.
· Support for U.S. exhibitors in selected overseas and domestic trade shows to attract qualified business partners.
· Fee-based programs to introduce exporters of U.S. products to qualified buyers and distributors.
· Individualized counseling and advocacy.
· Training programs on subjects such as export documentation, export controls and the basics of exporting.

Click
HERE to learn more about the U.S. Commercial Service.


Export.gov

Export.gov brings together resources from 19 U.S. Government Agencies to assist American businesses in planning their international sales strategies and succeeding in today’s global marketplace. Using these government resources, providing market research and trade leads Export.gov helps American exporters navigate the international sales process and avoid pitfalls such as non-payment and intellectual property misappropriation. Launched by Export.gov, Exports Live is an 8-city seminar tour designed for small and medium-sized businesses wanting to start or grow their international sales with government solutions. Speakers from the SBA, Department of Commerce, Ex-Im Bank and various exporters provide strategies used by local small and medium-sized businesses that have already discovered how to increase profitability through exporting.

Click
HERE for other export news and training opportunities sponsored by Export.gov.

Tuesday, November 17, 2009

Trade Terms Tuesday


Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports, and one for logistics/transportation. This week, we continue with the E’s.

Edge Protector
The edge protector is an angle piece fitted over the edge of boxes, crates, bundles and other packages to prevent the pres­sure from metal bands or other types from cutting into the package.

Explanatory Notes
The Explanatory Notes provide an explanation, chapter-by-chapter; heading-by- heading, of what CBP intends to be covered by the various sections, chapters, and headings in the HTSUS. Explanatory Notes are not part of the legal system; however, they do represent the views of classification experts.

End-user
The end-user is the person abroad that receives and ultimately uses the exported or reexported items. The end-user cannot be a forwarding agent or intermediary, but may be the purchaser or ultimate consignee.

Monday, November 16, 2009

Section XIV of the HTSUS

Thank you for joining us for our series on classification. Two weeks ago, we explored the articles contained in Section XIII of the HTSUS. Today, we will study the various commodities covered in Section XIV of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Section XIII Answer
Correct Answer: 6913.10.5000

See: NY G81399

Section XIV covers just one chapter. Chapter 71 contains precious and semi precious stones, precious metals, pearls, diamonds, stones, silver and gold jewelry. Products of this chapter may require special marking Importers of goods in this chapter should spend time reading the Chapter Notes and Explanatory Notes. Chapter Note 4 defines the precious metals as silver, gold and platinum. Chapter Note 9 defines jewelry as any small object of personal adornment or article normally carried on the person such as rings, bracelets, necklaces, earrings, tiepins, compacts and pill boxes. The Explanatory Notes to Chapter 71 makes clear that "cladding" and "plating" are two distinct processes of applying a metal to another surface.

Question
What is the correct classification for a platinum plated, sterling silver set of silverware, which contains a dozen each of forks, knives and spoons?

Join us next week for the answer to this week’s classification question and a discussion of Section XV of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to wizard@boskage.com

Friday, November 13, 2009

Ask the Wizard: Required Compliance Tools



Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week we had an excellent question about the publications that CBP requires brokers and importers to maintain.

Question:
Are U.S. importers required by Customs law to have a desktop copy of the U.S. Customs explanatory notes? If not, in a case of a customs audit will customs look to see if you have a copy for the purpose of reasonable care?


When dealing with import compliance, the answers are almost never quite as simple as “yes” and “no.” The CBP Regulations (19 CFR) do not require importers to maintain copies of the Explanatory Notes or other government publications; however, it is important for importers to have access to tools that will help them fulfill their responsibilities and demonstrate reasonable care. Additionally, a CBP audit requires importers to answer questions that indicate what resources are used and how they are used. Ask yourself this question. If CBP asked you to demonstrate how classification of a specific product was determined, how would you explain the process and what documentation would you provide? The Wizard might discuss this in another article if anyone is interested.

The types of tools importers maintain depend on the complexity and volume of transactions. For example, a low volume importer that only imports two products may not need to purchase the Explanatory Notes. However, an importer with hundreds of products and classifications or products identified as difficult to classify is more likely to need the Explanatory Notes, along with the HTSUS, access to binding rulings and other CBP publications. Remember, the importer has the ultimate responsibility for the accuracy for classifications, even if they use a broker. Another issue to consider is how the tools are used. It would be worse for an importer to purchase a copy of the Explanatory Notes, put them up on a shelf, and never use them, than to not have them at all. Consider the volume of imports, complexity of classifications, available resources, procedures and other factors. Don’t forget the other tools that are available.
  • Code of Federal Regulations Title 19 (19 CFR)
  • Harmonized Tariff Schedule of the U.S (HTSUS)
  • Dictionaries and Reference Books
  • Internet Access
  • Procedures
  • Customs Rulings

While it is not mandatory that importers have all of these tools, use of them helps demonstrate reasonable care and compliance. They also make employee's jobs easier, and increase productivity and accuracy.

Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” See you next Friday!

Thursday, November 12, 2009

Coming Soon: FDA “PREDICT”

The U.S. Food and Drug Administration “FDA” will soon launch the Predictive Risk-based Evaluation for Dynamic Import Compliance Testing “PREDICT." PREDICT, the new risk-based screening system for imports, replaces the admissibility screening function of the current system, OASIS. PREDICT will improve screening and targeting of higher-risk shipments for examination. It will also expedite the clearance of lower-risk cargo, but only if accurate and complete data are provided by importers and entry filers. This means that importers and brokers need to work together to ensure the most accurate data is provided. Submissions containing poor quality or missing data will increase the likelihood of an FDA exam.

In addition to PREDICT, entry filers will be able to use the Import Trade Auxiliary Communications System “ITACS” to check the status of individual entries, submit documents and link them to specific entries.

Click HERE to see a schedule of PREDICT Import Trade Community Outreach Events.

Wednesday, November 11, 2009

CBP News


1. CBP 2009 Trade Symposium

The 2009 Trade Symposium is scheduled for December 8 – 10, 2009. Click HERE to view the symposium topics and schedule. Registration for the conference is currently full, but CBP is offering the option to attend by webcast. For only $35, participants will be able to view and interact online.


2.
Updated ABI Software Vendors List

CBP updated its ABI Software Vendors List on 11/9/2009. This list contains the company name, address, phone number and email contact information along with the types of services provided. U.S. Customs and Border Protection (CBP) only collects the information and does not provide any endorsements as to the nature, extent or quality of the services that may be provided.


3.
American Recovery & Reinvestment Act Funds

Check out updates on how CBP is using the funds received from American Recovery and Reinvestment Act (ARRA). CBP appropriated $420 million for constructing 24 new land ports of entry, primarily along the northern border and making repairs to existing land ports.


4.
CBP Announces New Intellectual Property Bonds

U.S. Customs and Border Protection has established new bond options for intellectual property rights (IPR) owners. The owners will use this bong to obtain samples of imported merchandise suspected of violating a copyright, trade name or trademark registered by the IPR owner. IPR owners may use either a continuous or single transaction IPR sample bond. A continuous IPR sample bond has the advantage of covering multiple IPR sample transactions, across all ports of entry with a single bond and reduces the administrative burden for CBP to track single transaction IPR bonds.


5. C-TPAT Enforcement & Appeal Process

This new document provides an overview of the reasons for suspending or removing C-TPAT members from the program. Members may be immediately removed for aggravated circumstances such as providing false information or intentionally disregarding the program’s requirements. For lesser violations, members may be suspended and provided with an opportunity to comply with the requirements in order to resume active membership.

Once a security related incident or other program violation occurs, C-TPAT officials determine the appropriate next steps on a case-by-case basis. To be reinstated into the program after an incident or violation, the company must agree to a corrective action plan that identifies specific objectives and periods within which those objectives should be reached. In addition, the company must consent to un-announced visits by C-TPAT staff to monitor progress. In the case of a failed validation, the company must demonstrate that it has successfully addressed all vulnerabilities and complied with all other requirements before being fully reinstated.

Companies that are suspended or removed may appeal this decision to CBP HQ. CBP will decide the appeal in a timely fashion.


6. CBP Updates ISF FAQ

U.S. Customs and Border Protection (CBP) recently updated its "Frequently Asked Questions" document on Importer Security Filing (ISF). The document contains new information about liquidated damages, duplicate filings, Instruments of International Trade (IIT), empty containers and garments on hangers. Information about bill of lading numbers, bonds, progress reports and U.S. Goods Returned has been updated.

Tuesday, November 10, 2009

Registration Open For CBP Trade Symposium Webcast

Registration for the 2009 CBP Trade Symposium Webcast is now open. Click HERE to register. This is the first time the annual trade symposium has been offered via webcast. For only $35, participants will be able to view and interact online. Additionally, those who attend the live sessions or purchase the live webcast will receive a 30-day on-demand free access to view the general sessions and all eight breakout sessions. This is an excellent opportunity for trade professionals to attend a fantastic information-packed event at a minimal expense. Thank you, CBP! Click HERE to view the symposium topics and schedule.

The Wizard is registered, are you?

Trade Terms Tuesday


Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the D’s.


Demurrage
Sometimes used interchangeably with “detention,” demurrage refers to the extra charges incurred because of the excess time taken for loading or unloading cargo. These charges are used to help offset the costs incurred because of the additional time used to unload the container when the container could have been used for other purposes.

Dual Invoicing
A dual invoicing system results in submission of one invoice for CBP entry purposes reporting lower prices than those actually paid for imported merchandise. This allows the importer to understate the value and under pay the duties. Another invoice containing the higher amount is submitted to the importer for payment.

Dual Use
Items that have both commercial and military or proliferation applications are classified as dual use. An item that satisfies more than one purpose at any given time could be considered dual use. For example a global positioning system that serves military purposes can also be utilized to benefit non-military commercial interests. BIS regulates dual use items.

Monday, November 9, 2009

How Safe Is Your Office?

On Saturday, the front page of our local newspaper contained not only the news of the tragic shooting in Texas, but another shooting in an office in Orlando, Florida. While the investigation in Texas is ongoing, the Florida incident stemmed from the shooter being fired by his employer two years ago. My first thought was sadness for the lives cut short and sympathy for the loved ones they left behind. After those thoughts came the question about the safety of our own offices.

Most of you reading this blog are involved in some type of international compliance and likely work for a C-TPAT compliant company, so your offices must be secure, right? According to your procedures, your company states that they may search vehicles and requires all visitors to sign in, but are these procedures followed? Several years ago disgruntled employee shot his supervisor at a company where I worked and the company had excellent security policies. Could an angry ex-employee gain access to your facilities? Now, I’m not suggesting that every business install metal detectors to screen for guns and knives, but I am suggesting that we might take a closer look to see if we are practicing what our procedures say we are. If we don’t have procedures in place yet, then it’s time to implement them. Along the same lines, does your company have any procedures for identifying employees who may pose a danger to others? Again, I’m not suggesting that we sit around and scrutinize our co-workers. Hey, we all have some little quirks, but what is the policy for handling someone who demonstrates an unusual temper or shows signs of substance abuse?

Spend some time reviewing your current procedures. Even better, try testing them. Send an unknown person into your facilities and see how far they get before being stopped by an employee. Ask random employees how they would handle an employee suspected of substance abuse or who showed violent behaviors. Review the results, analyze the risk potential for incidents of violence in your workplace and modify or create procedures as necessary. Not only will these precautions protect your company’s most important assets, the employees, but they will improve your C-TPAT compliance!

Note: We will return with our weekly study of the HTS next Monday.

Friday, November 6, 2009

Ask the Wizard: When & Where Brokers Work


Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week, we had an excellent question about when and where brokers work.

Question:
Where can I find a job working for a broker and what kind of hours can I expect to work?

Customs brokers generally work in offices located in large cities that have CBP offices and at border crossing areas. There are 327 official ports of entry in the United States and 15 Preclearance offices in Canada and the Caribbean. When possible, brokers tend to locate their operations close to CBP offices and/or airport facilities to expedite the clearance process. Click
HERE to review a list of CBP ports by state.

Depending on the location and type of job, most brokers work standard daytime hours; however, brokers may be on call 24 hours a day in some areas where CBP operates 24 hours a day, seven days a week. For example, the express couriers such as FedEx, UPS and DHL operate 24 hours a day and have CBP employees on site at designated hours. Many of those CBP officers work at night to clear packages so they can be delivered the next day; therefore, the broker must work at night. Volunteering for the night shift can be a great opportunity to gain experience. Determine the type of schedule you’d like to have and the location where you’d like to live. Then check out the brokers, forwarders, importers and other companies that may hire licensed brokers. Do research by checking out these sites. Key in various combinations of job titles and locations to provide more options.

Indeed.com
Monster.com
Jobsinlogistics.com

Industry organizations such as the International Compliance Professional Association (ICPA) and the National Customs Broker and Forwarders Association of America (NCBFAA) are good sources for general information, job opportunities and networking.

Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” See you next Friday!

Wednesday, November 4, 2009

CBE Appeal Checklist

If you are one of those who missed passing the exam by just a few questions, you may be thinking about appealing your exam score. If you appeal your CBP Exam score, it is important to follow CBP’s appeal instructions. You will find a link to a checklist at the end of this article.

Appeals must be filed within 60 days of the date of the letter notifying the applicant of the score. 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)

The most frequent question we hear is “when will CBP notify me if they accept my appeal?” Unfortunately, there is no magic answer for that question. People who have shared their experiences lead us to believe that you may not receive an answer before the date of the next exam. However, CBP tries to notify those who have had their appeals approved prior to the exam. This could be frustrating because if your appeal is approved, it may not be necessary for you to take the next exam. However, if your appeal is not approved, you may want to take the next test while the information is still fresh.

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.

Tuesday, November 3, 2009

Trade Terms Tuesday


Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the C’s.

Container Freight Station “CFS”
A CFS is a bonded warehouse facility used by carriers to load LCL cargo into containers or unload imported LCL cargo from containers. This is normally done when the container has more than one delivery location. The cargo is unloaded from the containers and delivered to the final destination.

Court of International Trade “CIT”
The CIT is a Federal court with jurisdiction to hear cases against the United States arising from Federal laws governing import transactions. The court hears antidumping, classification, and countervailing duty matters as well as appeals of unfair trade practice cases from the International Trade Commission. Established in 1890 the court has principal offices located in New York City. The judges are appointed for life by the President, subject to Senate confirmation.

Country Chart

Located in Supplement 1 to Part 738 for the EAR, the country chart contains licensing requirements based on destination and “reason for control. Maintained by BIS, the Commerce Country Chart allows users to determine whether a license is required for items on the CCL.

Monday, November 2, 2009

Section XIII of the HTSUS

Thank you for joining us for our series on classification. Last Monday, we explored the articles contained in Section XII of the HTSUS. Today, we will study the various commodities covered in Section XIII of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Section XII Answer
6505.90.8090
Q36 October 2009 CBE
Q34 April 2002 CBE


Section XIII covers Chapters 68 - 70 containing articles of stone, cement, ceramic and glass. There are no Section Notes; however, CBP provides quite a few Informed Compliance publications on glassware. Some of the articles contained in these chapters may be subject to FDA requirements for lead content.

Chapter 68 contains building stone, marble, slate, roofing, plasterboard, cement blocks, tiles and other products made of stone. The Additional U.S. Notes to Chapter 68 provide specifications for slabs and tiles. Asbestos products may be prohibited from importation, so it would be a good idea to check with the EPA for specific prohibitions.

Chapter 69 covers household fixtures, kitchenware and other house wares of porcelain, china, earthenware and stoneware. For classification purposes, it will be necessary to determine the difference between porcelain, china and other ceramics. Chapter Note 5 explains the difference between porcelain, earthenware and bone china. Chapter Note 6 provides the pieces necessary to classify a set of dishes. The Explanatory Notes provide detail for distinguishing purely ornamental articles from those with a specific utilitarian purpose.

Chapter 70 contains glassware such as, safety glass, mirrors, jars, tableware, items for toilet, office and home use, and glass fibers. The Chapter Notes and Explanatory Notes provide additional explanation of glass terminology. It is important to be able to distinguish between tempered and safety glass. The Explanatory Notes distinguish the characteristics of the two.

Question:
A shipment contains 100 10-inch and 7½ inch decorative porcelain plates. The plates are packed in retail sets of one 10-inch plate and one 7 ½ inch plate per set. Each set is valued at $375. The plates are used as pictures or placed over cabinets. What is the correct classification of these plates?


Join us next week for the answer to this week’s classification question and a discussion of Section XIV of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to wizard@boskage.com

Friday, October 30, 2009

I Passed the Exam! What Happens Next?


Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week.

Question
I received notice that I passed the exam. What happens next?


After passing the exam, an application (CBP 3124) must be filed at the port where you want to transact customs business. The application must be accompanied by a $200 application fee, plus a fingerprint check and processing fee. The application must be filed within 3 years after passing the exam.

In addition to the initial fees, brokers are required to pay a yearly fee for each permit and provide a status report every three years. The list of fees brokers are required to pay is found in
19 CFR §111.96.

Each broker license applicant must undergo a background investigation that includes a fingerprint analysis and a review of character references, credit reports, and any arrest record. A CBP officer will contact you to set up a time to discuss your application. Arrests or convictions do not necessarily preclude the issuance of a license. It is better to tell the truth when asked because lying does not demonstrate the integrity and character required to obtain a license. The length of time it takes to complete the license application process can vary depending on multiple factors. Some of the factors include but are not limited to the number of different locations where the applicant has lived , the workload of the agent conducting the background investigation and the national security threat level. Do not get too discouraged because an application can take from 8 to 12 months to process. Try to relax and be happy that you have passed the exam!

Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” See you next Friday!

Thursday, October 29, 2009

Trade Promotion Coordinating Committee Outlines Export Priorities

The TPCC is an interagency task force that ensures the coordination and development of a government-wide export promotion plan and is made up of 20 government agencies. According to a press release from the Department of Commerce and information on the International Trade Administration’s web site, the Trade Promotion Coordinating Committee “TPCC” convened on October 23 to focus on measures designed to create jobs for Americans and stimulate U.S. exports. The TPCC members agreed to launch the following six working groups to help accomplish these goals.

1. Analysis and Data
The group will develop a better understanding of the relationship of jobs and exports and of the export potential of U.S. industry.

2. Small Business
The focus of this group is increasing the participation of small and medium-size businesses in exporting.


3. Emerging Markets
This group will be focused on developing outreach, major projects and trade missions to China, India and Brazil.


4. Developing Markets
This group will identify and coordinate efforts in other developing countries in Asia, Africa, the Middle East and South America that could benefit from market development assistance.

5. Clean Energy
The focus of this group will be on clean energy technology and services to create opportunities for U.S. companies to become leaders in this field.

6. Advocacy
This group will address issues like foreign competitive practices and provide increased advocacy abroad for U.S. companies competing for major infrastructure projects.

Wednesday, October 28, 2009

How the Flu Affects Business


We have all heard the warnings to take extra precautions to avoid getting the flu this year. Wash your hands. Get the flu shot. Flu season is just getting underway and already we have record setting cases of the flu reported. Is this the year that the U.S. will see a serious influenza pandemic that has the potential of crippling the workforce? People have struggled through the economy trying to hold on to their homes and jobs and now the flu threatens to keep them off work for a week or more. Make no mistake; the flu can keep a person sidelined for a long miserable week. Even then, it may take a few more days for them to recover their strength and get back to normal.

What are the options if employers do not want sick employees to come to work and risk infection to others and why are we writing about it on an international trade blog?

To provide opportunities that are more flexible for employees to remain productive while protecting the actual workplace, more employers are offering telecommuting options to employees. For example, a mother caring for a young child with the flu could work from home. This solution works well for everyone. The employee/mother can stay at home to take care of the child and continue to be productive. The employer is able to operate efficiently without worries of more employees becoming infected. Sounds like a great plan, right? Yes, telecommuting is a solution that benefits all parties; however, we must also plan for things that could disrupt our perfect solution. In an article on
Homeland Security Today, Anthony Kimery explains that the increased number of telecommuters could create congestion on the Internet, thus slowing communications. Internet providers are not equipped to handle the heavy traffic on residential lines, which could hinder the work performed by telecommuters. Kimery points out that the Department of Homeland Security has not developed a strategy to deal with the potential internet congestion that could delay essential communications. Hopefully, DHS, Internet providers, employers and the public will develop a plan that will make telecommuting a viable option without disrupting communication systems. In the meantime, the Wizard reminds you to drink orange juice, take your vitamins, get plenty of sleep, practice good hygiene and avoid close contact with sick people.

Tuesday, October 27, 2009

Trade Terms Tuesday


Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the B’s.

Break bulk Cargo
Break bulk cargo consists of goods that are shipped and not containerized, such as vehicles and large machinery.


Binding Ruling
A binding ruling is a written decision by CBP in response to a written request for a ruling by an importer or other party pertaining to classification, valuation or marking of merchandise.

Back-To-Back Letter of Credit
A back-to-back credit is created when an exporter holding an irrevocable Letter of Credit persuades the buyer's bank (the advising bank) to open a second credit in favor of the merchandise supplier. The two credits finance the same shipment and are identical in all respects, except that the supplier becomes the Beneficiary of the back-to-back credit. Also, the amount of the second credit is less than the original export credit to make up for the import agent's commission. Banks are reluctant to issue these letters of credit because of the increased risk with multiple parties.

Monday, October 26, 2009

Section XII of the HTSUS


Thank you for joining us for our series on classification. Last Monday, we explored the textile articles contained in Section XI of the HTSUS. Today, we will study the various commodities covered in Section XII of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve accuracy of your classifications.

Answer to Section XI Question

Classify a pair of infant’s 100% cotton woven ski mittens, which will be worn by a child whose body height is 68 cms.

Correct Answer: 6209.20.5050More Information: Chapter 61 Note 6(a) & (b)/ Chapter 62 Note 4(a) & (b)

Section XII covers Chapters 64 - 67 containing footwear, headgear, umbrellas and artificial flowers. There are no Section Notes; however, there are a few Informed Compliance Publications related to footwear and headgear.

Chapter 64 covers footwear such as ski boots, work boots, sandals, slippers, sports shoes and disposable footwear. Pay special attention to Chapter Note 2 that defines which parts are classified under the parts provision. Parts do not include pegs, protectors, eyelets, hooks, buckles, ornaments, braids or laces. Footwear products require the submission of the CBP 5523, Footwear Details Invoice. Subheading Note 1 defines sports footwear. Statistical Note 1 defines the requirements for work footwear.

Chapter 65 covers woven or knitted hats, helmets, headbands and visors. Products of this chapter must comply with the regulations of the DOT and CPSC. Review the Chapter Notes for a list of items that are excluded from classification in this chapter. Bicycle helmets must comply with CPSC standards; however, motor vehicle helmets require the submission of the HS-7 form.
Chapter 66 includes sun, garden and rain umbrellas and walking sticks. There are no prohibitions on the importation of products from this chapter, and no special licenses or permits are needed.

Chapter 67 covers feathers, down and articles of the foregoing, artificial flowers, plastic fruit and wigs. Products of this chapter may be subject to the regulations of FWS, USDA, DOC and CPSC. Articles subject to FWS review will require special documentation and clearance at a specially designated FWS port. Feathers and skins from some birds are strictly prohibited.

Question
What is the classification of a woven hat, does not contain braid and is 55% nylon, 45% wool?

Join us next week for the answer to this week’s classification question and a discussion of Section XIII of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to
wizard@boskage.com

Friday, October 23, 2009

Ask the Wizard: MSDS Documentation Requirements


Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week.

Question:
Does U.S. Customs require you that you file the MSDS (Material Safety Data Sheet) on shipments that require statement of use and TSCA?

This is an excellent question. While the CBP Regulations do not specifically mandate submission of the MSDS form by name, there are other avenues CBP can use to request it. One way is by the use of the CBP 28, Request for Information. The CBP 28 is used as an informal method for CBP to request and review import records.

Under OSHA's Hazard Communication standard
(29 CFR 1910.1200), chemical manufacturers, importers and distributors must provide material safety data sheets (MSDSs) for hazardous chemicals they are supplying to other distributors and employers. According to 29 CFR 1910.1200(c), an importer is defined as the first business with employees within the Customs Territory of the United States which receives hazardous chemicals produced in other countries for the purpose of supplying them to distributors or employers within the United States

According to
29 CFR 1910.1200(g)(6), chemical manufacturers or importers must:

· Ensure distributors and employers are provided with an MSDS with their initial shipment of a hazardous chemical, and with the first shipment after an MSDS is updated.

· Provide MSDSs with the shipped containers or send them to the distributor or employer prior to or at the time of the shipment.

· If the MSDS is not provided with a shipment that has been labeled as a hazardous chemical, the distributor or employer must obtain an MSDS from the chemical manufacturer or importer as soon as possible.

· Provide distributors or employers with an MSDS upon request.

29 CFR 1910.1200(g)(7) requires that:

· Distributors ensure that MSDSs and updated information are provided to other distributors and employers with their initial shipment of a hazardous chemical and with the first shipment after an MSDS is updated.

· Distributors either provide MSDSs with the shipped containers or send the MSDSs to the other distributor or employer prior to the shipment.

· Retail distributors selling hazardous chemicals to employers having a commercial account must provide an MSDS to such employers upon request and must post a sign or otherwise inform them that an MSDS is available. (Note: A commercial account is demonstrated by a retail distributor selling hazardous chemicals to an employer, generally in large quantities over time and/or at costs that are below the regular retail price.)

· Wholesale distributors selling hazardous chemicals to employers over-the-counter provide MSDSs upon the request of the employer at the time of the over-the-counter purchase, and must post a sign or otherwise inform these employers that an MSDS is available upon request.

· If an employer without a commercial account purchases a hazardous chemical from a retail distributor not required to have MSDSs on file (i.e., the retail distributor does not have commercial accounts and does not use the materials), then the retail distributor must provide the employer, upon request, the name, address, and telephone number of the chemical manufacturer, importer, or distributor from which an MSDS can be obtained.

· Wholesale distributors must also provide MSDSs to employers or other distributors upon request.

To bolster compliance in classification and ensure the form is readily available, it would be considered a good practice to request and maintain the MSDS information. While you do not need to physically maintain this information in your department, you should be able to access it easily. A good place to start would be with the purchase order and classification. When an order is placed for a product subject to the MSDS requirement, the import compliance group has an opportunity to obtain the information at that time and classify the goods accordingly. Even if your department does not maintain the MSDS sheets, you can notate the location of the form and other identifiers with the classification information maintained by your department. Additionally, having the document readily available for submission to CBP will help expedite the release of your shipment in the event CBP wants to review the documents.

We look forward to hearing about our reader’s experiences with this topic!


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