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 (2009 version) (Supplement 1)
2. Title 19, Code of Federal Regulations (revised as of April 1, 2009) Parts 0 to140, 141 to 199 and 200 to End) (no supplements)
CBP added Part 200 to End for the April2009 Exam and there were five (5) questions from Part 351 on antidumping. Part 149 covering ISF was added to Title 19 this year, so it is a target for the upcoming October exam.
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. 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.
The Wizard is taking a break from the weekly "Ask the Wizard" article. Check back next week when the Wizard answers one of the questions submitted by our readers.
Friday, July 31, 2009
Thursday, July 30, 2009
CBP Space Trivia
Did you ever wonder why General Note 3(e)(iv) exempts articles returned from space? Could it be related to the return of Apollo 11 and the Customs Declaration required of the astronauts upon arrival in Hawaii? On July 24, 1969, customs inspectors at Honolulu, Hawaii filled out a general declaration form for the Neil Armstrong and the crew of Apollo 11. Note that the space travelers list a moon rock and moon dust as cargo.
In 1984, §484a was added to the Tariff Act of 1930 to exempt articles returned from space from entry if certain conditions were met. However, this provision appears to only apply to articles that were taken from the customs territory of the U.S. and returned, not articles that were taken from space, such as the moon rocks. If moon rocks and moon dust were imported and subject to entry,where would they be classified? How would they be valued? What is the duty rate for articles from the moon?
Wednesday, July 29, 2009
Bill Proposes Withdrawal of NTR Treatment
On July 27, 2009, Thaddeus McCotter (R-MI), Chairman of the Republican House Policy Committee, introduced HR 3347. The bill would withdraw normal trade relations treatment (formerly MFN) from products of foreign countries that do not maintain acceptable standards of religious freedom and worker rights.
Cited as the Freedom Trade Act, McCotter said, “It will show all our potential partners throughout the world that the United States remains a beacon of freedom that will never forget Natan Sharansky’s warning that ‘How a government treats its own people cannot be separated from how that government could be expected to treat other countries.’”
The bill amends Title IV of the Trade Act of 1974 to impose Column 2 duty rates for products of foreign countries engaging in violations of religious freedom defined in 22 U.S. C. 6402 or restricting the freedom of workers to associate, organize and bargain collectively
Click HERE for additional detail on the proposed bill.
Cited as the Freedom Trade Act, McCotter said, “It will show all our potential partners throughout the world that the United States remains a beacon of freedom that will never forget Natan Sharansky’s warning that ‘How a government treats its own people cannot be separated from how that government could be expected to treat other countries.’”
The bill amends Title IV of the Trade Act of 1974 to impose Column 2 duty rates for products of foreign countries engaging in violations of religious freedom defined in 22 U.S. C. 6402 or restricting the freedom of workers to associate, organize and bargain collectively
Click HERE for additional detail on the proposed bill.
Tuesday, July 28, 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 N’s.
Non-Vessel Operating Common Carrier (NVOCC)
The NVOCC is a company providing international transport of goods although it does not necessarily operate or own transportation vehicles or equipment. The NVOCC is a cargo consolidator of small shipments in ocean trade, generally soliciting business and arranging for or performing containerization functions at the port. NVOCC’s contract with the shipper to move goods from the exporter’s premises to the importer’s premises. The NVOCC issues its own transport document although they will sub contract with other carriers.
Negligence
Negligence is violation that arises through a failure to exercise the degree of reasonable care expected from a person in the same circumstances. Generally, an import violation is negligent if it results from a failure to exercise reasonable care to ensure that information provided in connection with the importation of merchandise is complete and accurate, or failure to perform any material act required by regulation. A violation rises to gross negligence if done with actual knowledge or with wanton disregard of the relevant facts and with indifference to, or disregard for, the offenders' obligations. Negligence is more akin to making an honest mistake whereas gross negligence can be related to knowing the correct way to do something and ignoring it by doing something different.
Non-Disclosure Agreement
The NDA is an agreement between two or more parties not to disclose trade secrets, trade practices, business plans or any other proprietary or confidential information. Exporters often use NDA’s when working with confidential, export controlled information. The parties often require the inclusion of certain phrases about the restrictions to appear on the documentation subject to the NDA.
Non-Vessel Operating Common Carrier (NVOCC)
The NVOCC is a company providing international transport of goods although it does not necessarily operate or own transportation vehicles or equipment. The NVOCC is a cargo consolidator of small shipments in ocean trade, generally soliciting business and arranging for or performing containerization functions at the port. NVOCC’s contract with the shipper to move goods from the exporter’s premises to the importer’s premises. The NVOCC issues its own transport document although they will sub contract with other carriers.
Negligence
Negligence is violation that arises through a failure to exercise the degree of reasonable care expected from a person in the same circumstances. Generally, an import violation is negligent if it results from a failure to exercise reasonable care to ensure that information provided in connection with the importation of merchandise is complete and accurate, or failure to perform any material act required by regulation. A violation rises to gross negligence if done with actual knowledge or with wanton disregard of the relevant facts and with indifference to, or disregard for, the offenders' obligations. Negligence is more akin to making an honest mistake whereas gross negligence can be related to knowing the correct way to do something and ignoring it by doing something different.
Non-Disclosure Agreement
The NDA is an agreement between two or more parties not to disclose trade secrets, trade practices, business plans or any other proprietary or confidential information. Exporters often use NDA’s when working with confidential, export controlled information. The parties often require the inclusion of certain phrases about the restrictions to appear on the documentation subject to the NDA.
Monday, July 27, 2009
Parts & Accessories
Thank you for joining us for our series on classification. Last Monday, we discussed temporary importations. Today, we will explore the difference between parts and accessories.
Sometimes it is important to know whether the imported item is a “part” or “accessory” in order to properly classify the item. Some HTS provisions provide for parts and accessories, while others only provide for parts. The following information defines what CBP considers to be parts and what it considers to be accessories.
Parts Criteria
· It cannot be used on its own; or
· It must be combined with other articles to be used; or
· It is an integral, constituent or component part without which the article to which it is joined could not function; or
· It lends to the safe and efficient operation of the article; and
· It is identifiable by the shape or other characteristics as being an article solely or principally used as a part.
Accessory Criteria
· It may facilitate use or handling; or
· It may widen the range of use of the named article; or
· It may improve the operation of the main article; and
· It is not needed to enable the articles with which it is used to fulfill their intended function; and
· It is something nonessential but desirable that contributes to an effect or result.
Example: Trailer Cover
A polyester weather cover is imported for use in covering a metal bike trailer to keep rocks and other debris from injuring someone riding in the trailer or damaging the contents on the trailer. The trailer is classified in 8716.90.5060 which provides for trailers and parts thereof. The provision does not provide for accessories. The polyester cover is not considered a part of the trailer as the trailer can function without it and could be used on a wide range of applications.
Click HERE to read the CBP Ruling related to this example.
Join us next week as we tackle another challenging classification issue. If you have 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
Sometimes it is important to know whether the imported item is a “part” or “accessory” in order to properly classify the item. Some HTS provisions provide for parts and accessories, while others only provide for parts. The following information defines what CBP considers to be parts and what it considers to be accessories.
Parts Criteria
· It cannot be used on its own; or
· It must be combined with other articles to be used; or
· It is an integral, constituent or component part without which the article to which it is joined could not function; or
· It lends to the safe and efficient operation of the article; and
· It is identifiable by the shape or other characteristics as being an article solely or principally used as a part.
Accessory Criteria
· It may facilitate use or handling; or
· It may widen the range of use of the named article; or
· It may improve the operation of the main article; and
· It is not needed to enable the articles with which it is used to fulfill their intended function; and
· It is something nonessential but desirable that contributes to an effect or result.
Example: Trailer Cover
A polyester weather cover is imported for use in covering a metal bike trailer to keep rocks and other debris from injuring someone riding in the trailer or damaging the contents on the trailer. The trailer is classified in 8716.90.5060 which provides for trailers and parts thereof. The provision does not provide for accessories. The polyester cover is not considered a part of the trailer as the trailer can function without it and could be used on a wide range of applications.
Click HERE to read the CBP Ruling related to this example.
Join us next week as we tackle another challenging classification issue. If you have 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, July 24, 2009
Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week, we have another questions about brokers.
Question:
Why do people become licensed customs brokers?
Becoming a licensed customs broker can require a lot of hard work; however, obtaining a license can provide several benefits such as
Question:
Why do people become licensed customs brokers?
Becoming a licensed customs broker can require a lot of hard work; however, obtaining a license can provide several benefits such as
· Increased knowledge of the HTSUS and Regulations.
· Increased value to an employer.
· Improved chances of promotion to certain positions.
· Opening doors to other positions outside of working for a customs broker.
· Allowing people to open their own customs brokerage office.
The education and experience is priceless and no one can take them away from you. The Wizard took the exam many years ago for the challenge, educational benefits, as well as the promotion and earning potential. The investment of time and money was worth it!
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, July 22, 2009
Cell Phones: An Employer's Dilemma
If cell phones were used only for making phone calls, the employer’s dilemma would not be quite as difficult as it has now become. However, cell phones are used for Internet access, text messaging, photos, email and the occasional phone call. Since nearly every employee has a personal or company-issued cell phone, the use of these devices creates headaches related to productivity, privacy, safety and legal issues.
Cell phones have become indispensable tools for today's workforce. While these devices provide productivity benefits, they also pose new risks to organizations. It's becoming increasingly important for today's employers to implement effective cell phone use policies, both to limit liability and improve safety. Other than the most obvious risks, why should exporters be more concerned about the use of cell phones on the job?
The U.S. Government restricts the release of the following information to foreign nationals in the U.S. and abroad through export regulation and embargoes:
• critical technologies,
• technical data/software code,
• equipment,
• chemicals/biological materials, and
• other materials, information and services
Penalties for violating export control regulations include fines, loss of export privileges, personal liability and damage to the organization’s reputation.
Still unsure why exporters should care about cell phones in the office? Let’s define what constitutes an export. Exports include the following:
• Shipment of a controlled item or good
• Transmission (including fax, digital or hand-carried) of controlled information related to a controlled item
• Release or disclosure (including verbal or visual) of any controlled technology, software or technical data either in the U.S. or abroad
• Use or application of controlled technology on behalf of, or for the benefit of, any foreign person or entity, either in U.S. or abroad
• Exports can occur when you provide foreign persons “access” to technical information. For example, by hosting a visitor, hiring a consultant, using outside legal/translation services, giving tours of your business, making presentations, participating in casual conversations and sending emails, faxes, etc.
• Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad
• Transmission (including fax, digital or hand-carried) of controlled information related to a controlled item
• Release or disclosure (including verbal or visual) of any controlled technology, software or technical data either in the U.S. or abroad
• Use or application of controlled technology on behalf of, or for the benefit of, any foreign person or entity, either in U.S. or abroad
• Exports can occur when you provide foreign persons “access” to technical information. For example, by hosting a visitor, hiring a consultant, using outside legal/translation services, giving tours of your business, making presentations, participating in casual conversations and sending emails, faxes, etc.
• Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad
Get the picture? If not, think about your employees taking the picture of confidential business documents. That’s right! Many cell phones have cameras that could be used to take pictures of restricted data. Get the message? Think about the emails or messages that may be stored on that phone. What if that phone is taken on a plane destined to a foreign destination and having it inspected and/or seized by a foreign customs organization?
Now that we have the big picture, what should the employer do? The answer to that question is complex and must take a variety issues into consideration, such as the type of business, information employees have access to, ownership of the phones, use of phones, type of phones, etc.
Although many companies already have confidentiality and privacy policies in place, we’ve provided a few suggestions for consideration.
· Employees need to be aware and acknowledge in writing that they’re not allowed to take pictures and send them to? sales contacts, technical personnel, etc. without going through your office’s documented compliance procedure.
· Visitors should not be given access to goods or information that is subject to export controls unless cell phones have been checked in by Security or the visitors are escorted and informed that photography is prohibited.
· Foreign visitors should not be allowed the use of cell phones or other photographic or recording equipment while touring a facility.
· Visitors should not be given access to goods or information that is subject to export controls unless cell phones have been checked in by Security or the visitors are escorted and informed that photography is prohibited.
· Foreign visitors should not be allowed the use of cell phones or other photographic or recording equipment while touring a facility.
For company issued cell phones, the following actions can be taken to protect cell phones and company information.
· Install and configure additional security controls such as encryption, remote content erasure, firewall, antivirus, intrusion detection, anti-spam and virtual private network (VPN) software
· Back up data frequently
· Install user authentication, content encryption and other available security facilities
· Use remote password reset and locking .
· Install controls to restrict application downloads, access and use.
· Establish controls to restrict camera, microphone and removable media use.
· Inform employees that company issued phones are company property and are subject to search at any time.
· Back up data frequently
· Install user authentication, content encryption and other available security facilities
· Use remote password reset and locking .
· Install controls to restrict application downloads, access and use.
· Establish controls to restrict camera, microphone and removable media use.
· Inform employees that company issued phones are company property and are subject to search at any time.
Tuesday, July 21, 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 M’s.
Marine Insurance
Marine insurance compensates the owner of goods transported by air or sea in the event of loss or damage that cannot be recovered from the carrier. Losses may include fire, shipwreck, piracy, inclement weather and various other causes.
Merchandise Processing Fee (MPF)
The MPF is a fee assessed for formal entries based on 0.21% of the invoice value, with a minimum of $25 per formal entry and a maximum of $485.
Munitions List (USML)
The U.S. Munitions List contains a list of articles, services and technology determined to be defense-related pursuant to the Arms Export Control Act. These articles fall under jurisdiction of the Department of State. The USML is found in Part 121 of Title 22, Foreign Relations, of the Code of Federal Regulations (CFR). Any article, service or related data found be on the USML requires an export license.
Marine Insurance
Marine insurance compensates the owner of goods transported by air or sea in the event of loss or damage that cannot be recovered from the carrier. Losses may include fire, shipwreck, piracy, inclement weather and various other causes.
Merchandise Processing Fee (MPF)
The MPF is a fee assessed for formal entries based on 0.21% of the invoice value, with a minimum of $25 per formal entry and a maximum of $485.
Munitions List (USML)
The U.S. Munitions List contains a list of articles, services and technology determined to be defense-related pursuant to the Arms Export Control Act. These articles fall under jurisdiction of the Department of State. The USML is found in Part 121 of Title 22, Foreign Relations, of the Code of Federal Regulations (CFR). Any article, service or related data found be on the USML requires an export license.
Monday, July 20, 2009
Temporary Importations (TIB)
Thank you for joining us for our series on classification. Last Monday, we discussed classification of clocks. Today, we will explore one of the methods of importing goods duty-free using Chapter 98 of the HTSUS.
One of the most frequently asked questions by importers is whether there is some way to import their goods without paying duty. In certain circumstances, there may be a way, but to take advantage of the free provisions, it’s important for importers and brokers to know those options, usually found in Chapter 98 of the HTSUS. Chapter 98 covers U.S. Goods Returned, Goods Assembled Abroad with U.S. Components, Government Importations, Samples and more. Traditionally, this section has been the most ignored in the study of classification and this is a mistake. For qualifying products, the special provisions usually provide some alternative to the normal payment of duties. Let’s look at one of the duty-free alternatives.
Is there a way to import an article that is not going to remain in the country without having to pay duty?
Temporary Importation under Bond (TIB) is a procedure that allows merchandise to be entered duty-free for a limited time. Merchandise entered under a TIB cannot be sold, but can be repaired, altered, or processed. Not all merchandise can be entered under a TIB. Merchandise must fit into one of the provisions in the HTSUS under 9813 and any relevant Chapter Notes. Importers must post a bond guaranteeing the payment of duties in the event the merchandise is not exported. Generally, goods entered under a TIB may remain in the US for a period of one (1) year, plus a maximum of two (2) one-year extensions. Thus, the goods may remain in the U.S. a maximum of three years. Importers must be able to show proof of exportation and provide CBP with advance notice of export, in case they decide to inspect the outbound merchandise. Regulations for TIB's are found in 19 CFR 10.31 to 10.40. Some of the items subject to temporary importation privileges include the following.
· 9813.00.05 - Articles to be repaired, altered or processed, or manufactured
· 9813.00.10 - Models of women's wearing apparel
· 9813.00.15 - Articles imported by illustrators and photographers
· 9813.00.20 - Samples solely for use in taking orders for merchandise
· 9813.00.25- Articles solely for examination with a view to reproduction
· 9813.00.30 - Articles intended solely for testing experimental or review purposes
· 9813.00.35 - Automobiles, motorcycles, bicycles, airplanes, boats, etc imported by nonresidents for use in races or other contests
· 9813.00.40 - Railroad equipment for emergency services
· 9813.00.45 - Containers for compressed gases
· 9813.00.50 - Professional equipment, tools of trade imported by or for nonresidents
· 9813.00.55 - Articles of special design used in connection with the manufacture of articles for export
· 9813.00.60 - Animals for breeding, exhibition or competition and the usual equipment
· 9813.00.70 - Works of fine arts imported by professional artists, lecturers or scientists for use in exhibition, promotion and encouragement of art or science
· 9813.00.75- Automobiles and parts for show purposes
Join us next week as we tackle another challenging classification issue. If you have 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
One of the most frequently asked questions by importers is whether there is some way to import their goods without paying duty. In certain circumstances, there may be a way, but to take advantage of the free provisions, it’s important for importers and brokers to know those options, usually found in Chapter 98 of the HTSUS. Chapter 98 covers U.S. Goods Returned, Goods Assembled Abroad with U.S. Components, Government Importations, Samples and more. Traditionally, this section has been the most ignored in the study of classification and this is a mistake. For qualifying products, the special provisions usually provide some alternative to the normal payment of duties. Let’s look at one of the duty-free alternatives.
Is there a way to import an article that is not going to remain in the country without having to pay duty?
Temporary Importation under Bond (TIB) is a procedure that allows merchandise to be entered duty-free for a limited time. Merchandise entered under a TIB cannot be sold, but can be repaired, altered, or processed. Not all merchandise can be entered under a TIB. Merchandise must fit into one of the provisions in the HTSUS under 9813 and any relevant Chapter Notes. Importers must post a bond guaranteeing the payment of duties in the event the merchandise is not exported. Generally, goods entered under a TIB may remain in the US for a period of one (1) year, plus a maximum of two (2) one-year extensions. Thus, the goods may remain in the U.S. a maximum of three years. Importers must be able to show proof of exportation and provide CBP with advance notice of export, in case they decide to inspect the outbound merchandise. Regulations for TIB's are found in 19 CFR 10.31 to 10.40. Some of the items subject to temporary importation privileges include the following.
· 9813.00.05 - Articles to be repaired, altered or processed, or manufactured
· 9813.00.10 - Models of women's wearing apparel
· 9813.00.15 - Articles imported by illustrators and photographers
· 9813.00.20 - Samples solely for use in taking orders for merchandise
· 9813.00.25- Articles solely for examination with a view to reproduction
· 9813.00.30 - Articles intended solely for testing experimental or review purposes
· 9813.00.35 - Automobiles, motorcycles, bicycles, airplanes, boats, etc imported by nonresidents for use in races or other contests
· 9813.00.40 - Railroad equipment for emergency services
· 9813.00.45 - Containers for compressed gases
· 9813.00.50 - Professional equipment, tools of trade imported by or for nonresidents
· 9813.00.55 - Articles of special design used in connection with the manufacture of articles for export
· 9813.00.60 - Animals for breeding, exhibition or competition and the usual equipment
· 9813.00.70 - Works of fine arts imported by professional artists, lecturers or scientists for use in exhibition, promotion and encouragement of art or science
· 9813.00.75- Automobiles and parts for show purposes
Join us next week as we tackle another challenging classification issue. If you have 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, July 17, 2009
Protest Filing Period
Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week’s question is related to a post entry process.
Question:
Our company has a procedure that states the protest period is 180 days from the date of liquidation, but 19 CFR 174.12 state that protests must be filed within 90 days of liquidation. Which one is correct?
Excellent question! You have a sharp eye. This difference could be quite confusing for someone trying to decide whether it was too late to file a protest or for someone studying for the Customs Broker Exam.
HR 1047—Miscellaneous Trade and Technical Corrections Act of 2004, enacted in December 2004, was responsible for this change. Among other things, Sec. 2103 of the Act amends 19 U.S.C. 1514 extended to the time frame in which a protest may be filed from 90 days to 180 days after the date of liquidation or reliquidation or the date of the decision being protested. A protest cannot be submitted before liquidation; however, it must be received by CBP within 180 days of liquidation or reliquidation, or all rights to a potential refund are forfeited. The Wizard does not know why the CFR has not been updated to reflect this change, but you can always refer to HR1047 Sec 2103 as support for the change from 90 days to 180 days. CBP has not asked a question concerning the protest period on the Customs Broker Exam since this change took effect; however, persons studying for the exam should make note of these differences in the copy of the regulations used for 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!
Question:
Our company has a procedure that states the protest period is 180 days from the date of liquidation, but 19 CFR 174.12 state that protests must be filed within 90 days of liquidation. Which one is correct?
Excellent question! You have a sharp eye. This difference could be quite confusing for someone trying to decide whether it was too late to file a protest or for someone studying for the Customs Broker Exam.
HR 1047—Miscellaneous Trade and Technical Corrections Act of 2004, enacted in December 2004, was responsible for this change. Among other things, Sec. 2103 of the Act amends 19 U.S.C. 1514 extended to the time frame in which a protest may be filed from 90 days to 180 days after the date of liquidation or reliquidation or the date of the decision being protested. A protest cannot be submitted before liquidation; however, it must be received by CBP within 180 days of liquidation or reliquidation, or all rights to a potential refund are forfeited. The Wizard does not know why the CFR has not been updated to reflect this change, but you can always refer to HR1047 Sec 2103 as support for the change from 90 days to 180 days. CBP has not asked a question concerning the protest period on the Customs Broker Exam since this change took effect; however, persons studying for the exam should make note of these differences in the copy of the regulations used for 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!
Wednesday, July 15, 2009
HTSUS NOTICE: July Supplement Now A Reprint
The U.S. Government Is Releasing a Reprint of the HTSUS
Typically, summer is when the International Tariff Commission (ITC) issues a supplement to the Harmonized Tariff Schedule of the US (HTSUS). However, due to the February enactment of the US Peru Free Trade Agreement (UPFTA), nearly every page of the HTSUS will be affected.
As a result, the book will be reprinted.
HERE'S WHAT BOSKAGE IS DOING ABOUT IT FOR OUR SUBSCRIBERS
To accommodate such an unusual situation, we are presenting our subscribers with three options.
1) Purchase the Paper Summer Reprint At A Special PriceWe don't anticipate the majority of our clients will need the Peru-focused paper summer reprint. However, we recognize that this will be an important edition for importers and brokers who do business with Peru.Therefore, we are making a limited edition printing of the Peru-focused paper summer reprint available to our customers at the reduced price of $77.2) New HTSUS Reprint FREE on CD-ROMWe are committed to providing you with up-to-date information. If you purchased a 2009 HTSUS from us and still want all the update info (but don't want all that additional paper), we offer a new, FREE, updateable, hyperlinked, searchable CD-ROM.
3) Do Nothing
We understand if you don't find the Peru-focused paper summer reprint is relevant to your situation. If that's the case, you can ignore this message.
NOTE: According to the Notice of Examination for the Customs Broker License Exam, the reprint will not be needed for the October Exam.
You can order the limited-edition summer reprint here.
Call us if you are a Boskage subscriber and want a free disc, or if you have any questions: 888-880-4088.
Exporters Share Commodity Classifications
Companies can make information about their products available via the Bureau of Industry and Security (BIS) web site. The purpose of this service is to improve transparency in the licensing process and to assist exporters in complying with U.S. export and re-export control laws. Company information posted to the BIS webpage is for informational purposes only. BIS does not validate the data and is not responsible for the accuracy of the classification information. Inclusion of the company information on the webpage does not signify BIS endorsement of any company, its employees or its products or services.
Click HERE to review the current list.
If your company currently has, or plans to have, Commodity Classification information available on your company’s website, or an export control point of contact, and you would like this information to be accessible via the BIS website, send an email to: CommodityClassifications@bis.doc.gov. Include any of the following information you would like to be posted on the BIS website:
1. Company name
2. General description of the products/services
3. Commodity classification information website address
4. Export control point of contact (may be a general telephone number or email address)
Click HERE to review the current list.
If your company currently has, or plans to have, Commodity Classification information available on your company’s website, or an export control point of contact, and you would like this information to be accessible via the BIS website, send an email to: CommodityClassifications@bis.doc.gov. Include any of the following information you would like to be posted on the BIS website:
1. Company name
2. General description of the products/services
3. Commodity classification information website address
4. Export control point of contact (may be a general telephone number or email address)
Tuesday, July 14, 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 L’s.
Less than Container Load (LCL)
LCL is the designation for cargo that does not meet the criteria for a full container based on quantity or weight. Since the cargo does not fill the container, it is combined with cargo belonging to another consignee to make a full container for shipping.
Liquidation
Liquidation is the final review by CBP of an entry. The date of liquidation starts the 180-day clock for filing protests. Unless an entry is subject to suspension or extension of liquidation or manual intervention, the entry will liquidate on the 314th day after entry. Liquidation closes the entry unless post-entry issues are pursued or fraud is suspected.
License Exception
Subject to certain conditions, a License Exception is an authorization that allows export without a license of items subject to the Export Administration Regulations that would otherwise require a license. The license exemptions are signified by three-letter symbols such as GBS, LVS and TMP. A license exception may depend on the nature of the item being exported, the country of ultimate destination, the end-use or end-user, or other circumstances surrounding the export. License exceptions are found in Part 740 of the EAR.
Less than Container Load (LCL)
LCL is the designation for cargo that does not meet the criteria for a full container based on quantity or weight. Since the cargo does not fill the container, it is combined with cargo belonging to another consignee to make a full container for shipping.
Liquidation
Liquidation is the final review by CBP of an entry. The date of liquidation starts the 180-day clock for filing protests. Unless an entry is subject to suspension or extension of liquidation or manual intervention, the entry will liquidate on the 314th day after entry. Liquidation closes the entry unless post-entry issues are pursued or fraud is suspected.
License Exception
Subject to certain conditions, a License Exception is an authorization that allows export without a license of items subject to the Export Administration Regulations that would otherwise require a license. The license exemptions are signified by three-letter symbols such as GBS, LVS and TMP. A license exception may depend on the nature of the item being exported, the country of ultimate destination, the end-use or end-user, or other circumstances surrounding the export. License exceptions are found in Part 740 of the EAR.
Sunday, July 12, 2009
Classification of Clocks & Watches
Thank you for joining us for our series on classification. Last Monday, we discussed the NAFTA Tariff Shifts. Today, we will explore the classification of clocks and watches.
Chapter 91 covers the importation of clocks, watches, parking meters, watchbands and other parts. Commercial invoices for products of this chapter require additional information. Chapter Note 3 defines the term "watch movements." The Additional U.S. Notes provide additional information on the types of watches. 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. Looking at the many options can be intimidating. The key to conquering this beast is to learn the difference between clocks and watches and make sure you have the information needed on the commercial invoice. Click HERE to view two tables summarizing the classification of clocks andwatches. The first chart shows the products and specifications required to classify an article as a watch. Note that watches are designed to be worn or carried on the person and fall into two headings, 9101 and 9102. Also note the size of the movement, the width, length and diameter. Clocks can be classified in one of three potential headings and also have size requirements.
For additional information, check out CBP’s Informed Compliance Publication: Classification and Marking of Watches and Clocks.
Join us next week as we tackle another challenging classification issue. If you have 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.
Chapter 91 covers the importation of clocks, watches, parking meters, watchbands and other parts. Commercial invoices for products of this chapter require additional information. Chapter Note 3 defines the term "watch movements." The Additional U.S. Notes provide additional information on the types of watches. 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. Looking at the many options can be intimidating. The key to conquering this beast is to learn the difference between clocks and watches and make sure you have the information needed on the commercial invoice. Click HERE to view two tables summarizing the classification of clocks andwatches. The first chart shows the products and specifications required to classify an article as a watch. Note that watches are designed to be worn or carried on the person and fall into two headings, 9101 and 9102. Also note the size of the movement, the width, length and diameter. Clocks can be classified in one of three potential headings and also have size requirements.
For additional information, check out CBP’s Informed Compliance Publication: Classification and Marking of Watches and Clocks.
Join us next week as we tackle another challenging classification issue. If you have 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, July 10, 2009
A Day in the Life of a Broker
Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week.
Question:
What is a typical day in the life of a broker like?
You are not likely to get bored when working as a customs broker. With the constant changes in international trade regulations, there’s something new to learn every day. While your job title and actual responsibilities may vary depending on the type of job you obtain, we’ve provided a list of some of the tasks typically performed by brokers.
Persons working for or as brokers may:
· Provide information to importers on rates of duty and the methods of clearance.
· Prepare and process documents and other forms according to CBP regulations and procedures.
· Sign import/export documents on behalf of clients.
· Arrange for payment of duties, taxes, and storage and transportation costs related to the imported goods.
· Provide advice to clients on import restrictions, other government agency requirements and new regulations.
· Assign HTS numbers to imported products.
· Communicate with CBP and other government agencies.
· Enter data into the computer for CBP release and entry summary.
· Track cargo with steamship lines, railroads, airlines and trucking companies.
· Contact customers to obtain information or to provide status on shipments.
· Arrange transportation for movement of cargo from the port of unloading and for delivery to the customer.
· Maintain records of transactions.
· Attend and/or provide training seminars and industry conferences.
· Create standard operating procedures.
What is a typical day in the life of a broker like?
You are not likely to get bored when working as a customs broker. With the constant changes in international trade regulations, there’s something new to learn every day. While your job title and actual responsibilities may vary depending on the type of job you obtain, we’ve provided a list of some of the tasks typically performed by brokers.
Persons working for or as brokers may:
· Provide information to importers on rates of duty and the methods of clearance.
· Prepare and process documents and other forms according to CBP regulations and procedures.
· Sign import/export documents on behalf of clients.
· Arrange for payment of duties, taxes, and storage and transportation costs related to the imported goods.
· Provide advice to clients on import restrictions, other government agency requirements and new regulations.
· Assign HTS numbers to imported products.
· Communicate with CBP and other government agencies.
· Enter data into the computer for CBP release and entry summary.
· Track cargo with steamship lines, railroads, airlines and trucking companies.
· Contact customers to obtain information or to provide status on shipments.
· Arrange transportation for movement of cargo from the port of unloading and for delivery to the customer.
· Maintain records of transactions.
· Attend and/or provide training seminars and industry conferences.
· Create standard operating procedures.
· Be the advocate for the importer with CBP, other government agencies, truckers and others involved in the import transaction.
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!
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, July 9, 2009
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Wednesday, July 8, 2009
Tracking Your Toys
On August 14, 2009, the CPSIA tracking label requirement becomes effective on all children’s products. After several high profile toy recalls The Consumer Products Safety Improvement Act (CPSIA) was enacted in August of 2008 to “establish consumer product safety standards and other safety requirements for children’s products.” Implemented in stages, the next part requires manufacturers to have a tracking label or other distinguishing permanent mark on any consumer product primarily intended for children twelve and younger. Recognizing that it may not be practical for permanent distinguishing marks to be printed on small toys and other small products that are manufactured and shipped without individual packaging, Congress modified the requirement for tracking labels with the phrase “to the extent practicable.” The law requires that markings with the specified information be permanent; therefore, hangtags and adhesive labels are not permanent. Note the term “consumer product” is broad and will require compliance for items such as clothing and shoes, not just toys. All goods in this category, domestic and imported, manufactured after that date must bear the required tracking label.
Although the tracking labels are required effective on Aug. 14, the CPSC has provided very little guidance for implementation.
The tracking label must contain certain basic information, including the
· source of the product,
· date of manufacture and
· detailed information on the manufacturing process, such as a batch or run number.
With less than 6 weeks remaining until the new requirements take effect, let’s hope the CPSC provides some guidance soon!
Although the tracking labels are required effective on Aug. 14, the CPSC has provided very little guidance for implementation.
The tracking label must contain certain basic information, including the
· source of the product,
· date of manufacture and
· detailed information on the manufacturing process, such as a batch or run number.
With less than 6 weeks remaining until the new requirements take effect, let’s hope the CPSC provides some guidance soon!
Tuesday, July 7, 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 K’s.
Known Shipper
Cargo offered for transport on board a passenger airliner must come from a Known Shipper. A Known Shipper is an individual or business that has an established reputation in the shipping community and is offering their own goods for transportation. To become a Known Shipper, the party must usually complete a form provided by the carrier and agree to furnish additional documentation if requested. The rules of this program are administered by the Transportation Security Administration (TSA), who is responsible for the oversight of all transportation security, including truck, rail and ocean, as well as air
Known Shipper
Cargo offered for transport on board a passenger airliner must come from a Known Shipper. A Known Shipper is an individual or business that has an established reputation in the shipping community and is offering their own goods for transportation. To become a Known Shipper, the party must usually complete a form provided by the carrier and agree to furnish additional documentation if requested. The rules of this program are administered by the Transportation Security Administration (TSA), who is responsible for the oversight of all transportation security, including truck, rail and ocean, as well as air
Knitted
Cloth made by looping together yarn or thread by means of special needles and fastened together closely and firmly; cloth made by looping together yarn or thread. Knitting can also be done by machines.
Knowledge
When referring to a participant in a transaction that is subject to the EAR, knowledge of a fact or circumstance relating to the transaction includes not only positive knowledge that the fact or circumstance exists or is substantially certain to occur, but also an awareness that the existence or future occurrence of the fact or circumstance in question is more likely than not. Such awareness is inferred from evidence of the conscious disregard of facts known to a person and is also inferred from a person’s willful avoidance of facts. Note: The term may also include “know,” “reason to know,” or “reason to believe.” (15 CFR 772.1)
Cloth made by looping together yarn or thread by means of special needles and fastened together closely and firmly; cloth made by looping together yarn or thread. Knitting can also be done by machines.
Knowledge
When referring to a participant in a transaction that is subject to the EAR, knowledge of a fact or circumstance relating to the transaction includes not only positive knowledge that the fact or circumstance exists or is substantially certain to occur, but also an awareness that the existence or future occurrence of the fact or circumstance in question is more likely than not. Such awareness is inferred from evidence of the conscious disregard of facts known to a person and is also inferred from a person’s willful avoidance of facts. Note: The term may also include “know,” “reason to know,” or “reason to believe.” (15 CFR 772.1)
Monday, July 6, 2009
NAFTA Tariff Shifts
Thank you for joining us for our series on classification. Last Monday, we discussed the classification of decals, stickers and labels. Today, we will explore the meaning of tariff shifts in relationship to the free trade agreements.
A non-originating article may be considered originating if that article undergoes a tariff shift. The degree of change necessary in order to confer origin through tariff shift is based solely on the rules and guidelines found in General Note 12(t). The NAFTA Tariff Shift Rules are organized in order by Chapter, and tariff shift rules vary widely from Chapter to Chapter in that listing. This extensive and detailed list for NAFTA makes up more than 100 pages of the General Notes. Some of the other Free Trade Agreements also utilize the concept of tariff shifts, which are provided in the other General Notes, but for this article, we’ll focus on the NAFTA tariff shifts.
A tariff shift may be made from one heading in a chapter to another heading in the same chapter.
Example 1:
A good classified in Chapter 17, under 1704, needs only to have been changed into heading 1704 from any other heading, which may include headings 1701, 1702, or 1703.
In some cases, the list in GN 12(t) specifies that a shift must be from one specific chapter to another specific chapter.
Example 2:
In order for a good classified in Chapter 5 to be eligible under NAFTA, the good must have been changed into a good of Chapter 5 from any other chapter of the HTSUS.
Sample Question
Will a travel kit, imported into the U.S. from Mexico qualify for NAFTA if it is classified under HTS 9605.00.0000, and contains components that originate in the U.S. or Mexico except for the following non-originating items?
· A plastic case classified under HTS 3923.10
· Sewing thread classified under HTS 5204.20
· Sewing needles classified under HTS 7319.90
· Toothpaste classified under HTS 3306.10
· A toothbrush classified under HTS 9603.21
Answer: No.
First, we should look up the HTSUS number provided to make sure it is eligible for duty-free treatment from Mexico. We find the symbol "MX" in the Special subcolumn which indicates that the HTSUS is indeed eligible for duty-free treatment if the non-originating items satisfy the tariff shift. Turning over to General Note 12(t), we find the tariff shift must be from any other chapter to Chapter 96. All of the non-originating products on our list EXCEPT the toothbrush meets this requirement. No preferential treatment is allowed because the non-originating toothbrush classified in HTS 9603.21 does not make the tariff shift to Chapter 96 from any other chapter.
Join us next week as we tackle another challenging classification issue. If you have 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.
A non-originating article may be considered originating if that article undergoes a tariff shift. The degree of change necessary in order to confer origin through tariff shift is based solely on the rules and guidelines found in General Note 12(t). The NAFTA Tariff Shift Rules are organized in order by Chapter, and tariff shift rules vary widely from Chapter to Chapter in that listing. This extensive and detailed list for NAFTA makes up more than 100 pages of the General Notes. Some of the other Free Trade Agreements also utilize the concept of tariff shifts, which are provided in the other General Notes, but for this article, we’ll focus on the NAFTA tariff shifts.
A tariff shift may be made from one heading in a chapter to another heading in the same chapter.
Example 1:
A good classified in Chapter 17, under 1704, needs only to have been changed into heading 1704 from any other heading, which may include headings 1701, 1702, or 1703.
In some cases, the list in GN 12(t) specifies that a shift must be from one specific chapter to another specific chapter.
Example 2:
In order for a good classified in Chapter 5 to be eligible under NAFTA, the good must have been changed into a good of Chapter 5 from any other chapter of the HTSUS.
Sample Question
Will a travel kit, imported into the U.S. from Mexico qualify for NAFTA if it is classified under HTS 9605.00.0000, and contains components that originate in the U.S. or Mexico except for the following non-originating items?
· A plastic case classified under HTS 3923.10
· Sewing thread classified under HTS 5204.20
· Sewing needles classified under HTS 7319.90
· Toothpaste classified under HTS 3306.10
· A toothbrush classified under HTS 9603.21
Answer: No.
First, we should look up the HTSUS number provided to make sure it is eligible for duty-free treatment from Mexico. We find the symbol "MX" in the Special subcolumn which indicates that the HTSUS is indeed eligible for duty-free treatment if the non-originating items satisfy the tariff shift. Turning over to General Note 12(t), we find the tariff shift must be from any other chapter to Chapter 96. All of the non-originating products on our list EXCEPT the toothbrush meets this requirement. No preferential treatment is allowed because the non-originating toothbrush classified in HTS 9603.21 does not make the tariff shift to Chapter 96 from any other chapter.
Join us next week as we tackle another challenging classification issue. If you have 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, July 1, 2009
Every Dog Has Its Day - In Court
Since OFAC updated their list of violators and the former University of Tennesse professor was sentenced for his violations this week, it’s only fair that we add an importer to this list.
The importers of contaminated pet food that killed and caused severe sickness in cats and dogs across the country in 2007 may face jail time for their involvement. The pet food was manufactured with tainted gluten from China. The owners pleaded guilty to various charges contained in a Feb. 6, 2008, federal indictment. As a result of an investigation by the Food & Drug Administration (FDA) and U.S. Immigration and customs Enforcement (ICE), the importers were prosecuted by the U.S. Attorney’s Office for the Western District of Missouri.
The two owners of the import company could face two years in prison and a maximum fine of $200,000; however, it is likely they will be given the lesser sentence of probation and a reduced penalty payment. The corporation is subject to a fine of up to $400,000 and a requirement for restitutions. Sentencing hearings will be scheduled after the U.S. Probation Office completes its investigations.
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