Some of the departments of the U.S. Government have joined the electronic communication trend of blogging and twittering. Are you following them? Are they following you? Check out some of the electronic social networks of interest to the international trade community.
Homeland Security Leadership Journal
The Blog - Homeland Security
The TSA Blog
Tradeology (ITA)
White House Blog
Customs & Border Protection Twitter
DoD Live
While checking out these sites, you may find some of these agencies are on Facebook too! Facebook and other social network sites have been controversial subjects in the government. While many of the agencies use one or more of the sites available, some agencies such as the U.S. Marines have banned them. The government won’t likely post any sensitive top secret information to their blogs. As individuals, we should also remember not to post personal information that could increase incidents of identity theft or put us in danger.
Wednesday, September 30, 2009
Tuesday, September 29, 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 W’s.
Wharfage
Charge assessed by a dock owner for handling cargo or for docking vessels at the wharf.
World Trade Organization
The World Trade Organization (WTO) seeks to monitor world trade and place it on a secure basis, thereby contributing to economic growth and development, and the welfare of the world’s people. The WTO is an international organization with membership from over 100 countries, created to help trade flow smoothly, freely, fairly and predictably. WTO principles include:
Wharfage
Charge assessed by a dock owner for handling cargo or for docking vessels at the wharf.
World Trade Organization
The World Trade Organization (WTO) seeks to monitor world trade and place it on a secure basis, thereby contributing to economic growth and development, and the welfare of the world’s people. The WTO is an international organization with membership from over 100 countries, created to help trade flow smoothly, freely, fairly and predictably. WTO principles include:
· Trade without discrimination
· Protection through tariffs
· Stable basis for trade
· Promoting fair competition
· Quantitative restrictions on importers
· Settling trade disputes
Wassenaar Arrangement
The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies “Wassenaar Arrangement” was established to contribute to regional and international security and stability by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies. Participants strive to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities which undermine these goals and are not diverted to support such capabilities.
Monday, September 28, 2009
Section VIII of the HTSUS – September 28
Thank you for joining us for our series on classification. Last Monday, we explored the articles contained in Section VII of the HTSUS. Today, we will study the various commodities covered in Section VIII 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 VII Question
3926.20.2000
NY 868759
http://rulings.cbp.gov/index.asp?ru=868759&qu=Ny+868759&vw=detail
Answer to Section VII Question
3926.20.2000
NY 868759
http://rulings.cbp.gov/index.asp?ru=868759&qu=Ny+868759&vw=detail
Good knowledge of what is included in each chapter comes in handy for this question. It is also important to know that "vinyl" is not a textile and for the purposes of the HTSUS, some vinyl products are classified in Chapter 39.
Section VIII includes Chapters 41 through 43, which address raw hides, leather, articles of leather, travel goods, backpacks and similar goods. Articles in these chapters may require permits and approval of the Fish & Wildlife Service or be subject to quotas if imported from certain countries. When classifying goods in Chapter 42, be very careful to read the type of material and articles contained in each heading and subheading.
Chapter 41 covers raw and prepared animal and reptile hides and skins, patent leather and composition leather. Pay close attention to Chapter Note 1 (c) explaining certain exclusions and inclusions of goods in Chapter 43. Clearance of certain products must be made at designated FWS ports. FWS enforces regulations pertaining to the articles made from endangered species. Click HERE to learn more about Fish & Wildlife requirements.
Chapter 42 includes leather articles, saddlery and harnesses, travel goods, handbags and similar containers. Note the exclusions to this chapter. Textile luggage may be subject to quota restrictions from certain countries. In addition to CBP marking requirements, textile luggage must meet labeling specifications for type of fabric.
Chapter 43 covers fur skins, articles made of fur, artificial fur and articles of artificial fur. Note that footwear and headwear are not included in this chapter.
Question
Discount Dollar Store imports compact disc carrying cases. The carrying cases will hold up to 25 CDs, and the exterior surface is made of 100% nylon. What is the correct classification for the carrying cases?
Section VIII includes Chapters 41 through 43, which address raw hides, leather, articles of leather, travel goods, backpacks and similar goods. Articles in these chapters may require permits and approval of the Fish & Wildlife Service or be subject to quotas if imported from certain countries. When classifying goods in Chapter 42, be very careful to read the type of material and articles contained in each heading and subheading.
Chapter 41 covers raw and prepared animal and reptile hides and skins, patent leather and composition leather. Pay close attention to Chapter Note 1 (c) explaining certain exclusions and inclusions of goods in Chapter 43. Clearance of certain products must be made at designated FWS ports. FWS enforces regulations pertaining to the articles made from endangered species. Click HERE to learn more about Fish & Wildlife requirements.
Chapter 42 includes leather articles, saddlery and harnesses, travel goods, handbags and similar containers. Note the exclusions to this chapter. Textile luggage may be subject to quota restrictions from certain countries. In addition to CBP marking requirements, textile luggage must meet labeling specifications for type of fabric.
Chapter 43 covers fur skins, articles made of fur, artificial fur and articles of artificial fur. Note that footwear and headwear are not included in this chapter.
Question
Discount Dollar Store imports compact disc carrying cases. The carrying cases will hold up to 25 CDs, and the exterior surface is made of 100% nylon. What is the correct classification for the carrying cases?
Join us next week for the answer to this week’s classification question and a discussion of Section IX 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, September 25, 2009
Ask the Wizard: C-TPAT & Focused Assessments
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 C-TPAT procedures.
Question:
Since CBP has started to inquire about C-TPAT during Focused Assessments, should we include C-TPAT procedures with our import compliance procedures?
Recently, importers that are not members of C-TPAT receiving Focused Assessments from CBP were required to complete Supply Chain Security Observation (”SCSO”) questionnaires. Although participation in C-TPAT has been voluntary, it appears that this addition to the FA might be an attempt to strongly encourage companies to join the program. Simply put, join or undergo more scrutiny on your FA. What does this mean for importers? If your company is a member of C-TPAT, then you don’t have much to worry about. You should already have the required procedures in place, and they are reviewed during revalidation. However, it might not hurt to cross-reference some of the applicable security procedures if your company has separate import and C-TPAT compliance manuals. If your company is not a member of C-TPAT, you may want to weigh the costs and benefits of joining. You should consider adding a global security section to your import compliance procedures. At the very least, you may want to invest in adopting some of the most important risk based procedures utilized by C-TPAT members. Click HERE to view information about a generic C-TPAT manual that can be used to customize procedures for importers at a reasonable cost.
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:
Since CBP has started to inquire about C-TPAT during Focused Assessments, should we include C-TPAT procedures with our import compliance procedures?
Recently, importers that are not members of C-TPAT receiving Focused Assessments from CBP were required to complete Supply Chain Security Observation (”SCSO”) questionnaires. Although participation in C-TPAT has been voluntary, it appears that this addition to the FA might be an attempt to strongly encourage companies to join the program. Simply put, join or undergo more scrutiny on your FA. What does this mean for importers? If your company is a member of C-TPAT, then you don’t have much to worry about. You should already have the required procedures in place, and they are reviewed during revalidation. However, it might not hurt to cross-reference some of the applicable security procedures if your company has separate import and C-TPAT compliance manuals. If your company is not a member of C-TPAT, you may want to weigh the costs and benefits of joining. You should consider adding a global security section to your import compliance procedures. At the very least, you may want to invest in adopting some of the most important risk based procedures utilized by C-TPAT members. Click HERE to view information about a generic C-TPAT manual that can be used to customize procedures for importers at a reasonable cost.
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, September 24, 2009
Customs Broker Exam Study Tip 12: CBP Directives
For many years, the Customs Brokers Exam only required the use of the HTSUS and the CBP Regulations; however, in 2004, CBP expanded its scope of materials to include Customs Directives and other reference materials. These materials are important because they provide guidance on activities brokers perform that aren’t included in the regulations. Since their addition, these resources have comprised 7.5% of the total questions on the exam. Because of the number of resources, it’s difficult to predict specific areas for testing. The best thing to do is to study all of it. We’ve provided the key highlights for the four most frequently tested supplemental resources.
1. Instructions for Preparation of CBP Form 7501
Although most entry summaries are completed electronically, it’s important to have a good understanding of the information contained in this document. By reading these instructions, you can complete a CBP 7501 by hand without the assistance of a computer. You should keep this document handy and review all blocks because it has been one of the most frequently tested supplemental resources since the implementation of the new CBP 7501 format in September 2005. Become very familiar with each block number, so you can easily reference it. Block 2 (Entry Type Code) and Block 31 (Net Quantity) are easy targets!
2. CD 3510-004 - Monetary Guidelines for Setting Bond Amounts
The purpose of the bond is to protect the revenue and ensure compliance. The amount of a bond is calculated using information on the bond application, the criteria in Part 113 of the CBP Regulations and the guidelines in this directive. This directive provides standardized guidelines for computing the bond amounts for all types of bonds. For the exam, it’s important to know how to calculate single entry and continuous bonds.
The first type of bond is the Activity 1, Importer or Broker Continuous Bond. The minimum amount of a bond in this category is $50,000.
For importers paying zero to $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in increments of $10,000.
For importers paying over $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in $100,000 increments.
The next type of bond is the Activity 1, Importer or Broker Single Transaction Bond. This bond is valid for one shipment and is computed in an amount not less than the total entered value of the merchandise plus all duties, taxes and fees, unless the merchandise falls into a special category. If the merchandise is subject to other government agency requirements such as the FDA or FCC, the bond will be computed in an amount of at least three times the total entered value of the shipment. In addition, the district director may set the single transaction bond amount at 10 percent of the total entered value for unconditionally free merchandise, which is not subject to the previously mentioned categories.
Note:
Not all of the government agencies are included in the list that requires a bond in the amount of three times the value of the shipment. If your goods are not regulated by one of the government agencies on the list, then the single entry bond will be written for value plus duty.
3. CD 3550-055 - Instructions for Deriving Manufacturer/Shipper Identification
Questions involving the manufacturer’s identification code “MID” should be some of the easiest to answer. Not only does this directive provide instructions on how to construct the code, but the information is also included in the CBP Form 7501 Instructions. Just memorize the rules for deriving the MID.
This code is commonly referred to as the MID or Manufacturer Identification Code. This technique is also known as keylining. On the broker’s exam from October 2005, a question required knowledge of the term keylining.
Customs requires the formation of a code from the name and address of the manufacturer.
The MID contains five components that are added together without spaces to create the code. The code can be up to 15 characters in length. The five components consist of the following information:
· Two letter abbreviation for the country of origin
· First three letters of the first name of the manufacturer
· First three letters of the second name of the manufacturer
· First four digits of the street address, and
· First three letters of the city name.
There are some general rules to consider.
· Ignore all punctuation
· Ignore single character initials. and
· Ignore the words “a”, “an”, “and’, “of”, and “the”.
4. CD 3550-067 - Entry Summary Acceptance and Rejection
Customs Directive 3550-067 provides guidelines for uniform acceptance and rejection of entry summaries. Five major areas of interest in this directive include the following:
· Collections Processing – Rejections
· Acceptance Review and Summary Processing
· Processing of Rejected Entry Summaries
· Time Limit
· Rejection Effect on Entry Summary Filing Time
This information is a little more complicated to grasp, so read each of the major areas and highlight key information.
Although we didn’t cover all of the directives and supplemental materials, they are not any less important. Remember the advice from the beginning of the article - the best thing to do is to study all of it.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly to find more useful news for international trade professionals! As soon as the Wizard obtains a copy of the test and has time to work out some preliminary answers, we’ll post them here for your review and comments.
1. Instructions for Preparation of CBP Form 7501
Although most entry summaries are completed electronically, it’s important to have a good understanding of the information contained in this document. By reading these instructions, you can complete a CBP 7501 by hand without the assistance of a computer. You should keep this document handy and review all blocks because it has been one of the most frequently tested supplemental resources since the implementation of the new CBP 7501 format in September 2005. Become very familiar with each block number, so you can easily reference it. Block 2 (Entry Type Code) and Block 31 (Net Quantity) are easy targets!
2. CD 3510-004 - Monetary Guidelines for Setting Bond Amounts
The purpose of the bond is to protect the revenue and ensure compliance. The amount of a bond is calculated using information on the bond application, the criteria in Part 113 of the CBP Regulations and the guidelines in this directive. This directive provides standardized guidelines for computing the bond amounts for all types of bonds. For the exam, it’s important to know how to calculate single entry and continuous bonds.
The first type of bond is the Activity 1, Importer or Broker Continuous Bond. The minimum amount of a bond in this category is $50,000.
For importers paying zero to $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in increments of $10,000.
For importers paying over $1,000,000 in duties and taxes, the bond should be computed as 10% of the duties and taxes paid for the previous calendar year and issued in $100,000 increments.
The next type of bond is the Activity 1, Importer or Broker Single Transaction Bond. This bond is valid for one shipment and is computed in an amount not less than the total entered value of the merchandise plus all duties, taxes and fees, unless the merchandise falls into a special category. If the merchandise is subject to other government agency requirements such as the FDA or FCC, the bond will be computed in an amount of at least three times the total entered value of the shipment. In addition, the district director may set the single transaction bond amount at 10 percent of the total entered value for unconditionally free merchandise, which is not subject to the previously mentioned categories.
Note:
Not all of the government agencies are included in the list that requires a bond in the amount of three times the value of the shipment. If your goods are not regulated by one of the government agencies on the list, then the single entry bond will be written for value plus duty.
3. CD 3550-055 - Instructions for Deriving Manufacturer/Shipper Identification
Questions involving the manufacturer’s identification code “MID” should be some of the easiest to answer. Not only does this directive provide instructions on how to construct the code, but the information is also included in the CBP Form 7501 Instructions. Just memorize the rules for deriving the MID.
This code is commonly referred to as the MID or Manufacturer Identification Code. This technique is also known as keylining. On the broker’s exam from October 2005, a question required knowledge of the term keylining.
Customs requires the formation of a code from the name and address of the manufacturer.
The MID contains five components that are added together without spaces to create the code. The code can be up to 15 characters in length. The five components consist of the following information:
· Two letter abbreviation for the country of origin
· First three letters of the first name of the manufacturer
· First three letters of the second name of the manufacturer
· First four digits of the street address, and
· First three letters of the city name.
There are some general rules to consider.
· Ignore all punctuation
· Ignore single character initials. and
· Ignore the words “a”, “an”, “and’, “of”, and “the”.
4. CD 3550-067 - Entry Summary Acceptance and Rejection
Customs Directive 3550-067 provides guidelines for uniform acceptance and rejection of entry summaries. Five major areas of interest in this directive include the following:
· Collections Processing – Rejections
· Acceptance Review and Summary Processing
· Processing of Rejected Entry Summaries
· Time Limit
· Rejection Effect on Entry Summary Filing Time
This information is a little more complicated to grasp, so read each of the major areas and highlight key information.
Although we didn’t cover all of the directives and supplemental materials, they are not any less important. Remember the advice from the beginning of the article - the best thing to do is to study all of it.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly to find more useful news for international trade professionals! As soon as the Wizard obtains a copy of the test and has time to work out some preliminary answers, we’ll post them here for your review and comments.
Wednesday, September 23, 2009
President Obama to Nominate Alan Bersin to Lead CBP
After a long wait, it appears that U.S. Customs and Border Protection may finally get a new Commissioner. In March, we reported that Alan Bersin was rumored to be the top nominee for the next Commissioner. Yesterday, it was announced that President Obama planned to nominate Alan Bersin to serve as U.S. Customs and Border Protection (CBP) Commissioner. Mr. Bersin has served as Assistant Secretary for International Affairs and Special Representative for Border Affairs at the Department of Homeland Security since April. He held a similar position as U.S. attorney for the Southern District of California and the U.S. attorney general’s Southwest border representative under the Clinton administration. Although Bersin will remain with the DHS, his new position as Commissioner will require Senate confirmation.
In addition to Bersin, President Obama also announced his intent to nominate seven other individuals. Click HERE to learn more about the nominees.
In addition to Bersin, President Obama also announced his intent to nominate seven other individuals. Click HERE to learn more about the nominees.
Tuesday, September 22, 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 V’s.
Volume
The volume is the size or measure of anything in three dimensions. Air freight rates are usually quoted based on actual scale weight or actual volume (dimensional) weight of a shipment.
Volume = Length x Width x Height
Volume
The volume is the size or measure of anything in three dimensions. Air freight rates are usually quoted based on actual scale weight or actual volume (dimensional) weight of a shipment.
Volume = Length x Width x Height
Valuation
Valuation is the process of determining the worth of an imported product for the purposes of calculating the amount of duty payable and making the declaration to Customs and Border Protection. Various methods can be used to determine the value, but the methods must be used in order, as appropriate, and in accordance with the regulations.
Validated Export License
A validated export license is document issued by the U.S. government providing permission for the export of commodities for which written export authorization is required by law. Exporters should submit license requests early as they may take time to process.
Monday, September 21, 2009
Section VII of the HTSUS
Thank you for joining us for our series on classification. Last Monday, we explored the articles contained in Section VI of the HTSUS. Today, we will study the various commodities covered in Section VII 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 VI Question
3004.90.9155
NY K87058
http://rulings.cbp.gov/index.asp?ru=k87058&qu=pain+reliever&vw=detail
Section VII includes Chapters 39 and 40, which contain plastics and rubber and articles made from each. With the increased use of plastic and rubber products, it’s not surprising that these two chapters contain a large number of detailed provisions. Products of this section may require compliance with FTC, CPSC, FDA, EPA and DOT regulations. For example, rubber surgical gloves must comply with FDA regulations.
Chapter 39 covers plastic products in primary forms such as styrene, vinyl esters, and acrylic and plastic articles such as tubes, sheets, housewares, seals and various other articles. Review the exclusions found in the Chapter 39 Notes which include certain wall coverings, jewelry, parts of vehicles and articles found in various other chapters. It is important to have some familiarity with the products included in the other chapters to ensure merchandise is not incorrectly classified in Chapter 39. Also check 19 CFR 141.89 for special invoice requirements for certain articles.
Chapter 40 includes natural and synthetic rubber, vulcanized and unvulcanized rubber, tires, hygienic articles and miscellaneous manufactured articles of rubber. Pay close attention to the articles excluded from classification in this chapter. It is important to be familiar with the products included in Chapters 64, 65, 90, 92, 94, 95 and 96 in order to avoid improperly classifying products in Chapter 40.
Question
Classify a vinyl baseball mitt with sewn seams.
Join us next week for the answer to this week’s classification question and a discussion of Section VIII 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
Answer to Section VI Question
3004.90.9155
NY K87058
http://rulings.cbp.gov/index.asp?ru=k87058&qu=pain+reliever&vw=detail
Section VII includes Chapters 39 and 40, which contain plastics and rubber and articles made from each. With the increased use of plastic and rubber products, it’s not surprising that these two chapters contain a large number of detailed provisions. Products of this section may require compliance with FTC, CPSC, FDA, EPA and DOT regulations. For example, rubber surgical gloves must comply with FDA regulations.
Chapter 39 covers plastic products in primary forms such as styrene, vinyl esters, and acrylic and plastic articles such as tubes, sheets, housewares, seals and various other articles. Review the exclusions found in the Chapter 39 Notes which include certain wall coverings, jewelry, parts of vehicles and articles found in various other chapters. It is important to have some familiarity with the products included in the other chapters to ensure merchandise is not incorrectly classified in Chapter 39. Also check 19 CFR 141.89 for special invoice requirements for certain articles.
Chapter 40 includes natural and synthetic rubber, vulcanized and unvulcanized rubber, tires, hygienic articles and miscellaneous manufactured articles of rubber. Pay close attention to the articles excluded from classification in this chapter. It is important to be familiar with the products included in Chapters 64, 65, 90, 92, 94, 95 and 96 in order to avoid improperly classifying products in Chapter 40.
Question
Classify a vinyl baseball mitt with sewn seams.
Join us next week for the answer to this week’s classification question and a discussion of Section VIII 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, September 18, 2009
Customs Broker Exam Study Tip 11: Free Trade Agreements
With the increase of free trade agreements between the U.S. and other countries, the number of questions on the CBE related to these agreements has increased. In fact, “Trade Agreements” often has its very own section of questions on the exam. Free Trade Agreements (FTAs) are international agreements made between two or more nations that relate to common trade or service issues. FTA’s reduce or eliminate all tariffs and other restrictions on substantially all the trade in goods between its member countries based on country of origin.
The information needed to answer questions about FTA’s is likely to be found in one of four places, the General Notes of the HTSUS, Chapters 98 an 99 of the HTSUS, 19 CFR Part 10 and 19 CFR Part 181. Memorize the titles of these General Notes and skim the text to become familiar with the topics covered in each. In your review of the programs, concentrate on the basic requirements such as tariff shift, de minimis and RVC requirements. Each program has different requirements regarding allowance of the special duty treatment, and some of these programs are subject to change. Most of these programs have very detailed requirements that must be met in order to claim the duty-free status. Additionally, these programs are often difficult to understand, and some have limited use in daily practice. Try not to be too overwhelmed when encountering these problems. If they appear too difficult, move and come back to them later.
Don’t overlook important terminology. Be sure to know the definitions for each of the following:
· Accumulation
· Direct Cost of Processing
· De Minimis
· Imported Directly
· Transshipment
· Regional Value Content RVC
· Tariff Shift
· Substantial Transformation
To view a list of the FTAs, the references to the HTSUS General Notes, SPI and CFR references, click HERE.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals!
The information needed to answer questions about FTA’s is likely to be found in one of four places, the General Notes of the HTSUS, Chapters 98 an 99 of the HTSUS, 19 CFR Part 10 and 19 CFR Part 181. Memorize the titles of these General Notes and skim the text to become familiar with the topics covered in each. In your review of the programs, concentrate on the basic requirements such as tariff shift, de minimis and RVC requirements. Each program has different requirements regarding allowance of the special duty treatment, and some of these programs are subject to change. Most of these programs have very detailed requirements that must be met in order to claim the duty-free status. Additionally, these programs are often difficult to understand, and some have limited use in daily practice. Try not to be too overwhelmed when encountering these problems. If they appear too difficult, move and come back to them later.
Don’t overlook important terminology. Be sure to know the definitions for each of the following:
· Accumulation
· Direct Cost of Processing
· De Minimis
· Imported Directly
· Transshipment
· Regional Value Content RVC
· Tariff Shift
· Substantial Transformation
To view a list of the FTAs, the references to the HTSUS General Notes, SPI and CFR references, click HERE.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences. Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals!
Thursday, September 17, 2009
CBE Study Tip 10: Valuation
Customs Valuation (19 CFR 152) is one of the most complex parts of the regulations. This section is one of the most frequently tested on the exam, and the questions are often long and time consuming to answer. When reading Part 152, it would be wise to read each section slowly in order to understand the complex terms discussed. Pay close attention to any examples provided because they help explain and demonstrate the complicated concepts. Highlight important areas of text. Make notes and lists in the margins. Locate the valuation questions in old exams and work through the questions. Make sure to mark each section of the regulations that was used in determining the answers.
Click HERE to view an outline of the most important valuation information found in 19 CFR 152. Read and highlight these sections in your copy of the regulations. Take this outline to the exam with you for a quick reference tool.
Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog.
Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog.
Wednesday, September 16, 2009
Wanted: Cheese Crackers
You’ve probably heard the old saying “curiosity killed the cat,” right? Since you are reading this article, you’ll be relieved that curiosity did not kill the Wizard, but it did lead the Wizard to kill some time learning about the things Customs and Border Protection purchases. While perusing various web sites for newsworthy or at least entertaining tidbits for the blog, an article about the Department of Immigration and Customs Enforcement (ICE) caught the Wizard’s eye. The article announced that ICE was outsourcing its disaster recovery planning and preparations. The government outsources a lot of functions, but for some reason, the outsourcing of disaster recovery planning by an agency that is part of the Department of Homeland Security, which also responsible for the Federal Emergency Management Agency (FEMA) seemed a little ironic. Since CBP is also part of this group, the Wizard followed the trail (not the yellow brick road) over to the Federal Business Opportunities web site. Here you can find all sorts of opportunities to provide goods and services to the government. Not to be sidetracked by the all of the wonderful opportunities for a wise old wizard, I selected the Department of Homeland Security, Office of Customs and Border Protection. The list included some of the items you would expect to find, such as office furniture and supplies. The following is a list and links to some of the more interesting products and services sought by U.S. Customs and Border Protection. After skimming a few of these, you’ll probably be grateful you can go down to the local grocery store to buy cheese crackers without preparing a lengthy proposal. Enjoy and don’t let curiosity kill too much of your time!
C-TPAT Membership Survey – Seeks a company to perform surveys of C-TPAT Members
Membership - Seeks executives to share financial best practices
SUV Floor Mats – Seeks rubber floor mats for SUVs.
Cross-Occupational Training – Seeks variety of management and writing skills training
Flu Shots – Seeks 400 flu shots for employees
Cheese Crackers – Seeks 6400 cases of cheese crackers
C-TPAT Membership Survey – Seeks a company to perform surveys of C-TPAT Members
Membership - Seeks executives to share financial best practices
SUV Floor Mats – Seeks rubber floor mats for SUVs.
Cross-Occupational Training – Seeks variety of management and writing skills training
Flu Shots – Seeks 400 flu shots for employees
Cheese Crackers – Seeks 6400 cases of cheese crackers
Tuesday, September 15, 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 U’s.
Unknown Shipper
An unknown shipper is a person that has not established a business relationship with an aircraft operator or carrier by furnishing items such as customer records, shipping contracts, business history and a site visit or Dun and Bradstreet vetting. Unknown shippers are not permitted to ship packages on passenger airlines.
Ultimate Consignee
The Ultimate Consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper sold the imported merchandise; the party who receives the imported goods.
U.S. Munitions List (USML)
The USML identifies those items or categories of items considered to be defense articles and defense services subject to export control under 22 CFR 121. These defense items generally consist of items specially designed or modified for military use. The U.S. Department of State is responsible for controlling the export of defense articles and services under the USML.
Unknown Shipper
An unknown shipper is a person that has not established a business relationship with an aircraft operator or carrier by furnishing items such as customer records, shipping contracts, business history and a site visit or Dun and Bradstreet vetting. Unknown shippers are not permitted to ship packages on passenger airlines.
Ultimate Consignee
The Ultimate Consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper sold the imported merchandise; the party who receives the imported goods.
U.S. Munitions List (USML)
The USML identifies those items or categories of items considered to be defense articles and defense services subject to export control under 22 CFR 121. These defense items generally consist of items specially designed or modified for military use. The U.S. Department of State is responsible for controlling the export of defense articles and services under the USML.
Monday, September 14, 2009
Section VI of the HTSUS
Thank you for joining us for our series on classification. Our last classification blog explored the articles contained in Section V of the HTSUS. Today, we will study the various commodities covered in Section VI of the HTSUS. Having a good general knowledge of the products covered in each section and chapter will expedite the classification process and improve the accuracy of your classifications.
Answer to Section V Question
2716.00.0000 Free
Section VI covers a wide variety of chemical products from Chapter 28 through 38. Many of the products are subject to regulation by one or more government agencies such as the EPA, FDA, FTC and USDA. Certain chemical products will require a Chemical Abstracts Service (C.A.S.) registry number. The Chemical Appendix to the HTSUS provides a list of C.A.S. numbers.
Chapter 28 covers inorganic chemicals such as inorganic acids, nonmetal oxygen, halogen silicides and nitrides. Products of this chapter must comply with EPA, TSCA and DOT regulations. The entry invoice must contain the Chemical Abstracts Services Number (CAS). Chemical products may require special packaging, which allows for ventilation and temperature control.
Chapter 29 covers organic chemicals such as alcohol, vitamins, hormones and antibiotics. The entry invoice must contain the CAS number.
Answer to Section V Question
2716.00.0000 Free
Section VI covers a wide variety of chemical products from Chapter 28 through 38. Many of the products are subject to regulation by one or more government agencies such as the EPA, FDA, FTC and USDA. Certain chemical products will require a Chemical Abstracts Service (C.A.S.) registry number. The Chemical Appendix to the HTSUS provides a list of C.A.S. numbers.
Chapter 28 covers inorganic chemicals such as inorganic acids, nonmetal oxygen, halogen silicides and nitrides. Products of this chapter must comply with EPA, TSCA and DOT regulations. The entry invoice must contain the Chemical Abstracts Services Number (CAS). Chemical products may require special packaging, which allows for ventilation and temperature control.
Chapter 29 covers organic chemicals such as alcohol, vitamins, hormones and antibiotics. The entry invoice must contain the CAS number.
Chapter 30 includes pharmaceutical products such as medicines, bandages and drugs for both humans and animals. Pay special attention to the exclusions found in Note 1 of this Chapter. Pay close attention to Chapter Note 1, which provides some important exclusions. Note 4 provides a list of goods that must be classified in heading 3006. The importation of pharmaceutical products is highly regulated. There are numerous labeling requirements depending on the type and use of the drug. All labeling information must be in English and appear conspicuously on the label.
Chapter 31 covers the importation of fertilizers in both solid and liquid forms whether manufactured from animal, vegetable, mineral or chemical substances. Chemical fertilizers require the submission of a TSCA Certification.
Chapter 32 includes paints, inks, enamels, varnishes, putties and other coloring extracts. Products containing chemicals require the submission of a TSCA Certification.
Chapter 33 covers perfumes, make-up, deodorants, and hair, dental, shaving and bath products. Note that soap is not included in this chapter. Certain liquid oral hygiene products, such as mouthwashes, must be packaged in tamper-resistant packages. In addition to Customs marking requirements, the FDA regulates the labeling of cosmetics. A list of ingredients and warnings is required on specific commodities distributed for retail sale.
Chapter 34 covers soap, cleaning products, polishes, candles and dentistry preparations. Note that preparations containing soap, such as shampoos and shaving creams, are not classified in Chapter 34.
Chapter 35 covers starches, glues and adhesives.
Chapter 36 includes the importation of explosives, fireworks, matches and lighter fuels. Importers of explosives must obtain a license from ATF. The importation of white phosphorus matches is prohibited.
Chapter 37 covers the importation of photographic film, paper, plates and other media motion picture film and photographic chemicals. Products may require the submission of a TSCA Certification.
Chapter 32 includes paints, inks, enamels, varnishes, putties and other coloring extracts. Products containing chemicals require the submission of a TSCA Certification.
Chapter 33 covers perfumes, make-up, deodorants, and hair, dental, shaving and bath products. Note that soap is not included in this chapter. Certain liquid oral hygiene products, such as mouthwashes, must be packaged in tamper-resistant packages. In addition to Customs marking requirements, the FDA regulates the labeling of cosmetics. A list of ingredients and warnings is required on specific commodities distributed for retail sale.
Chapter 34 covers soap, cleaning products, polishes, candles and dentistry preparations. Note that preparations containing soap, such as shampoos and shaving creams, are not classified in Chapter 34.
Chapter 35 covers starches, glues and adhesives.
Chapter 36 includes the importation of explosives, fireworks, matches and lighter fuels. Importers of explosives must obtain a license from ATF. The importation of white phosphorus matches is prohibited.
Chapter 37 covers the importation of photographic film, paper, plates and other media motion picture film and photographic chemicals. Products may require the submission of a TSCA Certification.
Chapter 38 covers the importation of miscellaneous chemical products such as turpentine, wood tars, creosote, insecticides, pesticides, disinfectants, hydraulic fluids and antifreeze. Insecticides and pesticides must be registered with the EPA. The EPA 3540-1 must be presented at entry for insecticide and pesticide shipments. Products of this chapter may also require a TSCA Certification.
Question
Classify chewable, antacid tablets consisting of 500mg of calcium carbonate. The tablets come in assorted colors and flavors and are put up for retail sale in plastic bottles containing 100 tablets.
Join us next week for the answer to this week’s classification question and a discussion of Section VII 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
Question
Classify chewable, antacid tablets consisting of 500mg of calcium carbonate. The tablets come in assorted colors and flavors and are put up for retail sale in plastic bottles containing 100 tablets.
Join us next week for the answer to this week’s classification question and a discussion of Section VII 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, September 11, 2009
Customs Broker Exam Study Tip 9: How to Use the HTSUS – Part 2
Classification is a skill that takes time to develop, but the more effort put into the process, the faster one will become more proficient. The actual process of classification is very complex, almost like reading a foreign language. It is important for both experienced and beginner to understand that the strategy for answering classification questions on the brokers exam is a little different from the process used for classifying goods for your companies on a daily basis. The basic steps discussed are similar to those used in daily transactions, but there is more to the process for those classifying goods on a regular basis. On the exam, you won’t be able to consult with experts or use the Cross Rulings Database. Remember, the average time allotted per question on the exam is three (3) minutes. In actual practice, you would likely spend more than three minutes trying to classify a product. The primary difference between classification on the exam and classification in a business situation is that the exam provides five (5) possible answers, and you know that one of those answers is correct. In real life, you aren’t provided with a set of answers in which you know for certain one is correct. Another difference is that classification questions found on the exam are intentionally complicated and sometimes tricky. Thus, there is a need for a slightly different strategy for answering the questions on the exam.
1. Carefully read the question and make note of the details.
The first step in answering any classification question involves a careful, thorough reading of the question and making note of the details provided. Some of the details may be critical to answering the question correctly. Remember, exam questions have been carefully worded and may be tricky, so some of the detail may be not be necessary. You may want to highlight the details as you read the question.
2. Look up each answer and eliminate those that are clearly incorrect.
The second step for answering classification questions is to look up all the answer selections and eliminate those that are clearly incorrect. This process may be more difficult than it sounds. Classification questions are typically written in such a way that all or most of the answers appear to be correct. The best way to answer them is by a process of elimination. Consider the following example.
What is the classification of a woven nylon scarf measuring 55 cm x 50 cm?
A. 6214.30.0000
B. 6214.40.0000
C. 6213.90.1000
D. 6117.10.2030
E. 6117.10.6020
Notice that the answers are found in two different chapters, so it is likely that we will be able to eliminate one of the chapters. Indeed, we can eliminate Answers D and E easily because Chapter 61 covers knit articles and our scarf is woven.
3. Read Chapter and Section Notes
The third step is to review the Section and Chapter Notes to make sure that there is not any information there that would preclude one or more answers. Section and Chapter Notes provide valuable information about what items are specifically included and excluded as well as useful definitions. Because of the time constraints, it would be easy to skip the Notes; therefore, the writers of the Exam intentionally include questions that require the applicant’s ability to use the Notes. Remember, the Notes can be long and many of them will not be related to the classification you are checking. You must learn to scan the notes for significant headings and keywords. If you still have several potential answers at this stage, the Notes may help you make a determination between them. You should do this even if you only have one answer remaining after the elimination step. If you have eliminated all answers but one when you reach this step and find a Note that eliminates that answer, you will have to start over to find the answer you have eliminated incorrectly. Let’s go back to the scarf.
Answer B should be eliminated because the provision is for artificial fibers and our scarf is nylon, which is a synthetic fiber. If you did not know whether nylon was artificial or synthetic, Chapter 54 and 55 covering man-made fibers would help. It would appear that Answer A is the correct selection for our scarf; however, Chapter 62, Note 7 explains that scarves that measure less than 60 cm should be classified as handkerchiefs under 6213. This is a prime example of the importance of reading the Notes. If we had overlooked the Notes assuming that 6214.30.0000 specifically describing our product was correct, we would have answered the question incorrectly.
In most situations, you will be able to answer questions using these steps; however, there may be a few questions that require an additional step involving the application of the General Notes and/or GRI. For example, a question may require you to select the appropriate duty rate. Once you’ve located the appropriate HTS number, you will select a duty rate based on the country of origin. Given the origin, you may need to check the General Notes to determine if the country is included or excluded from certain free trade agreements.
Now that you are familiar with the organization of the HTSUS and have some tips on how to answer classification questions, it’s time to practice these skills. One of the best ways to practice for the exam is to take past exams. Old exams can be found on CBP’s website. For detailed instruction on classification and related topics, check out our online courses at bcpLearning.com.
Stay tuned to the Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! The next article will cover “Valuation”. We also welcome any suggestions on topics you would like to see discussed.
1. Carefully read the question and make note of the details.
The first step in answering any classification question involves a careful, thorough reading of the question and making note of the details provided. Some of the details may be critical to answering the question correctly. Remember, exam questions have been carefully worded and may be tricky, so some of the detail may be not be necessary. You may want to highlight the details as you read the question.
2. Look up each answer and eliminate those that are clearly incorrect.
The second step for answering classification questions is to look up all the answer selections and eliminate those that are clearly incorrect. This process may be more difficult than it sounds. Classification questions are typically written in such a way that all or most of the answers appear to be correct. The best way to answer them is by a process of elimination. Consider the following example.
What is the classification of a woven nylon scarf measuring 55 cm x 50 cm?
A. 6214.30.0000
B. 6214.40.0000
C. 6213.90.1000
D. 6117.10.2030
E. 6117.10.6020
Notice that the answers are found in two different chapters, so it is likely that we will be able to eliminate one of the chapters. Indeed, we can eliminate Answers D and E easily because Chapter 61 covers knit articles and our scarf is woven.
3. Read Chapter and Section Notes
The third step is to review the Section and Chapter Notes to make sure that there is not any information there that would preclude one or more answers. Section and Chapter Notes provide valuable information about what items are specifically included and excluded as well as useful definitions. Because of the time constraints, it would be easy to skip the Notes; therefore, the writers of the Exam intentionally include questions that require the applicant’s ability to use the Notes. Remember, the Notes can be long and many of them will not be related to the classification you are checking. You must learn to scan the notes for significant headings and keywords. If you still have several potential answers at this stage, the Notes may help you make a determination between them. You should do this even if you only have one answer remaining after the elimination step. If you have eliminated all answers but one when you reach this step and find a Note that eliminates that answer, you will have to start over to find the answer you have eliminated incorrectly. Let’s go back to the scarf.
Answer B should be eliminated because the provision is for artificial fibers and our scarf is nylon, which is a synthetic fiber. If you did not know whether nylon was artificial or synthetic, Chapter 54 and 55 covering man-made fibers would help. It would appear that Answer A is the correct selection for our scarf; however, Chapter 62, Note 7 explains that scarves that measure less than 60 cm should be classified as handkerchiefs under 6213. This is a prime example of the importance of reading the Notes. If we had overlooked the Notes assuming that 6214.30.0000 specifically describing our product was correct, we would have answered the question incorrectly.
In most situations, you will be able to answer questions using these steps; however, there may be a few questions that require an additional step involving the application of the General Notes and/or GRI. For example, a question may require you to select the appropriate duty rate. Once you’ve located the appropriate HTS number, you will select a duty rate based on the country of origin. Given the origin, you may need to check the General Notes to determine if the country is included or excluded from certain free trade agreements.
Now that you are familiar with the organization of the HTSUS and have some tips on how to answer classification questions, it’s time to practice these skills. One of the best ways to practice for the exam is to take past exams. Old exams can be found on CBP’s website. For detailed instruction on classification and related topics, check out our online courses at bcpLearning.com.
Stay tuned to the Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! The next article will cover “Valuation”. We also welcome any suggestions on topics you would like to see discussed.
Thursday, September 10, 2009
Customs Broker Exam Study Tip 8: How to Use the HTSUS – Part I
In Study Tip 7, we provided some suggestions on how to read the CBP Regulations. In this article, we provide some tips on the key components and arrangement of information contained in the Harmonized Tariff Schedules of the United States (HTSUS). The next article will provide some helpful information on how to answer exam questions.
If you want to pass the Exam, no subject is more important than classification. On each test, classification accounts for 15% - 25% of all questions asked. If you are not experienced in this process or have not dedicated sufficient study to this area, your chances of success are more uncertain. The good news is that by focusing on some basic skills, developing a strategy and answering questions from previous exams, both experienced and beginning students can achieve success! To begin your study of the HTSUS, you should familiarize yourself with the key components and arrangement of information found in the HTSUS. Then, organize your book in a way that allows you to find information quickly. The following points will assist you with these tasks.
1. Familiarize yourself with the components of the HTSUS.
The HTSUS is similar to the CFR in that it is a reference text and not the type of book that is read from page one to the end. It is important to be familiar with the major parts so you will know where to look for answers and what information is the most important to read.
· General Rules of Interpretation (GRI) – The GRI appear at the beginning of the HTSUS and provide the primary rules for classification.
· General Notes – Covering over 500 pages, the General Notes provide instructions on special duty programs, free trade agreements, duty rates and other information necessary for proper classification and calculation of duties. The first three General Notes are the most likely sources of Exam questions; however, you should be familiar with the topics covered by all of the notes.
· Section and Chapter Notes - Each Section and Chapter contains notes that appear at the beginning of each. Since these notes provide lists of goods specifically included or excluded from a particular section, chapter, heading or subheading and contain definitions of certain terms, it is important to read these notes when classifying imported products.
· Classification Tables - The Section and Chapter Notes are followed by pages of tariff numbers along with descriptions of the products, duty rates and any special rates associated with the tariff numbers. They also contain footnotes and quota code information that can be pertinent in classification questions.
2. Familiarize yourself with the arrangement of the HTSUS.
In the HTSUS, goods are logically arranged so they appear in headings beginning with the most basic substances, and ending with more advanced manufactured goods. This progression is found within the chapters and in the sections.
Section 11 is a good example of the progression. As indicated by the title, this section contains listings for textile and textile Articles. Chapter 50 contains silk threads, yards and fabrics, and Chapter 52 covers cotton threads, yarns and fabrics. Chapters 61, 62 and 63 contain articles that are manufactured from the silk, cotton and other raw materials covered in the previous chapters. Notice how the book progresses from a basic item—in this case silk and cotton—to the products obtained from the basic item.
3. Organize your HTSUS
Similar to the hints we provided for the CFR, consider using tabs for your copy of the HTSUS. If you are looking for the chapter on cotton and you know that it's in the middle of the book, having a tab with the chapter number and cotton may enable you to locate the exact chapter more quickly. Here are a few suggestions for using tabs.
Attach tabs to designate each of the 22 Sections, or
Attach tabs to designate each of the 99 Chapters, or
Use both Section and Chapter tabs
Use tabs to mark the GRI and each General Note.
Consider using different color tabs to designate different sections.
Now that you are familiar with the key components and arrangement of information in the HTSUS, it’s time to learn techniques to answer exam questions. CBE Study Tip 9 will provide suggestions to help you prepare your strategy for answering classification questions on the exam. Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog!
If you want to pass the Exam, no subject is more important than classification. On each test, classification accounts for 15% - 25% of all questions asked. If you are not experienced in this process or have not dedicated sufficient study to this area, your chances of success are more uncertain. The good news is that by focusing on some basic skills, developing a strategy and answering questions from previous exams, both experienced and beginning students can achieve success! To begin your study of the HTSUS, you should familiarize yourself with the key components and arrangement of information found in the HTSUS. Then, organize your book in a way that allows you to find information quickly. The following points will assist you with these tasks.
1. Familiarize yourself with the components of the HTSUS.
The HTSUS is similar to the CFR in that it is a reference text and not the type of book that is read from page one to the end. It is important to be familiar with the major parts so you will know where to look for answers and what information is the most important to read.
· General Rules of Interpretation (GRI) – The GRI appear at the beginning of the HTSUS and provide the primary rules for classification.
· General Notes – Covering over 500 pages, the General Notes provide instructions on special duty programs, free trade agreements, duty rates and other information necessary for proper classification and calculation of duties. The first three General Notes are the most likely sources of Exam questions; however, you should be familiar with the topics covered by all of the notes.
· Section and Chapter Notes - Each Section and Chapter contains notes that appear at the beginning of each. Since these notes provide lists of goods specifically included or excluded from a particular section, chapter, heading or subheading and contain definitions of certain terms, it is important to read these notes when classifying imported products.
· Classification Tables - The Section and Chapter Notes are followed by pages of tariff numbers along with descriptions of the products, duty rates and any special rates associated with the tariff numbers. They also contain footnotes and quota code information that can be pertinent in classification questions.
2. Familiarize yourself with the arrangement of the HTSUS.
In the HTSUS, goods are logically arranged so they appear in headings beginning with the most basic substances, and ending with more advanced manufactured goods. This progression is found within the chapters and in the sections.
Section 11 is a good example of the progression. As indicated by the title, this section contains listings for textile and textile Articles. Chapter 50 contains silk threads, yards and fabrics, and Chapter 52 covers cotton threads, yarns and fabrics. Chapters 61, 62 and 63 contain articles that are manufactured from the silk, cotton and other raw materials covered in the previous chapters. Notice how the book progresses from a basic item—in this case silk and cotton—to the products obtained from the basic item.
3. Organize your HTSUS
Similar to the hints we provided for the CFR, consider using tabs for your copy of the HTSUS. If you are looking for the chapter on cotton and you know that it's in the middle of the book, having a tab with the chapter number and cotton may enable you to locate the exact chapter more quickly. Here are a few suggestions for using tabs.
Attach tabs to designate each of the 22 Sections, or
Attach tabs to designate each of the 99 Chapters, or
Use both Section and Chapter tabs
Use tabs to mark the GRI and each General Note.
Consider using different color tabs to designate different sections.
Now that you are familiar with the key components and arrangement of information in the HTSUS, it’s time to learn techniques to answer exam questions. CBE Study Tip 9 will provide suggestions to help you prepare your strategy for answering classification questions on the exam. Stay tuned to Boskage Trade News for more helpful hints on studying for the Customs Broker Exam! Please feel free to add your comments, suggestions for topics you would like to see covered and other useful information to the blog!
Wednesday, September 9, 2009
Sending Gifts to Cuba
Dear America,
Please send gifts to us in Cuba. We would especially like computers, music, phones and medicine.
Sincerely,
Your Friends in Cuba
For Americans with relatives in Cuba, the relaxation of certain restrictions is great news. Even though the embargo remains in place, the allowance of certain activities has been expanded.
Of great importance to individuals, the amendments now expands the exchange of gifts to allow gift parcels to be sent from an individual in the United States to an individual, or religious, educational or charitable organization in Cuba. The value limit for these gift parcels has been increased from $400 to $800 per parcel, and the number of parcels that an individual donor may send each month increased from one parcel per household to one parcel per recipient. Gifts may not include civilian clothing, personal hygiene items and certain communications devices, such as mobile phones.
The amendments provide two significant benefits for U.S. exporters. First, the regulations allow an expanded range of commercial telecommunications transactions with Cuba, such as cellular and satellite communications This rule provides a license exception for Consumer Communications Devices (CCD) that authorizes the export and reexport to Cuba of certain donated consumer communications devices. Note that the license exception requires the goods to be donated and provides no limits on value or frequency of shipments of mobile phones, personal digital assistants, laptop and desktop computers and peripherals such as monitors, flash drives, printers, and digital cameras.
The regulations authorize a general license that allows employees of producers or distributors of medical or agricultural products (including food) to travel to Cuba to participate in marketing, sales negotiation, accompanied delivery or servicing in Cuba of agricultural commodities, medicine or medical devices eligible under the Department of Commerce's export or re-export licensing policy to Cuba.
Click HERE to view the document posted by the BIS that explains the changes made, eligibility, limits on donations and other information relevant the new regulations.
Click HERE to view the information published in the Federal Register on September 8, 2009.
Please send gifts to us in Cuba. We would especially like computers, music, phones and medicine.
Sincerely,
Your Friends in Cuba
For Americans with relatives in Cuba, the relaxation of certain restrictions is great news. Even though the embargo remains in place, the allowance of certain activities has been expanded.
Of great importance to individuals, the amendments now expands the exchange of gifts to allow gift parcels to be sent from an individual in the United States to an individual, or religious, educational or charitable organization in Cuba. The value limit for these gift parcels has been increased from $400 to $800 per parcel, and the number of parcels that an individual donor may send each month increased from one parcel per household to one parcel per recipient. Gifts may not include civilian clothing, personal hygiene items and certain communications devices, such as mobile phones.
The amendments provide two significant benefits for U.S. exporters. First, the regulations allow an expanded range of commercial telecommunications transactions with Cuba, such as cellular and satellite communications This rule provides a license exception for Consumer Communications Devices (CCD) that authorizes the export and reexport to Cuba of certain donated consumer communications devices. Note that the license exception requires the goods to be donated and provides no limits on value or frequency of shipments of mobile phones, personal digital assistants, laptop and desktop computers and peripherals such as monitors, flash drives, printers, and digital cameras.
The regulations authorize a general license that allows employees of producers or distributors of medical or agricultural products (including food) to travel to Cuba to participate in marketing, sales negotiation, accompanied delivery or servicing in Cuba of agricultural commodities, medicine or medical devices eligible under the Department of Commerce's export or re-export licensing policy to Cuba.
Click HERE to view the document posted by the BIS that explains the changes made, eligibility, limits on donations and other information relevant the new regulations.
Click HERE to view the information published in the Federal Register on September 8, 2009.
Tuesday, September 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 T’s.
TEU
A “twenty-foot equivalent unit” (TEU) is a shipping capacity measurement and is equal to a 20-foot container. A 40-foot container would equal two (2) TEUs.
TIB
The Temporary Importation Bond (TIB) allows importers to enter merchandise for temporary use without paying duties. Merchandise entered under a TIB cannot be sold but can be repaired, altered or processed. A bond must be posted to guarantee that these goods will be exported within the specific period, which is usually one year from the date of import.
Technology Transfer
This term is used to describe "the transfer of knowledge generated and developed in one place to another.” Technology may be transferred in many forms, such as research and development; conferences, agreements between a U.S. and foreign entity, sale of processes or blueprints and the activities that take place in multinational organization.
TEU
A “twenty-foot equivalent unit” (TEU) is a shipping capacity measurement and is equal to a 20-foot container. A 40-foot container would equal two (2) TEUs.
TIB
The Temporary Importation Bond (TIB) allows importers to enter merchandise for temporary use without paying duties. Merchandise entered under a TIB cannot be sold but can be repaired, altered or processed. A bond must be posted to guarantee that these goods will be exported within the specific period, which is usually one year from the date of import.
Technology Transfer
This term is used to describe "the transfer of knowledge generated and developed in one place to another.” Technology may be transferred in many forms, such as research and development; conferences, agreements between a U.S. and foreign entity, sale of processes or blueprints and the activities that take place in multinational organization.
Friday, September 4, 2009
Ask the Wizard: Finding Difficult Answers in the Regulations
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 finding difficult answers in the CBP Regulations.
Question:
When reading a question related to the CBP Regulations, some answers are easy to find, but there are some topics where it is not always obvious where to find the correct answer. For example, when you are reading a question that deals with liquidation or penalties, how do you know what to look for in the question to help locate the correct answer?
As an example, we will use the question from the April 2008 exam submitted by our reader.
When CBP notifies a principal of a claim for liquidated damages, the surety or sureties involved will be notified _____.
A. at CBP’s discretion within sixty days of the offense
B. at CBP’s discretion after 180 days of initial mailing of notice
C. sixty days from the date of the demand on the surety
D. thirty days from the date of the demand on the surety
E. at the same time as the initial notification to the principal
First, it is important to note that this question was posted under the section titled “Bonds” on the exam. Since the question mentions sureties numerous times and is listed under the Bond Section of the exam, one might assume that the answer would be found in Part 113 – Customs Bonds. It is helpful to determine what the question is really asking. The primary subject appears to be some type of information about liquidated damages. In fact, the question seeks information about notification of the surety in a liquidated damages claim. If unsure of the answer, you might scan the list of topics covered in Part 113. Subpart F – Assessment of Damages might be a source of information, but looking at the individual section titles, liquidated damages are not mentioned. By learning the names of each part in the Regulations, we should know that liquidated damages are covered in Part 172. Scanning the topics covered in Part 172, we find information about notices for liquidated damages in 172.1.
When it comes to questions about penalties, those answers may be found in more than one part of the regulations. For example, information related to “petitions” and “offers in compromise” can be found in both Part 171 and Part 172. Penalty amounts for violation of 19 U.S.C. 1592 can be found in Part 162 and Appendix B to Part 171. Again, this demonstrates the need to learn and possibly summarize on a fact sheet the types of information found in each part.
To summarize, learning the names of each part and becoming familiar with the types of information contained in each part is key to finding answers. Scanning the topics covered in each part is often a good method of confirming or eliminating that part as the source of an answer. In addition, Tip 7 on how to read the regulations published on Thursday may also provide some helpful suggestions on getting to know the information contained in the various sections.
We invite our readers to share their tips on how to find difficult and/or confusing information in the CBP Regulations.
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:
When reading a question related to the CBP Regulations, some answers are easy to find, but there are some topics where it is not always obvious where to find the correct answer. For example, when you are reading a question that deals with liquidation or penalties, how do you know what to look for in the question to help locate the correct answer?
As an example, we will use the question from the April 2008 exam submitted by our reader.
When CBP notifies a principal of a claim for liquidated damages, the surety or sureties involved will be notified _____.
A. at CBP’s discretion within sixty days of the offense
B. at CBP’s discretion after 180 days of initial mailing of notice
C. sixty days from the date of the demand on the surety
D. thirty days from the date of the demand on the surety
E. at the same time as the initial notification to the principal
First, it is important to note that this question was posted under the section titled “Bonds” on the exam. Since the question mentions sureties numerous times and is listed under the Bond Section of the exam, one might assume that the answer would be found in Part 113 – Customs Bonds. It is helpful to determine what the question is really asking. The primary subject appears to be some type of information about liquidated damages. In fact, the question seeks information about notification of the surety in a liquidated damages claim. If unsure of the answer, you might scan the list of topics covered in Part 113. Subpart F – Assessment of Damages might be a source of information, but looking at the individual section titles, liquidated damages are not mentioned. By learning the names of each part in the Regulations, we should know that liquidated damages are covered in Part 172. Scanning the topics covered in Part 172, we find information about notices for liquidated damages in 172.1.
When it comes to questions about penalties, those answers may be found in more than one part of the regulations. For example, information related to “petitions” and “offers in compromise” can be found in both Part 171 and Part 172. Penalty amounts for violation of 19 U.S.C. 1592 can be found in Part 162 and Appendix B to Part 171. Again, this demonstrates the need to learn and possibly summarize on a fact sheet the types of information found in each part.
To summarize, learning the names of each part and becoming familiar with the types of information contained in each part is key to finding answers. Scanning the topics covered in each part is often a good method of confirming or eliminating that part as the source of an answer. In addition, Tip 7 on how to read the regulations published on Thursday may also provide some helpful suggestions on getting to know the information contained in the various sections.
We invite our readers to share their tips on how to find difficult and/or confusing information in the CBP Regulations.
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, September 3, 2009
Customs Broker Exam Study Tip 7: How to Read the CBP Regulations
From the time we were children, most of us were taught to read a book from the beginning to the end or cover-to-cover, starting with the first page. When reading Title 19 of the Code of Federal Regulations “CBP Regulations” for the Customs Brokers Exam, you should break that rule. Yes, we really did suggest that you should not read the regulations from the beginning to the end, but that doesn’t mean that you shouldn’t read the entire book. The material contained in the regulations is very technical and often quite boring; therefore, it is not the kind of book you can read from cover-to-cover in a short time.
If you think this idea sounds crazy, pick up the book and read 19 CFR 4, containing approximately 45 pages. Only three questions from Part 4 have appeared on the last ten exams; that’s three questions in a total of 800 questions, which is less than 1% of the questions. This means you’ve just spent valuable time reading material that won’t likely be tested. On the other hand, 19 CFR 111, “Part 111” is one of the most frequently tested sections and it contains 15 pages. There have been 52 questions from Part 111 on the last ten exams which means approximately 6.5% of the questions on each exam come from Part 111. Not only will you be reading information that is important for the test, but Part 111 provides requirements for customs brokers. Understanding the requirements for customs brokers is important for passing the exam and for persons who want to be brokers.
The CBP Regulations book is lengthy and often difficult to read and understand; however, it is important for importers, brokers, and other parties involved in international trade to have a good understanding of this book. There are numerous reasons for reading, understanding and applying the regulations. For purposes of the exam, knowledge of the regulations reduces time spent looking for answers on exam day. CBP employees and other members of the trade community might tell you that all of the sections are equally important. This is true, but for the purposes of the exam, some sections are not as significant because they are not as heavily tested.
The key to reading the regulations is to match your reading schedule with your study plan. In most situations, this means reading the sections that are most heavily tested first and saving the sections that are rarely tested for later. For example, Week 1 of your plan may require you to read Part 111- Brokers, Part 141 – Entry of Merchandise and Part 142 - Entry Process. These three parts are included in the top five sections that have been tested on the last ten exams and make up about 13% of the total questions on each exam.
Another strategy might be to read sections that are related to each other by a common theme. For example, Parts 18, 114, 127, 132, 143, 144 and 146 contain information about types of entries and alternatives to entry. There are various strategies for reading the regulations. Use what works best for your study plan, but use your time wisely and avoid reading the book from cover-to-cover.We would like to offer some other suggestions related to reading the regulations. First, use "tabs" to mark each part of the regulations. Colored tabs can be used to indicate more important or frequently used parts. Using tabs also makes certain parts easier to find which can be a time saver during the exam. Second, highlight important facts, which can be used later for making outlines, flash cards or other study tools. Third, make notes in the margins to help you remember certain fact or provide examples that might not be included. Fourth, memorize the titles of each part and/or associate that title with something that will remind you of the information contained in that part.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences.
Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals! We will discuss “How to Use the HTSUS” in the next study tip.
If you think this idea sounds crazy, pick up the book and read 19 CFR 4, containing approximately 45 pages. Only three questions from Part 4 have appeared on the last ten exams; that’s three questions in a total of 800 questions, which is less than 1% of the questions. This means you’ve just spent valuable time reading material that won’t likely be tested. On the other hand, 19 CFR 111, “Part 111” is one of the most frequently tested sections and it contains 15 pages. There have been 52 questions from Part 111 on the last ten exams which means approximately 6.5% of the questions on each exam come from Part 111. Not only will you be reading information that is important for the test, but Part 111 provides requirements for customs brokers. Understanding the requirements for customs brokers is important for passing the exam and for persons who want to be brokers.
The CBP Regulations book is lengthy and often difficult to read and understand; however, it is important for importers, brokers, and other parties involved in international trade to have a good understanding of this book. There are numerous reasons for reading, understanding and applying the regulations. For purposes of the exam, knowledge of the regulations reduces time spent looking for answers on exam day. CBP employees and other members of the trade community might tell you that all of the sections are equally important. This is true, but for the purposes of the exam, some sections are not as significant because they are not as heavily tested.
The key to reading the regulations is to match your reading schedule with your study plan. In most situations, this means reading the sections that are most heavily tested first and saving the sections that are rarely tested for later. For example, Week 1 of your plan may require you to read Part 111- Brokers, Part 141 – Entry of Merchandise and Part 142 - Entry Process. These three parts are included in the top five sections that have been tested on the last ten exams and make up about 13% of the total questions on each exam.
Another strategy might be to read sections that are related to each other by a common theme. For example, Parts 18, 114, 127, 132, 143, 144 and 146 contain information about types of entries and alternatives to entry. There are various strategies for reading the regulations. Use what works best for your study plan, but use your time wisely and avoid reading the book from cover-to-cover.We would like to offer some other suggestions related to reading the regulations. First, use "tabs" to mark each part of the regulations. Colored tabs can be used to indicate more important or frequently used parts. Using tabs also makes certain parts easier to find which can be a time saver during the exam. Second, highlight important facts, which can be used later for making outlines, flash cards or other study tools. Third, make notes in the margins to help you remember certain fact or provide examples that might not be included. Fourth, memorize the titles of each part and/or associate that title with something that will remind you of the information contained in that part.
We welcome your comments on these suggestions and encourage you to add your own ideas to this forum so that other students studying for the exam can benefit from your experiences.
Check the Boskage Trade News regularly for more helpful hints on studying for the Customs Broker Exam and other useful news for international trade professionals! We will discuss “How to Use the HTSUS” in the next study tip.
Wednesday, September 2, 2009
International Trade Compliance News Summary
1. CBP Posts Schedule of Future ISF Outreach Events
CBP will offer ISF training in the following cities during the month of September.
· Miami, FL – Wednesday, September 09, 2009
· Charleston, SC – Wednesday, September 09, 2009
· Chicago, IL – Wednesday, September 23, 2009
· San Francisco, CA – Wednesday, September 23, 2009
· Washington, DC - Tuesday, September 29, 2009
· New York, NY - Wednesday, September 30, 2009
· Norfolk, VA – Wednesday, September 30,
Don’t forget to check out the penalty information published in the Customs Bulletin on July 17, 2009.
2. First Sale Indicator No Longer Required
CBP will offer ISF training in the following cities during the month of September.
· Miami, FL – Wednesday, September 09, 2009
· Charleston, SC – Wednesday, September 09, 2009
· Chicago, IL – Wednesday, September 23, 2009
· San Francisco, CA – Wednesday, September 23, 2009
· Washington, DC - Tuesday, September 29, 2009
· New York, NY - Wednesday, September 30, 2009
· Norfolk, VA – Wednesday, September 30,
Don’t forget to check out the penalty information published in the Customs Bulletin on July 17, 2009.
2. First Sale Indicator No Longer Required
U.S. Customs and Border Protection (CBP) issued a message informing ports and the trade community that the requirement for filing the First Sale Declaration indicator ended on August 19, 2009. Starting on August 20, 2008, importers were required to enter the letter “F” in a miscellaneous indicator field for each entry line where the declared entry value was determined by the first sale rule. CBP collected the information and forwarded it to the U.S. International Trade Commission (ITC), which will review the data for the 12-month period and report the findings to the Senate Committee on Finance and the House Committee on Ways and Means by February 10, 2010.
3. Tips for New Importers and Exporters
On August 31, CBP posted revisions to its “Tips for New Importers and Exporters.” CBP recommends that importers and exporters become familiar with CBP policies and procedures prior to actually importing/exporting" goods. To assist the trade in this process, the article provides information and links related to:
· Licenses required for import
· Other Government Agencies
· Importing into the United States Publication
· Informed Compliance Publications
· CBP Ports and Contacts
· CROSS Rulings
· Export Documents, Licenses and Requirements
· Bureau of Industry and Security (BIS)
· Customs brokers
· Bills from CBP
4. CBP Posts Updated ABI Provider List
CBP updated its list of providers of data processing services to the trade community for the Automated Broker Interface (ABI). Inclusion on the list does not constitute any form of an endorsement by CBP.
The list contains software providers for :
ACE = Automated Commercial Environment
DV = Drawback
FTZ = Foreign Trade Zone
ISF= Importer Security Filing
PV = Protest
QP/WP = In-bond
V = ABI entry
Service bureaus (SB) are also included on the list. Service bureaus act as a communications source for data transmission to ACS. These organizations are in the business of transmitting and receiving Customs data for ABI participants. Be sure to check with the individual provider to determine the services offered. Each of ABI participants have successfully completed a period of intensive testing to receive approval for various levels of ABI operations.
5. Lacey Act Declaration Enforcement Delayed for Some Products
In the September 2, 2009, Federal Register, the Department of Agriculture, Animal and Plant Health Inspection Service (APHIS) published revisions to the enforcement of the requirement to file an import declaration for certain goods under the Lacey Act. Be sure to check the Federal Register and the USDA web site for changes to the Phase III requirements starting October 1, 2009, and the Phase IV requirements starting April 1, 2010.
Tuesday, September 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 S’s.
Stuffing
Stuffing is the process of loading cargo into a shipping container. Proper container stuffing allows for the use of as much as possible of the container’s cube capacity and protects the cargo from loss or damage during transit.
Substantial Transformation
When a production or manufacturing process which results in an article having a new and different name, character and use from the imported article, it is considered to have undergone substantial transformation.
Simplified Network Application Process (SNAP)
SNAP is a secure electronic portal for submission of export and reexport applications, and commodity classification requests via the Internet to the Bureau of Industry and Security (BIS). SNAP also allows the user to attach supporting documentation electronically, which can expedite processing.
Stuffing
Stuffing is the process of loading cargo into a shipping container. Proper container stuffing allows for the use of as much as possible of the container’s cube capacity and protects the cargo from loss or damage during transit.
Substantial Transformation
When a production or manufacturing process which results in an article having a new and different name, character and use from the imported article, it is considered to have undergone substantial transformation.
Simplified Network Application Process (SNAP)
SNAP is a secure electronic portal for submission of export and reexport applications, and commodity classification requests via the Internet to the Bureau of Industry and Security (BIS). SNAP also allows the user to attach supporting documentation electronically, which can expedite processing.
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