Monday, November 30, 2009
Answer to Section XV Question
Classify a brass showerhead
Correct Answer: 7418.20.1000
Additional Information: NY R01416
As one of the largest sections of the HTSUS, Section XVI covers Chapters 84 and 85 consisting of machinery, mechanical appliances and electronics. This section and the two chapters it contains can be very confusing, even for experienced classification specialists. Pay close attention to the exclusions found in the Section Notes, especially 1 (g) for parts of general use.
Many of the parts for the machines classified in Chapters 84 and 85 are also specifically found in these chapters. For example, a hydraulic pump might include a solenoid valve. Should the valve be classified as a hydraulic pump part under 8413.91.9050 or as a solenoid valve under 8481.80.9005? According to GRI 1 and Section XVI Note 2(a), the valve should be classified in its respective heading even if it is a part of a pump. Products in this section, specifically Chapter 85, may require compliance with FCC guidelines.
Easily one of the largest chapters in the HTSUS, Chapter 84 covers a wide variety of machinery, equipment and parts. Articles of this chapter include engines, pumps, forklifts, hand power tools, calculators, computers, valves, bearings and other products. Certain commodities, such as bearings, require extra detail on the commercial invoice. Commodities requiring additional information are found in 19 CFR 141.89.
Chapter 85 covers a wide variety of equipment powered by or involving the use of electricity. Products include electric motors, batteries, appliances, lighting, hair dryers, telephones, radios, switches, light bulbs and miscellaneous parts. The Chapter and Statistical Notes provide explanations of various electrical products such as printed circuits, integrated circuits, transceivers and others.
Note: Significant changes were made to Chapters 84 and 85 in January 2007. If you are reviewing CBE tests or binding rulings issued prior to 2007, you may find some discrepancies in HTS numbers.
Section XVI Question
Classify a hydraulic accumulator used on a forklift truck.
Join us next week for the answer to this week’s classification question and a discussion of Section XVII of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to firstname.lastname@example.org
Wednesday, November 25, 2009
Trade Compliance Professionals are thankful for:
1. A job.
2. A day off
3. Not being selected for an audit
Tuesday, November 24, 2009
Free on Board (FOB)
The Incoterm Free on Board means the seller completes his obligations when the goods have been cleared for export and have passed over the ship’s rail. The buyer is responsible for all costs and risks of loss or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term should only be used on ocean shipments; however, it is often used for other modes of transportation.
Foreign Trade Zone (FTZ)
Foreign Trade Zones are special commercial and industrial areas, in or near ports of entry where foreign and domestic merchandise, including raw materials, components and finished goods, may be brought in without being subject to payment of customs duties. Merchandise brought into these zones may be stored, sold, exhibited, repacked, assembled, sorted, graded, cleaned or otherwise manipulated prior to re-export or entry into the customs territory.
A foreign person is any person resident outside the United States or subject to the jurisdiction of a country other than the United States. A "person" is any individual, branch, partnership, association, associated group, estate, trust, corporation or other organization. Specifically, a foreign person is:
· A foreign person is any natural person who is not a lawful permanent resident of the U.S.
· Foreign corporations, business associations, partnerships, trusts, societies or any other entity or group that is not incorporated or organized to do business in the United States is treated as a foreign person.
· International organizations, foreign governments and any agency or subdivision of a foreign government are treated as foreign persons.
Monday, November 23, 2009
Section XIV Answer
Correct Answer: 7114.11.4500
Section XV covers 12 chapters containing base metals and articles of base metals. Notice that not all articles made of metal are classified in this section. For example, metal furniture is found in Chapter 94. It is important to read all of the section and chapter notes. The section notes list articles excluded from classification in these chapters. For example, Section Note 3 lists the base metals. Section Note 5 describes an alloy of base metals as being classified by the metal, which predominates by weight over each of the other metals. Pay close attention to Section Note 2, which defines parts of general use. These items are generally capable of having multiple functions not specific to any one machine and are called parts of general use. Most of the goods covered in this section do not require any special approval from other government agencies. There are some exceptions for metal articles used for food service such as metal cooking utensils. Some chapters contain articles subject to antidumping and countervailing duties.
Chapter 73 covers iron and steel products such as pipes, fittings, fasteners and miscellaneous articles. Some articles entered under 7301 through 7307 may require a mill analysis providing percentages by weight of the elements, such as carbon, found in the article. Articles in this chapter require special steel licensing. See http://ia.ita.doc.gov/steel/license/ for additional information concerning the steel licensing process.
Chapter 74 covers copper articles such as plates, tubes, fasteners, pots, house wares and plumbing supplies. This chapter also includes brass and bronze articles.
Chapter 75 covers nickel and articles of nickel such as wire, tubes, fittings and miscellaneous articles.
Chapter 76 contains aluminum and articles such as plates, pipes, kitchenware, hardware and other articles.
Chapter 77 has been reserved for future use and does not currently contain any Chapter Notes or HTSUS numbers.
Chapter 78 covers lead and articles of lead such as plates, tubes, fittings and miscellaneous articles.
Chapter 79 contains zinc and articles of zinc such as sheets, tubes, fittings, gutters and miscellaneous articles
Chapter 80 covers tin and articles of tin such as plates, strips, pipes, fittings and household articles.
Chapter 81 covers base metals not specified elsewhere such as tungsten, molybdenum, magnesium, cobalt, titanium and articles made of these base metals.
Chapter 82 contains metal hand tools such as gardening tools, wrenches, hammers, cutlery, razors and scissors. With the exception of articles for use with food products regulated by the FDA, products of this chapter do not require any special licensing, permits or documentation. See 19 CFR 134 for special marking requirements for certain tools. The Statistical Notes provide guidance on proper reporting of pieces in a set. Duty on sets of 8206, 8211 and 8215 is determined by the article in the set that carries the highest duty rate.
Chapter 83 covers miscellaneous metal articles such as keys, mountings for furniture, office accessories, nameplates and caps.
Classify a brass showerhead
Join us next week for the answer to this week’s classification question and a discussion of Section XVI of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to email@example.com
Friday, November 20, 2009
How can I find out if my product is subject to antidumping and/or countervailing duties since the HTSUS does not provide this information?
Wow, this is a great question with a variety of solutions. If you are familiar with the classification process, you know that the Harmonized Tariff Schedule published by the United States International Trade Commission does not provide a list of HTS numbers that are subject to ADD or CVD cases. So, where is this information hiding? Is it some big secret? No, it is just a matter of doing a little detective work to find what you need. Brokers have the ability to obtain information by using ABI to query antidumping/countervailing duty cases by case number, International Organization for Standardization (ISO) country code or tariff number. Thus, our first option is to ask our broker to query ABI and provide a list.
The International Trade Administration and International Trade Commission have made the job easier by publishing a couple of useful lists on their websites. The lists can be accessed using either the ITA or the USITC websites. The first list, which is actually found on the USITC website, consists of an Excel spreadsheet that contains the case numbers, order dates, products and countries. The nice thing about this list is that it is short and can be sorted to find cases by country or product. If you need more detail about a case, then the second option, published by the ITA, allows you to search by country. Click on the country and then the product to obtain more detail.
These are a few of the quick ways to find out which products require antidumping and countervailing duties. In fact, Boskage has just developed an advanced HTSUS research tool at www.bcpsource.com, which (among many other helpful tools) brings all of these antidumping elements together in an easy-to-use format. Click here to sign up for a free trial!
Although most of our processes are moving to the electronic environment, the spreadsheet is an excellent quick reference tool to get you started. There is another option; however, we would NOT recommend that you try this one. You can stick your head in the sand, pretend your product isn't subject to antidumping and wait for CBP to send you a bill. With all of the better options we provided, there is no longer any need to hide from antidumping or countervailing issues.
Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” The Wizard will be enjoying a long Thanksgiving weekend next Friday, so look for the next question and answer session on Friday December 4th.
Wednesday, November 18, 2009
The Export-Import Bank of the United States raised the upper limit of its small business multi-buyer export credit insurance policy from $ 5,000,000 to $7.5 million. This change is designed to allow more small businesses to export their goods and services more easily. Effective December 1, U.S. exporters designated as small businesses under Small Business Administration standards, and with annual export credit sales of $7.5 million or less, will be eligible for enhanced coverage under Ex-Im Bank’s short-term small business multi-buyer insurance policy. Click HERE to learn more about the Ex-Im Bank and other programs launched during the past year to increase support for small business exporters trying to survive the during the current economic crisis.
U.S. Commercial Service
The U.S. Commercial Service (USCS), a division of the International Trade Administration within the U.S. Department of Commerce, provides a variety of opportunities to assist U.S. exporters sell overseas and help overseas buyers learn about U.S. exports.
· The USCS helps U.S. small and medium sized businesses grow international sales by providing:
· Online and customized market research.
· Support for U.S. exhibitors in selected overseas and domestic trade shows to attract qualified business partners.
· Fee-based programs to introduce exporters of U.S. products to qualified buyers and distributors.
· Individualized counseling and advocacy.
· Training programs on subjects such as export documentation, export controls and the basics of exporting.
Click HERE to learn more about the U.S. Commercial Service.
Export.gov brings together resources from 19 U.S. Government Agencies to assist American businesses in planning their international sales strategies and succeeding in today’s global marketplace. Using these government resources, providing market research and trade leads Export.gov helps American exporters navigate the international sales process and avoid pitfalls such as non-payment and intellectual property misappropriation. Launched by Export.gov, Exports Live is an 8-city seminar tour designed for small and medium-sized businesses wanting to start or grow their international sales with government solutions. Speakers from the SBA, Department of Commerce, Ex-Im Bank and various exporters provide strategies used by local small and medium-sized businesses that have already discovered how to increase profitability through exporting.
Click HERE for other export news and training opportunities sponsored by Export.gov.
Tuesday, November 17, 2009
The edge protector is an angle piece fitted over the edge of boxes, crates, bundles and other packages to prevent the pressure from metal bands or other types from cutting into the package.
The Explanatory Notes provide an explanation, chapter-by-chapter; heading-by- heading, of what CBP intends to be covered by the various sections, chapters, and headings in the HTSUS. Explanatory Notes are not part of the legal system; however, they do represent the views of classification experts.
Monday, November 16, 2009
Section XIII Answer
Correct Answer: 6913.10.5000
See: NY G81399
Section XIV covers just one chapter. Chapter 71 contains precious and semi precious stones, precious metals, pearls, diamonds, stones, silver and gold jewelry. Products of this chapter may require special marking Importers of goods in this chapter should spend time reading the Chapter Notes and Explanatory Notes. Chapter Note 4 defines the precious metals as silver, gold and platinum. Chapter Note 9 defines jewelry as any small object of personal adornment or article normally carried on the person such as rings, bracelets, necklaces, earrings, tiepins, compacts and pill boxes. The Explanatory Notes to Chapter 71 makes clear that "cladding" and "plating" are two distinct processes of applying a metal to another surface.
What is the correct classification for a platinum plated, sterling silver set of silverware, which contains a dozen each of forks, knives and spoons?
Join us next week for the answer to this week’s classification question and a discussion of Section XV of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to firstname.lastname@example.org
Friday, November 13, 2009
Each Friday, the Wizard joins us to share an answer to one of the questions asked during the week. This week we had an excellent question about the publications that CBP requires brokers and importers to maintain.
Are U.S. importers required by Customs law to have a desktop copy of the U.S. Customs explanatory notes? If not, in a case of a customs audit will customs look to see if you have a copy for the purpose of reasonable care?
When dealing with import compliance, the answers are almost never quite as simple as “yes” and “no.” The CBP Regulations (19 CFR) do not require importers to maintain copies of the Explanatory Notes or other government publications; however, it is important for importers to have access to tools that will help them fulfill their responsibilities and demonstrate reasonable care. Additionally, a CBP audit requires importers to answer questions that indicate what resources are used and how they are used. Ask yourself this question. If CBP asked you to demonstrate how classification of a specific product was determined, how would you explain the process and what documentation would you provide? The Wizard might discuss this in another article if anyone is interested.
The types of tools importers maintain depend on the complexity and volume of transactions. For example, a low volume importer that only imports two products may not need to purchase the Explanatory Notes. However, an importer with hundreds of products and classifications or products identified as difficult to classify is more likely to need the Explanatory Notes, along with the HTSUS, access to binding rulings and other CBP publications. Remember, the importer has the ultimate responsibility for the accuracy for classifications, even if they use a broker. Another issue to consider is how the tools are used. It would be worse for an importer to purchase a copy of the Explanatory Notes, put them up on a shelf, and never use them, than to not have them at all. Consider the volume of imports, complexity of classifications, available resources, procedures and other factors. Don’t forget the other tools that are available.
- Code of Federal Regulations Title 19 (19 CFR)
- Harmonized Tariff Schedule of the U.S (HTSUS)
- Dictionaries and Reference Books
- Internet Access
- Customs Rulings
While it is not mandatory that importers have all of these tools, use of them helps demonstrate reasonable care and compliance. They also make employee's jobs easier, and increase productivity and accuracy.Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” See you next Friday!
Thursday, November 12, 2009
In addition to PREDICT, entry filers will be able to use the Import Trade Auxiliary Communications System “ITACS” to check the status of individual entries, submit documents and link them to specific entries.
Click HERE to see a schedule of PREDICT Import Trade Community Outreach Events.
Wednesday, November 11, 2009
The 2009 Trade Symposium is scheduled for December 8 – 10, 2009. Click HERE to view the symposium topics and schedule. Registration for the conference is currently full, but CBP is offering the option to attend by webcast. For only $35, participants will be able to view and interact online.
2. Updated ABI Software Vendors List
CBP updated its ABI Software Vendors List on 11/9/2009. This list contains the company name, address, phone number and email contact information along with the types of services provided. U.S. Customs and Border Protection (CBP) only collects the information and does not provide any endorsements as to the nature, extent or quality of the services that may be provided.
3. American Recovery & Reinvestment Act Funds
Check out updates on how CBP is using the funds received from American Recovery and Reinvestment Act (ARRA). CBP appropriated $420 million for constructing 24 new land ports of entry, primarily along the northern border and making repairs to existing land ports.
4. CBP Announces New Intellectual Property Bonds
U.S. Customs and Border Protection has established new bond options for intellectual property rights (IPR) owners. The owners will use this bong to obtain samples of imported merchandise suspected of violating a copyright, trade name or trademark registered by the IPR owner. IPR owners may use either a continuous or single transaction IPR sample bond. A continuous IPR sample bond has the advantage of covering multiple IPR sample transactions, across all ports of entry with a single bond and reduces the administrative burden for CBP to track single transaction IPR bonds.
5. C-TPAT Enforcement & Appeal Process
This new document provides an overview of the reasons for suspending or removing C-TPAT members from the program. Members may be immediately removed for aggravated circumstances such as providing false information or intentionally disregarding the program’s requirements. For lesser violations, members may be suspended and provided with an opportunity to comply with the requirements in order to resume active membership.
Once a security related incident or other program violation occurs, C-TPAT officials determine the appropriate next steps on a case-by-case basis. To be reinstated into the program after an incident or violation, the company must agree to a corrective action plan that identifies specific objectives and periods within which those objectives should be reached. In addition, the company must consent to un-announced visits by C-TPAT staff to monitor progress. In the case of a failed validation, the company must demonstrate that it has successfully addressed all vulnerabilities and complied with all other requirements before being fully reinstated.
Companies that are suspended or removed may appeal this decision to CBP HQ. CBP will decide the appeal in a timely fashion.
6. CBP Updates ISF FAQ
U.S. Customs and Border Protection (CBP) recently updated its "Frequently Asked Questions" document on Importer Security Filing (ISF). The document contains new information about liquidated damages, duplicate filings, Instruments of International Trade (IIT), empty containers and garments on hangers. Information about bill of lading numbers, bonds, progress reports and U.S. Goods Returned has been updated.
Tuesday, November 10, 2009
The Wizard is registered, are you?
Sometimes used interchangeably with “detention,” demurrage refers to the extra charges incurred because of the excess time taken for loading or unloading cargo. These charges are used to help offset the costs incurred because of the additional time used to unload the container when the container could have been used for other purposes.
A dual invoicing system results in submission of one invoice for CBP entry purposes reporting lower prices than those actually paid for imported merchandise. This allows the importer to understate the value and under pay the duties. Another invoice containing the higher amount is submitted to the importer for payment.
Monday, November 9, 2009
Most of you reading this blog are involved in some type of international compliance and likely work for a C-TPAT compliant company, so your offices must be secure, right? According to your procedures, your company states that they may search vehicles and requires all visitors to sign in, but are these procedures followed? Several years ago disgruntled employee shot his supervisor at a company where I worked and the company had excellent security policies. Could an angry ex-employee gain access to your facilities? Now, I’m not suggesting that every business install metal detectors to screen for guns and knives, but I am suggesting that we might take a closer look to see if we are practicing what our procedures say we are. If we don’t have procedures in place yet, then it’s time to implement them. Along the same lines, does your company have any procedures for identifying employees who may pose a danger to others? Again, I’m not suggesting that we sit around and scrutinize our co-workers. Hey, we all have some little quirks, but what is the policy for handling someone who demonstrates an unusual temper or shows signs of substance abuse?
Spend some time reviewing your current procedures. Even better, try testing them. Send an unknown person into your facilities and see how far they get before being stopped by an employee. Ask random employees how they would handle an employee suspected of substance abuse or who showed violent behaviors. Review the results, analyze the risk potential for incidents of violence in your workplace and modify or create procedures as necessary. Not only will these precautions protect your company’s most important assets, the employees, but they will improve your C-TPAT compliance!
Note: We will return with our weekly study of the HTS next Monday.
Friday, November 6, 2009
Where can I find a job working for a broker and what kind of hours can I expect to work?
Customs brokers generally work in offices located in large cities that have CBP offices and at border crossing areas. There are 327 official ports of entry in the United States and 15 Preclearance offices in Canada and the Caribbean. When possible, brokers tend to locate their operations close to CBP offices and/or airport facilities to expedite the clearance process. Click HERE to review a list of CBP ports by state.
Depending on the location and type of job, most brokers work standard daytime hours; however, brokers may be on call 24 hours a day in some areas where CBP operates 24 hours a day, seven days a week. For example, the express couriers such as FedEx, UPS and DHL operate 24 hours a day and have CBP employees on site at designated hours. Many of those CBP officers work at night to clear packages so they can be delivered the next day; therefore, the broker must work at night. Volunteering for the night shift can be a great opportunity to gain experience. Determine the type of schedule you’d like to have and the location where you’d like to live. Then check out the brokers, forwarders, importers and other companies that may hire licensed brokers. Do research by checking out these sites. Key in various combinations of job titles and locations to provide more options.
Industry organizations such as the International Compliance Professional Association (ICPA) and the National Customs Broker and Forwarders Association of America (NCBFAA) are good sources for general information, job opportunities and networking.
Do you have a question for the Wizard? Submit your question by clicking on the link in the space for “Ask the Wizard.” See you next Friday!
Wednesday, November 4, 2009
Appeals must be filed within 60 days of the date of the letter notifying the applicant of the score. CBP will reject the appeal if it:
- is incomplete, is untimely, or is in the wrong format
- includes any arguments written by another person
- does not provide supporting arguments
- argues for an answer the applicant did not select
- contests an incomplete erasure or insufficient marking on the applicant’s answer sheet
CBP will provide to the examinee written notice of the decision on the appeal. If the CBP decision on the appeal affirms the result of the examination, the examinee may request review of the decision on the appeal by writing to the Secretary of Homeland Security, or his designee, within 60 calendar days after the date of the notice of that decision. 19 CFR 111.13(f)
The most frequent question we hear is “when will CBP notify me if they accept my appeal?” Unfortunately, there is no magic answer for that question. People who have shared their experiences lead us to believe that you may not receive an answer before the date of the next exam. However, CBP tries to notify those who have had their appeals approved prior to the exam. This could be frustrating because if your appeal is approved, it may not be necessary for you to take the next exam. However, if your appeal is not approved, you may want to take the next test while the information is still fresh.
Save yourself some time and expense by submitting your very best arguments the first time. To help you submit an appeal that complies with CBP requirements, we’ve created the CBE Appeal Checklist. Be sure to review each item and place a check mark next to the individual requirements.
Tuesday, November 3, 2009
Container Freight Station “CFS”
A CFS is a bonded warehouse facility used by carriers to load LCL cargo into containers or unload imported LCL cargo from containers. This is normally done when the container has more than one delivery location. The cargo is unloaded from the containers and delivered to the final destination.
Court of International Trade “CIT”
The CIT is a Federal court with jurisdiction to hear cases against the United States arising from Federal laws governing import transactions. The court hears antidumping, classification, and countervailing duty matters as well as appeals of unfair trade practice cases from the International Trade Commission. Established in 1890 the court has principal offices located in New York City. The judges are appointed for life by the President, subject to Senate confirmation.
Monday, November 2, 2009
Section XII Answer
Q36 October 2009 CBE
Q34 April 2002 CBE
Section XIII covers Chapters 68 - 70 containing articles of stone, cement, ceramic and glass. There are no Section Notes; however, CBP provides quite a few Informed Compliance publications on glassware. Some of the articles contained in these chapters may be subject to FDA requirements for lead content.
Chapter 68 contains building stone, marble, slate, roofing, plasterboard, cement blocks, tiles and other products made of stone. The Additional U.S. Notes to Chapter 68 provide specifications for slabs and tiles. Asbestos products may be prohibited from importation, so it would be a good idea to check with the EPA for specific prohibitions.
Chapter 69 covers household fixtures, kitchenware and other house wares of porcelain, china, earthenware and stoneware. For classification purposes, it will be necessary to determine the difference between porcelain, china and other ceramics. Chapter Note 5 explains the difference between porcelain, earthenware and bone china. Chapter Note 6 provides the pieces necessary to classify a set of dishes. The Explanatory Notes provide detail for distinguishing purely ornamental articles from those with a specific utilitarian purpose.
Chapter 70 contains glassware such as, safety glass, mirrors, jars, tableware, items for toilet, office and home use, and glass fibers. The Chapter Notes and Explanatory Notes provide additional explanation of glass terminology. It is important to be able to distinguish between tempered and safety glass. The Explanatory Notes distinguish the characteristics of the two.
A shipment contains 100 10-inch and 7½ inch decorative porcelain plates. The plates are packed in retail sets of one 10-inch plate and one 7 ½ inch plate per set. Each set is valued at $375. The plates are used as pictures or placed over cabinets. What is the correct classification of these plates?
Join us next week for the answer to this week’s classification question and a discussion of Section XIV of the HTSUS. If there are any specific commodities or sections of the HTSUS that you would like to see discussed in this series, please feel free to post a comment or send your suggestions to email@example.com