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 also 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.

CBP Posts Estimated Border and Airport Wait Times

Many large cities have big signs showing travel times from Point A to Point B during rush hour traffic. Restaurants give you those vibrating disks with flashing red lights to alert customers that their table is ready. Some law enforcement agencies post active calls on the Internet. At some time, CBP joined the bandwagon and posts wait times at the Canadian and Mexican border crossings. They have probably been doing this for quite some time, but it’s not highly advertised on their web site.

The Border Wait Time table shows the estimated wait times for reaching the primary inspection booth, the first point of contact with CBP when crossing the Canada/U.S. and Mexico/U.S. land borders. Each border location updates its estimated wait times hourly. You must use your browser’s refresh or reload function in order to obtain the most updated information.

Airport Wait Times are calculated a little differently and are not shown in real time like the BWT. CBP closely monitors the flight processing times, commonly referred to as wait times, for arriving flights at 23 of the busiest international airports. The flight processing time is the length of time from flight arrival to the time the last passenger on the flight is screened by CBP officers in the primary processing area.

Over the course of the day, incoming flights may not occur for extended periods of time due to variable flight arrival patterns. Wait times are calculated in hourly time intervals for all flights arriving at the airport/terminal shown. The CBP Airport Wait Times report displays only those time intervals during which at least one flight arrival was recorded. If no flights arrived during a particular time interval, that time interval will not appear in the report. This web site allows the user to select an airport, a month and day or days and retrieve average wait times based on the day or month selected.

So, if you are sitting in your car waiting to cross the border or need to know how long it might take to clear CBP at a major airport, you can pass the time by booting up the laptop, hope you can get a wireless signal and check out the BWT and AWT at your location!

Click HERE for Border Wait Times.
Click HERE for Airport Wait Times.

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 letter S.

Surcharge
A surcharge is an additional charge added to the usual or customary freight. Some of the most common surcharges include the following:

BAF - Bunker Adjustment Factor: A fuel surcharge expressed as a percentage added or subtracted from the freight amount, reflecting the movement in the market place price for bunkers.

CAF - Currency Adjustment Factor: A fee applied to the shipping costs to compensate for exchange rate fluctuations.

Congestion Surcharge: An extra charge for waiting periods at the port.

Hazardous Cargo Surcharge: A charge applied to hazardous materials shipped with the carrier.

Peak Season Surcharge: An additional fee usually charged to ocean cargo during the end of 3rd qtr and 4th qtr because the demand to move freight is so high due to holiday inventory requirements. However,
PSS may be charged to and from other parts of the world based on high demands during a particular time.

Sale
CBP recognizes the term “sale,” to be defined as: the transfer of property from one party to another for consideration. To conclude that a sale for exportation occurred, CBP must conclude that a sale first occurred. In determining whether a bona fide sale has taken place between a potential buyer and seller of imported merchandise, no single factor is determinative. The determination is made by review of the entire situation, with the result in each case governed by the facts and circumstances of the case itself.

Several factors may indicate whether a bona fide sale existed between a potential seller and buyer. In determining whether property or ownership has been transferred, CBP considers whether the:

·alleged buyer has assumed the risk of loss and
·acquired title to the imported merchandise,
·buyer paid for the goods,
·payments are linked to specific importations of merchandise, and
·roles of the parties and circumstances of the transaction indicate that the parties are functioning as seller and buyer.

System for Tracking Export License Applications – STELA
STELA is the online tool that allows users to check the status of export/re-export license applications and classification requests by entering a BIS assigned application control number (ACN). The user can retrieve the same status information currently communicated on the phone-based system. The phone system will be phased out soon.

In about six weeks, we will have completed the alphabet twice and it might be a good idea to start another trade topic for Tuesday. If we end the series on trade terms, what topic or topics would you like to see take its place. Please send your suggestions to wizard@boskage.com

bcpSource Classification Contest & GRI Answers

Last Monday, we continued our study of classification by exploring how the General Rules of Interpretation (GRI) are tested on the Customs Broker Exam. The answers to the quiz questions are found at the end of this article.

For the next four weeks, Boskage Commerce Publications is sponsoring a contest to introduce bcpSource, the advanced HTSUS online research tool! bcpSource contains the complete HTSUS, designed for speed and ease, updated with timely data, customizable to fit your specific needs, and loaded with tools to help you integrate your program.

To participate in the contest, check the blog for the weekly question and submit your answer by following these instructions.

1. Go to www.bcpsource.com/program/ to access bcpSource.
2. Complete the registration.
3. Read the instructions on how to use the various features.
4. Locate the correct classification.
5. Click the "P" (which allows you to add your specific data) next to the classification code and type “FOUND IT in the SKU field.
6. Email inquiries@boskage.com to let us know that you've found the answer, and what your answer is.
7. Enjoy using bcpSource!

Answers must be submitted by Noon (EST) Friday each week. Although we announced the contest last Wednesday, we extended the deadline for the first week until 2/26/2010. A new question will be posted on March 1, 2010. We'll pick the winning contestant randomly from a pool of all correct responses. The winner will be notified via email the following week, and will receive a $50 Amazon.com gift card. A list of the weekly winners will be posted on the blog at the end of the contest.

Week 1 bcpSource Classification Question
Classify a set of four cherry bed lifters. The square lifters measure approximately 5”x5” and are imported from Nicaragua.


Answers from GRI Quiz - February 15, 2010

Answer 1
GRI 3a and GRI 3b. The candle imparts the essential character of the imported item.

GRI 3a states that the heading which provides the most specific description will be preferred to headings providing a more general description. For this example the provision for glass jar and candles are equally specific.

GRI 3b states that mixtures, composite goods consisting of different materials made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to GRI 3a, will be classified as if they consist of the material or component which gives them their essential character. The candle gives the product its essential character.
_______________________

Answer 2
False. GRI 3c states that, when goods cannot be classified using 3a or 3b, they will be classified under the heading which occurs last in numerical order among those classifications which equally merit consideration.
_______________________

Answer 3
GRI 5a. GRI 5a states that cases and containers are classified with articles for which they are intended when imported along with those objects, if they are shaped or fitted to contain that article and are suitable for long-term use.
_______________________

Answer 4
The leather case would be classified with the pocketknife so long as the case is shaped or fitted to contain the knife and suitable for long-term use.
_______________________

Answer 5
No. Wood furniture is classified in Chapter 94. Remember, General Note 1 states that the titles of Sections and Chapters are for ease of reference only.

What is the ACTA?

Introduced in 2006, the Anti-Counterfeiting Trade Agreement (ACTA) seeks to provide international enforcement of intellectual property rights through cooperation and coordination among international governmental agencies. Protection of intellectual property encourages creativity that is essential to continued growth and success of the economy. Without protection, companies and individuals may not be as willing to invest the time and money necessary to develop innovative new products that enhance, and in many cases, save our lives. Unfortunately, unethical criminal behaviors have created an increase in counterfeit and pirated goods that inhibit creativity and threaten profitability of legitimate creators. Trade in counterfeit goods such as CDs, clothing and drugs cost the true owners around the world billions of dollars annually. In some cases, counterfeit medical, automotive and electrical goods may create safety hazards.

Today's technological advancements and the ability of foreign manufacturers to produce lower cost goods present almost limitless opportunities for distribution of goods that are authorized by the IPR owner. However, this same technology and low cost production provide the same opportunities for proliferation of products that infringe on intellectual property rights. For example, anyone with a computer equipped with a CD and/or DVD burner and a stack of discs can illegally copy and distribute protected works. The lack of protection and enforcement has led to widespread unauthorized copying and use of unlicensed marks to flood the market with goods that violate intellectual property rights.

Parties involved in negotiations include the US, the EU, Japan, South Korea, Canada, Mexico, Australia, Morocco, Singapore, Switzerland and New Zealand. The group will meet again in April with the goal of completing the agreement by the end of 2010. Click HERE for more information about the ACTA.

Customs Broker Exam Study Tip 6: Taking Previous Exams

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

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

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

A. 10 calendar days
B. 10 working days
C. 15 calendar days
D. 15 working days

The correct answer is C. Part 142.2(a)

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

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

4. Highlight all answers in the CBP Regulations.
As you review the exam questions answered, highlight the correct answers in your copy of the regulations. This will reinforce your knowledge of the regulations, and the highlighted information tends to stand out on the page when you are looking for it. Even though the questions for each exam may be worded differently, the answers will still be found in the same texts. The last twelve exams contained 42 questions from Part 24. Fifteen of those 42 questions came from 19 CFR 24.23. Seven of the 42 questions came from 24.1 and five came from 24.5. By marking the answers in those three sections, you reinforce the information in your mind, and you will be more likely to spot the answer quickly when looking for it on the actual exam.

Click HERE to see a sample of a highlighted page for the answers related to 24.5.

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

Note:
When taking old exams, be alert for possible inconsistencies in the answer selections. Tariff numbers and duty rates have changed over the years. A tariff number that was listed as a possible answer on the October 2003 Exam may not be valid in 2010. When calculating the duty rates to determine an answer, you may find a slight variance because of the reduction in duty over the years. With the addition of new free trade agreements, duties have been reduced and eliminated for certain countries.

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

bcpSource Classification Contest - Win A $50 Amazon Gift Card!

For the next four weeks, Boskage Commerce Publications is sponsoring a contest to introduce bcpSource, the advanced HTSUS online research tool! bcpSource contains the complete HTSUS, designed for speed and ease, updated with timely data, customizable to fit your specific needs, and loaded with tools to help you integrate your program.

To participate in the contest, check the blog for the weekly question and submit your answer by following these instructions. Answers must be submitted by Noon (EST) Friday each week. To kick this contest off, we'll give you a few extra days, so the deadline for the first week will be 2/26/2010.

1. Go to www.bcpsource.com/program/ to access bcpSource.

2. Complete the registration.

3. Read the instructions on how to use the various features.

4. Locate the correct classification.

5. Click the "P" (which allows you to add your specific data) next to the classification code and type “FOUND IT in the SKU field.

6. Email inquiries@boskage.com to let us know that you've found the answer, and what your answer is.

7. Enjoy using bcpSource!

We'll pick the winning contestant randomly from a pool of all correct responses. The winner will be notified via email the following week, and will receive a $50 Amazon.com gift card. A list of the weekly winners will be posted on the blog at the end of the contest.

Week 1 bcpSource Classification Question

Classify a set of four cherry bed lifters. The square lifters measure approximately 5”x5” and are imported from Nicaragua.

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 R’s.

Reefer
A refrigerated container or reefer is a shipping container used to transport temperature sensitive cargo. The reefer has an integral refrigeration that uses an external power source; however, when transported over the road, they can be powered from diesel powered generators.


Remote Location Filing
Remote Location Filing (RLF) is a program that allows approved customs brokers and importers to file electronic entry data for clearance of imported cargo from a location other than where the goods will arrive. For example, a broker located in New Orleans can file an entry for merchandise located in Charlotte. North Carolina.

RLF allows customs brokers with a national permit to serve several port locations without the cost of maintaining multiple offices. Approved importers and brokers transmit electronic entry data via the Automated Broker Interface, also called ABI, to designated RLF ports. Currently, only Entry Types 01 and 11 are allowed to be processed by RLF.


Returned Without Action
For export control purposes, the returned without action (RWA) means that a license application is returned when the application is incomplete, additional information is required, or the product is eligible for a General License.

General Rules of Interpretation (GRI)

As we continue our lessons on classification this week, we’ve provided some questions that require you to use your knowledge of the GRI to answer them. First, let's review the answers to the Parts & Accessories questions from last week.

Parts & Accessories Answers – February 8, 2010
· Monitor - Part
· Flash Drive - Accessory
· Internal Hard Drive - Part
· Textile Storage Case - Accessory

The HTSUS contains six General Rules of Interpretation that are the primary rules used to determine classification, especially when there is ambiguity between two possible classifications, either of which might be right.

There are two types of questions that require you to use the rules on the Customs Brokers Exam. The first type of exam question requires you to select the GRI that should be used to classify the product that is provided for the question. You will choose one of the GRI options provided. This type of question has not been used much recently; however, it is important to know how to select the proper GRI because CBP has been known to ask questions that require you to select the correct classification code as well as the GRI used to make the proper choice. The second type of question requires that you select the proper classification code; however, you must be able to apply the GRI in order to answer the question correctly.

We’ve provided some sample questions. The answers will be posted on the blog next Monday.

Question 1
You have a glass jar containing a candle. Chapter 70 provides for glass jars and Chapter 33 provides for candles. Which GRI should be used to determine the classification?

Question 2
True or False
If you have a product that cannot be classified using GRI 3a or 3b, then the product will be classified under the heading that provides the highest duty rate.

Question 3
Which GRI would be used to classify a trumpet case imported with the trumpet?

Question 4
Would a leather case imported containing a multipurpose pocketknife be classified as an article of leather, or included in the classification for the pocketknife?

Question 5
Should wood furniture be classified in Chapter 40 – Wood and Wood Products?

Customs Broker Exam Study Tip 5: Time Management

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

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

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

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


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

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


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

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


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


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


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


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


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

• Make Good Use of Unproductive Time


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


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


3. Lunch
Do you really need an hour to eat lunch? Consider devoting a portion of your lunch breaks each to study. Eat lunch, then read or eat and read at the same time. Treat yourself to a nice lunch out at the end of the week.


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


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

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

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 P’s.

Pro Number
Short for progressive number, the “pro number” is used by carriers to identify a shipment for tracking and payment purposes.

Prior Disclosure
A prior disclosure provides a method for importers to report an instance of noncompliance with import laws and regulations. The importer must report the error before CBP discovers and notifies the importer of the noncompliance in order to take advantage of the prior disclosure process and receive reduced penalties.

Pre-shipment Inspection (PSI)
A few countries require goods and documents to be examined before export by an independent agency. Even when the inspection is optional, a customer may request it. Usually, countries where PSI applies have appointed one dedicated agency to perform the pre-shipment inspection. A freight forwarder or customer will be able to provide information on the arrangements.

Parts & Accessories

In keeping with our discussions on the Harmonized Tariff Schedule of the United States (HTSUS) and classification, this week we explore the differences between parts and accessories. Sometimes it is important to know whether the imported item is a "part" or "accessory" in order to properly classify the item. Some HTSUS provisions provide for parts and accessories, while others only provide for parts. The following information provides some guidelines to use when trying to determine if an imported good is a part or accessory.

Parts Criteria
· It cannot be used on its own; or
· It must be combined with other articles to be used; or
· It is an integral, constituent, or component part without which the article to which it is joined could not function; or
· It lends to the safe and efficient operation of the article; and
· It is identifiable by the shape or other characteristics as being an article solely or principally used as a part.

Accessory Criteria
· It may facilitate use or handling; or
· It may widen the range of use of the named article; or
· It may improve the operation of the main article; and
· It is not needed to enable the articles with which it is used to fulfill their intended function; and
· It is something nonessential but desirable that contributes to an effect or result.

The following items are either parts or accessories for a laptop computer. Try to determine the proper designation for each. Check back next Monday for the answers!

· Monitor
· Flash Drive
· Internal Hard Drive
· Textile Storage Case


Trivia Answers – February 1, 2010

1. Prior to the implementation of the new HTSUS in 1989, there tariff numbers consisted of SEVEN digits.
2. The Word Customs Organization maintains the international version of the HTS.
3. The Tariff of 1828 was also known as the Tariff of Abominations because of the detrimental effects it had on the southern economy.
4. The Tariff Act of 1930 is also known as the Smoot-Hawley Tariff Act of 1930.

Customs Broker Exam Study Tip 4: Organization

Now that you have made the decision to take the April 2010 Customs Broker Exam, it’s important to develop a study plan that guarantees your chances of success.

Some people are naturally good at organization; everything has a neat orderly place. Have you ever noticed your colleague’s desk or your neighbor’s garage? All of the books are stacked on bookshelves. Papers are filed away or neatly stacked. The tools are hung on a pegboard and two cars actually fit into the garage. On the other hand, you wonder how another colleague can find anything since his or her desk is covered with so many papers, books and other junk that you can’t even see a desk. The neighbor’s two-car garage won’t even hold a bicycle, let alone one car! Organization is another step on your journey to pass the CBE.

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

What is organization?

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

Why is organization important?

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

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

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

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

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

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

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

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

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

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

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

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

Update: Iran Sanctions Bill

Imports of carpets from Iran may be prohibited in the near future. Last week, the Senate passed the Comprehensive Iran Sanctions, Accountability, and Divestment Act (S.2799) which expands the Iran Sanctions Act of 1996. The Act prohibits the U.S. government from contracting with companies that export sensitive communications technology to Iran and provides codification of the U.S. ban on trade with Iran. In December 2009, the House passed the Iran Refined Petroleum Sanctions Act of 2009 (H.R. 2194). Although the bills contain many of the same provisions, they must be reconciled in conference to work out differences and passed again by the Senate and House before it can be signed into law by the President. The Senate version contains export control provisions, not included in the House bill. There are also several amendments proposed. Stay tuned for more!

Click HERE to read S.2799
Click HERE to read H.R. 2194

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 O’s.

Open Top Container

An open top container is similar to a regular freight container; however, it does not have a rigid roof. The open top container may have a flexible or removable cover constructed of plastic or canvas material.

Open Account
In an open account transaction, credit is granted to the buyer without any security. Goods are shipped to the buyer without any guarantee of payment. This form of payment is the most risky to the seller, so it is important that the buyer has an excellent payment history and/or references from other parties with whom the buyer has done business.

Offsets

An offset is a compensation practice that foreign governments or companies require U.S. businesses to enter into as a condition of purchase. These arrangements tend to be reciprocal. For example, as part of a purchase agreement of $10 million worth of aircraft parts, the seller agrees to purchase $10 million of electronic equipment from the buyer's country.

Tariff Trivia

In keeping with our discussions on the Harmonized Tariff Schedule of the United States (HTSUS) and classification, this week we are providing a few tariff trivia questions.

1. Prior to implementation of the new HTS in 1989, how many digits were found in the old tariff numbers in the Tariff Schedule of the United States?

2. What organization is responsible for maintaining the international version of the HTS?

3. Which tariff act was known as the Tariff of Abominations? Why?

4. By what other name is the Tariff Act of 1930 known?

Check back next Monday for the answers!