Changes Proposed to Customs Broker License Examination Eligibility Requirements

On Tuesday May 27, the Federal Register contained a Notice of Proposed Rulemaking (NPR) concerning changes to the eligibility requirements for taking the Customs Broker License Examination. The proposed rule would require individuals to meet the following criteria prior to the date of the exam. In order to take the exam, individuals must be U.S. citizens,
21 years of age, and not be an officer or employee of the U.S. Government.

The proposed amendments would more closely align the requirements for taking the written examination with the requirements an individual must satisfy in order to obtain a customs broker's license. As a result, this proposed rule would facilitate the overall customs broker licensing process by helping to ensure that those taking the examination are not automatically precluded from obtaining a license by reason of age, citizenship status, or employment. These changes also resemble the requirements for obtaining a license that were changed in 2000 to allow applicants three years to meet the eligibility requirements after taking the exam.

Comments must be received on or before July 28, 2008. Make your opinion count and post your comments! Comments must be identified by docket number and submitted by one of the following methods:

Federal eRulemaking Portal:
http://www.regulations.gov/. Docket number USCBP–2008–0059.


Mail:
Trade and Commercial Regulations Branch, Regulations and Rulings
U.S. Customs and Border Protection
1300 Pennsylvania Avenue, NW., (Mint Annex)
Washington, DC 20229.

Changes to Antiquated Customs Broker Regulations Pending

At the NCBFAA Conference in April, Commissioner Ralph Basham stated that some changes needed to be made to antiquated broker processes. First, there needs to be change to the process of filing the Triennial Status Report. Initiated prior to automated systems, the party who forgets to mail the administrative report could lose their license almost immediately, which results in a penalty disproportionate with the infraction. Second, CBP needs to be able to suspend the licenses of brokers whose illegal activities threaten national security and the health and safety of individuals in the U.S. Just last year, brokers were indicted and arrested for smuggling, but CBP could not suspend their licenses. Basham told the attendees that new draft legislation addresses both of these issues.

New Informed Compliance Publications

Customs and Border Protection has been busy writing, reviewing and updating the Informed Compliance Publications this year. Three new publications have been added, and 24 were updated in the first quarter of 2008. Here’s a brief overview of the new publications along with a list of the publications that have been reviewed and updated.

New Publications:

Classification and Entry Requirements of Alcoholic Beverages and Spirits (February 2008)
This new publication provides detailed explanations of each heading, the related explanatory notes and some examples of products included in each heading. Additionally, it provides instructions on how to compute proof liters along with examples. This is a great source of information for importers of alcoholic beverages and for persons studying for the broker’s exam. CBP has asked questions related to the classification of alcoholic beverages and calculation of proof liters on past exams.

Classification of Coated and Water Resistant Apparel (January 2008)
Finding the proper classification of wearing apparel can be a difficult task, but determining the difference between coated and water resistant provisions is one of the most frequently misunderstood areas. This new publication presents information to clarify the distinctions between the visibly coated and water resistant apparel goods by explaining how the GRI, Chapter Legal Notes and the actual headings provide direction in classifying these goods. Since CBP recently asked a question related to a water resistant apparel good on the broker’s exam, this publication would also be helpful to those studying for the upcoming exam.

Eyewear Frames and Eyewear (January 2008)
The new publication provides a comprehensive discussion of eyewear, which encompasses the actual completed product, frames, accessories and cases. In addition to CBP regulations, this publication includes information concerning the regulation of eyewear by other government agencies.


Revised and Updated Publications:
· Agglomerated Stone - 03/13/2008
· Agricultural Actual Use Provisions - 02/01/2008
· Base Metal Mountings and Fittings - 02/13/2008
· Basic Forms of Non-Ferrous Metals - 02/26/2008
· Beauty and Skin Care Products of Heading 3304 - 03/06/2008
· Button, Snap Fasteners, Slide Fasteners and Similar Articles - 02/13/2008
· Buying & Selling Commissions - 01/08/2008
· Caviar - 03/20/2008
· Classification of Children's Apparel - 02/13/2008
· Classification of Cooking Ranges, Stoves and Ovens - 03/03/2008
· Classification and Marking of Watches and Clocks - 02/13/2008
· Coated Nonalloy Flat-Rolled Steel - 02/13/2008 02/13/2008
· Decorative Glassware - 03/13/2008
· Diodes, Transistors & Similar Semiconductor Devices - 02/21/2008
· Distinguishing Bolts from Screws - 02/21/2008
· Fasteners of Heading 7318 - 02/13/2008
· Hand Tool Sets Classified Within Subheadings
  8205.90.00 and 8206.00.00 - 02/13/2008
· Household Articles of Base Metal - 02/13/2008
· Mushrooms - 03/06/2008
· Peanuts and their Classification under the HTSUS - 03/06/2008
· Personal Digital Assistants (PDAs) and Electronic Organizers - 04/01/2008
· Stranded Wire, Rope and Cable, of Iron or Steel- 02/28/2008
· Vending Machines and Their Parts Under the HTSUS - 04/21/2008
· Waste & Scrap as it Relates to Base Metals of Chapter 81 - 02/26/2008

Tired of looking for updates? Click here to find out how you can have updated versions for all of the Informed Compliance Publications along with an extensive compilation of Customs Directives and other selected CBP information in looseleaf and searchable CD-ROM.

Importer Security Filing “10+2” Update

In May, the Federal Register published the regulatory agendas for various government agencies, including the Department of Homeland Security. The comment period for the implementation of 10+2 ended on March 18, 2008. Almost 200 comments were submitted in response to the proposed rulemaking have been published for review. Click here to view some of the comments. According the information published in the Federal Register, CBP projects that they will issue the final 10+2 rule sometime in September.

As we posted in September 2007 and February 2008, the Importer Security Filing rule will require that carriers and importers submit additional data elements by EDI. CBP states that collection of this information will enhance targeting and risk analysis capabilities, improve facilitation of lawful trade, and is required by the SAFE Port Act 203. In addition to the new reporting requirements, the rule also proposes to amend 19 CFR 113.62 to include payment of liquidated damages for violations of the proposed regulations. The principal could be liable for damages equal to the value of the merchandise for failure to comply with the regulations. Additional penalties of $5,000 per violation could be imposed for failure to comply with container status messages.

Even though the final rule will not be published until September and the implementation is likely to be phased in over 8 to 12 months, importers, brokers, forwarders and carriers need to prepare now.

Someone within your organization needs to have responsibility for obtaining the required information. For importers, should this responsibility be delegated to Customs Compliance, Logistics, or some combination of parties? Who will transmit the information – your company or an agent? Remember that the importer is solely responsible for submitting the information, but an agent may submit it if they have a power of attorney. For brokers, how will you manage this process with clients? What changes will need to be made to the software and other electronic data systems?

Take action now to avoid costly delays in cargo delivery later!

Customs Broker Exam Pass Rate - 20.6%

For all of you who have been patiently (or not so patiently) waiting on the results of the April 2008 Customs Broker Exam, CBP expects to have the answers posted their web site some time this week. CBP will start mailing letters at the end of this week, so you should start camping out by your mailbox next Monday.

The pass rate for this exam was 20.6%, which is higher than the 9.2% on the October exam. We’ll be watching the CBP web site for the answers so we can provide an updated list of correct answers and a list of potential protest questions. For those of you who purchased the Boskage Study Plans that included the detailed exam commentary, we’ll be completing that information and posting it as soon as possible after the official exam results are posted.

Priority Trade Initiatives

As most of the trade community may have noticed, U.S. Customs and Border Protection has been updating their web site. It may take a little extra effort to find some of the information and get used to the new format, but in time, we will enjoy the new features and expanded information. One of the new areas created during the update is the Priority Trade Issues (PTI). PTIs are identified as high-risk areas that are likely to cause significant revenue loss, economic risk to U.S. industry or health and safety concerns to citizens.

Currently, the following seven areas are identified as PTIs:

• Agriculture


• Antidumping and Countervailing Duties


• Import Safety


• Intellectual Property Rights


• Penalties


• Revenue


• Textiles

Click HERE to learn more about each PTI.

BIS Principles of Export Compliance

With increased scrutiny of export compliance, exporters should have an effective compliance system in place. At the recent BIS Export Control Forum in Newport Beach CA, Assistant Secretary for Export Enforcement Darryl Jackson gave a presentation outlining nine principles of export compliance used to evaluate the effectiveness of an export compliance program and determine whether mitigation of an administrative penalty is warranted. These nine principles include:

· Meaningful Risk Analysis
· Written Compliance Programs
· Responsibility for Oversight by a Senior Official
· Adequate Employee Training
· Adequate Customs and Transaction Screening
· Compliance with Recordkeeping Requirements
· Internal System for Reporting Violations
· Internal and External Reviews/Audits
· Remedial Actions to Address Violations

Similar to import compliance programs, exporters must be able to demonstrate that the nine principles are applied in business transactions and not just something put on paper to satisfy the government. The export compliance programs must also be reviewed and updated to reflect changes in business practices and government regulations. Click on the following links to view Jackson’s speech and presentation.

Creating Your Import Compliance Procedures

In March, we discussed the importance of having import compliance procedures and promised that we would discuss creating and customizing these procedures in April. In order to obtain all of the benefits having import compliance procedures offer, it’s important to create procedures that will be supported by executive management and useful for employees. So, how do we get started?

We’ve provided the following suggestions to help you develop your import policies and procedures:

• Obtain support of executive management.



• Identify CBP-related laws and regulations, import activities, organization and products that may require procedures.



• Draft an outline or table of contents of procedure topics.



• Collect and review any existing procedures, making notes for necessary changes.



• Collect information that will help you draft the policy or procedure.



• Select a format.



• Create drafts of procedures.



• Review the drafts and allow functional areas affected by the procedures to review and provide feedback.



• Review feedback and make changes.



• Prepare final document.



• Obtain final approval.



• Assemble the manual and make copies and/or upload procedures for employee access when using electronic media.



• Implement and communicate new procedures.



• Provide training when necessary.



• Schedule review and update.

Now that you have determined the need for the procedures and have possibly taken the first few steps to creating your own procedure manual, how are the procedures written? When writing standard operating procedures, there are a number of different ways to organize and format them. Many people fear the task of writing procedures because they do not like to write, or may not feel that their writing skills are sufficient. Generic templates can make the task more manageable because the basic information has already been created. All you have to provide is the information that pertains to your company. Your goal is to create a document that is factually and legally accurate, useful, and easy for the reader to understand. Let's look at some suggestions that may help you when writing policies and procedures.

Policies should be clear, concise, simple, understandable, factual, and logical.

You should also consider the following tips:

• Avoid using information that may be quickly outdated, such as names of employees.



• Spell out acronyms the first time they are used.



• Include step-by-step instructions for completing forms.



• Use graphs, charts, drawings, and illustrations as required.



• Be consistent with use of headings, bold, underline etc.



• Divide into sections that contain materials related to one topic or process.



• Use action verbs to begin sentences and lists when possible.



• Simplify and summarize difficult information.

Click HERE to view a generic sample of a General Order procedure.

When supported by management, your organization’s import compliance procedures can serve as an example for an overall corporate commitment to compliance. If well written, properly used and reviewed regularly, your company should experience higher levels of quality and increased employee and customer satisfaction.

Special HTSUS Change Package - Boskage Exclusive

The International Trade Commission (ITC) has revised the 2008 Harmonized Tariff (HTSUS). However, the ITC has elected NOT to print these changes.

We understand that many of our customers will want to update their printed editions, and we have a limited number of printed change packages available for sale to our customers only. This is the only available print edition of this revision.

Order now as these print editions are limited.

NOTE: If you purchased the HTSUS through Boskage, this revision is not part of regularly printed government supplements, which will still be sent to you at no charge upon release as part of your 2008 subscription.

The special change package is 198 pages. The price is $24.50 with $6.00 shipping/handling.

Please click here to get your HTSUS special change package.

If you are a Boskage OneSource CD subscriber, these changes will be made to your software the next time you access OneSource.

If you would like to purchase a special OneSource HTSUS that includes the current changes, please click here to have your CD sent today.

Potential Answers for April 2008 Customs Broker Exam

As many people sit on pins and needles waiting to see the answers posted for the most recent Customs Broker’s Exam, our very own Wizard has taken the exam and provided a list of possible answers and related regulations where the answers were found. We never know when CBP will post the answers and the wait feels like forever. The answers for the October 2007 Exam were not posted until November 13.

We invite you to post your answers, explanations, arguments and other comments. Obviously, Boskage Commerce Publications cannot guarantee the accuracy of these answers since CBP has the one and only answer key, but the Wizard has an excellent record of achieving a score of better than 90%.

Click HERE to view a copy of the Wizard’s answers for the April 2008 Exam! Additional commentary on the exam will be available to our students soon.

Note: The Wizard had the most difficulty answering the questions marked by an “asterisk” and highlighted in purple.

The Future of Incoterms

Developed by the International Chamber of Commerce, Incoterms consist of 13 standard trade definitions used in international sales contracts. As part of the contract between the buyer and seller, Incoterms define the responsibilities of the buyer and seller for delivery of goods, and determine how costs and risks are allocated to the parties. By using Incoterms, a buyer and seller have a standard set of guidelines, which determine the responsibilities of each party, reducing the possibility of costly misunderstandings and disputes. Incoterms are not part of the contract for transportation; however, the terms define which party is responsible for arranging transportation, delivery and international insurance.

The first version of the Incoterms was introduced by the ICC in 1936. To keep up with changes in international trade, the Incoterms have been updated six times, most recently in 2000. Changes to the 2010 edition are now being discussed by the ICC Commercial Law & Practice Committee. One change includes the removal of the year from the title. Currently, the inclusion of the year implies that a new edition would not be released for ten years. Incoterms could be revised at any time, thus a neutral title should help alleviate these assumptions.

What should be changed, added or deleted during these revision discussions? One idea suggests clarification for certain terms that are often misunderstood and misused. Another option would be to remove terms that are not frequently used. With the increased use of the Internet as a means to transact business, is it possible that a new term or terms could be created to apply strictly to Internet contracts? In addition, there were some suggestions that were not implements for the 2000 edition that might be more practical now. Another issue the committee must consider is the changes in relationships and contracts as result of cargo security requirements. It’s still early, but we should be prepared to learn a few new terms and say goodbye to some old ones.

Update: Cargo Systems Messaging Service (CSMS)

In January, CBP announced the pending implementation of the new Cargo Systems Messaging Service (CSMS), Administrative Message notifications by email that were formerly issued through the Automated Broker Interface (ABI).

Now fully operational, CSMS is a searchable database of messages that pertain to ABI Filers, ACE Participants and Air, Ocean, Rail and Truck Carriers. Similar to the CROSS Rulings Database, users can search by topic and keywords. The results can be sorted by publication date, title and CSMS number. Click HERE to see the results of a sample search.

Interested parties can subscribe to receive email notifications that new messages have been posted to CSMS. You can find the CSMS by accessing Imports, then selecting Operations Support and then Automated Systems. It will save you time to bookmark the actual search page. As an added benefit, Spanish translations have been provided CBP as a courtesy to non-English speaking trade community; however, the official CBP text is the English version of the messages and/or documents.

Pack Your Bags: The Custom Broker Exam Checklist

With the exam less than a week a way, it’s time to start thinking about what to pack for the exam. You will be using most of your resource materials up until the day before the exam, so it’s impossible to pack them in advance of the actual test. However, you can use the practical checklist we’ve created to make sure that you have everything on the list packed in your heavy-duty tote bag, large cardboard box or other container the night before the exam. If you are like most people, you may be a little nervous prior to the exam so you don’t want to run the risk of forgetting something important or being late because you couldn’t find your calculator, pens or other materials. Packing everything on your checklist the night before will help you relax and reduce unnecessary stress.

Click HERE to view and print your Customs Brokers License Exam Materials Checklist. You can customize this list to add specific items that you plan take to the exam. No matter what you plan to take, make sure to use the checklist to ensure you have each item packed and ready to go the night before the exam. Remember, electronic devices such as laptops and cell phones are prohibited.

Why Do Importers Need Import Compliance Procedures?

Creating import compliance procedures is a tremendous task for an organization, but it is a necessary process for importers, brokers and others with international trade compliance responsibilities. A well-written policy and procedure manual will help your organization fulfill its responsibility for compliance with CBP requirements and provide other benefits. An effective import compliance program includes written policies and procedures that promote the organization’s commitment to compliance.

Why would an importer want to invest time and money to prepare a procedures manual? A customs policy and procedure manual can help your organization:

· Demonstrate Reasonable Care and Compliance
As part of a Focused Assessment, CBP evaluates the importer’s internal controls and requests copies of procedures and evidence that the procedures are followed. Written procedures show CBP that your organization is serious about compliance.

· Provide Training and Decrease the Learning Curve
Procedures can be the roadmap that employees use to learn about importing and how import-related activities are performed. When procedures are written so that they explain the purpose and then provide step-by-step instructions on how to carry out the subject of the procedure, an employee will be able to know exactly what to do in such areas as documentation, recordkeeping, penalties, and other situations by reading the procedure.

· Save Time and Money
Written procedures can be used as guides to bring new employees up to speed faster and answer repetitive questions that are asked by any employee, including those in other departments. Electronic manuals allow for easy access by users. The use of electronic manuals also saves time in updating, printing, copying, and distributing bulky paper copies.

· Improve Efficiency
Creating procedures provides the company with an opportunity to review import-related processes in various functional areas of an organization. When writing procedures, it sometimes becomes apparent that those processes could be improved or changed to make them more efficient, avoid duplication of effort, close loopholes, or save money.

· Centralize Information and Provide Consistency (Electronic Versions)
Some organizations have too many manuals and loose memos so that employees do not know what is important. Policy and procedure manuals are not always up-to-date. An up-to-date, online system will permit those who use or are directly affected by policies and procedures, to have the access they need. Having one place to view the documents with various levels of access can help provide consistency in maintenance of the procedures.

There are numerous types of manuals and ways to write them. Importers have different needs when it comes to procedures. The CBP regulations are the same for all entities, but the application of the regulations may be different depending on the type of operation. A manufacturer’s processes are different from distribution centers. A foreign trade zone has operates differently than a retail importer. Some importers may have a dedicated staff of knowledgeable import professionals, while others may have only one or two employees that rely on outside experts for some of the work. While there is no one, right way to create a manual, importers must develop procedures that are related to the nature of their business and address compliance issues required by CBP.

If you don’t want to start from scratch, there are various helpful resources available for organizations creating a customs compliance procedure manual. We’ve provided information on two of these resources.

CBP provides a sample Internal Control Manual in Exhibit 4a of the Focused Assessment Program Documents. The Regulatory Audit Division of U.S. Customs and Border Protection prepared this document for the trade community to encourage importers to develop their own compliance programs. While CBP recommends that the importing community examine this publication for ideas to help develop their own unique compliance manual, this document has no legal or binding authority and was not designed to be all-inclusive.

Boskage Commerce Publications, Ltd. publishes a generic Import Policy and Procedure Manual containing over 150 policy and procedure guidelines with software that makes customization of procedures to fit your organization an easier task. The procedures contained in this publication serve as a convenient reference source and starting point to assist the user in developing a comprehensive import procedure manual. Similar to the CBP disclaimer, this publication is not law, and information contained in this publication is not to be considered legal advice. While every effort was made to include the procedures, which are fundamental to all importers, it is not possible for a publication of this size to cover all of the CBP laws and regulations

Remember, your organization’s Policy and Procedure Manual is not just a stack of documents. Your manual can demonstrate corporate commitment to compliance with CBP regulations, save the organization time and money, provide training and promote efficiency across functional areas.

Next month we’ll discuss the process of creating, customizing and implementing your import compliance manual.

CBE Study Tip 7: 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.

Customs Broker Exam Study Tip 6: 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 answer. 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 our scarf example.

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. For explanation of these exams, Boskage's Study Plan electronic resources offer expert analysis of each question on the last six Broker's Exams.

For detailed instruction on classification and related topics, check out our online courses at bcpLearning.com.

Customs Broker Exam Study Tip 5: How to Use the HTSUS – Part I

In Study Tip 4, we provided some suggestions on how to read the Code of Federal Regulations. In this article we will provide some tips on the key components and arrangement of information contained in the Harmonized Tariff Schedules of the United States (HTSUS). In the next article we 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 low. 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 and 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 to 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 source 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, you should 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.

· Place tabs to designate each of the 22 Sections, or
· Place 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 6 will provide suggestions to help you prepare your strategy for answering classification questions on the exam. Please feel free to add your comments, suggestions and other useful information to the blog!

Customs Broker Exam Study Tip 4: How to Read the CFR

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 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 Part 4, containing approximately 45 pages. Only one question from Part 4 has appeared on the last ten exams; that’s one question 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, Part 111 is one of the most frequently tested sections and it contains 15 pages. There have been 59 questions from Part 111 on the last ten exams which means approximately 7.4% 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 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 the CBP Regulations. 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 16% 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.

As always, 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.

Coming Soon: Mandatory AES

As most of the country eagerly anticipates the coming of spring, the trade community will be anticipating the mandatory use of the Automated Export System (AES). The Bureau of Census is in the final stages of requiring mandatory electronic filing using the Automated Export System (AES); therefore, the use of the paper SED will be likely be eliminated sometime in the second quarter of 2008. The original proposal was published in the Federal Register in February, 2005.

On February 25, the proposed revisions to the AES records were published in the Federal Register. The revisions include changes that have been made by Census and CBP since 2005. The changes include (1) edits for rough diamond shipments for the Kimberly Process; (2) e-mail messaging; (3) created the Validated End-User license code; (4) automated carrier code updates; (5) developed background Standard Carrier Alpha Codes (SCAC) update process from National Motor Freight Traffic Association file; (6) developed SCAC maintenance log list; (7) developed Consignee screens; (8) allowed Option 4 vessel shipments to proscribed countries; (9) developed method of transportation maintenance screens; and (10) developed edit value type screens.

Census believes that the mandatory use of the AES will provide more accurate export statistics and data to assist in the enforcement of export controls. The export statistics collected from the current collection process are used by a variety of government agencies and the trade community. In addition to the use as economic indicators, the information collected from the SED and the AES records is used to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users and enforce the International Traffic in Arms Regulations. The information can also be used by the trade community to develop new markets and other applications as they apply to the specific sector. For example, carriers can use the shipping information to determine the need for changes to sailing schedules, ports of call, etc.

When implemented, the penalties for inaccurate or late filed information will increase from $1,000 to $10,000 per violation. Not only is the AES a tool for collecting statistical information, but it also becomes a method for enforcing export control requirements. Both exporters and freight forwarders can be held liable for inaccurately filed information. As part of their compliance program, exporters should be reviewing the SED/AES data submitted by forwarders on their behalf. Additionally, forwarders should ensure that they have procedures in place for obtaining information from customers and submitting that information accurately and timely. The trade community should use this time to make sure they are prepared for the implementation of the mandatory filing requirements.

Comments for the proposed information collection requirements must be submitted to Brian Harris-Kojetin by e-mail (bharrisk@omb.eop.gov) or fax (202-395-7245) by March 26, 2008.

Last Chance To Apply For The April Exam!

The deadline for filing applications to take the April exam is just a few days away. If you are planning to take the April Broker License Exam, don’t let this important deadline pass! All exam applications and the exam fees of $200 must be received and accepted by CBP at the service port where the applicant intends to take the examination on or before the close of business Friday, March 7, 2008. Applications received after Friday, March 7, 2008 will not be accepted- NO EXCEPTIONS.

Click to print your application. Fill it out and take it over to your local CBP office today! If you are not close to an office, send it by express courier, today!

Don’t wait or it will be too late!

Free Trade Agreement Update

The U.S. House of Representatives and the Senate approved a ten-month extension of the Andean Trade Preference Program that was due to expire on February 29, 2008. The new expiration date has been extended to December 31, 2008, which gives the USTR and Congress additional time to approve the U.S-Columbia FTA and implement the U.S. – Peru agreements.

The U.S. and members of CAFTA agreed to extend the deadline for Costa Rica to complete its obligations under the CAFTA-DR until October 1, 2008. Since Costa Rican voters approved CAFTA-DR in October 2007, Costa Rica has made significant process towards implementing certain requirements by the February 29 deadline, but they needed additional time to implement certain legislative and regulatory requirements.

On a political note, both Obama and Clinton indicate that they would take a tougher position on future trade agreements and might opt out of NAFTA if certain provisions are not renegotiated. In the meantime, President Bush continues to press Congress to approve the U.S. free trade agreement with Colombia.

It looks like 2008 will be an interesting year for free trade agreements.

Customs Broker Exam Study Tip 3: 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 simulated test environment.

Do your best to recreate the actual test-taking environment and conditions. Find a quiet spot 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 4 hours for taking the entire test or 2 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 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 ten exams contained 33 questions from Part 24. Ten of those 33 questions came from 19 CFR 24.23. Six of the 33 questions came from 24.5 and six came from 24.1. 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 3 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 2008. 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.

Customs Broker Exam Study Tip 2: 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 of 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 achievement of success. You must prioritize and create schedules to accomplish the tasks necessary to accomplish your goals. Once you make up our 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. Compete 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, walking around the block to a game of softball or a workout at the gym.

· Limit Unproductive Activities
Reduce the amount of time spent on the phone, watching television, reading email, playing computer games, etc. There will be plenty of time for these activities when you finish the exam. Take the necessary phone calls, but do not use the phone as an excuse for not studying.

· Make Good Use of Unproductive Time

1. Waiting
At one time or another, you will find yourself waiting for something. The wait may be at the doctor’s office or at an airport. 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 tothe 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 three of your lunch breaks each week to study. 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 or cruise 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.

Customs Broker Exam Study Tip 1: Organization

Now that you have made the decision to take the April Customs Broker Exam, it’s important to develop a study plan that guarantees your chances of success. Boskage wants to help you achieve your goal of passing the exam; therefore, we are starting a series of articles to support you on your journey to success! Our first topic focuses on organization.

Some people are naturally good at organization; everything has a neat orderly place. Have you ever noticed your colleague’s desks or your neighbor’s garage? All of the books are stacked on bookshelves, all of the 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 same may be said of your neighbor’s garage that may look like it is being used as a storage facility since there is no room for one car, much less two. 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 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?

Obtain Required Materials - The first step in your organization plan should be acquiring the required materials. CBP has furnished a complete list of materials necessary to take the exam. You should obtain all of these resources now.

Organize Required Materials - Once you have obtained the required materials, you should organize them. You will want to be able to access each one 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. What remains is the stack of directives and 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.

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 our 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.

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 too. 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.

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 that 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. Our next study tip will cover “Time Management”.

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!

Boskage has many resources and study aides that can help you pass the exam. Click here for more info.

Second Phase of Government Travel Initiative Effective January 31, 2008

On January 23, 2007, citizens of the United States, Canada, Mexico and Bermuda traveling by air between the U.S. and Canada, Mexico, Central and South America, the Caribbean, and Bermuda were required to present a valid passport to enter or depart the U.S.

Effective January 31, 2008, U.S. and Canadian citizens 19 years and older who enter the U.S. at land and sea ports of entry from within the Western Hemisphere must present government-issued photo ID, such as a driver’s license as proof of identity, AND proof of citizenship, such as a birth certificate or naturalization certificate, or a passport.

All children 18 and under must present a passport when entering the United States airports. Children age 18 and under must present a birth certificate, naturalization certificate or a passport to enter the U.S. by land or sea.


Single Document Option
U.S. and Canadian citizens arriving by land or sea may present one of the following documents to prove both identity and citizenship.

· U.S. or Canadian Passport
· U.S. Passport Card (Available spring 2008)
· Trusted Traveler Cards (NEXUS, SENTRI, or FAST)
· State or Provincial Issued Enhanced Driver’s License (EDLs) verifying identity and citizenship (Several states including Washington, Vermont, New York, and Arizona are working with DHS to develop EDLs for U.S. citizens. These documents denote both identity and U.S. citizenship. Several Canadian provinces are also considering production of EDLs for use by Canadian citizens.)
· Enhanced Tribal Cards (when available)
· U.S. Military Identification with Military Travel Orders
· U.S. Merchant Mariner Document
· Native American Tribal Photo Identification Card
· Form I-872 American Indian Card
· Indian and Northern Affairs Canada (INAC) Card

Two Document Option
U.S. and Canadian citizens arriving by land or sea who do not have one of the documents from the single document list must present BOTH an identification and citizenship document from each of the lists below. Identification documents must contain a photo, name and date of birth.

1. Identification Documents
· Driver’s license or identification card issued by a federal, state, provincial, county, territory, or municipal authority
· U.S. or Canadian military identification card

2. Citizenship Documents
· U.S. or Canadian birth certificate issued by a federal, state, provincial, county, territory or municipal authority
· U.S. Consular report of birth abroad
· U.S. Certificate of Naturalization
· U.S. Certificate of Citizenship
· U.S. Citizen Identification Card
· Canadian Citizenship Card
· Canadian certificate of citizenship without photo


Example 1
A U.S. citizen presenting a birth certificate as proof of citizenship must also provide a government-issued photo ID.

Example 2
A U.S. citizen presenting a U.S. Passport need not present additional documentation because the U.S. Passport provides both proof of citizenship and contains a government-issued photo ID.



These documentation requirements only apply to entry into the United States. When traveling to other countries, it is best to check with the country you are visiting to determine the appropriate document requirements. The U.S. Department of State provides additional information for persons traveling outside of the U.S.

Additional information about the document requirements and how to obtain them can be found on the CBP website.

CBP Publishes C-TPAT Accomplishments for 2007

The Customs-Trade Partnership Against Terrorism (C-TPAT) initiative is designed to build cooperative government-business relationships that strengthen and improve the international supply chain and U.S. border security. Since its introduction in November 2001 with just seven importers, this program has seen significant growth to over 7000 members and has received widespread support throughout the trade community in the United States and our trading partners. With this support and the hiring of additional CBP officers and supply chain specialists, C-TPAT continues to achieve its mission, goals and objectives.

The following are some of the accomplishments of C-TPAT for 2007:

· Supply chain security specialists visited manufacturing and logistics facilities in 79 countries, representing some of the most terrorist prone and high-risk areas of the world.

· C-TPAT validated 3,011 supply chains, representing a 27 percent increase from 2006. Of the 3,011 validations conducted, 601 or 20 percent were revalidations. This was the first year that C-TPAT began re-verifying supply chains.

· C-TPAT certified 2,601 new members in accordance with SAFE Port Act requirements.

· C-TPAT Tier III status was granted to 17 companies as a result of the validation process.

· C-TPAT suspended or removed 112 companies from the program for security breeches or failure to meet C-TPAT's minimum-security criteria as revealed in the validation process. Of the 112 companies, 47 were either conditionally or fully reinstated in the C-TPAT program after they demonstrated to CBP's satisfaction that immediate and sustained corrective action had been taken.

· C-TPAT made progress on additional SAFE Port Act mandates including the development of a 3rd Party Validation pilot program.

· To enhance the supply chain security processes and procedures of its members, minimum-security criteria were issued for Mexican long haul carriers, U.S. and foreign-based marine port authority and terminal operators, foreign manufacturers and air carriers.

· C-TPAT signed a mutual recognition agreement with New Zealand’s Customs Service and established work plans with several other countries to achieve similar arrangements.

· C-TPAT participated in more than 100 conferences and seminars throughout the world.

· The University of Virginia conducted a survey on behalf of CBP to determine member's perceptions regarding the cost, benefits and motivations to join the program. The results demonstrated that C-TPAT has moved thousands of companies to provide closer scrutiny to the security of the goods they handle and to ensure that their overseas suppliers have implemented sound security practices.

As the new year begins, CBP continues its increased determination to prevent terrorists and terrorist weapons from entering the U.S. and strengthen the relationships with the trade community and our foreign trading partners. Working with the trade community and foreign partners, CBP will continue to pursue the achievement of the mission, goals and objectives of C-TPAT. CBP is committed to:

· Conducting more validations and revalidations.
· Providing training opportunities to C-TPAT members.
· Requesting additional funds for hiring new employees, improving facilities and upgrading and acquiring new equipment.
· Enhancing air, sea and land border security measures.
· Improving communication, understanding and mechanisms for prevention of terrorism.

Be a part of this successful government-industry team by continuing your participation, support and vigilance in C-TPAT!

Update on 10+2 Security Filing

We are pleased to provide an update to our September article about complying with the 10+2 Security Filing Requirements. On January 2, U.S. Customs and Border Protection published a Notice of Proposed Rulemaking in the Federal Register proposing the requirement that importers and carriers submit additional information to CBP before cargo is imported into the United States by vessel. The Office of Management and Budget’s analysis of the rule’s economic impact predicts that shippers may need to add another day to their normal transit schedules to account for the information gathering and reporting during the first year. The delay should be reduced to 12 hours starting in the second year. The delays may add two or more days to the importers supply chains, which will ultimately increase inventory carrying costs. Importers also see the potential for increased costs to modify their data collection systems to capture the new data and may be required to pay fees to brokers or forwarders to transmit the information to CBP.

Under the proposed rule, importers or their agents would be required to submit an Importer Security Filing containing 10 data elements for shipments of goods intended to be entered into the United States or delivered to a foreign trade zone. The 10 data elements include:

· Manufacturer Name and Address
· Seller Name and Address
· Buyer Name and Address
· Ship to Name and Address
· Container Stuffing Location
· Consolidator Name and Address
· Importer of Record Number/Foreign Trade Zone Applicant Identification Number
· Consignee Number
· Country of Origin of the Goods
· Commodity Harmonized Tariff Schedule Number

The Importer Security Filing would have to be transmitted to CBP by the importer or their designated agent, no later than 24 hours before cargo is laden aboard a vessel destined to the United States.

CBP has invited written comments on the proposed rule on or before March 18, 2008. Comments may be submitted via the Federal eRulemaking portal or by mail to Border Security Regulations Branch, Office of Trade, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, NW, Washington, DC 20229.

Click HERE to read the full text of the proposed rule.

CBP Posts Notice of Exam for April 2008

U.S. Customs and Border Protection has posted a notice to its web site announcing the April 2008 Customs Broker License Exam. The exam will be held on Monday, April 7, 2008 and applications (CBP 3124E) to take the exam must be received on or before Friday, March 7, 2008. A complete list of references necessary for the exam is found in the official notice; however, we have included some important information concerning the following references.

Harmonized Tariff Schedule of the United States (2007 version - no supplements)
Questions for the 2008 Exam were written using the 2007 HTSUS. It is important to use this edition since questions often require the determination of the correct HTS number, duty rate and applicability of Free Trade Agreements, all of which may change slightly from year to year.

Note: The link provided to the HTSUS in the CBP Notice is tied to the 2006 HTSUS. Be sure to use the 2007 HTSUS!

Title 19, Code of Federal Regulations (revised as of April 1, 2007) (Parts 1 - 199)
Questions on the exam were written using the 2007 CBP Regulations. There shouldn’t be too much confusion here since the 2008 version will not be available prior to the exam. However, anybody with the 2006 Regulations can use that book if it contains the updates through April 2007 (5th update).

NEW: C-TPAT – Minimum Security Criteria for Customs Brokers (3-20-2007)
This is the first time since C-TPAT was implemented that CBP has included them on the exam. Since CBP has included them, it is very likely the exam will contain at least one question related to these criteria. Be sure to read through them and be familiar with the eight major categories and their corresponding requirements. Stay tune, we’ll post some helpful information about this publication in a future blog.

DELETED: Remote Location Filing: Eligibility Requirements
CBP deleted this document, so you can remove it from any materials you have collected.

BEWARE: Submission Changes for Supplemental Information Letters and Post Entry Amendments
Surprisingly this document was not deleted from the list, even after CBP awarded credit for all answers on the question related to SILs and the PEA from the October 2007 Exam. Even though most of the trade community is aware that the SIL is no longer a valid method of correcting entries, be aware that a question related to it may be included on the exam.



If you ordered the 2008 April Exam Reference Package from Boskage, all of the correct references were included.

It’s time to get ready for the next Customs Broker Exam! Click HERE for a complete list of our study plans and products designed to help you study and pass the exam!

Don’t forget to visit the blog again for import/export news updates, articles about specific trade topics and helpful posts related the Customs Broker Exam!

2008 HTSUS Now Shipping!

Just like the U.S. Postal Service, “neither snow nor rain nor heat nor gloom of night” will prevent the release and shipment of the new 2008 Harmonized Tariff Schedule. January brings lots of snow and very cold weather here, but the staff at Boskage has been keeping warm by working hard to prepare the 2008 Harmonized Tariff Schedule of the United States for shipment. The books were shipped on January 24, 2008. For immediate shipment of the 2008 HTSUS, click HERE to order yours today!

President Issues Directives for U.S. Export Control Reforms

On January 22, 2008, the President announced a national security directive that requires action by the U.S. State Department and the Department of Commerce, Bureau of Industry and Security. With the continued threats to security, proliferation of weapons of mass destruction and increased reliance on outsourcing in our global economy, the United States must be vigilant to ensure that distribution of controlled technology to foreign entities is only allowed when properly authorized.

The President’s directive to the Department of Commerce addresses three major initiatives:

1. Foreign End-Users

This initiative focuses on foreign end-users of U.S. technology products to deny potentially sensitive technology to America’s adversaries while facilitating the development of technology with our allies. The use of the Validated End User (VEU) program facilitates legitimate exports to civilian end-users. After submitting the required information and receiving authorization from BIS, export, reexport and transfer of eligible items to approved end-users in eligible destination will be allowed. Exports to foreign parties with a record of activities in opposition to U.S. foreign policy and national security interests will be subjected to additional scrutiny.

2. U.S. Competitiveness

This requirement includes developing a regular process for review of the list of controlled dual-use items, the Commerce Control List (CCL), improved controls on intra-company transfers, revised controls on encryption products, and a review of reexport controls.

3. Transparency

Another aspect of the directive identifies the need for the Commerce Department to provide sufficient information related to dual-use export controls to U.S. exporters to help them comply with the regulations. To fulfill this obligation, Commerce will publish advisory opinions on the BIS website and a list of foreign parties that warrant higher scrutiny.

The directives issued to the U.S. Department of State also focused on three major areas, licensing, dispute resolution and enhanced enforcement:

1. More Effective U.S. Export Licensing

This directive is designed to limit the period of time the government is permitted to make license determinations for goods on the U.S. Munitions List (USML) to 60 days. Additional resources will be made available to carry out this mandate. In addition, the electronic licensing system will be upgraded to permit the submission of all types of defense trade licenses and to enable all agencies to access the same electronic information.

2.More Efficient Dispute Resolution Mechanism

A formal interagency dispute mechanism will be created to allow for timely resolution of licensing jurisdiction issues involving the Departments of State and Commerce under the Commodity Jurisdiction (CJ) process. The National Security Council will also undertake a review to make sure the CJ process is efficient and timely.

3. Enhanced Enforcement

A multi-agency working group will be established to improve procedures for conducting export enforcement investigations.

In concluding his communication of these directives, the President stated that the Administration continues to support reauthorization of the Export Administration Act with updated penalties and enhanced law enforcement.

CBP Proposes Elimination of First Sale Rule

In the January 24, 2008 edition of the Federal Register, CBP announced its proposal to change the interpretation of “sold for exportation to the United States”. CBP proposes that in a transactions involving a series of sales, the price actually paid or payable for the imported goods when sold for exportation to the United States is the price paid in the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale.

The WTO Valuation Agreement, formally GATT, provides that the customs value of imported merchandise "shall be the transaction value, that is the price actually paid or payable for the goods when sold for export to the country of importation, adjusted in accordance with the provisions of Article 8.” The WTO Valuation Agreement, which all members of the WTO are required to implement, does not define the phrase "sold for export to the country of importation.” Neither 19 U.S.C. 1401a, nor the implementing regulations set forth in part 152 of title 19 of the Code of Federal Regulations (19 CFR part 152), defines the phrase "sold for exportation to the United States.''

When the import transaction involves only one sale, it is usually easy to identify the sale for exportation to the United States to determine the price actually paid or payable. In this situation, there is only one buyer, usually located in the United States, and one seller, usually located in another country. The problem arises when the import transaction involves a series of sales between parties in different countries. CBP's current interpretation bases transaction value on the price paid by the buyer in the first or earlier sale (e.g., the sale between the manufacturer and the intermediary) provided the importer can establish provide evidence that the sales was made at arm's length and that, at the time of such sale, the merchandise was clearly destined for exportation to the United States. See T.D. 96-87.

In April 2007, the Technical Committee on Customs Valuation (Committee) adopted Commentary 22.1, which provides clarification on the meaning of the phrase “sold for exportation to the country of importation” in a series of sales. The Committee found that member countries might find it difficult to verify the information related to the first sale. The Technical Committee concluded that in a series of sales situation, the price actually paid or payable for the imported goods when sold for export to the country of importation is the price paid in the last sale occurring prior to the introduction of the goods into the country of importation.

As a result of the Committee’s decision, CBP examined the decision and the current application of the first sale rule in the U.S. and concluded that the current interpretation as set forth in T.D. 96-87 is not correct. Seeking to comply with the Committee’s findings and Commentary 22.1, CBP proposes the use of the price paid or payable for the imported goods when sold for exportation in the last sale occurring prior to the introduction of the goods into the United States instead of the first (or earlier) sale.

CBP provides detailed information concerning the reasons for the change the Federal Register publication. CPB indicates that adopting the new standards will:

· Assure components of value such as commissions, packing and assists that may not be included when using the first sale are properly included in the value.
· Reduce the amount of time and resources spent by the importer or CBP to verify the requirements of T.D. 96-87 have been met.
· Provide a straightforward rule for determining value in a series of sale.
· Reduce post entry audit verification issues including production of records.
· Reduce importer’s burden for compliance in properly declaring the value 19 U.S.C. 1484.

Specifically, CBP is proposing that in a series of sales situation, the price actually paid or payable for the imported goods when sold for exportation to the United States is the price paid in the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale. As a result, transaction value in situations involving a series of sales will be determined based on the price paid by the buyer in the United States. In order demonstrate how the proposed new interpretation would apply to U.S. valuation law, the Committee’s example was provided at the end of the Federal Register document.

If this proposed interpretation is adopted, it will result in the revocation of T.D. 96-87, the modification or revocation of administrative rulings that have analyzed the series of sales issue using the first-sale criteria, and the revocation of any treatment previously accorded by CBP to substantially identical transactions. In addition, the application of the court decisions in McAfee, Nissho Iwai and Synergy would be limited to the specific entries at issue in those cases. Of course, the most important result is the potential for increased duty payments for importers currently using the provisions allowed by the first sale rule. Consider the following scenario:

Scenario
Company A in the United States purchases widgets from Company B in Canada for $500,000. Company B purchases the Widgets for Company A from Company C in Germany for $300,000. Company C ships the widgets to Company A in the United States. Widgets are dutiable at 5%.

Option 1 – First Sale Rule
Using the first sale rule, Company A could use the value of the “first sale” between Company B and company C. The amount of duty paid would be $15,000 ($300,000 x 5%).

Option 2 – Last Sale Rule
Using the proposed last sale rule, Company A must use the value of the sale between Company A and Company B. The amount of duty paid would be $25,000 ($500,000 x 5%).

Results
As you can see, application of the last sale rule results in an increase in duty for the importer of $10,000.

This proposal has extremely important ramifications for the trade community. Importers and other members of the trade are urged to provide comments to CBP. Instructions for submitting comments are found in the Federal Register Notice and must be received on or before April 23, 2008.