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.

CBP’s New System for Administrative Messages

In Message 08-0003 on January 16, 2008, Customs and Border Protection introduced the new Administrative Messaging Service (CSMS). The CSMS is the new system for distributing Administrative Messages that replaces the current distribution of messages through the Automated Broker Interface (ABI). CBP uses Administrative Messages to communicate general information including:

· Currency exchange rates.
· Changes to the HTS.
· Antidumping and countervailing duty cases.
· New or changed entry procedures.
· Port power outages and closings.
· Other government agency notices.

CBP has moved all significant Administrative Messages previously issued by ABI into the new database. For consistency, two additional zeros have been added following the hyphen for all of the converted messages. The new format for Administrative Message numbers is YY-NNNNNN. YY represents the last two digits of the calendar year and NNNNNN is a sequentially assignment number.

Effective February 11, 2008, CBP will only issue Administrative Messages using the CSMS. The trade community has two new options to obtain Administrative Messages from CBP. CSMS messages can be retrieved via a database linked to www.CBP.gov based on combination of keywords and filtering. Individuals can also elect to receive administrative messages via email by registering for a free subscription.

The Proposed Federal Freight Fee: A New Tax on Imports and Exports?

It appears that the Harbor Maintenance Fee isn’t enough. Last week, the National Surface Transportation Policy and Revenue Study Commission released a report to Congress that recommends a Federal freight fee to help finance freight-related improvements. In conjunction with that report, Rep. Ken Calvert, R-Corona plans to introduce federal legislation that would impose a maximum $500 tax on all cargo shipments moving through U.S. ports of entry.

The proposed tax is 0.075 percent levied on the value of each shipment imported or exported through the nation’s 300 ports of entry, which includes ocean ports, airports and border crossings. The proposal puts a $500 maximum tax per shipment, which means the maximum of $500 would be applied to any single shipment over $6,600; however, the details of what constitutes a single shipment have not been determined. The tax could raise $3 billion to $5 billion per year to finance freight-related improvements for seaports, airports and border crossings within 300 miles of the port of entry. Calvert’s plan calls for the taxes to be used within 300 miles of the port they are collected and used only for goods-movement related projects. The plan sunsets in 10 years.

There is a minor detail that the Congressman may have overlooked related to the constitutionality of imposing a tax on exports. Many of you may remember the controversial issue over the application of the Harbor Maintenance Tax (HMT) to exports. Article I, Section 9, Clause 5 of the United States Constitution states that “no Tax or Duty shall be laid on Articles exported from any State.” On March 31, 1998, after a lengthy court battle, the, the Supreme Court ruled the application of the Harbor Maintenance Tax to exports was an unconstitutional tax on exports in violation of the Export Clause. Given the history of the HMT, it doesn’t look like Rep. Calvert’s plan to impose the Federal freight tax on exports would pass muster. Once again, the importers would foot the bill for these improvements.

Currently, Calvert does not have the support of key transportation sectors such as retailers and the railroads. With the increased costs of transportation and the unfairness of burdening the importing community with another tax, it will be interesting to see how much support importers and exporters provide.

Voice your opinions for or against this plan by contacting Rep. Calvert and your state representatives!

New Year’s Resolutions for International Trade Professionals

As we eagerly launch into 2008, the Boskage staff would like to share a few New Year’s Resolutions with you and provide an opportunity for you to share a few of yours with us. In a few weeks, we’ll take all of the suggestions received and create a complete list. We’ve started the list with the following resolutions.

As an active member of the international trade community, I commit to:

· Contribute my best efforts and quality to my company’s international compliance program.
· Abide by all government regulations, even when it’s a lot of work.
· Keep updated on current events through trade associations and industry publications.
· Participate in relevant educational opportunities.
· Share knowledge with and assist my colleagues.
· Keep our company’s name out of the “look who has done something bad” list.

It's your turn. Share your New Year's Resolutions with us!

Happy New Year from the staff at Boskage Commerce Publications!

CBP Introduces Revised Agreement

As the C-TPAT program evolves, changes to certain processes and procedures are necessary to improve the efficiency and effectiveness of the program. When applicants for membership in C-TPAT complete the online application in the Security Link Portal, they are required to accept the C-TPAT Agreement to Voluntarily Participate. In compliance with the SAFE Port Act, CBP created a revised agreement for C-TPAT participants. The new agreement updates the most recent version of the agreement to include the changes that have occurred since the introduction of C-TPAT in 2001. Current members are not required to sign the agreement or submit additional information; however, CBP encourages members to review the new agreement because continued membership indicates that the participant concurs with the new agreement.

Some of the revisions to the agreement include:

• Use of the term “Partners” for all parties instead of carriers, importers, brokers, etc.


• Addition of the requirement to cooperate with validation and re-validation process under Partner’s agreement.


• Shortened version of the Partner’s agreement to comply with the program requirements in place of multiple statements in the old version about developing written and verifiable processes followed by the list of major processes.


• Addition of the statement that CBP will conduct validation within one year of the Partner’s certification.


• More CBP responsibilities than in the original agreement


• Provisions for C-TPAT participants to verify information via Status Verification Interface


• Opportunities for C-TPAT Partners to participate in the Mutual Recognition Program

We have included a link to each document so that you can review each and make note of the changes. Click on the appropriate link to view the old and revised versions of the C-TPAT Agreement to Voluntarily Participate:

(Old) C-TPAT Agreement to Voluntarily Participate
(Revised) C-TPAT Agreement to Voluntarily Participate

2008 Government Publications

It’s that time of year again, when we field a number of questions about when the 2008 government publications will be available from Boskage.

The 2008 government publications are likely to be released within the first six weeks of 2008. The trade does not have an exact date of release because the government entities responsible for delivering these titles do not give out a release date in advance of publication. However, if the last three years are any indication of a trend, the ITC (HTSUS) Census Bureau (Schedule B), and Treasury Department (CBP Regulations) will release in mid to late January of 2008, and the Bureau of Industry and Security (Export Regulations) will release in late January to mid February of 2008. We’ll post blog entrys when each publication is released so that you’ll have the latest information.

Boskage stands ready to ship the new HTSUS and the rest of these subscriptions as soon as they become available. Order your subscriptions now to ensure your company will remain in compliance by using the most current editions of the required publications.

All subscriptions through Boskage include printed supplements throughout the calendar year for free*.

Click on the publications below for a complete description of the publication and pricing.

2008 Harmonized Tariff Schedule (HTSUS)
2008 U.S. Customs Regulations (19 CFR Title 1, Parts 0-199)
2008 Export Administration Regulations
2008 Updates to the 2007 Schedule B

Looseleaf editions include all shrink-wrapped pages and all updates.

Deluxe editions include looseleaf pages (with all updates) heavy-duty D-ring binder and indexing tabs.


*Supplements are included at this price. However, re-prints (any edition comprising more than 50% of the original) will be billed at cost.

Pass Rate For October 2007 Customs Broker Exam

From the CBP:

Number of candidates: 1387
Pass Rate: 9.2%

Credit was given to all for 4 questions.

CBP Posts October Exam Answers

After weeks of waiting, the answers for the October Customs Brokers Exam have been mailed to the anxious examinees and posted to the CBP website for the public. First, we want to congratulate all of you who passed! We would like to hear your comments about how you studied, what worked best for you and any other comments about the exam. Next, we want you to know that there appear to be some typographical errors related to references on the Exam Key dated November 13, 2007. Click here to view the correct references.

We were not surprised that questions were thrown out, but it was a little surprising that four questions were eliminated. Congratulations, everyone automatically answered four questions correctly and earned five free percentage points (4 x 1.25). Now all you need is 70 points, which equates to answering 56 questions correctly.

So what if you only answered 54 or 55 questions correctly? Should you give up and say “maybe next time?” No! Look at the answers to see if there are any questions that could be protested. You haven’t lost anything by protesting a question, but with the right protest, you may go from failing to passing and obtaining your license.

We have analyzed the questions and answers and found five questions that we believe could be subject to protest. Those questions are 19, 21, 42, 45 and 47. Click here to see the comments about Question 45. In future postings to the blog we will provide additional information about these potential protest questions. We welcome your comments and suggestions on these questions and any others you think might be subject to protest. Remember, you haven’t lost anything by filing a protest and you may save yourself the time and money necessary to take the test again.

Foreign Suppliers Can Help Importers

Foreign suppliers are often overlooked in the import process, yet they must perform certain tasks in order for the foreign goods to be allowed entry into the U.S. Sometimes foreign entities are only familiar with the laws of their own country and do not realize that the U.S. has laws that are different. The manner in which the foreign supplier fulfills their obligations can expedite or delay the import process. If the importer provides the foreign supplier with instructions about preparation of documents, country or origin, cargo security and other requirements, then the foreign supplier will have a better understanding and the tools to help them help you.

Wait a minute! You may be thinking that you don’t even have time to train your own staff and other departments in your organization. How can you be expected to train foreign suppliers? However, it’s not that hard and the small investment in time will make your life easier because the quality of the documentation and compliance with the company’s requirements will be improved.

Here are some suggestions on how you can educate your foreign suppliers.

1. Provide the foreign suppliers with standard guidelines for import shipments. The guidelines can be published online, provided with each purchase order, or some other method. You may also want to collaborate with others in your supply chain, such as buyers and logistics, to create a document that covers the importation of these products from the time an order is placed to the time payment is made. What should be included in those guidelines? The following is a brief list of items that should be addressed:

A. Company Contacts
Your guidelines should provide names, phone numbers and email addresses for key contacts related to imports, exports and logistics.

B. Documents
This section should provide a list of all documents that are required for your shipments along with any specific requirements for each document. For example, the commercial invoice is a key document and it is important for the foreign supplier to know what information is required to be included on the document. You could include a link to 19 CFR 141.86 or provide the list in your own format. If your company imports goods from a NAFTA country, remember to include the production of the CBP 434 NAFTA Certificate as a required document.

C. Country of Origin Marking
The requirements for country of origin marking should be explained along with any special requirements your company may have for marking of the merchandise and packaging. Since failure to mark or improperly marked merchandise creates additional work for the importer and potential penalties from CBP, some companies include a provision for charge-backs for improper marking. Provide a list of responsibilities for the supplier to assist them in marking the merchandise correctly.

D. Valuation - General
Determining the value for goods is difficult enough for importers, so explanation of these requirements to the foreign suppliers may be even more difficult. Consider introducing this topic with a summary of the importance of declaring the value and being able to support these calculations if requested. Then provide a list and brief explanation of the key components of value such assists, commissions, packing and related parties. If you are aware that certain components affect your shipments, such as related party transactions, place more emphasis on these topics.

E. Free of Charge Goods
Include some brief instructions on the proper declaration for free of charge goods. It is important for foreign suppliers to properly declare the values for the free of charge items they send and it will save you time having to contact the supplier to obtain the values in order to obtain release of the goods from CBP. The supplier may have difficulty understanding the importance of declaring accurate values since the good are being supplied free, so a good explanation and example may help get the point across.

F. Repaired Goods
Explain that imported merchandise that is subsequently exported for repairs and re-imported could be charged duty on the entire value of the shipment unless the return shipment is properly identified as being “repaired goods returned.” The foreign supplier responsible for the repairs must complete documentation that provides the value of the goods and value of the repair. Explain that for purposes of paying Customs duties, it is irrelevant that the goods may have been under warranty or that the repairs are performed at no cost to the importer.

G. Packaging and Labeling
In addition to the country of origin markings, each company will have specific packaging and labeling requirements based on the type of products imported. You should include information such as size and type of boxes, pallets and special marking required on the cartons.

H. Transportation
While transportation issues may not be the responsibility of the Import Compliance Department, your Logistics Department may want to contribute to these guidelines. This section usually contains information about the use of ocean and air carriers, as well as forwarders. You may want to specify carriers and when it is allowable to ship air versus ocean.

I. C-TPAT Security Requirements for Suppliers
For those companies that are members of C-TPAT, you must assess the security policies, procedures and processes of your business partners. Use this section to convey your company’s commitment to C-TPAT and provide links or references to the relevant C-TPAT Security Criteria for Manufacturers.

J. Accounts Payable
This section should include the requirements for submitting invoices for payment and provide the methods of payment used by the company.


2. Check out the bcpLearning courses.

The basic suite of courses contains a short course designed specifically for foreign suppliers. This course describes the basic process of importing for a U.S. company from beginning to end. The course then focuses on the roles of Foreign Suppliers in the process, including complying with C-TPAT guidelines, providing complete documentation packages, and preparing documents for express courier shipments. This course also includes a foreign supplier guidelines document, which describes the information included in this article and additional topics in more detail.

Is Your Company Still Thinking About C-TPAT Membership?

Are you one of the importers, brokers or other trade participants who hasn’t signed up for C-TPAT? What are you waiting for? Although participation in C-TPAT requires commitment of time and resources, the initial steps for participation are much easier now than they were for early members. The pioneers of the early C-TPAT programs didn’t have the benefit of the resources that are available now. As a result of hard work by the trade and CBP, companies contemplating C-TPAT membership today have a wealth of resources available to them. So, let’s take a look at some issues that companies consider when looking at participation.

Why Companies Should Participate in C-TPAT

C-TPAT is not mandatory and participation may not be necessary for companies that rarely import and export; however, C-TPAT has numerous benefits and some of the other companies in your supply chain may require that you join in order to do business with them. Other reasons to join include:

· Participation demonstrates good corporate citizenship.
· Participation reduces potential for negative publicity and protects your company’s image.
· Procedures required for participation assist in reducing inventory loss and increases the visibility of the supply chain.
· Membership provides expedited cargo release.
· C-TPAT requires participation by nearly all of the business units within an organization, which promotes increased understanding and cooperation between departments.
· Participants receive reduced numbers of cargo inspections.
· Membership is a prerequisite for account-based processes such as Importer Self-Assessment.

A recent independent study conducted by the University of Virginia on behalf of U.S. Customs and Border Protection reported that “95 percent of respondents indicated they are likely to remain in C-TPAT.”

What Will it Cost?

The expenses vary depending on the current procedures in place; however, some of the common areas that require the most investment of time and money include:

· Improvement or implementation of physical security features such as electronic access, cameras, fences and other security procedures,
· Maintenance of the physical security features and security officers, and
· Training and education for staff.

How Can Boskage Help?

Third parties can assist importers, brokers and carriers in creating C-TPAT programs; however, no one can do C-TPAT for you. Boskage provides some excellent tools that will make the process easier and less expensive.

The Corporate C-TPAT Manual for Importers contains over 100 policies and procedures that address each of the security criteria. Although the manual was written for importers, the format and most procedures can be altered to work for brokers.

The manual contains policies, procedures, and a summary for all of the C-TPAT criteria for importers and are arranged in the same order as provided by CBP in the Security Link Portal. Just take the information you compiled from the questionnaire and other sources and create your narrative using our examples. Once you are satisfied the narratives adequately reflect the status of your operations, enter them into the portal.

In addition to the policies and procedures, the manual contains a C-TPAT Project Plan and Organizer to assist you in organizing your C-TPAT process from the time you decide to apply for membership through your first annual review of processes and procedures. The Project Plan outlines processes and provides helpful hints to keep your project moving forward. The Organizer in spreadsheet format will help you to assign projects and keep track of due dates.

Click HERE to view the Table of Contents and a Sample Procedure.

In addition to the procedure manual, Boskage offers an online C-TPAT training course that can be used to explain the entire process to employees and helps satisfy education and awareness requirements. Even if your company has already applied and been accepted as a C-TPAT member this course will help your employees understand the process involved in becoming a member and the responsibility of importers once they obtain membership. C-TPAT is an ongoing process for organizations involved in international trade. If your organization has not applied for C-TPAT membership, this course will provide valuable information on the requirements for membership.

Click HERE to view information about bcpLearning’s C-TPAT Compliance Course.

Don’t Forget Export Compliance!

For years, export professionals said that exporting was simpler than importing, but I never believed them. When working with imports, you only need to consider U.S. laws. Considering the Code of Federal Regulations, the USC, HTSUS and the information published by Customs, that’s more than enough to keep track of.

Compare that with working with exports. Not only do you have to consider all of the U.S. regulations enforced by the BIS, Department of State and Commerce Department, but you also have to consider the laws of the countries where you export products. One thing that is similar is responsibility. Just as importers are responsible for the declarations made to Customs, responsibility for export compliance rests with the exporter.

Penalties - Don’t Let Them Happen to You

Export penalties are on the rise. The Bureau of Industry and Security publishes a report listing the names of parties who have violated the export laws and the amounts of the penalties. To see the list of violators, go to the BIS web site where they have a publication titled, “Don’t Let This Happen to You.”

Not only are the penalties high, there is a proposal to increase the current amounts. The table below shows the current and proposed amounts for violations of export laws. As an additional penalty, companies may be barred from exporting for a period of time.

	Current EAA Penalties	Proposed EAA Penalties
Criminal Maximum(Corporate)	$1 Million or 5 times the value of exports involved	$5 million or 10 times the value of exports involved
Civil Maximum(Corporate)	$11,000 per violation (prior to March 2006) $50,000 per violation (after March 2006 under IEEPA) $120,000 for national security violations	$500,000 per violation

How Much Does Export Compliance Cost?
Exporting is a necessity to survive in today’s global economy. Undertaking appropriate due diligence, training and export compliance measures is required to be competitive and successful. While third parties may be able to assist in compliance efforts, exporters cannot outsource liability for compliance. Even sophisticated international companies have found that failure to abide by U.S. Export Control laws and regulations can result in confiscation of goods by customs and the assessment of substantial civil and criminal penalties.

Companies involved in exporting must be fully aware of their responsibilities under the Export Administration Regulations. It is the responsibility of the exporter to be up to date on the U.S. EAR and to comply with U.S. laws governing export transactions.

So, how much does export compliance cost? With the current penalty structure at $1 million for criminal penalties and civil penalties at $50,000, the better question might be "what is the cost of non-compliance?" If you hire the right people and implement the proper procedures, the cost to maintain compliance is much less than the cost of non-compliance. That’s why it’s important to be aware of the costs and consequences of not being informed about exporting.

Click HERE to check out our export publications.

Click HERE for more info about Export Compliance.

We are currently looking for new authors to develop eLearning courses and compliance procedures. If you have experience in export compliance and the ability to translate regulations into an understandable format, please click HERE.

Potential Answers for the October 2007 Customs Broker's 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 April 2007 Exam were not posted until the middle of June leaving many people little time protest questions and receive answers prior to the October exam.

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 October 2007 Exam!

Note: The Wizard had the most difficulty answering the questions highlighted in purple.