Is your firm related to its foreign shippers, sellers or manufacturers?
"Related persons" means: (1) Members of the same family, including brothers and sisters (whether by whole or half-blood), spouse, ancestors, and lineal descendants.(2) Any officer or director of an organization, and that organization.(3) An officer or director of an organization and an officer or director of another organization, if each individual also is an officer or director in the other organization.(4) Partners.(5) Employer and employee.(6) Any person directly or indirectly owning, controlling, or holding with power to vote, five percent or more of the outstanding voting stock or shares of any organization, and that organization.(7) Two or more persons directly or indirectly controlling, controlled by, or under common control with, any person. If the answer is “YES”, a discussion should take place on how your firm assigns values to the commercial invoices provided that will be presented to Customs. Valuation on related companies is scrutinized by Customs to ensure that products declared represent a transacted value negotiated at “arm’s length” or a fair market value acceptable to Customs.
Are you furnishing any assists to the manufacturer? Are they being declared on each invoice?
“Assist" means any of the following if supplied directly or indirectly, and free of charge or at reduced cost, by the buyer of imported merchandise for use in connection with the production or the sale for export to the United States of the merchandise: (i) Materials, components, parts, and similar items incorporated in the imported merchandise. Tools, dies, molds, and similar items used in the production of the imported merchandise. Merchandise consumed in the production of the imported merchandise. Engineering, development, artwork, design work, and plans and sketches that are undertaken elsewhere than in the United States and are necessary for the production of the imported merchandise. However, such service or work will not be treated as an assist if the service or work: Is performed by an individual domiciled within the United States; Is performed by that individual while acting as an employee or agent of the buyer of the imported merchandise; and is incidental to other engineering, development, artwork, design work, or plans or sketches that are undertaken within the United States.
Are there any commissions being paid to a buying or selling agent?
Only bona fide buying commissions are non-dutiable. In order to determine if your commissions are dutiable, please see the informed compliance publication https://www.cbp.gov/document/publications/buying-selling-commissions. Selling commission" means any commission paid to the seller's agent, who is related to or controlled by, or works for or on behalf of, the manufacturer or the seller. Noting that “selling commissions are dutiable. We can provide you with a more detailed questionnaire that will help make this determination.
Are you importing any items subject to Intellectual Property Rights?
Does your imported product or packaging contain any trademarks or copyrighted matter? If so, do you have the legal right to do so? Does your company have authorization and/or permission to import and use the goods or packaging bearing a U.S. registered trademark; or are you the registered owner of this trademark? Importing products that include an unauthorized trademark or copyright can be detained and/or subject to seizure. Does your Customs Broker have copies of the documented authorizations that allow you to import the subject goods?
Are you paying any royalty or license fees?
Royalties or license fees for patents covering processes to manufacture the imported merchandise generally will be dutiable. Royalties or license fees paid to third parties for use, in the United States, of copyrights and trademarks related to the imported merchandise generally will be considered selling expenses of the buyer and not dutiable. The dutiable status of royalties or license fees paid by the buyer will be determined in each case and will depend on (1) whether the buyer was required to pay them as a condition of sale of the merchandise for exportation to the United States, and (2) to whom and under what circumstances they were paid. Payments made by the buyer to a third party for the right to distribute or resell the imported merchandise will not be added to the price actually paid or payable for the imported merchandise if the payments are not a condition of the sale of the merchandise for exportation to the United States.
Are there any additions to or adjustments to the invoices used to make entry? Have you established reliable procedures to know the “price actually paid or payable” for your merchandise? Is this amount being properly declared?
"Price actually paid or payable" means the total payment (whether direct or indirect, and exclusive of any charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. Are the terms of sale clearly defined on your commercial invoices? Are there any rebates? Indirect costs? Additional payments made?
Are your goods eligible for any Special Programs or Trade Agreements that allow duty free or reduced duty payments?
Examples: GSP (Generalized System of Preferences – now expired pending reauthorization), NAFTA (North American Free Trade Agreement), Israeli Free Trade Agreement, AGOA (African Growth and Opportunity Act), Andean Free Trade Agreement, Etc. Can you support these claims with the required documentation?
Have you taken reliable measures to ensure your product is properly marked with correct Country of Origin? Other required Markings?
Imported goods are to be marked, conspicuously, legibly, indelibly, permanently and in English to indicate to the ultimate purchaser the country of origin of an imported article.
Exceptions to marking rules do exist for articles for which it is not feasible or economical to mark, articles for which marking of the container suffices (limited reasons for this), articles either destined solely for use by the importer or to be further processed by the importer, articles whose origin is obvious by their nature, articles produced more than 20 years before importation into the us, and articles listed on what CBP refers to the J list. Textiles usually require additional markings and are regulated by the Federal Trade Commission. See: http://www.ftc.gov/os/statutes/textilejump.shtm As well, when a US location is mentioned on a product, country of origin must be marked in the same size print and in close proximity to the US location mentioned. Are your products marked properly?
Have you taken measures or developed reliable procedures to ensure that your merchandise complies with other participating government agency requirements (e.g. FDA, EPA/DOT, CPSC, FCC, FTC, Agriculture, etc.) prior to importation?
In many cases licenses, label approvals, permits and/or specific forms may also be required as a condition of importation.
Are your goods subject to a Commerce Department dumping or countervailing duty investigation or determination?
Certain goods entering the United States of America are subsidized by foreign governments in the form of incentives back to the origin manufacturer. These incentives are known to be unfair trade practices and as such the US government – ITC (International Trade Commission) regularly reviews US Domestic manufacturers petitions to determine if these practices are harming US manufacturers in the areas where these incentives exist. When found to be harmful, the USITC will levy additional either countervailing duties or dumping duties to offset a foreign governments action thus bringing the cost of the imported product to within line of domestic production costs to create a fair an equitable trade environment. More information on these types of additional duties can be found (here). New investigation requests can be found (here). And for existing ADD/CVD cases can be found (here). For ADD/CVD FAQ’s click (here). Information listed by product, country and order can be found (here).
Are your Goods subject to the Section 301 duties on goods made in China?
If your not sure, the best way to determine this if you know the HTS code for the product in question is to use this easy to use tool (here). Then examine the applicable descriptions as products can be included by HTS code but excluded based on the actual descriptions of what is covered or described thus eliminating what is not. Additionally, there are exclusions on specific products that although listed by HTS code and description may also be given a temporary exclusion (if not expired).
Is your imported product made with any inputs from the Uyghur region in China? Are you aware of the Uyghur Forced Labor Prevention Act?
The Uyghur Forced Labor Prevention Act (UFLPA), signed into law on December 23, 2021, reinforces the United States’ policy to strengthen the prohibition against the importation of goods made with forced labor. The UFLPA ensures support for enforcement of Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. § 1307), which prohibits the importation of all “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor and/or indentured labor under penal sanctions.” Do you engage your suppliers to assess the forced labor risk? Have you mapped your supply chain from raw material to production of the imported product? For more information click (here)
Importing Textiles/Apparel
Importing textile/apparel into the U.S. comes with a number of regulations and Government Agencies that regulate them such as CBP, The Federal Trade Commission and The Consumer Product Safety Commission. Failure to follow their requirements can lead to an inadmissible status and possible seizure of the goods. As well the classification of Apparel can get quite tricky if you are not aware of content and construction details. Do you have a written document for each style you import that allows your import team to identify all content and construction so that classification is made easy, visible and transparent to all parties in the supply chain?
Is your company participating in the C-TPAT program?
The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary supply chain program led by U.S Customs and Border Protection (CBP), focused on improving the security of private companies' supply chains with respect to terrorism. Companies who achieve C-TPAT certification and subsequent validation must have a documented process for determining and alleviating risk throughout their international supply chain. This allows companies to be considered low risk, resulting in expedited processing of their cargo, including fewer customs examinations. The C-TPAT program is also a pre-requisite for participating in the Importer Self Assessment program. Application for the program is made online using the CBP CTPAT website located (here). Upon satisfactory completion of the application and supply chain security profile, the applicant company is assigned a CTPAT Supply Chain Security Specialist to review the submitted materials and to provide program guidance on an on-going basis. The CTPAT program will then have up to 90 days to certify the company into the program, or to reject the application. If certified, the company will be validated within a year of certification.
Does your company participate in the Importer Self- Assessment (ISA) program?
The ISA program is built on the knowledge, trust, and willingness to maintain an ongoing CBP/importer relationship that is mutually beneficial to both parties. CBP’s goal is to partner with importers who can demonstrate their readiness to assume the responsibility to manage and monitor their compliance through self-assessment. Importers who are accepted into the ISA program receive tangible benefits, while allowing CBP to re-direct valuable resources to focus on high-risk and unknown importers. More info regarding the Importer Self -Assessment process can be found ( here). Need help?
Recordkeeping- Document Imaging
CBP requires that records be kept for any of the following activities for 5 years from the date of entry: • any importation, declaration or entry; • the transportation or storage of merchandise carried or held under bond into or from the customs territory of the United States; • the filing of a drawback claim; • the completion and signature of a NAFTA export Certificate of Origin pursuant to Part 181; • the collection and payment of fees and taxes to CBP; and any other activity required to be undertaken pursuant to laws or regulations administered by CBP. How are your records kept, paper or electronically? For more details on the subject click (here).
Classification
Classification is the process of assigning a 10-digit number from the Harmonized Tariff Schedule of the United States (HTS) to a product. See: http://hts.usitc.gov/ Every item that arrives in the U.S. from a foreign country must be classified. The classification of an item determines its duty rate and whether it requires clearance by any other government agency such as FDA, FCC, EPA, etc. The text of the HTS contains legal and guiding notes which should be examined prior to classification. It is an importers’ obligation to ensure that reasonable care is exercised in selecting the proper classification for your imported and exported products. Please give thought on your process as to how you will handle the classification of your products. Do you maintain a database of classifications to be shared with your Customs Broker? Do you review all classifications annually in coordination with each annual HTS update? In most cases a Customs Broker would be able to upload your HTS database into their operating system to use when clearing your product. This improves control and reporting to US Customs to reduce errors and maintain consistency. American Shipping Co. can also help guide you through the classification of your products and help to confirm the classifications you already may have on file.
Do you have any rulings issued by Customs?
If you have participated in any pre-classification programs? Did you know that if any merchandise has received a binding ruling, Customs requires that this ruling be indicated on subsequent CBP entries? Do you maintain a product code database correlating product codes with Harmonized Tariff System (HTS) classification numbers as well as ruling numbers?