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The following is a checklist of the United
States Bureau of Customs and Border Protection rules and
regulations that your company should be aware of as we enter
2007. Under Title VI (Customs Modernization) of the North
American Free Trade Agreement Implementation Act, importers are
responsible for correctly valuing, classifying and determining
the country of origin of their importations into the United
States. Importers who make mistakes in their importation
documentation may be penalized under Title 19 USC §1592 if it is
determined that they did not exercise reasonable care as
required by Title 19 § 1484 of the Tariff Act of 1930, as
amended.
In order to ensure that the company is in
compliance with the rules and regulations of importing into the
United States, review the following items as they apply to the
company’s own particular situation.
Advance Notification of Cargo Information
The Advance Notification final rule is in
effect regarding providing advance information pertaining to
shipments arriving at the U.S. ports of entry by truck. This
pre-notification is required to be electronically sent to CBP
one hour prior to truck arrival at the port of entry.
E-Manifest requirements
Part 123, Customs Regulations has been
amended to require trucks entering the United States through
ports of entry in the states of Washington and Arizona and
certain ports in North Dakota to transmit the advance e-Manifest
information through the ACE Truck Manifest system effective Jan.
25, 2007. If you haven’t already done so, now is the time to
talk to your U.S. Customs broker and the Mexican trucking
companies about the new e-Manifest requirements.
At publication time it appeared that when
the new regulation went into effect on Jan. 25, 2007 Customs
would begin an Informed Compliance Mode, which means that trucks
will not be returned to Mexico if carrier is out of compliance;
the carrier will be given a notice that they are out of
compliance. However, after a period of time, Customs will enter
into an Enforced Compliance Mode which means that if the Mexican
carrier is out of compliance with the e-Manifest rules the truck
will not be allowed to enter the United States.
General requirements
Ensure your Customs continuous bond and
Reconciliation bond rider are not about to expire.
Review the status of all open Temporary
Importation Bonds (TIBs). TIBs must be renewed once a year.
If the company imports goods into the
United States that are marked with a trade mark or trade name
that is not registered to the company, you should have a letter
issued by the owner of the trade marked or trade named goods
authorizing you to import the trade mark or trade named goods
into the United States. A copy of the letter should be given to
your U.S. Customs broker and the CBP import specialist team.
U.S. Customs commercial invoices
A commercial invoice, prepared by the
foreign shipper is acceptable for Customs purposes provided it
is prepared in accordance with §141.86, Customs Regulations.
Special information may be required on certain goods or classes
of goods in addition to the information normally required on an
invoice. The special information is found in §141.89 of the
U.S. Customs Regulations.
Are special programs (NAFTA; Assembly
9802.00.80; Repair/Alteration 9802,00.50; American Goods
Returned 9801 .00.10) annotated on the invoice?
Is the country of origin of each article
annotated?
Does the name of a responsible employee
-with knowledge of the relevant facts –appear on the invoice?
Are the estimated Customs values of the
part numbers reflected in the commercial invoice reasonable and
up to date?
Are the HTSUS classification numbers
appearing on the commercial invoice correct?
Harmonized Tariff Schedule of the United States (HTSUS)
classification requirements
§152.11 Customs Regulations states that all
merchandise imported into the U.S. shall be classified in
accordance with the HTSUS as interpreted by administrative and
judicial rulings. The HTSUS will undergo major changes on Jan.
1, 2007; over 1,300 U.S. tariff classification numbers have been
changed. CBP has given the trade to Feb. 15 to implement the
new HTSUS classification numbers. If you haven’t already done
so, now is the time to talk to your U.S. Customs broker and see
if any of the HTSUS classification numbers that you are
currently using will be changed.
Ensure that the HTSUS classification
numbers covering the company’s importations into the United
States are correct. You shouldn’t assume that the HTSUS numbers
used in the past are correct. Because of court decisions and CBP
ruling revocations, numerous HTSUS classifications that were
correct in the past are now incorrect. Under the U.S. Customs
Reasonable Care Checklist importers must review all HTSUS
classification numbers for accuracy.
Valuation requirements
Importers are required to include in the
commercial invoice the Customs value of the imported
merchandise. The valuation provisions of the Tariff Act of 1930
are found in section 402, as amended by the Trade Agreements Act
of 1979. The U.S. Customs ACS Reconciliation Prototype
Operations Handbook states that the ACS Reconciliation Prototype
is the exclusive means to reconcile entries for Value (19
USC1484 (b)).
Ensure all goods imported into the United States are
valued in accordance with the valuation principles stipulated in
the Trade Agreements Act of 1979 and implemented in Part 152
U.S. Customs Regulations.
Are the estimated Customs values used at
the time of entry reasonable and up to date?
If you are participating in the ACS
Reconciliation Prototype make sure that you file the
Reconciliation Entry on time.
NAFTA requirements
Goods produced in Mexico that satisfy
Article 401 of NAFTA are allowed to enter the United States as
originating goods subject to preferential tariff treatment
provided the importer has a valid NAFTA Certificate of Origin
prepared by the maquila at the time of importation.
Review all NAFTA Certificates of Origin
prepared by the maquila to ensure the blanket reporting period
of the certificate has not expired.
Ensure all goods covered by NAFTA
Certificates of Origin prepared by the maquila continue to
satisfy the NAFTA Rules of Origin before they are entered into
the United States as originating goods.
If you qualified a good using NAFTA
Preference Criterion B, ensure the specific rule of origin
stipulated in General Note 12(t), HTSUS, has not changed or that
the company has not switched sourcing of critical materials from
NAFTA originating to non-originating. Recalculate Regional Value
Content and De Minimis percentages.
If the maquila qualified a good using NAFTA
Preference Criterion C, ensure that you have a valid NAFTA
Certificate of Origin covering each material incorporated into
the good. A valid Certificate of Origin is defined as being
complete, signed and dated. An incomplete Certificate of Origin
may lead to the denial of preferential tariff treatment under
the NAFTA.
Request new NAFTA Certificates of Origin
from your suppliers in North America covering all materials that
you have claimed to be originating. This is extremely important
for any material that must originate in order for the goods
produced in Mexico to originate.
Ensure that you have a valid NAFTA
Certificate of Origin in your possession before you import goods
into the United States claiming the benefits of NAFTA.
Make an indicator on the U.S. commercial
invoice that is presented to Customs, such as MX or NAFTA,
preceding the classification of each good that satisfies the
NAFTA Rules of Origin which you desire the Customs broker to
enter as an originating good and claim the benefits of NAFTA.
If you have issued a NAFTA Certificate for
any good for a blanket period and have determined it is no
longer eligible, you must advise each person to whom you issued
the NAFTA Certificate of this change in eligibility. In
addition, the CBP import specialist team must be advised of the
mistake.
Don’t forget that you can file a NAFTA Post
Importation Duty Refund claim for goods that were entered as
non-originating that are subsequently determined to be
originating goods. Remember that you have 12 months from the
date of importation to file a NAFTA Post Importation Duty Refund
claim and receive a refund of Customs duty and Merchandise
Processing Fee.
Tariff Item 9801.00.10
Articles of U.S.-origin sent to Mexico and
subsequently returned to the United States are allowed duty-free
entry into the United States under preferential tariff provision
9801.00.10 provided they were not advanced in value or improved
in condition while in Mexico and the statutory requirements of
§10.1, Customs Regulations are satisfied.
Ensure that the product is of U.S.-origin
and that it has not been advanced in value or improved in
condition while in Mexico.
Ensure you have documentary evidence in the
form of a Manufacturer’s Affidavit or a NAFTA Certificate of
Origin issued by the producer of the article stating the article
being returned is a product of the United States.
Notate on the commercial invoice a legend
such as American Goods Returned.
If the value of the American goods being
returned is $2,000 or more ensure the required “Declaration by
the Foreign Shipper and the Declaration by the U.S. Importer” is
attached to the commercial invoice.
Tariff Item 9802.00.50
Articles sent to Mexico to be repaired or
altered are allowed duty-free entry into the United States under
preferential tariff provision 9802.00.50, provided they satisfy
all of the statutory requirements of §10.8, Customs Regulations.
You should consider using this preferential tariff provision
whenever the goods produced in Mexico do not satisfy the NAFTA
rules of origin and are subject to Customs duties.
Ensure that the articles sent to Mexico for
repair or alteration either are of United States origin, or, if
of foreign origin, they have been formally entered into the
commerce of the U.S. and any Customs duties due have been paid
before the articles are shipped to Mexico.
Ensure the required “Declaration by the
Person who Performed the Repairs or Alterations and the
Declaration by the Importer in the U.S.” is attached to the
U.S. commercial invoice.
Ensure the repair or alteration performed
in Mexico is not considered by CBP to be further processing or
operations performed on a product that had never been completed
for its intended use.
Tariff Item 9802.00.80
Preferential Tariff Provision 9802.00.80,
provides for articles to be assembled in Mexico and when
returned to the United States, Customs duties are assessed on
the Customs value of the article less the cost of the U.S.
components incorporated into the article. You should consider
using this preferential tariff provision whenever the goods
produced in Mexico do not satisfy the NAFTA rules of origin and
are subject to Customs duties.
Request Manufacturer’s Affidavits or NAFTA
Certificates of Origin from your suppliers in the United States
for all components declared to be U.S.-made and eligible for the
duty exemption under tariff item 9802.00.80, HTSUS. The
Manufacturer’s Affidavits and the NAFTA Certificates of Origin
must be signed by the producer of the components.
Update the “Assembly Description Forms”
submitted to Customs. Customs requires that the Assembly
Description Forms be updated at least once a year (Customs
Regulation §10.21) or whenever there is a change in the country
of origin of a component from U.S. to foreign.
Send the import specialist team a new Master List of
Assemblies.
Ensure the individual who signed the
“Foreign Assembler’s Declaration” is still with the company and
continues to serve in the same capacity.
Ensure that the U.S. components used in
your Mexican assemblies are (a) exported in a condition ready
for assembly without further fabrication, (b) have not lost
their physical identity by change in form shape or otherwise
(c) have not been advanced in value or improved in condition
abroad except by being assembled and except by operations
incidental to assembly.
Ensure that the commercial invoice
stipulated in §141.87, Customs Regulations is being used.
Determination of country of origin
Importers are required to include in the
commercial invoice to the country of origin of the imported
articles. The country of origin of goods produced in Mexico must
be determined in accordance with the NAFTA Rules of Origin
stipulated in Part 102, Customs Regulations.
Ensure the country of origin appearing on
the U.S. commercial invoices is correct as per Part 102 of the
Customs Regulations - The Rules of Origin. Don’t assume the
country of origin of all articles produced in Mexico is
“Mexico”, since not all goods produced in Mexico are considered
to be products of Mexico.
Country of origin markings
Part 134, Customs Regulations requires all
imported articles to be marked in a conspicuous place as
legibly, indelibly, and permanently as the nature of the article
permits, with the English name of the country of origin of the
article, to indicate to the ultimate purchaser in the U.S. the
name of the country of origin in which the article was
manufactured or produced.
Ensure that the country of origin marking
waiver approved by Customs has not expired. Customs requires
that all country of origin marking waivers be resubmitted yearly
for approval.
If the imported articles are not covered by
a country of origin marking waiver ensure that they are properly
marked in accordance with Part 134 Customs Regulations.
Ensure if the words “United States,” or
“American,” the letters “U.S.A.” or the names of any city or
locality in the United States, or the name of any foreign
country or locality other than the country or locality in which
the article was manufactured or produced appear on the imported
article or its container, there appear in close proximity to
such words, letters or name, and in at least a comparable size,
the name of the country of origin of the good preceded by the
legend “product of,” “made in,” or words of similar meaning..
If the imported articles will be repackaged
in the U.S. and the articles are not individually marked with
their country of origin, ensure that you have provided the CBP
port director the required “Letter of Certification”.
If the articles you import into the United
States are not marked with their country of origin and your
clients may repackage the imported merchandise, make sure you
send the client the “Notice to Subsequent Purchasers” as
required by § 134.26 of the Customs Regulations.
Recordkeeping requirements
Part 163, Customs Regulations sets forth
the recordkeeping requirements and procedures governing the
maintenance, production, inspection, and examination of records.
Ensure that all records appearing in the
Appendix to part 163 of Customs Regulations -known as the
(a)(1)(A) list - that apply to your importations into the U.S.
are kept in a manner that will allow the company to provide a
listed record to Customs within 30 calendar days of demand.
All records listed in the “(a)(1)(A) List’”
must be maintained for a period of five years. Under the Mod
Act, importers who do not present a listed document within 30
calendar days of receipt of a demand may be penalized.
Rudy A. Piña is president of R.A. Piña &
Associates, Inc. located in Nogales, Arizona. He can be reached
at rudy@rpina.com
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