Customs Compliance Checklist

  The following is a checklist of the United States Customs rules and requirements that importers of maquila shipments need to be aware of as we enter the new year.

  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.

General requirements

  Ensure your U.S. Customs continuous bond and/or Reconciliation bond rider is not about to expire.

  Ensure that the individual who signed the power of attorney authorizing the U.S. customs broker to conduct customs business in your behalf is still with the company and continues to serve in the same capacity.

  Review the status of all open Temporary Importation Bonds (TIBs).

  If you import goods into the U.S. that are marked with a trade mark or trade name that is not registered to your company, you should have a letter issued by the owner of the trade marked or trade named goods authorizing your company to import the trade marked or trade named goods into the United States.  A copy of the letter should be given to your U.S. customs broker and the U.S. Customs import specialist team assigned to your account.

U.S. Customs commercial invoices

  A commercial invoice, prepared by the maquila is acceptable for customs purposes provided it is prepared in accordance with §141.86, U.S. Customs Regulations.  Special information may be required on certain goods or classes of goods in addition to the information normally required on the invoice.  The special information is found is §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?

HTSUS classification requirements

  §152.11 U.S. Customs Regulations states that all merchandise imported into the U.S. shall be classified in accordance with the Harmonized Tariff Schedule of the United States as interpreted by administrative and judicial rulings. 

  Ensure that the HTSUS classification numbers covering your importations into the U.S. are correct by establishing reliable procedures to ensure you provide correct classifications for your merchandise. Don’t assume the HTSUS numbers you used in the past are correct. Because of court decisions and U.S. Customs revocations of administrative rulings, numerous HTSUS classifications that in the past were considered to be correct are now incorrect.   Under the U.S. Customs Reasonable Care Checklist, importers must review all transactions for accuracy if performed by other parties.

Valuation requirements

  Importers are required to include in the commercial invoice submitted to Customs 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.

  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 §152 U.S. Customs Regulations.

  If your importations are valued using estimated and/or standard costs you are required to submit periodic value reconciliation.

  If you are participating in the ACS Reconciliation Prototype, determine if any of your consumption entries were flagged during January 2002.   If they were, you must submit the Reconciliation Entry during the month of March 2003.  Importers who file late Reconciliation Entries are subject to liquidated damages.   Remember, you only have 15 months from the date of the earliest flagged consumption entry to file the Reconciliation Entry. 

  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). Previous methods of making post-entry adjustments such as Block Appraisement by presenting a Computed Value Cost Submission (CF 247) will no longer be permitted.

NAFTA requirements

  Goods produced in Mexico that satisfy Article 401 of the 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 issued by the maquila at the time of importation.

  Review all NAFTA Certificates of Origin executed by the maquila to ensure the blanket reporting period of the Certificate has not expired.

  Recalculate the de minimis and RVC percentages of all goods using updated costs.

  Because of issues such as devaluations of the peso, changes in purchase price, and possible changes in the NAFTA status of materials, it is imperative you ensure all goods you have originated using de minimis or by satisfying a RVC requirement continue to qualify as originating.

  If you originated goods by satisfying a Regional Value Content requirement under the Net Cost Method using estimated and/or standard costs, you are required under PART III, Section 6 (20) NAFTA Rules of Origin Regulations to recalculate the RVC percentage of those goods using actual costs.

  Ensure all goods covered by NAFTA Certificates of Origin continue to satisfy the requirements of Article 401 of the NAFTA before you enter the goods 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 GN 12(t), HTSUS has not changed or that your company has not switched sourcing of critical materials from NAFTA originating to non-originating.

  If you qualified a good using NAFTA Preference Criterion C, ensure that you have valid NAFTA Certificates of Origin covering each material incorporated into the good.

  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 your good 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.

  Don’t forget to file a NAFTA Post Importation Duty Refund claim for goods that were entered as non-originating and you have subsequently determined they satisfied the NAFTA Rules of Origin.  You have 12 months from the date of importation to file a NAFTA Post Importation Duty Refund claim and receive a refund of duty and Merchandise Processing Fee.

  Make an indicator on the U.S. commercial invoice that is presented to Customs, such as MX or NAFTA, next to each good that satisfies the NAFTA Rules of Origin as stipulated in Article 401 of the Agreement which you desire to be entered as an originating good and claim the benefits of NAFTA.

  If you have issued a NAFTA Certificate for a 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.

Tariff item 9801.0010, HTSUS, requirements

  Articles of U.S.-origin sent to Mexico and subsequently returned to the United States are allowed duty-free entry into the U.S. under preferential tariff provision 9802.0010 provided they were not advanced in value or improved in condition while in Mexico and the statutory requirements of §10.1 U.S. Customs Regulations are satisfied.

  Determine 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 NAFTA Certificate of Origin or a Manufacturer’s Affidavit issued by the producer of the goods stating the goods being returned to the United States are products of the United States .

  If the value of the American good 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 9802.0050, HTSUS, requirements

  Articles sent to Mexico to be repaired or altered are allowed duty-free entry into the United States under preferential tariff provision 9802.0050 provided they satisfy all of the statutory requirements of §10.8 U.S. Customs Regulations.

  Ensure that the articles sent to Mexico for repair or alteration either are of U.S. origin, or, if of foreign origin, they have been formally entered into the commerce of the U.S. and any duties due have been paid before being 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 U.S. Customs to be further processing or operations performed on a product that had never been completed for its intended use.

Tariff item 9802.00.80, HTSUS, requirements

  Preferential Tariff Provision 9802.0080 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.

  Request Manufacturer’s Affidavits 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 9802.0080, HTSUS.

  Update all Assembly Description Forms submitted to Customs. The Customs Service requires that Assembly Description Forms be updated at least once a year  (Customs Regulation §10.21 requires this every six months) 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 Assemblers Declaration is still with the company and continues to serve in the same capacity.

  Ensure 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.

Determining country of origin

  Importers are required to include in the commercial invoice submitted to Customs 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, U.S. Customs Regulations.

  Ensure the country of origin appearing on your U.S. commercial invoices is correct as per Part 102 of the U.S. Customs Regulations - The NAFTA 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 .

  Part 134, U.S. 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 goods produced in Mexico are properly marked in accordance with Part 134 U.S. Customs Regulations.

  Ensure that exceptions to the requirements of country of origin markings approved by Customs have not expired.  Customs requires that all country of origin marking waivers be resubmitted yearly for approval.

Rudy A. Piña is a U.S. Customs consultant whose office is located in Nogales, Ariz. . Check out his website at  www.theriver.com