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The following is a checklist regarding
the Bureau of Customs and Border Protection (CBP) 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.
In order to ensure that your company is in full compliance
with the rules and regulations of importing into the
United States
, I suggest you review the
following items as they apply to your own particular situation.
General
requirements
•Ensure your 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 the company’s 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 goods into the United States.
A copy of the letter should be given to your
U.S.
customs broker and the Customs
import specialist team assigned to your account.
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 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?
•If
the imported merchandise is appraised under the computed value
method is that fact reflected in the commercial 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
United States
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 BCP
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.
Customs
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 reconciliations.
•If
you are participating in the ACS Reconciliation Prototype,
determine if any of your consumption entries were flagged during
January 2003. If they were, you must submit the Reconciliation
Entry during the month of March 2004.
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.
Remember, 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 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
9801.00.10, HTSUS
Articles of U.S.-origin sent to Mexico and subsequently
returned to the U.S. are allowed duty-free entry into the U.S.
under preferential tariff provision 9802.00.10, HTSUS,
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
U.S.
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 9802.00.50, HTSUS, requirements
Articles sent to Mexico to be repaired or altered are
allowed duty-free entry into the United States under preferential
tariff provision 9802.00.50 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 United States origin, or, if of foreign origin, they have
been formally entered into the commerce of the United States 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
United States
is attached to the
U.S.
commercial invoice.
•Ensure
the repair or alteration performed in
Mexico
is not considered by BCP 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
Preferential Tariff Provision 9802.00.80, HTSUS, 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.–fabricated 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
9802.00.80, 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 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.
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
.
Country
of origin markings
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.
•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
United States
and the articles are not
individually marked with their country of origin, ensure you have
provided the U.S. Customs Service 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 any of your clients located in the
United States may repackage the imported merchandise, make sure
you send your client the “Notice to Subsequent Purchasers” as
required by § 134.26 of the U.S. Customs Regulations.
Recordkeeping
requirements
Part 163 U.S. 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 United States 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.
Customs
compliance manual
If your company does not have an Import Compliance Manual
you need to develop one. With the introduction of the Focused
Assessment Program (F.A), it is more important than ever for
importers to have a comprehensive procedures manual and written
documentation of import processes.
As part of the Pre-Assessment Survey, BCP auditors evaluate
the importer’s internal controls over Customs operations. During
a F.A. Customs auditors will be looking for formalized written
import procedures.
Rudy
A. Piña is a U.S. Customs consultant whose office is located in
Nogales
,
Ariz.
Find him on
the web at www.rpina.com.
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