Sign Up For
Shap Talk

In the era of Informed Compliance and Reasonable Care, the wary importer would be well advised to answer the following questions relative to their import operations.

General Questions Regarding All Transactions

• If you have not retained an expert to assist you with Customs compliance, do you have access to Customs Regulations (Title 19 of the Code of Federal Regulations), the Harmonized Tariff Schedule, and the GPO publication “Customs Bulletins and Decisions”?
• Do you have access to the Customs Internet Web Site, Electronic Bulletin Board or other research service to facilitate your establishment of import procedures and compliance with Customs regulations?
• Has a responsible and knowledgeable person within your firm reviewed Customs documentation you prepare to ensure it is clear, complete and accurate?
• If your Customs documents are prepared outside your organization, do you have measures in place to assure you receive copies, that they are reviewed for accuracy, and that Customs is notified timely of needed corrections?
• If you use an outside expert to assist with Customs compliance, have you discussed your import program in detail with them, and provided then with complete and accurate information about your import transactions?
• Are identical transactions of merchandise handled differently at different ports, or at different Customs offices within the same port? If so, have you brought this to the attention of appropriate Customs officials?

Questions Regarding Merchandise Description and Tariff Classification

• Do you have reliable procedures to identify what you ordered, where it was made, and what it is made of?
• Have you established reliable procedures to ensure you provide a complete and accurate description of your merchandise to Customs in accordance with 19 U.S.C. 1481? (Also, see 19 CFR 141.87 and 19 CFR 141.89 for special merchandise description requirements.)
• Have you established reliable procedures to ensure you provide correct tariff classifications under 19 U.S.C. 1484? Have you obtained a Customs “Ruling” regarding the description of your merchandise or its tariff classification? If so, have you set up procedures to ensure you abide by the ruling, and disclose the ruling with each entry?
• Where merchandise description or tariff classification information is not readily available, have you established reliable procedures for obtaining that information? Is the procedure being observed?
• Have you participated in a Customs Pre-Classification for proper description and classification of your merchandise? Have you consulted the Tariff Schedules, Customs informed compliance publications, court cases, and/or Customs Rulings to assist you in describing and classifying your merchandise?
• Have you consulted with a Customs “expert” such as a Customs Broker or lawyer to assist in the description and classification of your merchandise?
• If you are claiming a conditionally free or special tariff classification/provision for your merchandise (GSP, 9802, NAFTA, etc.), have you verified that the merchandise qualifies for such status? How? Have you obtained or developed reliable procedures for obtaining documentation required to substantiate such the claim? If making a NAFTA preference claim, do you already have NAFTA Certificates of origin in your possession?
• Is the nature of your merchandise such that a laboratory analysis or other specialized procedure is suggested to assure proper description and classification?
• Have you developed reliable procedures to secure, maintain and produce any required Customs entry documentation and supporting information?
• Do you know which documentation you are required to retain? For how long?
  
  
  Questions Regarding Valuation
• Do you have procedures to accurately determine the “price actually paid or payable” for your merchandise?
• Do you know your terms of sale, and whether there will be rebates, Tie-ins, indirect costs, and additional payments?
• Were “assists” provided, or commissions or royalties paid? Are amounts actual or estimated? Are you and the supplier “related parties”?
• Do you have procedures to establish and to provide to Customs proper declared values in accordance with 19 U.S.C. 1484 and 19 U.S.C. 1401a? If so, have you established procedures to assure you abide by the ruling, and brought these procedures to Customs attention?
• Have you consulted Customs valuation laws, the Customs Valuation Encyclopedia, Customs informed compliance publications, court cases and Customs Rulings to assist you in valuing merchandise?
• Have you consulted with a Customs “Expert” to assist in merchandise valuation?
• If you purchase from a “Related” seller, have you established procedures to ensure you report this fact upon entry? If related, have you taken measures to assure that value reported to Customs meets one of the “related party” tests? Have you established procedures to assure that all costs legally associated with the imported merchandise have been reported to Customs (commissions, indirect payments, rebates, assists, royalties, etc.)?
• If you are declaring a value based on a transaction in which you were not the buyer, have you substantiated that the transaction is a bona fide sale at arm’s length, and that merchandise was destined to the U.S. at the time of sale?
• If you are claiming a conditionally free or special tariff classification/provision for your merchandise (e.g. GSP, 9802, NAFTA, etc.), have you established reliable measures to ensure you reported all required value information, and obtained all required documentation to support the claim?
• Have you established reliable procedures to produce required entry documentation and backup?

Questions Regarding Country of Origin/Marking/Quota

• Have you taken reliable measures to ascertain correct country of origin for imported merchandise?
• Do you have reliable procedures to ensure you report correct country of origin on Customs entry documents?
• Do you verify that merchandise is properly marked upon entry with the correct country of origin in accordance with 19 U.S.C. 1304 and other applicable special marking requirements (watches, gold, textile labeling, etc.)?
• Have you obtained a customs “Ruling” on proper marking and country of origin for your merchandise? Have you established procedures to ensure compliance with the ruling, and reported them to Customs?
• Have you consulted an “expert” regarding correct country of origin/marking requirements for your merchandise?
• Have you communicated country of origin marking requirements to your foreign suppliers prior to importation?
• If you are claiming a change in the origin of merchandise or claiming the goods are of U.S. origin, have you taken appropriate measures to substantiate your claim?
• Do you have U.S. Milling Certificates or manufacturer's affidavits attesting to production in the U.S.?
• If you are importing textiles or apparel, have you developed procedures to ascertain correct country of origin per 19 U.S.C. 3592? Have you assured that no illegal transshipment or fraudulent practices were involved?
• Do you know how your goods are converted from raw materials to finished goods, where, and by whom?
• Have you checked with Customs and established procedures to ensure quota categories are correct?
• Do you have reliable procedures to check the “Status Report on Current Import Quotas” (Restraint Levels) issued by Customs to determine if your goods are subject to a quota category which has “part” categories?
• Have you taken reliable measures to obtain correct visas for your goods if they fall into visa categories?
• In the case of textile articles, have you developed a reliable program to prepare the proper Country Declaration for each entry, e.g. single country declaration (if wholly obtained or produced) or a multi-country declaration (if raw materials from one country were processed into goods in a second)?
• Do you have procedures in place to assure you can produce required entry documentation and backup, including certificates of origin, upon demand?
   

Questions Regarding Intellectual Property Rights

• Have or can you determine whether your merchandise or its packaging bear or use any trademarks or copyrights, or are patented? If so, can you prove you have the legal right to import or use these items in the U.S.?
• If you are importing trademarked or copyrighted goods or packaging, do you have procedures to ensure they are genuine, authorized and not restricted from import under the “gray market” or parallel import restrictions of U.S. law?
• If you are importing sound recordings of live performances, were the recordings authorized?
• Have you verified whether your merchandise is subject to an International trade Commission or court-ordered exclusion order?
• Can you produce required entry documentation and backup upon demand?

Miscellaneous Questions

• Do you have procedures in place to confirm your merchandise complies with “other agency” requirements (e.g. FDA, EPA, DOT, CPSC, FTC, DOAG, etc.) prior to importation, including procuring licenses and permits?
• Have you determined if your goods are subject to Commerce Department dumping or countervailing duty investigations or determinations? If so, do your procedures ensure compliance with Customs entry requirements?
• If your merchandise is subject to quota/visa requirements, do you have reliable procedures to provide a correct visa for the goods upon entry?
• Have you taken measures to ensure you are filing the correct type of Customs entry (e.g. TIB, T&E, Consumption, mail, etc.)? Have you ensured you have the legal right to make entry under Customs regulations?

Importing Questions Regarding Textiles and Apparel

Note: Section 333 of the Uruguay Round Implementation Act (19 U.S.C. 1592a) authorizes the Secretary of the Treasury to publish a list of foreign producers, manufacturers, suppliers, sellers, exporters or other foreign persons who have been found to have violated 19 U.S.C. 1592 by using certain false, fraudulent or counterfeit documentation, labeling or prohibited transshipment practices in connection with textiles and apparel products. Section 1592a also requires any importer of record entering, introducing or attempting to introduce into the commerce of the United States textile or apparel products that were either directly or indirectly produced, manufactured, supplied, sold, exported or transported by such named person to show, to the satisfaction of the Secretary, that such importer has exercised reasonable care to ensure that the textile or apparel products are accompanied by documentation, packaging and labeling that are accurate as to its origin.

Under Section 1592a, relying solely upon information regarding the imported product from a person named on the list does not constitute the exercise of reasonable care. Textile and apparel importers who have some commercial relationship with one or more of the listed parties must exercise a degree of reasonable care in ensuring that the documentation covering the merchandise, as well as its packaging and labeling, are accurate as to the country of origin of the merchandise. This degree of reasonable care must rely on more than information supplied by the named party.

In meeting the reasonable care standard when importing textile and apparel products and when dealing with a party named on the list published pursuant to section 1592a, an importer should consider the following questions in attempting to ensure that the documentation, packaging and labeling are accurate as to the country of origin of the imported merchandise. This list of questions is not exhaustive, but is illustrative.

• Has the importer had a prior relationship with the named party?
• Has the importer had any detentions and/or seizures of textile or apparel products that were directly or indirectly produced, supplied or transported by the named party?
• Has the importer visited the named company’s premises and ascertained that the company has the capacity to produce the merchandise?
• Where a claim of origin conferring process is made in accordance with 19 CFR 102.21, has the imported ascertained that the named party actually performed the required process?
• Is the named party operating from the same country as is represented by that party on the documentation, packaging and labeling?
• Have quotas for the imported merchandise closed, or are they nearing closing from the main producer countries for this commodity?
• What is the history of the country regarding this commodity?
• Have you asked questions of your supplier regarding the origin of the product?
• Where the importation is accompanied by a visa, permit or license, has the importer verified with the supplier that the visa, permit and/or license are both value and accurate as to product origin?
• Has the importer scrutinized the visa, permit and/or license as to any irregularities that would call its authenticity into question?

Shapiro will be happy to discuss your compliance or other consulting needs. After-entry Services such as preparation and documentation of Protests, Requests for Re-liquidations and applications for Refunds are also available. These professional services are available at hourly rates.