The Basics of Importing:Customs Documents and      Procedures        Scott Alan Case, LCB Vice President, Sales and Market...
Customs Entry Processes and           Procedures• Show the process involved in moving  goods to the U.S.A. and clearing Cu...
The Importing Process
The Importer• The party who purchases goods for  importation into a country and/or  who stands responsible for the  proces...
Importer of Record vs.              Ultimate Consignee• Importer of record is responsible for the  duties, taxes and fees ...
The Shipping Process
The Exporter• In general, a person or company  who sells or ships/delivers goods  to a buyer or recipient in another  coun...
The Shipping Process
The Freight Forwarder• A person or company  which arranges for the  transportation of goods as  agent on behalf of a  ship...
The Shipping Process
The Customs Broker• A person or firm who acts as an agent of  an importer (and sometimes an exporter)  for purposes of arr...
Customs and Border Protection • Branch of government under the control   of the Department of Homeland Security   responsi...
Customs Task:• In addition to collecting, protecting and  defending the revenue of the United  States government, Customs ...
Customs Task:• Customs also must balance the  importance of keeping trade flowing with  keeping out illegal drugs and  con...
Customs therefore plays the roles of:        • Police officer        • Historian        • Gatekeeper
The Shipping Process
Power of Attorney• A power of attorney is the document which allows a  Customs broker to sign Customs forms on an importer...
Documents for Customs     clearance:Transport document (bill of lading, airwaybill, truck pro)InvoicePacking listSpecial d...
Invoice requires:Description of goods that can beunderstood by an examining CustomsofficerQuantity of goods shippedCost pe...
Packing List requires:How are the goods packedWhat is whereHelps Customs in the event of anexamination to find what they w...
Participating Government        AgenciesFish & Wildlife (www.fws.gov)Food & Drug Administration (www.fda.gov)Department of...
Bond• A guarantee for payment of duties and  taxes, usually underwritten by a surety.  There are two types of bonds. A  co...
Surety• An insurance company who will  assume liability for non-payment  of duties or penalties in the event  an importer ...
Continuous bond• A continuous bond is good for one calendar year  from the date of acceptance by Customs. This  bond is wr...
Single entry bond• A single entry bond is written on a per shipment  basis and the amount of the bond varies based  on the...
Cargo Insurance• Do you have it? You might not get full recovery without  it. Rates vary by mode of transport and commodit...
Reviewing the invoice• Broker reviews invoice to check  description, values, currency and country  of origin.• Assists?• S...
Classification•    The classification of imported merchandise is determined     using the GRI’s, or General Rules of Inter...
Harmonized Tariff
Country of Origin• Required for Customs• Used for a variety of reasons  – Duty Rate  – Potential transshipment  – Regulato...
Manufacturer’s IDISO code of countryFirst three letters of first nameFirst three letters of second nameFirst four numbers ...
Important Data Elements:Importer’s federal ID numberUltimate consignee ID numberC-TPAT membership (and level, either certi...
Entry / Immediate Delivery
The Clearance Process                  CBPPaperless Entry         Entry Documents Required Release                        ...
Entry Summary
Entry summary  MUST be paid within 10 working days from the  date of release  Entry summary shows calculation of  duties, ...
Entry summaryMoral of the story? Pay Customsdirectly, either via ACH (AutomatedClearinghouse) or send checkspayable to Cus...
Post-entry• Liquidation  – The final computation of duties and taxes by CBP    where they ―agree‖ and move it to the cabin...
Post-entry continued• What if something was done wrong?  – Informal and quick way to get duty refunded is    through the f...
Entry Types:• Consumption• Quota• Anti-dumping / Countervailing• Temporary Importation (manufacturing or  display / testin...
Duty Free Opportunities    • Tariff engineering    • Selective country      sourcing    • Preferential trade      programs
Trade Programs• NAFTA• GSP (requires minimum 35% of regional value)• Free Trade Agreements  (Panama, Korea, Colombia)• Afr...
C-TPAT: Customs Trade Partnership         Against Terrorism• The goal of C-TPAT, as well as other  Customs initiatives is ...
C-TPAT: Customs Trade Partnership        Against Terrorism• Participants  – Carriers  – Freight Forwarders  – Customs Brok...
C-TPAT: Customs Trade Partnership         Against Terrorism• Reasons to Participate  – Better visibility with Customs  – Q...
Where To Go For Information    www.cbp.gov
Container Security Initiative• Customs is also working to EXTEND America’s borders  overseas to screen cargo at the origin...
Container Security InitiativeFacts about container imports into the USA:• In FY 2009, U.S. Customs processed 6.3 million v...
FY 2009 Import Facts• Total value of imports processed by CBP was a little  more than $1.7 trillion, a 25% decrease from t...
Another Tool:                The 24-Hour Rule• Called such because basic manifest level data  must be transmitted to CBP t...
And Customs’ Latest Targeting Tool…    X-ray device?
And Customs’ Latest Targeting Tool…      Dogs?
And Customs’ Latest   Targeting Tool…Dionne Warwick and the Psychic Friends              Network?
Importer Security Filing           a.k.a ―10 + 2‖• Data Elements ―The ten‖  – Manufacturer’s name and address  – Seller’s ...
Importer Security Filing           a.k.a ―10 + 2‖• Data Elements ―The ten‖ con’t:  – Ship to name and address  – Importer ...
Additional Security Pilots• CBP announced Simplified Entry Pilot for air. Ocean and  truck to follow in 2012.    – C-TPAT ...
―Miscellaneous‖• Carrier year in review (2011 and beyond).• Government sharing of import data.• Changes in Customs treatme...
Customs Entry Processes            and Procedures• Show the process involved in moving goods to  the U.S.A. and clearing C...
PORT ELIZABETH    VACIS
RECEIVER          TOWER                       GAMMA RAY                        EMITTER                              CONTRO...
THE WAY YOU SEE THEM   THE WAY YOU SEE THEMA 40 FOOT CONTAINER ON TRANSPORTER
THE WAY WE SEE SOME OF THEM!                 CONTAINERCAB             CARGO
THE WAY YOU SEE CONTAINERS      ON RAIL CARS
VACIS IMAGE OF HOPPER CARSOUTHERN BORDER OF THE U.S.
VACIS IMAGES OF VEHICLES CONTAINING CONTRABAND
Thank You        Scott Alan Case        (847) 737-6963s.case@camelotcompany.com  Twitter: @camelotcompany
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
2011 ITCC Customs Seminar
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2011 ITCC Customs Seminar

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This seminar was given to the International Trade Club of Chicago on November 18, 2011. It focuses on the role of the Customs broker in the international supply chain. The topics cover the mechanics of a Customs clearance, the different security and functional considerations of importing and features a slideshow of images of cargo insurance issues.

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2011 ITCC Customs Seminar

  1. 1. The Basics of Importing:Customs Documents and Procedures Scott Alan Case, LCB Vice President, Sales and Marketing The Camelot Company November 18, 2011
  2. 2. Customs Entry Processes and Procedures• Show the process involved in moving goods to the U.S.A. and clearing Customs• Detail the parties involved• Explain the mechanism of a Customs clearance• Customs programs for importers• Advanced Manifest Rules
  3. 3. The Importing Process
  4. 4. The Importer• The party who purchases goods for importation into a country and/or who stands responsible for the processing and correctness of the customs entry and payment of customs duty, if any.
  5. 5. Importer of Record vs. Ultimate Consignee• Importer of record is responsible for the duties, taxes and fees associated with the import transaction.• The ultimate consignee is the recipient of the goods and must be named.• Why do we need this? September 11th
  6. 6. The Shipping Process
  7. 7. The Exporter• In general, a person or company who sells or ships/delivers goods to a buyer or recipient in another country.
  8. 8. The Shipping Process
  9. 9. The Freight Forwarder• A person or company which arranges for the transportation of goods as agent on behalf of a shipper.
  10. 10. The Shipping Process
  11. 11. The Customs Broker• A person or firm who acts as an agent of an importer (and sometimes an exporter) for purposes of arranging customs clearance, payment (or refund) of duty, and/or in-bond transit or export of imported goods.
  12. 12. Customs and Border Protection • Branch of government under the control of the Department of Homeland Security responsible for collecting, protecting and defending the revenue of the United States government and securing our borders while facilitating legitimate trade.
  13. 13. Customs Task:• In addition to collecting, protecting and defending the revenue of the United States government, Customs also collects STATISTICS.• As the gatekeeper for imports, Customs collects the trade statistics which the government uses in negotiations with foreign countries and to set tariff rates and quotas for imported merchandise.
  14. 14. Customs Task:• Customs also must balance the importance of keeping trade flowing with keeping out illegal drugs and contraband, protecting trademarks and copyrights and preventing smuggling.
  15. 15. Customs therefore plays the roles of: • Police officer • Historian • Gatekeeper
  16. 16. The Shipping Process
  17. 17. Power of Attorney• A power of attorney is the document which allows a Customs broker to sign Customs forms on an importer’s behalf. These documents include entries, entry summaries, add slips, etc.• A power of attorney can be formal or informal, but it does require the signature of an officer of the corporation who is authorized to legally bind the corporation.• Brokers required to validate POA’s by Customs nowadays, expect more requests for supporting documentation.
  18. 18. Documents for Customs clearance:Transport document (bill of lading, airwaybill, truck pro)InvoicePacking listSpecial documents if applicable
  19. 19. Invoice requires:Description of goods that can beunderstood by an examining CustomsofficerQuantity of goods shippedCost per unitTotal valueAssists (if any)
  20. 20. Packing List requires:How are the goods packedWhat is whereHelps Customs in the event of anexamination to find what they want to lookat
  21. 21. Participating Government AgenciesFish & Wildlife (www.fws.gov)Food & Drug Administration (www.fda.gov)Department of Transportation (www.dot.gov)Environmental Protection Agency (www.epa.gov)Agriculture Department (www.aphis.gov)Consumer Product Safety Commission(www.cpsc.gov)
  22. 22. Bond• A guarantee for payment of duties and taxes, usually underwritten by a surety. There are two types of bonds. A continuous bond is good for one calendar year from the date of filing. A single transaction bond is for a single entry.
  23. 23. Surety• An insurance company who will assume liability for non-payment of duties or penalties in the event an importer defaults to Customs or another government agency.• It’s a parachute for Customs!
  24. 24. Continuous bond• A continuous bond is good for one calendar year from the date of acceptance by Customs. This bond is written for ten percent of the anticipated Customs duties which will be paid in one calendar year, with a minimum amount of $50,000. This bond can also be used at any port of entry in the United States by a Customs broker holding a valid power of attorney.• Is your bond sufficient?
  25. 25. Single entry bond• A single entry bond is written on a per shipment basis and the amount of the bond varies based on the type of entry. – The bond for general merchandise is written for the value of the goods, plus the duty. – For quota merchandise and merchandise subject to other government agency approval, the bond is written for three times the value of the merchandise.• Single entry bonds for ISF + entry can get expensive.
  26. 26. Cargo Insurance• Do you have it? You might not get full recovery without it. Rates vary by mode of transport and commodity.• Why you need it: carriers limit their liability. – Ocean (COGSA): $500/package – Trucker: $0.50/lb, $50/shipment maximum – Airline: 19 Special drawing rights (+/- $20/kg)• Written for CIF + 10% to insure coverage for freight and goods. Optional duty coverage available.• If importing high values per conveyance or shipment, check with insurer for vessel or shipment limitations.
  27. 27. Reviewing the invoice• Broker reviews invoice to check description, values, currency and country of origin.• Assists?• Special things
  28. 28. Classification• The classification of imported merchandise is determined using the GRI’s, or General Rules of Interpretation. 1. The table of contents and indices are for guidance only. Classification is determined based on the terms of the headings and chapter notes. 2. An item is what it is first, and a part of something else second. 3. When two or more headings apply, the item is classified as whatever falls last in the tariff. (for example, sets).
  29. 29. Harmonized Tariff
  30. 30. Country of Origin• Required for Customs• Used for a variety of reasons – Duty Rate – Potential transshipment – Regulatory control – Admissibility
  31. 31. Manufacturer’s IDISO code of countryFirst three letters of first nameFirst three letters of second nameFirst four numbers in street addressFirst three letters in the name of the cityA manufacturer’s ID CAN be different from thecountry of origin.
  32. 32. Important Data Elements:Importer’s federal ID numberUltimate consignee ID numberC-TPAT membership (and level, either certifiedor validated)Tariff numberCountry of originManufacturer’s IDCarrierSecurity data on file (ISF, AMS, other targetinghistory)
  33. 33. Entry / Immediate Delivery
  34. 34. The Clearance Process CBPPaperless Entry Entry Documents Required Release Examine Release Seize / Hold
  35. 35. Entry Summary
  36. 36. Entry summary MUST be paid within 10 working days from the date of release Entry summary shows calculation of duties, taxes and fees due to Customs• Failure to pay means penalty—around $100.00• Surety pays if importer refused…then surety subrogates• If broker is paid but does not pay Customs, importer is liable for the duty a SECOND TIME.
  37. 37. Entry summaryMoral of the story? Pay Customsdirectly, either via ACH (AutomatedClearinghouse) or send checkspayable to Customs and BorderProtection to the broker to attach toentry summaries.
  38. 38. Post-entry• Liquidation – The final computation of duties and taxes by CBP where they ―agree‖ and move it to the cabinet. – Happens by statute 314 days from the date of entry.• Importers should request liquidation reports from their brokers or sureties to make sure entries ARE liquidating. – Great way to see if CBP is snooping around is if your entries aren’t liquidating automatically.
  39. 39. Post-entry continued• What if something was done wrong? – Informal and quick way to get duty refunded is through the filing of a Post-Entry Amendment (PEA) where a refund can be issued prior to liquidation. – After liquidation, a protest must be filed. If the protest is late by one day, it’s lost. – If the broker can’t write the check for the overpayment, consult a Customs attorney.
  40. 40. Entry Types:• Consumption• Quota• Anti-dumping / Countervailing• Temporary Importation (manufacturing or display / testing)• Carnet• Warehouse• Drawback
  41. 41. Duty Free Opportunities • Tariff engineering • Selective country sourcing • Preferential trade programs
  42. 42. Trade Programs• NAFTA• GSP (requires minimum 35% of regional value)• Free Trade Agreements (Panama, Korea, Colombia)• African Growth and Opportunities Act (AGOA)• Regional discussions (Transpacific Partnership)
  43. 43. C-TPAT: Customs Trade Partnership Against Terrorism• The goal of C-TPAT, as well as other Customs initiatives is to provide greater security and prevent the introduction of unauthorized material (including weapons of mass destruction) into the United States.
  44. 44. C-TPAT: Customs Trade Partnership Against Terrorism• Participants – Carriers – Freight Forwarders – Customs Brokers – Importers – Truckers – Foreign Terminal Operators
  45. 45. C-TPAT: Customs Trade Partnership Against Terrorism• Reasons to Participate – Better visibility with Customs – Quicker releases under the new Automated Commercial Environment (ACE) – Fewer incidences of examinations under ACE – ―Get out of jail free card‖
  46. 46. Where To Go For Information www.cbp.gov
  47. 47. Container Security Initiative• Customs is also working to EXTEND America’s borders overseas to screen cargo at the origin before it has even arrived in the United States. Their goal is the Container Security Initiative (CSI).• Now deployed at 53 overseas ports covering 86% of US- bound maritime containers.• 150 CBP officers deployed.
  48. 48. Container Security InitiativeFacts about container imports into the USA:• In FY 2009, U.S. Customs processed 6.3 million vessel entries, down from 7.3 million in FY 2008.• The entered value of those goods was $692 billion, down 25% from the prior year.• FY 2010 projections are for that amount to rebound to $752 billion.
  49. 49. FY 2009 Import Facts• Total value of imports processed by CBP was a little more than $1.7 trillion, a 25% decrease from the year prior.• 31% of imported goods were dutiable and represented $29.5 billion in revenue, a 15% decline from FY 2008.• Customs processed 26 million entries.• China finally surpassed Canada as the top trading partner of the United States in 2009 and will continue to increase its lead in 2010.
  50. 50. Another Tool: The 24-Hour Rule• Called such because basic manifest level data must be transmitted to CBP twenty-four hours before a vessel is loaded at a foreign port destined for USA.• Different time requirements for air, truck and rail.• If CBP issues ―no-load‖ message at origin, CSI kicks in and CBP officers, in conjunction with local law enforcement, screen the container either using intrusive or non-intrusive means.
  51. 51. And Customs’ Latest Targeting Tool… X-ray device?
  52. 52. And Customs’ Latest Targeting Tool… Dogs?
  53. 53. And Customs’ Latest Targeting Tool…Dionne Warwick and the Psychic Friends Network?
  54. 54. Importer Security Filing a.k.a ―10 + 2‖• Data Elements ―The ten‖ – Manufacturer’s name and address – Seller’s name and address – Container stuffing location – Consolidator’s name and address – Buyer’s name and address
  55. 55. Importer Security Filing a.k.a ―10 + 2‖• Data Elements ―The ten‖ con’t: – Ship to name and address – Importer of record ID number – Consignee ID number – Tariff number to six digits – Country of origin
  56. 56. Additional Security Pilots• CBP announced Simplified Entry Pilot for air. Ocean and truck to follow in 2012. – C-TPAT membership required. – Reduced number of data elements submitted at time of entry. – Only certain types of entries will be allowed.• Air cargo pilot in conjunction with TSA. – Last October’s incidents with packages from Yemen set it in motion. – TSA working with integrators and airlines to get manifest data to screen prior to departure from origin. – 10 + 2 for air? NOT happening, but working to get additional data and expand the pilot to additional countries & participants.
  57. 57. ―Miscellaneous‖• Carrier year in review (2011 and beyond).• Government sharing of import data.• Changes in Customs treatment of importers / trends from counsel.• Antidumping / countervailing cases.• Living documents are your best defense in an audit.• Read. Read. Read. Everything.
  58. 58. Customs Entry Processes and Procedures• Show the process involved in moving goods to the U.S.A. and clearing Customs• Detail the parties involved• Explain the mechanism of a Customs clearance• Customs programs for importers• Upcoming trade issues.
  59. 59. PORT ELIZABETH VACIS
  60. 60. RECEIVER TOWER GAMMA RAY EMITTER CONTROL BOOTH RAILSVehicle And Container Inspection System
  61. 61. THE WAY YOU SEE THEM THE WAY YOU SEE THEMA 40 FOOT CONTAINER ON TRANSPORTER
  62. 62. THE WAY WE SEE SOME OF THEM! CONTAINERCAB CARGO
  63. 63. THE WAY YOU SEE CONTAINERS ON RAIL CARS
  64. 64. VACIS IMAGE OF HOPPER CARSOUTHERN BORDER OF THE U.S.
  65. 65. VACIS IMAGES OF VEHICLES CONTAINING CONTRABAND
  66. 66. Thank You Scott Alan Case (847) 737-6963s.case@camelotcompany.com Twitter: @camelotcompany
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