March 2012 - Business Law & Order - Paul Vandevert


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Export/Import; Customs; Considerations in Forming Entities

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March 2012 - Business Law & Order - Paul Vandevert

  1. 1. Customs and Doing BusinessInternationally Paul Vandevert International Trade Attorney Ford Motor Company SLIDE 1
  2. 2. Whenever goods cross an international border, there is a Customs event SLIDE 2
  3. 3. Customs 101: Basic Information Required • Based on information provided by importer, Customs must make several basic decisions: – Admissibility: Are the goods to be admitted to the country under any circumstances? – If admissible, under what conditions are the goods to be admitted? SLIDE 3
  4. 4. Customs 101: Admissibility • Admissibility: Not all goods may be imported into a country, because of: The nature of the goods. Contraband (drugs), dangerous goods (weapons, bombs), products of endangered species (elephant tusks), etc. The country of origin. In the U.S., for example, products from Cuba and North Korea, are prohibited SLIDE 4
  5. 5. Customs 101: Conditions for importing goods • Importers must provide the following basic information to Customs when importing goods:  Country of origin: Determines admissibility (see above) and whether special treatment, such as reduced or punitive duties, are to be applied.  Description of goods: Imported goods must be assigned a tariff code to know what rate of duty will be applied and whether special treatment is required.  Value of goods: Usually, the amount of duty to be paid is based on the ad valorem value of the goods, which as a rule of thumb starts with the price paid by the importer. SLIDE 5
  6. 6. Customs 101: Special Treatment for Imported Goods • Preferential Treatment: Some imported goods, depending on their origin and/or nature, may be eligible for preferential treatment, including reduced or zero Customs duties.  Free Trade Agreements, such as NAFTA, give reciprocal preferential treatment, subject to qualification rules, to products of member countries. Unilateral trade preference programs, such as GSP or AGOA, give preferential treatment to goods from certain countries. SLIDE 6
  7. 7. Customs 101: Special Treatment for Imported Goods • Punitive Treatment: Other imported goods, depending on their origin and/or nature, are subject to punitive treatment, such as additional duties or quotas.  Anti-Dumping and Countervailing Duties are imposed when the importing country determines that certain goods are being unfairly priced so as to cause damage to the domestic industry producing the same product.  Quantitative Restrictions, such as quotas, may be imposed where the volume of certain imported goods is deemed to damage or threaten domestic producers and competition. SLIDE 7
  8. 8. Customs 101: Don’t Try This At Home • Importing is highly regulated and the rules enforced by the Customs authorities in all countries. • Violations, even if unintentional, can be subject to severe civil and even criminal penalties. • Inform and protect yourself in your international trade business by engaging reputable Customs services professionals to assist and represent you in importing. SLIDE 8