NATIONAL IMPORT AND EXPORT REGULATION

• Topics for Discussion in Chapter• Import Regulation

• Assessment of Duties

• Marking

• Standards

• Exceptions

• Export Regulation• General License

• Validated License

IMPORT REGULATION

• Assessment of Duties-tax on imported good.

– Classification of Goods• Source

– Harmonized Tariff Schedule-uniform classification system used to classify goods for assessment of duties on imported goods.

» Sections-22 sections that broadly cover products from different industries.

» Chapter-99 chapters that groups products by industry ranging from agricultural and components to finished products. Headings and subheading follow chapter.

IMPORT REGULATIONS

• Assessment of Duties– Classification of Goods

• Interpretation-when a good can be classified in more than one tariff selection, must resort to General Rules of Interpretation.

– Rule of Specificity-requires use of Heading that provides the more specific description of the good over one that gives a general description

– Essential Character-Heading for material, component, or function that provides for essential character of good

– Deference is given to Customs Interpretation

IMPORT REGULATIONS

• Assessment of Duties– Tariff Computation

• Forms of Tariff» Ad Volorem Duties-percentage rate on imported

good.

» Specific Duty-specified amount on imported goods.

» Compound Duty-both ad valorem and specific duty.

• Tariff Computation» Duty=Value of Good X Tariff Rate

IMPORT REQUIREMENTS

• Assessment of Duties– Valuation of Goods is based on Transaction

Value of Good• Transaction Value requires that the value of the

imported good be on a commercially realistic basis.– Price of Identical Goods Sold to Unrelated customer.

– Deductive Value-Price of good sold in the United States deducting international freight, duties and commissions.

– Computed Value-fabricated by adding the manufacturer’s actual labor and material costs, along with estimates of its general expenses.

IMPORT REQUIREMENTS

• Assessment of Duties– Valuation of Goods

• Exemptions to Value of the Goods– Section 9802-articles assembled abroad in whole or in part

of fabricated components that are products of United States. Maquiladora

– Drawbacks-form of tax relief in which a lawfully collected customs duty is refunded or remitted wholly or in part because of the particular use made of the commodity.

– Foreign Trade Zones-Zones outside custom territory where activities take place and no duty until departure.

IMPORT REGULATION

• Assessment of Duties– Country of Origin-determining the nationality of

a product.• Approaches to determining Country of Origin

– Substantial Transformation-last country in which product changed into different product.

– Value Added-based on percentage of component parts making up finished good. Problem with this approach.

– Specific process Test-list the types of processes or operations that are considered to confer origin of good

– Change in Tariff Classification-product changes tariff.

IMPORT REQUIREMENTS

• MARKING REQUIREMENTS– In United States, imported goods must be

marked as to country of origin• Whether or nor marking is required is determined if

the purchaser is the ultimate purchaser.

– Customs Modernization Act• Importer is under a duty of reasonable care to

correctly classify and value the goods being imported and keep proper records on imported good.

IMPORT REGULATION

• STANDARDS REQUIREMENT-use of product quality, safety measures, quantity measure to impede imports.

– Agreements• WTO Agreement of Technical Barriers to Trade

• WTO Agreement on Sanitary Phyto-Sanitary

• International Labor Organization

– Purpose• Requires that member nation not use standards to

impede imports and makes rules transparent.

EXPORT REGULATION

• Agency– Bureau of Export Administration publishes

export restriction.• Restrictions

– Technical Information

– Goods

– Destination

• License Requirements– Validate License

– General License

EXPORT REGULATION

• License Requirements– General License-not required for individual

exporters• Shipper’s Export Declaration

• Destination Control Statement

– Validated License-grants a specific license for specific exporter for specific destination

– Is Country on Country List?

– Is Product on Commodity Control List

EXPORT REGULATIONS

• Government Agencies Relevant to Exporting– Department of Energy-nuclear technology and

Gas– Department of Justice-Drugs– Munitions- Department of State– Environmental Protection Agency-Pesticides– Patent and Trademark-Intellectual Property