On August 13, 2019, it was announced that the US is delaying
imposing tariffs on over $300 billion dollars of imports from China until Dec
15th because of “health, safety, national security and other
factors” according to The Washington Post and other news sources.
The products include mobile phones, laptops, video game consoles, some
toys, computer monitors, and certain footwear and clothing. The Trump administration say’s this delay was
in part to avoid hitting US shoppers this Christmas.
Today, American Shipper published in their Daily Digital Magazine, the news that acting CBP Commissioner, John Sanders, is resigning effective July 5th, 2019.
Acting Commissioner Sanders was in his role for 2 1/2 months. According to various news reports, President Donald Trump is expected to name Mark Morgan, a former FBI analyst who currently serves as acting director of Immigration and Customs Enforcement, as the new acting CBP commissioner.
Facing the onslaught of President Trump’s China Tariffs,
importers are having to get creative in order to minimize the impact these
higher duty rates will have on their goods.
Foreign Trade Zone / Bonded Warehouse / Tariff Engineering
Foreign Trade Zones (FTZ), approved by the U.S. government,
can be a temporary haven for companies reducing duties on a case-by-case
basis. Trade zones are not a loophole
for goods destined for the U.S. market, but they can be a way for companies to
avoid duties on goods shipped to the United States and subsequently re-exported
to another country.
There are different types of zone designations depending on
the end use of the goods; further manufacturing, packaging, comingling, etc. In any case, the duties are not paid out
until the goods are exported out of the Trade Zone, either in-bond for
re-export or destined for the U.S. market.
Companies can utilize the zones to spread out those duty payments based
upon the timing of the export from the zones.
This can help manage huge import duty payments being paid at time of
import to the U.S.
Bonded warehouses are another option. Firms can store and
make products in “Customs-bonded” warehouses for up to five years. Duties are
only applied once products leave the facility for consumption. Companies can
apply to U.S. Customs for a license to operate a bonded warehouse.
According to a paper by law firm Barnes, Richards & Colburn,
Tariff engineering also is making a comeback.
Companies can tweak their design processes in order to be able the
re-classify their goods under a lower duty rate. However, importers need to be very conscious
of taking this too far, since Customs tends to reject revisions to existing HTS
codes when companies appear to be making a “fictional or temporary
Effective July 2019, CBP will no longer publish on CBP.gov the quarterly interest rates for Reconciliation. Filers can find the quarterly rates on the www.irs.gov website by querying “quarterly interest rates for (YYYY)” in the search engine located on the upper right hand corner of the webpage.
section of the ACE Business Rules will be updated with the above website for
identifying the quarterly rates.
If you have any questions or require
additional information, please email OT-RECONFOLDER@CBP.DHS.GOV, Commercial
Operations, Revenue and Entry Division, Office of Trade.
U.S. Customs Centers of Excellence and Expertise, aka “CEEs” are Customs way to better align with modern business practices. Whether or not you are currently engaged with your CEE, Importers are already assigned to one.
Ever wonder how to find out which CEE team has been assigned to your company?
Well, it’s not as difficult as you may have thought… In order to get the details, you just need to do a simple bond query with your company’s Federal Identification number, either though your surety, Customs broker, or in ABI/ACE directly . The query results will show you who your CEE team is. Below is an example of how it looks in the ABI response.
It’s as simple as that! Contact CustomsNow if you have any questions.
CBP TRADE SYMPOSIUM IN CHICAGO – CBP sent out a formal notice that the Trade Symposium will be held in Chicago this year. The registration will open on Thursday, June 13th, at noon EST. Learn more here.
This is always a great event to get up-to-date information on current trade activities. The event sells out quickly so be sure to register early!
were manufactured in the United States (US) and returned to the US are eligible
for free entry back into the country only if:
They have not undergone
any advancement in value due to upgrades, repairs, improvements in condition or
any other processing which would elevate the value of the item.
If the goods were subjected to
changes which improved the condition then you would be responsible for paying
duty on the fair market value of the labor or the item as it has
been changed. Chapter 9802 would cover
the repairs, changes value.
**NOTE**, duty is only assessed on
the actual repair or improvement not on the entire value of the goods.
If the goods have not been subjected to any of the outlined processes above then you would file a CBP Form 3311, Declaration for Free Entry of American Goods Returned here. This would entitle you to free entry under HTS 9801.00.10 as duty free.
GOODS FOR WHICH DUTY HAS ALREADY BEEN
PAID RETURNING TO THE US
question which arises is “what if I have goods on which duty has already been
paid returning to the US”, for example a product sold that is defective,
damaged, doesn’t conform to a certain specification outlines by the buyer etc..
9801.00.26, HTS provides for articles, previously imported, with respect to
which the duty was paid, if
They were exported within 3 years
after the date of such previous importation.
Sold for exportation and exported to
individuals for their personal use, re-imported for the reason hat such
articles do not conform to sample or specifications
Re-imported without having been
advance in value or improved in condition by any process of manufacture or
other means while abroad.
Re-imported as personal returns from
those individuals; and re-imported by and for the account of the person who
exported the goods from the United States within one year of the exportation.
If all of
these conditions are satisfied, the goods are eligible to be re-imported duty
free. Also, if the goods are imported
under HTS 9801.00.26 they are not subject to visa or quota requirements as
the goods were originally exported with the benefit of drawback, the goods will
not be eligible for duty-free treatment upon re-import. The reason being, U.S. Note 1(a), Subchapter
I, Chapter98, HTS, states that subheading 9801.00.26 would not apply to an
article exported with the benefit of drawback.
CBP has the right to request proof from the exporting party that duty was paid
upon the previous import of the items.
According to to CBP CSMS# 18-000689, issued today, November 21, when filing a reconciliation for a Free Trade Agreement issue, ACE is displaying incorrect original paid amounts. Until headquarters issues further guidance, filers should submit the reconciliation header information in the Document Imaging System (DIS) when filing the reconciliation with a FTA issue.
If you have any questions or require additional information, please send an email to OT-RECONFOLDER@CBP.DHS.GOV, Commercial Operations, Revenue and Entry Division, Office of Trade.