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