Frequently Asked Questions Regarding Customs
A formal "Request for Information" under 19 CFR 151.11 can be issued to an importer by CBP to provide samples of merchandise and additional information concerning the importer, its transactions in general, or a particular entry transaction.
Typically, the form requests information related to classification, valuation, relationship between the importer and the seller, and any additional information that the Customs Import Specialist Team deems necessary.
Caution should be exercised when answering questions from CBP. You or your broker may be able to provide certain specific information about a transaction but may not realize the full legal ramifications of your answers. In many cases, legal counsel should be consulted prior to responding.
An importer is typically given 30 days to respond in writing to a CF 28, though additional time may be allowed. A written request for an extension should be submitted in advance of the deadline.
An importer needs to give proper attention to the handling of a CF 28, as frequently this form precedes actions by Customs to advance the duty rate, increase the valuation of imports, or even start a penalty action against an importer. If not properly and promptly complied with, CBP may make a demand under the importer's bond for the return of merchandise to CBP custody.
CBP often issues a CF-29 as a follow up to a CF-28, although they may begin a process with a CF-29 as well. The CF-29 will indicate Action Taken or Action Proposed.
If CBP determines that the entered duty rate or value of any merchandise is too low, or if the quantity of imported merchandise exceeds the entered quantity, (and the increase in duties on that entry exceeds $15.00), Customs is required to promptly notify the importer on Customs Form 29. That form is to specify the nature of the action taken by Customs and the reasons for the action.
If the Action is proposed, you have twenty days to respond. In the case of Action Taken, if the action is unfavorable you have the option of protesting the decision. It is usually in your best interest to consult with legal counsel when responding to a proposed Notice of Action or filing a protest against Action Taken.
Counsel can research the matter thoroughly and act to protect your best interests. Actions Taken establish precedent and there may be more at risk than what meets the eye initially. Customs brokers frequently handle these matters, however they may not be aware of all the legal ramifications in particular cases, and therefore an importer is well advised to consider hiring legal counsel to assist in the matter.
When merchandise is found not to be properly marked in accordance with customs' rules for country of origin marking, as provided in the Customs Regulations in 19 CFR Part 134, the port director is required to notify the importer to arrange to properly mark the articles or containers involved or to return all released articles to Customs custody for marking, exportation, or destruction. Customs will give notice on Customs Form 4647, which is called a "Notice to mark or redeliver."
The first course of action is to stop the distribution of the goods involved. These notices are usually issued because the goods appear to be lacking the appropriate country of origin marking, or the goods are not admissible into the United States.
If the goods have already left your warehouse, it is important to contact your customer and request the goods be put on hold. For marking issues, frequently an agreement can be negotiated with CBP to submit a sample of the revised marking rather than redelivering the entire shipment. Seeking appropriate legal counsel can greatly assist with this process and provides the best outcome.
Be aware that articles which are not properly marked as required by Part 134 of the Customs Regulations are subject to additional duties of 10% of the final appraised value unless exported or destroyed under Customs supervision prior to liquidation of the entry. The 10% additional duty is assessable for failure either to mark the article or container with the English name of the country of origin, or to include words or symbols required to prevent deception or mistake.
Binding rulings are tricky because they are binding on the requester. Once obtained, whether you like it or not, you are bound to follow CBP's decision or go through the process of protesting it.
Thorough classification research should be completed prior to submitting a request for a binding ruling, identifying the competing provisions and making an argument for the classification that is most beneficial.
It is not advisable to send a product sample to CBP with a simple request for a classification. It is always best to make a case for the outcome you want to achieve by presenting the proper legal arguments.
No. Proper classification and valuation are not the customs broker's responsibility. The broker files the entry based on information provided by the importer of record who is ultimately responsible for everything on the customs entry.
The Customs Modernization Act of 1993, (most often simply called "the Mod Act") shifted the legal responsibility for proper classification and valuation, as well as for providing accurate entry information, to importers. Before passage of the "Mod Act," customs was responsible for reviewing entry documents and imported products to verify classification and value prior to liquidation. Since the passage of "the Mod Act," importers are fully responsible for the correctness of all entry information and for producing underlying documents as supporting evidence.
Most information flows electronically and CBP uses a risk based analysis to decide which importations to verify. CBP utilizes focused assessments and audits to check on importers. CBP also posts its Priority Trade Issues on its website. These are updated annually and currently include Agriculture, Anti-dumping and Countervailing Duty, Import Safety, Intellectual Property Rights, Penalties, Revenue, and Textiles.
While your brokers provide professional guidance on many customs issues, a customs broker is merely the agent of its principal, and the primary liability to Customs is with the principal, that is, the importer.
Cargo entering the United States from any foreign territory is subject to physical examinations which are to determine the admissibility of the imported goods. The admissibility of goods involves evaluation of many criteria, including:
- If the goods are marked properly with country of origin or require special marking;
- If the goods contain marks that infringe US trademark/copyright owners' rights;
- If the goods violate requirements of other agencies such as Food and Drug Administration or Consumer Products Safety Commission;
- If the shipment contains prohibited articles;
- If the goods are correctly invoiced, classified and valued;
- If the shipment contains illegal narcotics.
CBP uses different types of exams to increase its ability to examine cargo effectively without slowing the flow of legitimate trade. The following are the type of exams used by CBP for this determination.
- Vacis Exam (NII) - This is a non- intrusive exam conducted at the terminal of the port of arrival. This exam is determined off the manifest that is transmitted to CBP. This exam is usually completed within 24 hours after the vessel has discharged all the containers for the port.
- CET Exam (Contraband Enforcement Exam) - This exam is used to determine if there are illegal narcotics or prohibited goods. These exams are usually determined by country of origin or other specific information in CBP's data base.
- Compliance Exam (Formally MET Exam) - These exams are usually designated by a review of the documentation presented to CBP in an effort to ensure that the shipment is in compliance with all CBP regulations.
The importer is responsible under the Mod Act to make sure all the information that is transmitted and presented to CBP is correct. If false information is presented the importer may face penalty actions. This means that the importer must protect itself by gaining a thorough knowledge of its suppliers and the products that it is importing.