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2.5% or free of duty? It can represent a large sum if the value is high and or the volume of entries is strong. But picking harmonized tariff codes based on duty rates is not only incorrect, it is against the laws that govern trade. The HTSUS (harmonized tariff schedule of the United States) is not a guide, it is a legal document backed with “teeth.” Failing to effectively classify commodities can lead to CF28’s (requests for information), CF29’s (notices of action often increasing the duty liabilities to the importer), focused assessments and audits. All of these are efficiency killers in today’s modern fast paced supply chain environment.
CF28’s take time and resources to provide appropriate answers to CBP. CF29’s take time and resources to review, rebut and sometimes to apply subsequent payments to an entry that may already be completed and closed in the books. Focused assessments and audits are a whole new level of resource taxing for an importer compared to CF28’s and 29’s.
So what can importers do?
First of all, importers should begin classifying according to the General Rules of Interpretation codified in the HTSUS. These rules provide the framework to follow a process to obtain correct HTS codes.
Second, importers should assess they database of commodities and determine items which need to be re-assessed.
Finally, an assessment of CF28’s and CF29’s should be examined. How many have been received in the past 12 months? How many have been answered? What items were affected by the requests? Have those items been updated inside the internal databases of the importer?
JAS Forwarding USA Inc. Compliance Team is experienced in all of these questions. We have solved these problems and can help. Contact us today and we will assist to analyze risk in this arena as well as others!
Anti-dumping and countervailing duties are assessed in an honest attempt to help level the playing field for US manufacturers. This is an important function and CBP is committed to aggressive action to protect the interests of US industry. Anti-dumping and countervailing duties do have effectiveness and as a result CBP has seen an increase in evasion tactics in some areas of the trade community. Evasion tactics have included fraudulent country of origin and shipping documentation etc. This behavior by some in the trade community is rather costly to the country. Keep in mind that ADD/CVD exists to encourage buyers to source items subject to these duties from US sources or sources that are using free market pricing strategies. The August 2016 Government Accountability Report notes that in the past 15 years, $2.3 billion were not collected in ADD/CVD. That is an average of $150+ million per year! That is also a bunch of US manufacturers being harmed by these questionable evasive practices.
New regulations empower competing importers and federal agencies to call importers out for suspicion of evasive practices with regards to ADD/CVD. Now is a good time for importers to engage in self-assessment and determine what risk(s) there may be. Internal audits and continuous improvement of internal compliance processes is a mitigating factor when CBP considers penalties for importers.
Do you have self-audits regularly scheduled? Do you have extensive experience investigating applicability of ADD/CVD? We at JAS USA Inc. Compliance team have tackled these issues over and over again. We pride ourselves in being educators and showing our valuable clients the right way to handle the sometimes uncomfortable positions these types of issues can create. We are experts at building customized compliance plans, manuals and auditing schedules. Contact us today and we will be glad to help you mitigate risk!
In Washington D.C. at the National Customs Broker & Forwarders Association of America (NCBFAA) Government Affairs Conference (GAC), representatives of the association (including JAS’s very own Laurie Arnold and Leah Ellis) and government legislators sat down to discuss issues that matter to international trade. The GAC Conference is held annually.
Some of the issues that were discussed are:
FDA has issued a final rule on the safety and effectiveness of certain antibacterial soaps. The final rule established that over-the-counter consumer antiseptic wash products contained certain active ingredients that can no longer be marketed. "Companies will no longer be able to market antibacterial washes with these ingredients because manufacturers did not demonstrate that the ingredients are both safe for long-term daily use and more effective than plain soap and water in preventing illness and the spread of infections," stated an article by the FDA. There are 19 ingredients addressed in this ruling. Some manufacturers have already begun the process of removing these ingredients from their products.
Import Specialists from the Miami based Agriculture & Prepared Products Center of Excellence and U.S. Customs and Border Protection Officers confiscated 42 tons of illegally imported Chinese honey on August 12. This was the third large confiscation of honey in four months. The honey was being contained in 132 fifty-five gallon drums that were being falsely stated as coming from Taiwan. This was done in order to avoid the anti-dumping duties that apply to honey coming from China.
“Customs and Border Protection considers Trade Enforcement a priority since it levels the playing field for legitimate companies. The agency certainly does not want questionable companies having a competitive edge because they choose not to correctly describe their products to evade duties,” stated Center Director for Agriculture & Prepared Products Center of Excellence & Expertise Dina M. Amato.
On September 12, 2016, President Barack Obama signed a proclamation which will reinstitute Burma’s eligibility for benefits under the Generalized System of Preferences (GSP) program as of November 13, 2016. "This action comes after the conclusion of a review of Burma’s compliance with the eligibility criteria under GSP statute, including whether Burma is taking steps to afford internationally-recognized worker rights," stated a press release by the Office of the United States Trade Representative.
What fruit is regulated by the Food and Drug Administration that has its seeds on the outside?
The only fruit that has its seeds on the outside is the strawberry. FDA is responsible for protecting the public health by assuring the safety, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. It’s also time for food facilities to re-register! Under section 102 of the Food Safety Modernization Act, all domestic and foreign facilities that manufacture, process, pack, or store food, food ingredients, pet foods, or dietary supplements are required to renew their registration with the FDA every even-numbered year. Re-registration must be done between October 1 and December 31!
Update 2016 Conference on Export Controls & Policy
Date: October 31 – November 2, 2016
Location: Washington, DCThe Bureau of Industry and Security (BIS) is preparing for the 29th annual Update Conference on Export Controls and Policy in Washington, D.C. This major outreach activity draws business and government representatives from around the world to learn and exchange ideas about export control issues. It is one of the Department’s most notable international trade events.