How to Import into the US

All goods that enter the United States are categorized according to the Harmonized Tariff Schedule. The act of placing goods into the correct category is called classification.

Classification determines how much duty will be collected. Classification is more than simply looking up an item in an index. It is a very complicated process requiring the application of the General Rules of Interpretation; the section, chapter and subheading notes; and the Explanatory Notes. The importer is responsible for properly classifying his merchandise before entry. If he is not sure how to properly classify an item, he can submit a request, in writing, for a binding classification ruling to the National Commodity Specialist Division, U.S. Customs, Attn: Classification Ruling Requests, New York, NY 10048. The rulings will be binding at all ports of entry unless revoked by the Headquarters’ Office of Regulations and Rulings. If an importer is not satisfied with the binding ruling received from New York, he or she can appeal it to the Headquarters’ Office of Regulations and Rulings, Washington, DC 20229. The Customs Service will not issue binding rulings in response to oral requests. Import Specialists can give oral advisory rulings but the classification-related opinions or advice of Customs Service personnel at one port are not binding on the Customs ports elsewhere. Oral inquiries may be made to Customs offices regarding existing binding rulings that might cover your importation. Binding rulings may also be researched on the Customs web site at www.customs.gov.

Washington, D.C. — U.S. Customs and Border Protection (CBP), in an effort to enforce U.S. trade laws and regulations, has seized $6 million textile products since February 24, 2006. This brings the total amount of textile goods seized in FY06 to more than $20 million.

In the past three weeks 26 seizures were made. Almost all of those seizures were based on the violation of Chinese safeguard/quota requirements. “CBP is charged with enforcing trade laws and we continue to be focused on the circumvention of quotas,” said Acting Commissioner, Deborah J. Spero.

CBP Import Specialists with specialized commodity knowledge analyze and review textile imports for possible violations at the ports of entry.

“CBP continues to maintain a robust trade enforcement program. The CBP Import Specialists will continue to review textile shipments to ensure compliance with laws and regulations governing imports,” said Janet Labuda, Director, Textile Enforcement and Operations Division.

CBP Air

On October 1, 2005, U.S. Customs and Border Protection (CBP) integrated its aviation assets, programs and personnel to establish CBP Air. With over 500 pilots and 250 aircraft, CBP Air is the largest law enforcement air force in the world.

Border Patrol

The priority mission of the Border Patrol is preventing terrorists and terrorists weapons, including weapons of mass destruction, from entering the United States. Border Patrol Agents patrol nearly 7,000 miles of international land border with Canada and Mexico and nearly 2,000 miles of coastal border. Undaunted by scorching desert heat or freezing northern winters, they work tirelessly as vigilant protectors of our Nation’s borders.

BACKGROUND

Canada is the United States’ most important trading partner, with an equivalent of over $1 billion a day in goods, services, and investment crossing the borders in each direction in 2001. Canada and the U.S. also enjoy a highly interdependent energy relationship, trading oil, and electricity. An example of this interdependence was an electric power outage on August 14, 2003, which left large portions of the Midwest and Northeast United States and Ontario, Canada without power.

After expanding 3.3% in 2002, Canada’s real gross domestic product (GDP) for 2003 grew 1.7%. A number of factors contributed to the slowdown of Canada’s economy, such as weak U.S. economic growth for most of the year; a strong appreciation of the Canadian dollar; the SARS outbreak in Toronto; and restrictions on exports of softwood lumber and beef (due to mad cow disease). However, the recovery of the U.S. economy, high oil and natural gas prices, and continued spending from the Canadian government are expected to boost Canada’s economy in 2004. The Canadian economy is forecast to grow 3.6% in 2004.

On December 12, 2003, Paul Martin was sworn in as Canada’s 21st prime minister, after the resignation of fellow Liberal party member Jean Chrétien. On taking office, Prime Minister Martin pledged to work on strengthening U.S. – Canada relations and to increase spending on defense, healthcare, and education, as well as to improve federal-provincial relations. Mr. Martin, the leader of the liberal Party, is expected to call national elections for spring 2004.

ENERGY OVERVIEW

Canada was the fifth-largest energy producer in the world in 2001, behind the United States, Russia, China, and Saudi Arabia. Over the past two decades, Canada has become a significant net energy exporter. In 2001, about 31% of Canadian energy production was exported, with the United States its main customer. In the first three quarters of 2003, the United States imported more oil (including crude oil and petroleum products) from Canada than from any other country. During the same time period, the United States also imported about 2.5 trillion cubic feet (Tcf) of Canadian natural gas, representing 87% of total U.S. imports. In 2001, about 39% of Canada’s primary energy production was natural gas, followed by oil (25%), hydropower (20%), coal (11%), and nuclear power (5%). Alberta is Canada’s largest producer of energy. Along with being a major energy-producer, Canada also was a significant energy consumer in 2001, ranking eighth in the world.

OIL

According to Oil Journal, as of January 2004, Canada’s total proven crude oil reserves stood at 178.9 billion barrels. Canada currently trails only Saudi Arabia, which holds the most proven crude oil reserves in the world. Prior to 2002, Canada did not even rank in the top 20 of countries with the most proven crude oil reserves. The massive increase in reserves reflects the Journal’s inclusion of Alberta’s oil sands, which stood at 174.4 billion barrels as of January 2004, according to Alberta Energy and Utilities Board (EUB). In contrast, conventional crude oil and condensate stood at an estimated 4.5 billion barrels, as reported by Canadian Association of Petroleum Producers (CAPP). Some analysts, however, have questioned the new assessment and whether it is accurate and appropriate to include oil sands.

Exploration and Production

Canada’s total oil production (including all liquids, bitumen and synthetic crude) averaged an estimated 3.1 million barrels per day (bbl/d) for 2003, an increase of 7% over 2002. The country’s oil production has been increasing since 1999, as new oil sands projects and production off the coast of Newfoundland have come onstream. Overall, oil sands production is expected to increase significantly and to offset the decline in conventional crude oil production, becoming Canada’s major source of oil supply.

WASHINGTON, D.C.- Today, United States Customs and Border Protection (CBP) Commissioner Robert C. Bonner and the government of Argentina announced the port of Buenos Aires as the 41st operational Container Security Initiative (CSI) port to target and pre-screen maritime cargo containers destined for U.S. ports. U.S. Ambassador to Argentina Lino Gutierrez and Dr. Alberto R. Abad, Federal Administrator of National Revenue of the Argentine Republic, signed the declaration of principles on May 9, 2005.

“The Container Security Initiative is a deterrent to terrorists seeking to use containerized cargo as a conduit for terrorism within the maritime environment. Having CSI ports, such as the one in Buenos Aires, is making U.S. borders more secure and more efficient,” said Commissioner Bonner. “CSI is a way of addressing the threat to global trade making it more secure against terrorist exploitation and Argentina was the first South American country to agree to participate in CSI. CBP will continue to cast out the CSI security blanket to additional foreign ports.”

CBP will deploy a team of officers to be stationed at the port of Buenos Aires to target maritime containers destined for the United States. Argentine Customs officials, working with CBP officers, will be responsible for screening any containers identified as a potential terrorist risk.

Currently, there are 41 operational CSI ports in Europe, Asia, Africa, the Middle East, and North and South America. Approximately 75 percent of cargo containers headed to the U.S. originate in or are transshipped from CSI ports.

Under the Container Security Initiative, CBP has entered into bilateral partnerships to identify high-risk cargo containers before they are loaded on vessels destined for the United States. Today, a total of 25 administrations have committed to join CSI and are at various stages of implementation.

“When first initiated, CSI was a revolutionary idea – to engage foreign governments to work with us to extend the U.S. zone to security outward, so that our borders are not the first line of defense against the threat of terrorism, and to secure and protect trade lanes from foreign seaports to the U.S.,” Commissioner Bonner said. “Now CSI is an accepted model of international cooperation to protect the global supply chain against terrorism.”

CBP’s goal is to have 50 operational CSI ports by the end of 2006. At that time, approximately 90 percent of all transatlantic and transpacific cargo imported into the United States will be subjected to pre-screening.

CSI will continue to expand to strategic locations around the world. The World Customs Organization (WCO), the European Union (EU), and the G8 support CSI expansion and have adopted resolutions implementing CSI security measures introduced at ports throughout the world.

Imported goods may not legally enter U.S. commerce until the shipment has arrived within the port of entry and Customs has authorized delivery of the merchandise. This is normally accomplished by filing the appropriate documents, either by the importer or by the importer’s agent. To expedite this process, Customs entry papers may be presented before the merchandise arrives, but entry will not take place until the merchandise arrives within the port limits.

The Customs Service does not notify the importer of the arrival of the shipment. The carrier of the goods usually makes notification of arrival. Arrangements should be made to ensure that the importer or their agent is informed immediately of arrival so that the entry can be filed and delays in obtaining the goods avoided.

The Customs Service defines “entry” not merely as the arrival of goods at a port, but as the process of presenting documentation for clearing goods through Customs. Imported merchandise not entered through Customs in a timely manner (within 15 calendar days of arrival) is sent by Customs to a general order warehouse to be held as unclaimed. The importer is responsible for paying storage charges while unclaimed merchandise is held at the warehouse. If it remains unclaimed at the end of six months, the merchandise is sold at auction.

Some type of Customs entry must be made at the first port of arrival. Ordinarily entry is made there for consumption, for entry into a bonded warehouse, or for transportation in bond to another port where a consumption or warehouse entry will be made. If an importer is unable to be there to prepare and file the entry, commercial brokers, known as customs brokers and licensed by the Customs Service, may act as an agent for the importer. These brokers charge a fee for their services. A list of customs brokers may be obtained from the local Customs office or found in the yellow pages of the local telephone directory.

In the case of a single noncommercial shipment, a relative or other individual may act as the importer’s agent for customs purposes. This person must know the facts pertaining to the shipment and must be authorized in writing to act for the importer.

The law prohibits Customs employees from performing these tasks for the importing public. However, they will advise and give information to importers about Customs requirements.

Contributed by: carmichelle@mymelody.com

Senators and business sectors are once again pushing for the revival of the anti-smuggling task force after its abolition. But PGMA has now turned over the tasks back to the Bureau of Customs giving it 60 days to solve smuggling activities and boost up its collections, or else she would revive the anti-smuggling task force. Will the newly appointed BOC Commissioner and officials be able to put together the Bureau in better shape in two-months time?

Through Executive Order No. 297 issued on March 10,2004 for the purpose of providing advice and recommendations to the President on violations of tax laws and to address the unabated smuggling of goods into the country, the anti-smuggling agency or the National Anti-Smuggling Task Force (NASTF) came to light. Department of Interior and local Government (DILG) Secretary Angelo Reyes immediately assumed the position as its task force chief. Thereafter, with the government s unwavering campaign against smuggling, Reyes and the NASTF agents thrived the waterfronts for six months, exercised the powers of search and seizure under the provisions of law (R.A. 1937) and consolidated effort to pre-empt, prevent and suppress smuggling activities including apprehension of smugglers and their accessories, as mandated by the Executive Order.

But immediately after the national elections, the NASTF was abolished. PGMA shifted the reigns of power and control over smuggling activities to the Bureau, under its new Commissioner George Jereos.

NASTF advocates Senators Mar Roxas and Juan Ponce Enrile are questioning the Palace for shelving the task force when it was supposedly winning the battle against smuggling.

Testimonies from business sectors intoned that NASTF is responsible for the reduction in smuggling, as statistics have shown in the recent months.

But PGMA has given the authority back to BOC and to ensure that BOC meets its two-month target, the President has even extended the Commissioner s jurisdiction by granting him the mandate to exercise the powers of the defunct Economic Intelligence and Investigations Bureau (EIIB).

The new officials should be given the chance to exercise their mandate, Sec. Reyes explained during an interview. However, failure on the Commissioner s part to accomplish the President s directive would mean revival of NASTF.

Amidst all these pressures are Customs employees and port workers who are pressed against these two skirmishing walls. An advocacy group called PWERSA or Port Workers, Employees and Representatives Solid Alliance a union of different associations representing various stakeholders transacting at BOC shares a different view.

Backtracking the days when military agents still rummaged around the ports, PWERSA has already made known to the government its determination to stamp out the anti-smuggling agency through unswerving protests and complaints claiming that the presence of such task force has only caused delay in trade facilitation, created disturbance and commotion among the customs employees and instilled fear in the people transacting business with BOC. Their meddling may only result to extortions from importers.

With senators and business sectors banding together for NASTF revival and with the president s 60-day ultimatum to BOC, it seems that PWERSA is once again on the lookout, ready to rise up in arms.

First and foremost, if they wanted to revive the functions of EIIB, bring back those that were laid-off, said PUWERSA chair Rommie Pagulayan. Customs has its own functions. The integration of EIIB with BOC is plain absurdity. How can the Commissioner derive powers from something that has been already deactivated?

EIIB was created during Corazon Aquino s term through EO 127 but was deactivated by Joseph Estrada after failing to perform its mandate to receive, gather, and evaluate illegal activities affecting the national economy resulting to a lateral attrition of 1,500 workers.

Now the burden of proof is with BOC, Pagulayan expressed, given that the country has been heavily relying on revenues generated from Customs and the Bureau of Internal Revenue. The anti-smuggling campaign is anchored by the country s acute fiscal deficit and its ballooning foreign debt. The government has been claiming that smuggling is the main reason for the decrease in its collections.

But Pagulayan averred that one of the culprits in the drastic drop of collections, particularly by the Bureau of Customs, is the country s accession to the common effective preferential tariff (CEPT) scheme of the Asean Free Trade Agreement, which is contrary to the Pure Transaction Value of WTO-GATT Agreement. Under the CEPT, the margin of preference offers a discount below GATT bound tariffs for ASEAN imported articles. As a consequence, goods can enter the country from an average of 30% rate of duty (based on WTO Transaction Value) to a very low 7% tariff (based on CEPT). Likewise, the government finds it difficult to determine whether the imported goods originated from the ASEAN country or were merely passed through the ASEAN to take advantage of the CEPT discounts.

Similarly, he explained that under the 11 Reform Program of the IMF-WB, a structural reform to combat smuggling, to increase the revenue and to protect the health and safety of the Filipino people was instituted. The two government agencies (BOC and BIR) subsequently embarked on a highly sophisticated computerization program and went into hiring the services of the Societe Generale de Sorvelance (SGS) a multinational Swiss-based firm with hopes to hit the collection targets. Implemented for 10 years, the government paid SGS an annual fee of P3B.

Yet BOC s collection remained negative. The government had to lower down its target so that BOC can hit it. And it did, for at least a couple of years, he explained.

To put it straight forward, even if an anti-smuggling task force is re-constituted, it can never be a factor in combating smuggling activities nor increasing the country s revenue collections stated Pagulayan. NASTF only duplicates the Customs job but it lacks technical knowledge of the whole Customs operation. What it has is merely the police power.

When ask about NASTF s abolishment, the PWERSA chair could only say It has outlived its usefulness.

As an alternative to the revival of NASTF, the government should support and strengthen the structure of BOC instead; increase the salaries (P3000 across the board); bring back employees benefits such as hazard and amelioration pays; put government counterpart to our existing provident funds; professionalize Customs personnel by insulating them from political patronage; improve our port facilities; and band shipping and forwarding companies from transacting business with Customs, Pagulayan implored.

Properly marking imported goods with the appropriate country of origin is the law. All imported goods must be marked in accordance with Customs regulations in a visible, permanent, and indelible manner. Failure to do so can result in:

• Delayed shipments due to Customs examinations,
• Fines and penalties for failure to abide by Customs regulations,
• Loss of import privileges,
• Additional costs to rework and remark goods before they are allowed to enter the US,
• Permanent seizure of your goods by US Customs.

Points to consider when marking your good for import

1. Markings must be permanent. Stickers, rub-ons, and pen/pencil marks are generally unacceptable. Markings should be etched into glass, die stamped into metal, dyed or sewn onto fabrics, etc.
2. Markings must be legible. They should be easy for an inspector to find. If a stranger can’t locate it without help in a few seconds, it’s not marked clearly enough. Hiding your country of origin markings where they can not be seen without removing pieces or disassembling merchandise is unacceptable.
3. Country of origin markings are intended for the ultimate consumer. The regulation is enforced at the borders and ports, but the goal is that the ultimate consumer understand where their product was made.
4. Country of origin refers to the country where the item was manufactured or underwent the most significant manufacturing process. For agricultural products, the country of origin is the country where the commodity was grown or raised. For manufactured goods, it is the country where the goods were underwent their most significant manufacturing process.
5. Special trade programs that reduce duty based on country of origin are very stringent about properly declaring an item’s origin.
6. Country of origin markings must be in English or an acceptable English abbreviation. When in doubt, use the full English name of the originating country
7. Some items are exempt from marking requirements. Exempt items include:
• Items that can not be marked (sugar, oil, or other crude substances),
• Items for use solely by the importer,
• Items that would be damaged by any marking process,
• Items for which its container marking will suffice,
• Items produced 20 years or more prior to their importation,
• Items produced in the United States, exported, and then returned.
8. Some goods require a specific type of marking set forth in the regulations. Examples include:
• Knives, forks, spoons and other tableware
• Dental and medical instruments
• Watches, clock, and timing mechanisms
• Native American style jewelry
9. Marking must unmistakably convey the origin of the goods if expressed as an adjective. For example, “Brazil Nuts” does not convey the country of origin because the term may refer either to the country of origin or the type of nut.
10. If any other identifier exists that might confuse the ultimate use as to the country of origin of the good (such as a trade name “American Eagle Clothing”) it must also display a conspicuous declaration of its country of origin preceded by “Made in” or “Product of.”

Final Note

If imported items are found lacking proper country of origin marking, they must be exported, destroyed, or modified at the importer’s expense and under the supervision of US Customs.

The following documents are commonly used in exporting; but which of them are necessary in a particular transaction depends on the requirements of the U.S. government and the government of the importing country.

Shipper’s Export Declaration (SED or form 7525-V) The SED is available through the Government Printing Office and a number of other commercial outlets. It can be electronically filed using AESDirect.

A NAFTA Certificate of Origin is needed for shipments to Mexico and Canada. This tool can help you through the process of filing this certification.

CE Mark requirements must be met to market goods in the European Union. Once a manufacturer has earned a CE mark for its product, it may affix the CE Mark to its product, and then the product may be marketed thoughout the EU without having to undergo further modifications in each EU member country.

Export license – a U.S. Government document required for “dual use” exports (commercial items which could have military applications), or exports to embargoed countries. Most export transactions do not require specific approval from the U.S. Government. Before shipping your product, make sure you understand the concept of dual use and the basic export control regulations.

Commercial invoice – a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties. Governments that use the commercial invoice to control imports will often specify its form, content, number of copies, language to be used, and other characteristics.

Certificate of origin – The Certificate of Origin is only required by some countries. In many cases, a statement of origin printed on company letterhead will suffice. Special certificates are needed for countries with which the United States has special trade agreements, such as Mexico, Canada and Israel. More information about filling out these special certificates is available from the TIC.

Bill of lading is a contract between the owner of the goods and the carrier (as with domestic shipments). For vessels, there are two types: a straight bill of lading which is non-negotiable and a negotiable or shipper’s order bill of lading. The latter can be bought, sold, or traded while the goods are in transit. The customer usually needs an original as proof of ownership to take possession of the goods.

Insurance certificate – is used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit. These can be obtained from your freight forwarder.

Export packing list – considerably more detailed and informative than a standard domestic packing list, it itemizes the material in each individual package and indicates the type of package, such as a box, crate, drum, or carton. Both commercial stationers and freight forwarders carry packing list forms.

Import License – Import licenses are the responsibility of the importer. Including a copy with the rest of your documentation, however, can sometimes help avoid problems with customs in the destination country.

Consular invoice – Required in some countries, it describes the shipment of goods and shows information such as the consignor, consignee, and value of the shipment. If required, copies are available from the destination country’s Embassy or Consulate in the U.S.

Air way bills – Air freight shipments are handled by air waybills, which can never be made in negotiable form.

Inspection certification is required by some purchasers and countries in order to attest to the specifications of the goods shipped. This is usually performed by a third party and often obtained from independent testing organizations.

A dock receipt and a warehouse receipt are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the ship line for export.

A destination control statement appears on the commercial invoice, and ocean or air waybill of lading to notify the carrier and all foreign parties that the item can be exported only to certain destinations.