Deck 12: Imports, Customs, and Tariff Law

Question 1

In interpreting the Harmonized Tariff Schedule,the courts will look at the common and commercial meaning of the items being imported.

Answer 1

True

Question 2

The Mod Act increased customs enforcement powers and stiffened penalties for violators.

Answer 2

True

Question 3

In 1997,U.S.Customs adopted a "checklist" that provides an absolute legal standard of reasonable care to be used by importers.

Answer 3

False

Question 4

Where an imported item could be classified under several different provisions of the Harmonized Code,it will generally fall under that provision which describes the item most specifically.

Question 5

Liquidation of goods must occur within three months of entry.

Question 6

The U.S.Bureau of Customs and Border Protection is the agency charged with assessing and collecting tariffs and administering duty-free zones.

Question 7

Under the Mod Act,negligent record keeping can be punished by fines up to a maximum of $5,000,or 20 percent of the value of the goods.

Question 8

Customs rules and duty assessment rates are uniform throughout the free world.

Question 9

For purposes of assessing duties to be paid,the transaction value is the dutiable value when all import-related costs have been included in the purchase price.

Question 10

Goods financed by the seller have duties assessed against the interest payable only if that amount is included in the purchase price of the goods.

Question 11

If an importer provides tools,dies,or molds to a foreign supplier free of charge to be used in the manufacturer of the imported items,the value of these assists will not be included in transaction value.

Question 12

Imported goods may be entered into the U.S.by the purchaser,consignee,or customs broker.

Question 13

Under the Harmonized Tariff Schedule,all countries charge the same rate of duty upon the import of the same or similar products.

Question 14

For smaller commercial shipments that are mailed into the U.S.,the U.S.Postal Service letter carrier acts as an agent for the U.S.Bureau of Customs and Border Protection for purposes of collecting import duties.

Question 15

The U.S.and Canada have both adopted the Harmonized Commodity Description and Coding System.

Question 16

The rule of informed compliance requires the importer to unilaterally seek a customs ruling on the tariff status of all goods they plan to import.

Question 17

Upon entering goods for use or consumption,all necessary documentation and duties,fees and taxes must be paid within five days.

Question 18

Textile imports are classified according to the fibers that constitute the chief weight of the article.

Question 19

In the United States v.Golden Ship Trading case,Wu,the owner,was found not liable because she exercised due care in verifying the merchandise was manufactured in China.

Question 20

The owner,purchaser,or consignee of goods or a customs broker with a written power of attorney must enter goods delivered to a U.S.port of entry within five days of the arrive of the goods.

Question 21

The customs service may seize articles imported into the U.S.that violate trademark or copyright laws of a U.S.firm but the mark must be registered with the:

A) U.S. Bureau of Customs and Border Protection.
B) U.S. Patent & Trademark Office.
C) A and B.
D) The Bureau of Customs and Border Protection does not seize items with this type of violation.

Question 22

The purpose of trade preferences is to provide assistance for countries whose economies are developing.

Question 23

Caribbean nations that do not cooperate with the U.S.in the enforcement of U.S.drug laws do not qualify for assistance under the Caribbean Basin Economic Recovery Act.

Question 24

Assume Article X is manufactured in Country Y.It is shipped to Country Z where it is substantially transformed before being imported into the United States for resale.For the purposes of imposing import duties under U.S.law,Article X will be considered a product of Country Z.

Question 25

The government agency responsible for determining the dutiable status of goods is:

A) U.S. Commerce Service.
B) U.S. Duties & Tax Service.
C) U.S. Port of Entry Service.
D) None of the above.

Question 26

U.S.imports that originate in a normal trade relations country and are shipped to a GSP country must undergo a dual transformation in the GSP country in order for the GSP country to be considered the country of origin.

Question 27

A full refund of duties paid is made when imported goods that do not conform to specifications are returned to U.S.customs within 90 days and returned to the seller under U.S.customs supervision.

Question 28

An imported item substantially transformed in the United States by the importer before being sold to the ultimate purchaser need not be marked with a foreign country of origin.

Question 29

Liquidation of goods by the U.S.Bureau of Customs and Border Protection refers to:

A) The assessment of applicable duties.
B) Disposal of seized goods.
C) Confiscation of goods not allowed for import to U.S.
D) Sale of unclaimed goods.

Question 30

A binding ruling,issued by the U.S.Bureau of Customs and Border Protection,is issued with regard to:

A) Penalties imposed for non-payment of duties owed.
B) Advance determination of the dutiable status of goods.
C) Seizure of goods not allowed for import to U.S.
D) All of the above.

Question 31

Goods held in a Foreign Trade Zone must be removed within one year of their original import date.

Question 32

Shipments to be entered must be accompanied by commercial invoices written in English and in the native language of the country of origin to assure that there are no discrepancies.

Question 33

Foreign Trade Zones make it possible for U.S.manufacturers to export goods without having to pay any duties.

Question 34

Foreign Trade Zones are free ports provided by the government to allow the receipt of imports to be duty free.

Question 35

Duty-free status is granted to Caribbean nations under the guidelines of both CBERA and the GSP.

Question 36

The purpose of country-of-origin marking requirements is to give consumers in the marketplace the information they need about the products they purchase.

Question 37

To determine the dutiable status of goods,it is necessary to know their classification,country of origin,and details pertaining to:

A) Perishable/non-perishable status.
B) Partially or fully manufactured goods.
C) Value.
D) Raw materials to be used in production.

Question 38

There are many provisions made in U.S.tariff laws designed to aid developing countries.

Question 39

Where the transaction value of merchandise cannot be determined,the U.S.Bureau of Customs and Border Protection will look to the dutiable value of identical merchandise imported under similar circumstances.

Question 40

The country of origin is always determined by where the article is grown,produced,or manufactured.

Question 41

A country designated as a beneficiary developing country is granted trade preferences for goods entering the U.S.market provided they meet all of the following conditions except:

A) It is located in Asia.
B) It cooperates with the U.S. in the enforcement of narcotics laws.
C) It has not unlawfully expropriated the property of U.S. citizens.
D) It is not controlled by a communist government.

Question 42

The principal use of an article refers to:

A) The purpose for which it is to be imported.
B) The use that is greater than any other single use of the article.
C) The use of the components once they are fully assembled.
D) Any one of the above.

Question 43

When dutiable value is determined by adding the costs of items such as raw materials,processing or fabricating,overhead,and the value of any assist,it is called:

A) Add-on value.
B) Deductive value.
C) Computed value.
D) Manufactured goods value.

Question 44

Which of the following combinations of drawbacks are not applicable?

A) Same condition and manufacturing.
B) Manufacturing and substitution.
C) Substitution and same condition.
D) Any of the above combinations could occur.

Question 45

Dutiable assists generally include all but which of the following:

A) Raw materials provided by the importer and used in the foreign production of the imported goods.
B) Tools, dies, and molds provided by the importer to the foreign manufacturer of imported goods.
C) Engineering, development. and artwork performed by a foreign firm.
D) All of the above are dutiable assists.

Question 46

The U.S.law granting trade preferences to imports from the island nations of the Caribbean and Central America is called:

A) The Caribbean GSP Act.
B) The Latin American Free Trade Act.
C) The Lome Convention.
D) The Caribbean Basin Economic Recovery Act.

Question 47

A 99% refund of duties and taxes paid on merchandise that is imported,subjected to manufacture or production,and then exported within five years is called a:

A) Manufacturing drawback.
B) Substitution drawback.
C) Same condition drawback.
D) Re-export drawback.

Question 48

GATT 1994's Agreement on Rules of Origin:

A) Calls on countries to harmonize and clarify their rules of origin by 1998.
B) Deems the country of origin to be the country where the article last underwent a change in tariff-classification.
C) Applies to trade entirely within free-trade zones such as NAFTA or the EU.
D) A, B, and C.
E) A and B only.

Question 49

The dutiable value of imported goods includes the price actually paid or payable when sold for exportation plus all of the following items if not included in the purchase price,with the exception of:

A) Royalty paid by the buyer as a condition of sale.
B) Proceeds from the resale of the goods that accrues to the seller.
C) Selling commission incurred by the buyer.
D) Export fees paid by the seller.

Question 50

Judicial review of a protest of entry is heard in which of the following courts:

A) Federal Trade Court.
B) Court of International Trade.
C) Circuit Court of Customs Appeals.
D) All of the above depending on the level of review.

Question 51

The Tariff Act of 1930 requires that every article of foreign origin be indelibly marked in English in a conspicuous place and in such a manner as to indicate the country of origin to whom:

A) The U.S. Bureau of Customs and Border Protection.
B) The freight forwarder.
C) The ultimate purchaser.
D) The consignee.

Question 52

Goods may be refused entry into the U.S.by the Bureau of Customs and Border Protection due to:

A) Quarantine to protect the public health.
B) Embargoed country of origin.
C) Lack of a commercial invoice.
D) All of the above.

Question 53

American exports returned to the U.S.are dutiable except when:

A) American-made goods are returned to the U.S. not substantially transformed.
B) Component parts that were made in the U.S. and assembled in a foreign country.
C) Articles exported for repair or alteration but not substantial transformation.
D) All of the conditions above exempt the goods from duties.

Question 54

When dutiable value is determined based on the resale price of goods it is called:

A) Deductive value.
B) Computed value.
C) Resale transaction value.
D) Calculated value.

Question 55

All of the following indicate that a product has been substantially transformed except:

A) the product has a new name, character or use.
B) the product has been advanced in value.
C) the product underwent a change in tariff classification.
D) the product has been manufactured in one country and shipped to an intermediary country before coming to the U.S.

Question 56

Where there are two possible classifications for goods,which is followed (in which order):

A) The latest heading that occurs in the schedule; essential character of the goods; their relative specificity.
B) Essential character of the goods; relative specificity; the latest heading that occurs in the schedule.
C) Relative specificity; the latest heading that occurs in the schedule; essential character of the goods.
D) Relative specificity; essential character of the goods; the latest heading that occurs in the schedule.

Question 57

Goods re-exported without having been significantly altered after being imported are subject to a refund of duties paid known as a:

A) Manufacturing drawback.
B) Substitution drawback.
C) Same condition drawback.
D) Non-transformation drawback.

Question 58

A protest of entry is filed by the importer against the Customs Service when:

A) A dispute arises regarding liquidation.
B) A dispute arises regarding the port at which the goods were received.
C) The importer wishes to refuse delivery and possession of the goods.
D) All of the above.

Question 59

U.S.Customs regulations specify many articles that are exempt from marking requirements.Some of these are:

A) Eggs, flowers, nuts, and bolts.
B) Products that cannot be marked without injury.
C) Products originating in Canada or Mexico.
D) A, B, and C.
E) A and B only.

Question 60

Country-of-origin information impacts all of the following except:

A) The applicability of a countervailing duty.
B) The applicability of a quota.
C) The tariff classification of the article.
D) The rate of duty on an import.

Question 61

Compare and contrast GSP status with normal trade relations status.

Question 62

Describe the differences,similarities,and resulting penalties or ameliorative mechanisms pertaining to intentionally false material statements,grossly negligent statements,fraud,and negligent statements on customs documents.

Question 63

Develop a draft of WTO rules regarding origin of goods (or looking at developments in this field,critique such existing proposals).

Question 64

Compare and contrast the different types of tariffs,considering which type would generally benefit the importing country.

Question 65

What types of articles do and do not require marks defining place of origin? What justifies these differences?

Question 66

Compare and contrast the way that textiles are treated under NAFTA with the way that they are treated under the WTO.What justifies these different choices?

Question 67

California Agricultural Aircraft Services,Inc.(CAAS)is a California corporation headquartered in Sacramento.CAAS leases aircraft to crop dusting businesses through California.On October 6,2006,CAAS entered into a contract with Jinshan Export Company (JEC),a private Chinese enterprise engaged in the businesses of export facilitation and sales agency,and Shànghai Aircraft Company (SAC),a state-owned enterprise organized pursuant to the laws of the People's Republic of China.The contract provided for the manufacture by SAC and purchase by CAAS of ten crop dusting aircraft at a price of U.S.$2.1 million,a savings of approximately $200,000 compared to crop dusting aircraft available from other manufacturers.In order to avoid problems arising from the sale of Chinese aircraft in the United States,JEC and SAC agreed to fabricate the aircraft parts at SAC's Chinese manufacturing facility but perform the actual assembly at its facility in Mexico.SAC would then export the aircraft to CAAS claiming they were products of Mexico subject to duty-free treatment pursuant to the North American Free Trade Agreement.Unfortunately,U.S.Customs classified the aircraft as products of China,denied the request for duty-free treatment pursuant to NAFTA and assessed the applicable tariff on aircraft originating from China.How will U.S.Customs Service and Border Protection determine the country of origin of the aircraft? What factors may Customs utilize in making this determination? Applying these factors to the above-stated facts,are the aircraft products of China or Mexico? Applying these factors,are JEC,SAC and CAAS likely to prevail if they challenge Customs' decision?

Question 68

In what ways do the rules regarding textiles and apparel differ from other rules regarding customs classification and valuation? In what ways do they resemble such rules? Consider the underlying justifications.

Question 69

Which of the following is not a function of the U.S.Bureau of Customs and Border Protection?

A) Assessing and collecting tariff revenue.
B) Regulating the entry of products under quota.
C) Ensuring importer compliance with the Incoterms.
D) Supervising exports.

Question 70

With regard to rules to determine the origin of goods,compare and contrast the tests used under NAFTA and non-NAFTA nations.

Question 71

Contrast the traditional "name,character,and use" test with that used presently.

Question 72

Comparing the U.S.and the EU,in what ways are U.S.businesses at a disadvantage in customs valuations/assessment of duties? In what ways are EU businesses?

Question 73

Which of the following are not allowed to enter goods into the customs territory of the United States?

A) The purchaser of the goods.
B) A customs broker authorized to act on behalf of the importer.
C) Nonresident individuals and foreign corporations.
D) All of the above may enter goods.

Question 74

Weigh the relative benefits and detriments of a unified customs protocol that would classify all goods.

Question 75

Recalling the chicken and egg scenario,design a plan to get a different ultimate product (or forbidden product)into your country.The focus here is not whether the plan is impervious to attack,but whether it exhibits a potential to work.

Question 76

In what ways might valuation methods implicate dumping and dumping remedies? Subsidies?

Question 77

Compare and contrast the use (and expense)of the transaction value rule and the first sale rule.

Question 78

What are the differences and similarities between the substantial transformation and the value-added test? What categories of countries are likely to favor which?

Question 79

Compare and contrast the different methods for assigning value.Consider who might favor which methods and why.