Deck 12: Imports, Customs, and Tariff Law

Question 1

The Mod Act shifted to the importer greater responsibility to comply with all customs laws and regulations.

Answer 1

True

Question 2

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.

Answer 2

True

Question 3

The rule of informed compliance requires the customs broker to be responsible for compliance with customs laws and handling all documentation with reasonable care.

Answer 3

True

Question 4

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

Question 5

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 6

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 7

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

Question 8

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

Question 9

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 10

Liquidation of goods must occur within three months of entry and cannot be extended.

Question 11

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

Question 12

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 13

Customs rules and duty assessment rates are uniform throughout NAFTA.

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

The owner, purchaser, 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 arrival of the goods.

Question 20

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

Question 21

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

Question 22

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 23

In the event where an importer files a protest and Customs denies the protest, an appeal can be filed with a federal court of appeals.

Question 24

Customs fraud requires that the importer committed a fraudulent violation by providing information and documentation that is beyond a reasonable doubt untrue.

Question 25

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

Question 26

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 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

In the event Customs discovers that the information provided by the importer was fraudulent at the time of liquidation, the case can be reopened within five (5) years.

Question 29

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

Question 30

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 31

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 32

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 33

Foreign Trade Zones are free ports provided by the import trading companies to stimulate international trade by allowing the receipt of imports to be duty free.

Question 34

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 35

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 36

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

Question 37

There are preference  provisions in U.S. tariff laws designed to stimulate the economic progress of less developed nations..

Question 38

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 39

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

Question 40

In an action to collect a customs penalty, the U.S. Treasury Department is the plaintiff and need only prove that the importer was negligent in providing misinformation.

Question 41

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 42

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 43

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 44

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 45

What order does the classification follow  when there are two possible classifications for goods?

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 46

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 47

Which of the following are included in the dutiable assists?

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

Question 48

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 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

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 51

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 52

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 53

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 54

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 55

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 56

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 57

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 58

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 59

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 60

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 61

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

Question 62

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

Question 63

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 64

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

Question 65

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 66

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

Question 67

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 68

In determining the description of an article under the tariff schedules, the courts rely on:

A) common meaning.
B) WTO definitions.
C) scientific authorities and expert witnesses.
D) A and C.

Question 69

Compare and contrast GSP status with normal trade relations status.

Question 70

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

Question 71

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 72

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

Question 73

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 74

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

Question 75

Customs is barred from bringing a civil action to collect an import duty after:

A) three years.
B) one year.
C) five years.
D) four years.

Question 76

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