About the Speaker • Corie Koropatnicki is the Account Manager for GHY

USA, the US brokerage division of GHY International. Corie brings 20 years of cross industry experience to all her client engagements, with the last 14 years as a Licensed Customs Broker.

• Her experience combined with her role at GHY USA provides opportunity to create and cultivate lasting relationships with importers across many industry sectors, and with US Customs officials as well. A combination that works well on behalf of the clients she represents.

GHY University Basics of Importing into the U.S.

March 11, 2015 Presented by Corie Koropatnicki

GHY International

• Our Vision

– Is to be a leader in providing innovative, tailor-made solutions to North American importers and exporters.

• Our Mission

– We are dedicated to providing the highest levels of personalized professional international trade services to our clients, whose needs shape all our endeavours.

GHY Values C A R E

• Clients are the reason we exist

• Associates matter

• Relentless pursuit of improvement

• Excellence in all we do

Importing Basics

• Admissibility and the Entry Process

• Tariff Classification

• Valuation

• Country of Origin

• Entry summary

• Post entry

• Liquidation

• Recordkeeping

The Entry Process

The Entry Process

• Importer of Record – Owner

– Purchaser

– Party who has financial interest in the transaction that brought the goods into the United States

• Evidence of Right to Make Entry – Endorsed Bill of lading

– airway bill or carriers certificate

– Possession of the goods in some instances

The Entry Process cont’d

• Import Bonds - issued by Surety companies

– Bond amounts are based on established risk guidelines set forth by CBP

– Annual continuous bonds - covers all shipments within the given year and common for high value or high volume importers

– Single Entry Bonds – covers just the entry of merchandise connected to one entry and is more common for infrequent importers

The Entry Process cont’d

• Customs Brokers

– In-house licensed customs brokers

– Outside customs brokerage service providers

– Brokers must hold a valid license to transact customs business

– Power of attorney

– Important to note that the importer retains ultimate liability for misstatements and mistakes in the entry process, no matter the cause

The Entry Process cont’d

• Pre-Importation requirements

• Rail & Air - automated manifest system

• Truck

– ACE E-Manifest

– One hour prior to arrival at the port of entry

• Ocean

– Importer Security Filing is also known as ISF or 10+2

– 24 hours prior to the loading on board a vessel at a foreign port

The Entry Process cont’d

• Entry Filing documents

– Entry manifest – submitted by the carrier

– Evidence of right to make entry (BOL)

– Evidence of a bond (single or continuous)

– Commercial or pro forma invoice

– Packing lists if appropriate for exam purposes

– Other product specific documents necessary to determine admissibility by CBP or other government agencies like FDA or USDA

Tariff Classification – aka HTS

Tariff Classification – aka HTS • Harmonized Tariff Schedule (HTS)

• Rates of Duty

• Special Tariff Preferences – NAFTA – North American Free Trade agreement

• Just because it’s made in Canada doesn’t mean it qualifies for Nafta benefits.

• Special Tariff Provisions – 9801.00 – USGR– US manufactured goods returning

– Cannot be advanced in value or improved in condition • Just because you purchased it in the US doesn’t mean it was

made there.

Valuation

Valuation

• Transaction Value –

– Is the most common and preferred method by CBP

– TV includes:

• Packing costs incurred by the buyer

• Selling commission incurred by the buyer

• Value of any assists (tooling, parts, or design work supplied by the buyer to the seller free of charge)

– Freight and insurance are non-dutiable charges and can be deducted if included in the invoice value

– Alternate Methods

Country of Origin Laws

Country of Origin Laws

• Importers must make accurate declarations as to the country of origin of imported merchandise

• CBP regulations require a single origin determination be made for imported merchandise

• The origin of a product is used to confirm

– Admissibility

– Quota – tariff rate or absolute

– Eligibility for trade agreements

Country of Origin Laws

• Substantial transformation – The name, character, and use of the imported article

and component materials – The nature and manufacturing process that resulted in

the finished article – The nature of the manufacturing process used to

produce the parts, components or materials in the article.

– The value that is added by the manufacturing process. – The “essential character” of the finished article. – The change in tariff classification that resulted from

the manufacturing process

Country of Origin Marking

Country of Origin Marking

• U.S. law requires that all foreign goods be marked with their country of origin “in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit.”

• Additional duty of 10% of the value assessed for failure to mark

• Delivery withheld until marked , duties deposited or redelivery of the goods is ordered

• Penalties for removal, defacement, or alteration of marking

Marking Exemptions

Marking Exemptions

• Articles substantially changed by manufacture

• Articles physically incapable of being marked or would be damaged by marking

• Articles named in the “J” list (nuts, bolts, buttons or eggs) but the outermost container must be marked with country of origin

• Articles imported for use by the importer and not intended for sale in their imported or any other form

Entry Summary & Entry Documentation

Entry Summary &

Entry Documentation

• Customs form 7501 or CF7501

• Must be filed with duty payment within 10 working days of release date

• Adjustments can be made within those 10 business days

• Most brokers file summaries less than the 10 day window

Post Entry

Post entry

• Post entry amendments – must be filed 20 days prior to liquidation

• NAFTA refunds aka 520(d) submissions can be filed up to one year after date of import or release from customs

• Refund or payment of duty must be $20 or more

Liquidation

Liquidation

• On or about day 314 after import, the entry is finalized or “liquidated”

• CBP’s final assessment of the admissibility and calculation of duties owed

• Protest can be submitted if an importer wishes to challenge CBP’s assessment of duties

• Protests must be filed within 180 days of liquidation.

Recordkeeping

Recordkeeping

• Entry records are required to be retained for five years after entry

• CBP may request copies of the entry records

• Documents must be provided to CBP “within a reasonable period of time after demand.”

QUESTIONS?

Corie Koropatnicki

corie@ghy.com

PH: 701-825-6474

WPG Direct: 204-957-7149

LinkedIn: Corie Koropatnicki, LCB