IT-Silkroad

[USA - Import procedure, etc.]

■ Outline

Customs clearance means that relevant goods are exported, imported and returned in accordance with the procedures prescribed by relevant Acts.

In detail, it refers toa series of procedures after import were declared to Customs, followed by the inspection of submitted documents and of export/import goods and transportation means, collection of customs duty and approval of import, etc..

In most countries, such clearance procedures are mostly consigned to a clearance expert. That's why even traders who have engaged in the trade business for a long time aren't well aware of the clearance affairs.

However, even a single good may not cross the border without going through customs clearance. Therefore, it's beneficial to comprehend a rough outline of clearance system for trader's own good in case of emergency.

From this perspective, hereinafter, other details related to the clearance as well as clearance system will be outlined.

Most of explanations which will be made hereinafter are included in the Acts of each country based on international agreements to which each country has acceded. That's why each national system has the similarity with those of other countries, and the difference between systems may be significantly distinct in the areas which aren't prescribed by said agreements.

America's customs system is mainly focused on import clearance rather than export clearance, therefore import clearance will be outlined first, and then export clearance.

■ Right to make entry

ㅇ In the United States, entries made by the licensed customs broker designated by the owner, purchaser, or consignee.

ㅇ customs brokers are the only persons who are authorized by the tariff laws of the United States to act as agents for importers in the transaction of their customs business. A Customs power of attorney is necessary for acting as agent. Ordinarily, experienced customs brokers are employed to make entry by a Customs power of attorney.

※ In order to transact customs business on behalf of importers, a citizen or permanent residents shall be qualified at The Customs Broker License Examination and get business permit additionally

ㅇ A nonresident individuals or partnership or foreign corporation may issue a power of attorney to qualified residents of the United States and empower the residents to accept service of process on behalf of the nonresident individual or organizations.

■ Types of entry

Entry in the United States is mainly categorized into two types. One is formal entry, which is required to submit necessary materials required by customs and payfor customs duties, etc. also follow the procedures by law, the other one is informal entry, which is suitable for special entries, including simplified clearance, temporary importation under bond entry, duty-free temporary import, etc.

Commercial goods are handled in the general international trade, procedure of formal entry is applied to most of commercial goods. Hereinafter, formal entry will be outlined first, and informal entry followed next.

■ Entry process of USA

The characteristics of entry in the United States are reflected in two aspects. ①elease of imported goods (Entry/ Immediate Delivery) and tax declaration (Entry Summary) are separated. ②ustoms bond is necessary for financial guaranty, etc.

This kind of two-stage declaration system and customs bond system are applied to guarantee quick customs clearance and secure collection of customs duties.

General entry process is outlined as follows.

①ubmit Manifest and implement logistics security control, such as 10+2 rule, etc.

②ile entry documents and customs bond are posted with Customs.

③btain permit from customs and get imported goods released.

④eview the estimated duties submitted and tax declaration (Entry Summary).

⑤iquidation

1. Entry of goods

Based on Invoice， B/L，and other materials, release document (CBPF3461 Entry/ Immediate Delivery) and customs bond shall be submitted in first step for the entry in the United States.

ㅇ The jurisdiction of the declaration

In principle, entry documents shall be submitted to the port director at goods’ port of entry.

ㅇ Declaration period

It is possible to submit entry documents to CBP, 5 days before entered the port by ship or after transmitted manifest by AMS (Automated Manifest System), if by air.

ㅇ Deadline of declaration

Regardless of means of transportation, it shall be declared within 15 days after goods arrived at port, however, it can be extended by 10 days for the first time.

ㅇ Declaration items and necessary documents

It shall be filed more than 50 items on the entry documents, including goods' name, quantity, price, manufacturer, destination, the location of goods, etc., also forward the necessary documents for entry to Customs.

Required materials vary from case to case. Invoice, packing list and B/L are essential materials,power of attorney, certificate of origin for applying to preferential tariff, customs bond and other required licenses are necessary if entrusted a customs broker.

In the United States, the commercial invoice of imported goods is managed more strictly than other countries since it is associated with security problem. Exporters shall be reminded on this point.

In the United States, a formal commercial invoice shall accurately include exporter's signature, shipping port, the port of destination, shipper and consignee's name, detail of goods, goods' name, weight, quantity, kinds of currency and country of origin, etc.

ㅇ Immediate delivery

Immediate deliveryis a special permit for releasing imported goods on Customs Form 3461 prior to arrival of the goods.

Immediate delivery is applied to goods from Canada and Mexico, which used in trade fairs or imported goods by U.S. government agency or special permit from CBP and other goods meet special requirement, etc. But, actually, Immediate Delivery system is applied to most of goods in broad scope, in addition to certain goods subject to an absolute quota.

2. Customs examination and release

Customs conducts examination concerning conformity of goods and invoice, Country of Origin, quantity, compliance of various legal requirements, etc. by contents of Immediate Delivery. But not all the imported goods shall be examined carefully; inspection targets are selected from declared goods by Automated Targeting System (ATS).

Customs classify imported goods by risk score

①Immediate Delivery is applied to the imported goods with no risk.

②Documents Review is applied to the imported goods with low risk.

③Cargo Examination is applied to the imported goods with high risk.

the Customs examination concerning the conformity of actual goods and invoice, prohibited items, required materials for customs evaluation, Country of Origin, compliance of special requirements, violation of law, etc.

When handle release declaration, shall attach acknowledged materials for special requirement of the goods.

Customs officer signs his/her name on the release declaration sheet after examination. If no legal or regulatory violations have occurred, imported goods can be picked up by the importer.

3. Entry summary

Entry summary documentation (CBP: form 7501) is filed and estimated duties are deposited by importers (or customs broker) within 10 working days of the entry of the goods at a designated customhouse.

Importers declare HS code classification, dutiable price, liquidation of duties, etc. on his/her own and produce relevant material relating to the duties, such as commercial invoice, etc.

Customs officers at the port of entry will review selected amount of tariff, filed statistics, quota, and other data whether those are consistent with practice and regulation or not.

Entry summary documentation is submitted to customs by Automated Broker Interface (ABI) recently, the use of ACE system is gradually increasing.

※ Combination of immediate delivery and entry summary is applied at the same time for certain condition. This pattern is mainly applied to commodities subject to quota items administered by Customs.

※ Importersor corresponding customs brokers are obliged to do Recording Keeping of entry. That is to say, documentations relating to entry, entry summary and other relevant materials are required to being kept for 5 years from the date of entry in compliance with Customs Modernized Act. If requested to produce any of these documents from CBP, it is better to submit required documents to Customs as soon as possible.

4. Liquidation

ㅇ Customs officers review selected classification and valuations, as well as other required import information for correctness or agreement of the submitted data, which is declaredby importer herself/himself in the stage of tax declaration,

ㅇ customs conduct review tax declaration and paid duties from the date of tax declaration. Insufficient portion of tax is billed for additional duties and refund for excessive portion after completion of review.

Onthe condition that none of additional procedures are followed in a year, liquidation is accomplished by confirming deposited estimated duties as the final duty.

ㅇ the completion of the whole procedure of liquidation is regarded as the end of entry.

※ Customs declaration and computer processing

In the United States, entry and summary entry is available by written declaration. The same with other countries, electronic declaration is applied in most cases for efficient and easy purpose. Electronic declaration is imposed on the specific entry as well.

The types of Electronic declaration system are listed as ABI, AMS, ACE,

ㅇ Automated Broker Interface (ABI)

⇒ Customs brokers transmit data when make declaration on behalf of importers. Currently, most of entries filed with Customs are via ABI.

ㅇ Automated Manifest system (AMS)

⇒ MS is data transmission system, which is mainly used by shipping companies, airlines, railway companies, freight forwarders and customs, those who exports shipments to U.S.

ㅇAutomated Commercial Environment(ACE)

⇒ CE, a business transaction processing systems developed by U.S. Customs and Border Protection (CBP) ，will eventually replace the current ABI and AMS. It is used by trade community as well. Various types of declaration for consumption purpose are available via ACE.

※ Note: management of Corporation’s information relating to entry

The same with other countries, the name of importers and information on imported documentation are kept confidentially.

But press, local authorities and other public authorities are availableto collect all the shipments information on import and export and go public information of importers or exporters on the basis of manifest.

If you wish your company is handled confidentially, submit required written document to Privacy Branch of CBP. After approval, the relevant person shall submit extension request every two years as the approval is valid for two years.

■ Customs Bond

It is necessary to comprehend customs bond before getting across customs clearance of the United States. Several systems for ensuring national revenue exist in other countries however, customs bonds are used specially for quick customs clearance and revenue guarantee of the country.

☉ Concept and Purpose

The characteristic of entry is that imported goods are released prior to tax payment as entry and tax declaration are separatedinto two phases.

A bond shall be posted with customs to cover any potential duties, taxes and charges that may accrue when importers transact entry.

In other words, for clear entries, importers shall present customs bond with the amount of duties, taxes and charge that may accrue to CBP.

Bonds are a guarantee from the surety company, if an importer fails to implement tax payment, the relevant Bond Company will assume the same duties and responsibility of the importer.

☉ Types and amount

Types of customs bond are Single Entry Bond andContinuous Bond. Single Entry Bond covers one import entry.Continuous Transaction Bonds cover all import transactions at all U.S. ports within one year from the date the bond is approved and effective.

The amount of bond is determined by port director at the port of entryin accordance with property of imported shipment, property of imported goods, tariff, the estimated amount of annual pay, history record, guarantee conditions, etc.

☉ Application of Bond

ㅇ customs bond shall be presented when the imported shipment exceeds $2500. Below three kinds of item could be used as customs bond. ①Bond issued from surety companies that licensed by The U.S. Department of Treasury ②U.S. currency ③pecific U.S. government bonds or Treasury bills.

ㅇ Many Customs brokers are also agents for sureties and sell bonds. When not entrusted, some customs brokers do not sell customs bond as well.

ㅇ Customs bonds can be obtained through a surety company licensed by the Treasury department with payment of guarantee fee. A customs broker uses his/her own bond to make entry, when entrusted by importers.

Guarantee fee is not the total amount of bond. Guarantee fee is about 3.5% of the amount of bond for Single Entry Bond and about 1% of the amount of bond for Continuous Transaction Bonds. The payment of guarantee fee shall never be refunded.

ㅇ when importers fail to assume tax payment by the designated period, both importers and guarantee will receive Notice of Liquidated Damages Incurred and Demand for Payment. If the importer does not respond to the notice, the relevant payment is deducted from customs bond.

■ Assessment Standard and Customs Valuation

☉ Assessment standard

Assessment standard means the value or quantity which serves as the basis for determining tax amount. In principle, the value or quantity of goods at the time of import declaration become assessment standard (amount of amount of customs = assessment standard × tariff rate).

Ad valorem duty is a tax based on the value of an item, and a specific duty is a tax based on the quantity of an item, regardless of price. And combined duties which ad valorem duty and a specific duty are combined are based on both the value and quantity of an item.

(Compared with other countries, more specific duty and combined duty exist in U.S.)

☉ Dutiable value

With respect to an ad valorem duty, the price which serves as an assessment standard is called dutiable value. FOB price without international freight and freight insurance premium is determined as dutiable value for import.

※ Note: unlike most countries, FOB price is determined as dutiable value, therefore, corresponding international freight and freight insurance premium are reduced in accordance with the amount of tariff.

☉ Customs valuation

1) Outline

A customs valuation refers to the procedure and method to determine the price of import goods, that is, a dutiable value which serves as an assessment standard (in particular, it becomes an issue in a specific duty).

If a customs valuation is different from each country, the unity of international trade may not be fulfilled easily. By taking it into account, when the WTO was launched, it completely integrated new Valuation Agreement into the WTO system under which the signatories to the new Valuation Agreement only may be eligible for acceding to the WTO. By doing so, a member country of WTO may use internationally unified customs valuation system.

(Provided, that each country may determine whether to include international freight and insurance into a dutiable value at its discretion. Withrespect to a dutiable value for importation, the U.S. adopted FOB price which doesn't include such elements into a dutiable value, and most countries such as Japan, China, Taiwan, EU, etc. adopted CIF price which includes freight and insurance.)

WTO Valuation Agreement specifies 6 methods of customs valuation. By doing so, in the case where the dutiable value cannot be determined by the first method, it's determined by sequential application of the valuation method in descending order.

ㅇ The first method: dutiable value based on the transaction value of relevant goods

ㅇ The second method: dutiable value based on the transaction value of identical goods

ㅇ The third method: dutiable value based on the transaction value of similar goods

ㅇ The fourth method: dutiable value based on domestic sale value

ㅇ The fifth method: dutiable value based on estimated value such as production costs of relevant goods

ㅇ The sixth method: dutiable value based on reasonable standards

2) Notices

Most of customs duties are pertaining to an ad valorem duty, and the first method accounts for a majority of the methods for dutiable value determining assessment standard. On the other hand, the first method is often misunderstood by relevant trader as a method under which customs amount may be adjustable because such method is based on the transaction value on the list of Invoice which is declared by the importer.

But, the first method may easily turn out a great embarrassment if due attention isn't paid to detailed information on that because it has plenty of application requirements. That is, actual transaction value shall not be affected by special circumstances, and it shall be the amount to which added elements is added, and if dutiable value cannot be determined by the first method, the second method or the following methods shall be applied, etc.

In consideration of continuous and repetitive nature of trading, traders need to pay attention to customs valuation because if any irregularity is found in the course of customs valuation,relevant trader is subjected to the criminal punishment as well as significant surcharge.

■ Classification and Tax Rate

☉ Classification System

The United States adopt the international HS (Harmonized Tariff Schedule - HTS) classification codes. At present, a10-digit classification codes are used in the United States.

But tariff rate is not in accordance with Customs Actor Customs regulation. The Harmonized Tariff Schedule (HTS) is administered by the U.S. International Trade Administration Commission (USITC).

The Harmonized Tariff Schedule in U.S. is on the basis of the International Tariff Schedule from Chapter 1 to Chapter 97. Chapter 98 and Chapter 99 are added additionally by U.S. itself. TheChapter 98 concerns on goods with reduced customs duty rates and duty-free exemption. Provisional tariff, countervailing tariff,provisional measures, etc. are included in Chapter 99.

6-digit HS headings in HTS of U.S. is the same with international common code, applied duty to single goods depends on the 8th digit and the last 2 digits are for statistics purpose.

☉ HS Code and Regulation

HS code is consistent with tariff rate clearly, however, a variety of laws and regulations relating to importation and exportation are not linked by classification. For this reason, importers have to investigate by relevant ruling on his/her own. From this point of view, U.S. is regarded as a country of non-tariff barriers with high levels.

※ Regulations on classification and HS Code.

For classification and regulations, the degree of its corresponding varies from country to country. The degree is very low in U.S. and Japan, in contrast, the degree is very high in EU, China, Korea, Taiwan, etc.

☉ Types of tariff rate

※Note: it is quite common to misunderstand that the tariff rate is fixed for the certain commodity, but it is false. Tariff rate for specific goods is determined by whether the relevant country is member of the agreement or not and selected rate under sequence regulation, etc.

1) General - Column 1

General tariff rate is generally applied when the relevant goods can not meet the terms of special tariff rates orstatutory tariff rates. It is widely applicableto WTO members with most-favored nation (MFN) treatment WTO. (Applicable for all the countries, except for North Korea and Cuba)

2) Special - Column 1

Special tariff rate is applicable to the general preferential tariff (GSP) and Free Trade Agreement (FTA) partner of the United States, etc. Importers from FTA partner country have to be applied general tariff rate, instead of special tariff rate, when importer herself/himself gives up special treatment or lack of required materials for special treatment, such as Country of Origin, etc.

3) Statutory tariff (Column 2)

Statutory tariff means high tariff rate, which is based on <1930’s Tariff Act> in the United States.

Statutory tariff was originally specific to socialist countries, but the quantity of country is reduced gradually. Afghanistan and Vietnam were targeted in the end of 2001 and Laoswas targeted in 2005. At present, statutory tariff is only limited at North Korea and Cuba

High tariff rate shall be applied to imported good from Cuba and North Korea as they are targeted country of statutory tariff. Therefore, it shall be great difficulty in importing goods to America.

4) Flexible tariff

Flexible tariff systemrefers to flexible adjustment of tariff rate within certain limit in accordance with economy status of domestic and overseas for protecting domestic economy and price stability.

In the United States, flexible tariff covers anti-dumping tariff, countervailing tariff, retaliatory tariff, Quota tariffs, etc. In general, these flexible tariffs are applied to specific country, company, commodity, etc.

Once applied, flexible tariff has priority over other tariff rates.

※ Priority order of tariff in a case is as below

flexible tariff ⇒statutory tariff (Column 2) ⇒special tariff ⇒general tariff

☉ Tax payment and additional charges on importation

Tax payment and additional chargeson importation are categorized into following three kinds. 1) federal excise taxes, 2) Merchandised Processing Fee（MPF），3) Harbor Maintenance Fee(HMF), in case of import by ship.

ㅇ Federal excise taxesconfine to alcoholic beverages, tobacco products, gun, ammunition, oil, etc.

ㅇ Merchandised Processing Feeis 0.3464 percent of the value of imported goods.The maximum amount of the fee shall not exceed $485 and shall not be less than $25. However, "originating merchandise"that qualifies to be marked as goods of Canada or of Mexico under the NAFTA are exempted from this fee.

ㅇ HMF is only collected on importation by ship, the relevant person are required to pay 0.125% of the value of the commercial cargo shipped through identified ports. HMF is not collected on cargo imported or transported via air. Some port doesn’t collect HMF as well.

※ For imported goods, VAT shall be collected in most countries, but not in the United States.

※ In addition, importers have to burden the expense of customs broker, freight fee, customs bond, etc. by his/her selection, the mount is very small.

■ Regulation of export and import

The reason why it is so difficult to understand the regulation of export and import in U.S. is as below.

ㅇ There are more than 170 regulation concerning trade directly or indirectly.

ㅇ Case law and statute law shall be taken into consideration at the same time.

ㅇ goods and corresponding regulations are not matched clearly by the U.S. Government.

Nevertheless, it is crucial to grasp the regulation in U.S. since it is the firstconsumption power in the world.

Thereinafter, regulation system of export and import in U.S. is briefly outlined. For detailed information, refer to other instructions.

☉ Regulations on trade qualification

In principle, any one in the United States can participate in trade. It is unnecessary for either importers or exporters to obtain additional licenses for engaging in trade business.

Provided that you are not a national of the US, should have to empower a national resident for proceeding trade, but for the certain commodity, the trader shall be granted qualification from U.S. Government.

For example, as for importation on agriculture product, Medical and Pharmaceutical Products requiring with prescription, household effects, vehicles, etc. for business purpose, it is necessary to register or obtain relevant licenses from U.S. Government beforehand.

☉ Laws and regulations

Of laws and regulations relating to trade in U.S., the essential part is, <The Tariff Act of 1930>, which is included in<US Code Title 19 Customs Duty>.

Besides above essential part, a great deal of laws and regulations are applied together with tariff act on import and export. The amount of laws and regulations relating to import and export are approximately 130, laws and regulations on export are about 10, other laws and regulations involved in export and import are about 30.

☉ Control agency

Department of Homeland Security (DHS) is mainly responsible for controlling import and export. Goods of entry are mainly administered in Customs and Border Protection (CBP).

CBP is responsible for controlling entry, also administering relevant parts in connection with other corresponding agencies, such as Food and Drug Administration (FDA), United States Department of Agriculture (USDA), etc. There are quite a few goods are also controlled by U.S. government besides CBP.

Departments relating to regulations on export and import are as below.

1. DHS: Department of Homeland Security

 CBP: Customs and Border Protection

Take charge of regulation on export and import and entry

 TSA: Transportation Security Administration

Take charge of export and import security

2. DHHS: Department of Health and Human Service

 FDA: Food and Drug Administration

Take charge of food and drug security

3. USDA: Department of Agriculture

 APHIS: Animal and Plant Health Inspections Service

Take charge of animal and plant’s epidemic prevention, health inspection.

 FSIS: Food Safety and Inspection Service)

Take charge of veterinary food inspection

4. Department of the Treasury

 TTB: Alcohol and Tobacco Tax and Trade Bureau

Take charge of regulation for alcoholic beverage, tobacco product

5. DOT: Department of Transportation

Take charge of regulation on vehicles and corresponding parts

6. DOE: Department of Energy

Take chare of regulation on household effects, professional equipment, pipe, etc.

7. EPA: Environmental Protection Agency

Take charge of regulation on exhaust gas, pesticide residues, etc.

8. CPSC: Consumer Product Safety Commission

Take charge of toys, children's products and other consumer product, etc.

☉ Class of goods is subject to prohibited or restricted

To protect the economy and security of the United States, to safeguard consumer health and well-being, to preserve domestic plant and animal life, some commodities are subject to prohibited, restricted like other countries. Classes of goods are listed as below.

ㅇ Agriculture commodities

ㅇ Arms, ammunition and radioactive materials

ㅇ Consumer product, such as toy, household appliance, paint, etc. ㅇ Radiation-producing product

ㅇ Electronic products

ㅇ Foods, drugs, cosmetics and medical devices

ㅇ Pesticides, toxic and hazardous substances

ㅇ Textile, wool and fur product

ㅇ trademarks, trade names and copyrights

ㅇ wildlife and pets

ㅇ Alcoholic beverages

ㅇ Automobile and boats

ㅇ Import quotas

ㅇ Commodities subject to quotas administered by customs

■ Informal entry

It refers to a kind of entry, which is specially admittedomitting part or whole procedures without the procedures prescribed by law, material submission and payment of tariff, etc.

☉ Informal Entry

Informal entry covers personal commercial shipment and mail shipment that are being entered for consumption, which is speciallyapproved for simple entry process.

1) Entry for commercial shipment in small amounts

In most cases, informal entry can be used while the value of shipment does not exceed $2500. Personal shipments valued over $ 2500 shall also process a formal entry.

If the commercial shipments are applied in informal entry, CBP officer will fill out import document and determine HTS code and customs duties instead of importer without producing B/L, Invoice, etc. and bond requirement

The benefit from the small amount of commercial shipments is quite a lot since the quantity of parcels is in large amounts. The duties on the parcel are collected by the letter carrier who delivers the parcel to the addressee.

Buton condition that the amount of following imported goods is less than $250, formal entry could be applied in.

※ Articles are covered by the scope of retaliatory tariff as listed below.

Billfolds and other flat goods

Feathers and feather products

Flowers and foliage, artificial or preserved

Fur, articles of

Gloves

Handbags

Headwear and hat braids

Leather, article of leather

Luggage

Millinery ornaments

Pillows and cushions

Plastics, miscellaneous articles of

Rawhides and skins

Rubber, miscellaneous articles of

Textile fibers and products

Toys, games, and sports equipment

Trimmings

2) Mail entry

International express provides a private international express service. Express company will make entry and handle all formalities on behalf of the importer. The procedure seems simple for importers.

Mail entry refers to the postal service for importers with collaborated countries around the world by the U.S. postal. Mail importations do not exceed $2500; theletter carrier at the destination delivers the parcel to the addressee upon payment of duty.

Each mail parcel containing an invoice or statement of value should be marked on the outer wrapper; if the parcel is commercial shipments, the invoice shall be enclosed within the sealed parcel,.

If the value of a mail importation exceeds $2500, the addressee is notified to prepare and file a formal Customs entry.

☉ Bonded import

The imported goods are kept by the United States in designated place without paying duty it is so called bonded import. Three main systems relating to bonded import are outlined. ① Bonded Warehouses, ② Foreign Trade Zones (FTZ), ③ Immediate Transportation.

These systems shall make declaration and get approval from Customs by submission proper form without posting customs bond. Importations are paid duty at the duty rate in effect on the date of withdrawal for consumption from bonded status.

☉ Temporary importationbond(TIB), ATA Carnet

1) Temporary Importationnd (TIB)

Goods of the types enumerated below, when not imported for sale, may be admitted into the United States under bond, without the payment of duty, for exportation within one year from the date of importation.

The amount of customs bond must be twice as much as estimated tariff. Upon application to the port director, the period can be extended, but shall not exceed a total of three years.

Classesof good available for TIB

• Merchandise to be repaired, altered, or processed in the United States.

• Models of women’s wearing apparel imported by manufactured for use solely as models in their own establishments.

• Samples solely for use in taking order for merchandise

• articles intended solely for testing, experimental, or review purposes, including drawings, blueprints, photographs, etc.

• Automobiles, motorcycles, bicycles, airplanes, boats for the purpose of taking part in races.

• Filledor empty containers for compressed gases.

• Professional equipment, tool, repair components for the equipment or tool

• Animals and poultry brought into the United States for the purpose of breeding, exhibition, or competition.

• Automobiles, bicycle, or parts for foregoing for show purpose.

2) ATA Carnet

ATA stands for the combined French and English words "Admission Temporaire-Temporary Admission." ATA Carnet is an international customs document that may be used for temporary duty-free importation of certain goods.

Under ATA clearance system, member nations of ATA Agreement may make clearance system rapid and convenient by replacing complicated clearance documents and a security with a certificate. (The United States is one of members of ATA Carnet, also most countries involved in international trade)

Through ATA Carnet clearance, relevant person isn't required to not only fill out documents for clearance, but also to provide customs duty, surcharges, security, etc. for Customs of importing country, enabling faster and smoother customs clearance in any member countries of ATA Agreement.

Target items are covering product samples, professional equipments, goods for exhibition, etc. and ATA certificate is valid for maximum 1 year without the possibility of extension.

■ Ruling

Like most of countries, importers must declare HS code classification, appraisement method, country of origin, etc. on her/his own in the United States. The tariff classification may not be correct or may not be acceptable because it is not consistent with established and uniform classification practice. U.S. Ruling is established for giving proper appraisement and determining relevant matters.

There is no special limitation for Ruling application. Generally, applicants are including importers, customs clearance companies, lawyers, consultants, exporters involved in trade.

Applicable agencies are as follows.

① National Commodity Specialist Division

Located in New York, is responsible for tariff classification, country of origin, etc. The period is within 30 days.

② Office of Regulations and Rulings

Located in CBP headquarter of Washington, is responsible for judging appraisement on tariff or other matters. The period is within 90 days.

Tariff classification, tariff appraisement or other decisions from Ruling are valid for the whole entry process, under the condition of invalid corresponding announcement from CBP. Determined ruling would be released on the Customs Rulings Online Search System (CROSS).

Note: when National Commodity Specialist Division releases ruling, company name and the person in charge will exposure to the public as well. While application, please be reminded that whether it would take adverse effects on business secret.

■ Logistics security and entry

Since the 9/11 terrorist attacks, a variety of security measures are planned and implemented. In case of failure to comply with the requirement of the logistics security, importers are subject to failure to make entry, entry delay, penalty, etc.

The logistic security relating to customs clearance in the United States listed as followings. (Refer to regulations on logistic security for detailed information

ㅇ CSI: conduct inspection the container to be shipped to U.S. at the port of departure in foreign country before loading shipments.

ㅇ C-TPAT: it refer to critical players in the global supply chain, including importers, customs brokers, terminal operators, carriers and foreign manufactures，those who get approval for security protection purpose on his/her own.

ㅇ 24-Hour Advance Manifest Rule: submit a cargo declaration to CBP 24 hours before cargo is loaded onto vessels calling the United States.

ㅇ 10+2: it requires importers to provide 10 data elements to CBP, as well as 2 more data elements from the carrier.

ㅇ 100% cargo inspection: implement 100 percent inspection of all inbound cargo containers

ㅇ Bioterrorism Act compliance: registration of facility and prior notice shall be implemented for exporting food to U.S.

■ Informed compliance

In the United States, Informed Compliance, based on Customs Modernized Act of 1993, is a shared responsibility between CBP and import community wherein CBP effectively communicates its requirements to the trade, and the people and business subject to those requirements conduct their regulated activities in accordance with U.S. laws and regulations.

In order to effectively handle growing demand for customs clearance and promote regulated activities, Informed Compliance plays two important roles. ①BP is responsible for providing a wealth of information to assist import community. ②mport community (especially importers) is expected to exercise Reasonable Care and Record Keeping.

From the trade perspective, in case voluntary compliance is attained, compliant importers are less likely to have their shipments examined or their entries reviewed, in this way, can make quick and correct entry.

☉ Responsibility of CBP

In order to fulfill Informed Compliance, the following functions are undertaken by CBP

① announce customs schedule (HST code), tariff regulation (CFR19), determination of customs (Customs Ruling, Bulletins) and publicize case of America's trade tribunal through CBP homepage.

② in order to supply correct rules for trade, put emphasis on communication and promotion of exchange information on trade, such as actively convene seminar, etc.

③ roviding import community by Automated Commercial Environment (ACE) at no cost, which is available to view data of entries process for your own company.

④ promote and supply specific criteria of Reasonable Care that trade companies shall comply with.

☉ Responsibility of importer (trade community)

1. Reasonable care checklist

CBP assess compliance level for all trade communities. Trader could make entry in quick way when obtained high compliance rate, otherwise shall be exposure to penalties and other compulsory measures when obtained low compliance rate or violation of law.

In case of violation of the law, Reasonable Care shall play important roles for determining to provide proper attention or apply punishment according to the relevant rate.

So far, Reasonable Care Checklist Standard is provided by CBP with more than 90 questions on all areas of entries.

Example of general questions for import related checklist as follows.

ㅇ If you have not retained an expert (e.g. lawyer, customs broker, accountant, or

customsconsultant) to assist you in complying with CBP requirements, do you have access to the CBP Regulations?

ㅇ Has a responsible, knowledgeable individual within your organization reviewed your CBP documentation to assure that it is full, complete and accurate?

ㅇ Documentation was prepared outside your organization, do you have a reliable method to assure that your receive copies of the information submitted to CBP that it is reviewed for accuracy, and CBP is apprised of needed corrections in a timely fashion?

ㅇ If you use an expert to help you comply with CBP requirements, have you discussed your importations in advance with that person, and have you provided him or her with complete, accurate information about import transaction(s)?

ㅇ Are identical transactions or merchandise handled differently at different ports or CBP offices within the same port? If so, have you brought this fact to CBP officials' attention?

※ Notice

In the United States, it is very import to discuss importations with an expert (customs broker, lawyer, accountant, or customs consultant, etc.) for complying with regulation of customs clearance.

Even if the error caused by the designated customs broker in the course of entry, the ultimate responsibility belongs to importer herself/ himself. Soit is necessary to check whether it is processed in accordance with rules when customs broker named in a Customs power of attorney is entrusted for entry purpose.

2. Record keeping requirement

Materials, records relating to customs declaration must be kept for 5 years from the date of entry, trade community is obliged to maintain Record Keeping.

When required the production of entry records from CBP, trade community is responsible for producing relevant records promptly, if fails to maintain demanded record, the relevant person shall be subject to penalty, which is not to exceed $100,000.

■ Prior disclosure

Prior Disclosure reveals the circumstance of violation in accordance with the regulation before CBP or other government agencies identify. Trade community can save benefit of reduced penalties by submission the prior disclosure.

In case of violation of law, any person relating to trade affair can submit prior disclosure. Once you identified the violations, should submit prior disclosure to customs processing clearance as soon as possible.

■ Marking and entry

U. S. Customs Acts require each article imported into the United States be marked with country of origin to indicate to the ultimate purchaser what country the article was manufactured, however, specially exempted from individual marking is a exception to this rule.

In case of violation of Country-Of-Origin, importers shall exposure to penalty (10% of dutiable value), also it may be the cause of clearance delays or unable to clear customs. (for detailed information , refer to Country-Of-Origin instruction)

■ Intellectual property and entry

ㅇ In order to prevent the infringement of intellectual property goods circulation, CBP have right to control the infringement of intellectual property rights together with other government agencies. The protection of intellectual property right system exists at the entry stage in most countries, but in the United States, the protection of intellectual property right system is carried out extraordinarily strictly.

ㅇ Intellectual property refers to creation of the mind that is used in business, such as inventions, musical literary, artistic works, symbols, words, image, design, etc. However, trademark and copyright are involved in entry stage.

ㅇ For effectively control entry, once trademark holders have registered their trademark rights with CBP beforehand. In case of violation of intellectual property, CBP is entitled to import ban, seizure, confiscation, etc.

■ Suggestions for faster clearance of your merchandise

1. Include all information required on your customs invoices.

2. Prepare your invoices carefully. Type them clearly. Allow sufficient space between lines. Keep the data within each column.

3. make sure that your invoices contain the information that would be shown on a well-prepared packing list.

4. Mark and number each package so it can be identified with the corresponding marks and numbers appearing on your invoice.

5. Show a detailed description on your invoice of each item of merchandise contained in each individual package.

6. Mark your goods legibly and conspicuously with the country of origin unless they are specifically exempted from country-of-origin marking requirements, and with such other marking as required by the marking laws of the United States.

7. Comply with the provisions of any special laws the United States that may apply to your goods

8. Observe the instruction closely with respect to invoice, packaging, marking, labeling .etc. sent to you by your customer in the United States. He or she has probably made a careful check of the requirements that will have to be met when your merchandise arrives.

9. Work with CBP to develop packing standards of your commodities.

10. Establish sound security procedures at your facility and while transporting your goods for shipment. Do not give narcotics smugglers the opportunity to introduce narcotics into your shipment.

11. Consider shipping on a carrier participating in the Automated Manifest System (AMS).

12. If you use a licensed customs broker for your transaction, consider using a firm that participates in the Automated Broker Interface (ABI)