I recently noticed that I have a “follower” on this blog from a company called TRG Direct which assists importers with various customs entry issues, including the filing of mandatory information with US Customs such as ISF filings.
Nearly one year ago US Customs began requiring advance notice of incoming cargo arriving within the limits of a U.S. port by vessel prior to its arrival. This notice, known as the Importer Security Filing or “ISF” must be filed no later than 24 hours before the cargo is laden on board a vessel at the foreign port. In everyday language, this means that US Customs must receive this information at least 24 hours before the cargo is loaded onto the ship.
There are 10 pieces of information, aka “data elements” that must be identified to US Customs for shipments that will be entered in to the U.S. or a foreign trade zone (FTZ), which is a location within the U.S. that, for customs purposes, is treated as if it were foreign territory in that goods may arrive there from a foreign port but not be considered to have “entered” yet. These 10 identifying data elements (supplied by the importer) along with 2 additional data elements (provided by the carrier) are:
1. Seller
2. Buyer
3. Importer of record number/FTZ application i.d. number
4. Consignee number(s)
5. Manufacturer (or supplier)
6. “Ship to” party
7. Country of origin
8. Commodity HTSUS number (tariff no.)
9. Container stuffing location (i.e., where container was loaded)
10. Consolidator (stuffer) (i.e., entity that packed the container)
11. Vessel stow plan
12. Container status messages relating to certain containers destined for the U.S.
Together these data elements are commonly known as "10+2."
US Customs claims in its published FAQs (see link on the right side) that updates to the ISF for known changes must be made prior to the goods entry into the first U.S. port and that amendments to the ISF will also be accepted at any time after their arrival. Be careful though, Customs likewise said in its FAQs that it will issue liquidated damages of $5,000 for each ISF transmission that is not timely, complete or accurate.
To help with better understanding the ISF requirements, US Customs is hosting a number of outreach events, including one tomorrow in New York City. For a list of their outreach schedule, click here.
More information on ISF and 10+2 can be found at 73 FR 71730, dated 11/25/08 and US Customs ISF Correcting Amendments (go to page 4 of this pdf file).
Additional instruction on this and other compliance measures workshops or webinars can be found through private companies such as TRG Direct. Thanks TRG Direct for your support!
Questions or comments? Feel free to email me at clark.deanna@gmail.com
Tuesday, September 29, 2009
Thursday, September 24, 2009
Regulation Overload? Stringing Together the (Compliance) Beads of a Jewelry Import Business
I recently met a woman who is considering starting up an import business of jewelry and other locally made crafts from Central America. The products she described sounded fantastic and it sparked my former interest in a jewelry and crafts import business I too once had. As we went through some of the product ideas however, it was clear within minutes that there was much more to consider than what color bracelets to import!
Different U.S. agencies have their specific requirements when it comes to imports and US Customs assists them with enforcing their regulations. Let me shed some light on the import issues that came up by going through a few product ideas.
Beaded wooden necklace – Lacey Act Declaration
Painted bracelet for girls – Lead Paint and CPSC* General Certificate of Conformity
Cooking oils – FDA** Advance Notice Declaration
Product declarations and certifications aside, there are other import issues to consider. For example, depending on which country the goods are ultimately imported from, there may be a free trade, or other preferential trade program that she could take advantage of, such as when importing from a country eligible for tariff reductions under the Generalized System of Preferences, of which many Central American countries are.
In everyday language, this means that the amount she would have been responsible for paying in duties is now reduced thanks to the lower duty rate resulting from the preferential program.
Being aware of compliance issues and duty consequences, or benefits, are important to know about prior to your first importation. In fact, consulting of this kind would be beneficial at any time beginning even, believe it or not, during the creation of a business plan. After all, these costs will need to be factored in when determining break even amounts, profit targets and other financial projections.
Consulting of this kind is further important, so that you are not hit with penalties on your first importation as a result of non-compliance which can wipe away any start up capital you once had. Or even worse - it can leave you in serious debt.
I know of a case where an importer's first shipment of goods had been seized, i.e. taken (and in this case, for good), due to an allegation of the products being counterfeit. Though mitigation (reduction) of the penalty imposed by US Customs decreased the penalty to 10% of the original claim, the mitigated amount was still over half a million dollars! And that was on their first importation. Needless to say, that kind of penalty can take its toll!
Starting up an import business can be a lot of fun but there is also a complex maze of government compliance issues to consider and successfully navigate through.
Thinking about starting up an import business? Feel free to contact me with any questions at clark.deanna@gmail.com.
*Consumer Safety Product Commission
** Food and Drug Administration
Different U.S. agencies have their specific requirements when it comes to imports and US Customs assists them with enforcing their regulations. Let me shed some light on the import issues that came up by going through a few product ideas.
Beaded wooden necklace – Lacey Act Declaration
Painted bracelet for girls – Lead Paint and CPSC* General Certificate of Conformity
Cooking oils – FDA** Advance Notice Declaration
Product declarations and certifications aside, there are other import issues to consider. For example, depending on which country the goods are ultimately imported from, there may be a free trade, or other preferential trade program that she could take advantage of, such as when importing from a country eligible for tariff reductions under the Generalized System of Preferences, of which many Central American countries are.
In everyday language, this means that the amount she would have been responsible for paying in duties is now reduced thanks to the lower duty rate resulting from the preferential program.
Being aware of compliance issues and duty consequences, or benefits, are important to know about prior to your first importation. In fact, consulting of this kind would be beneficial at any time beginning even, believe it or not, during the creation of a business plan. After all, these costs will need to be factored in when determining break even amounts, profit targets and other financial projections.
Consulting of this kind is further important, so that you are not hit with penalties on your first importation as a result of non-compliance which can wipe away any start up capital you once had. Or even worse - it can leave you in serious debt.
I know of a case where an importer's first shipment of goods had been seized, i.e. taken (and in this case, for good), due to an allegation of the products being counterfeit. Though mitigation (reduction) of the penalty imposed by US Customs decreased the penalty to 10% of the original claim, the mitigated amount was still over half a million dollars! And that was on their first importation. Needless to say, that kind of penalty can take its toll!
Starting up an import business can be a lot of fun but there is also a complex maze of government compliance issues to consider and successfully navigate through.
Thinking about starting up an import business? Feel free to contact me with any questions at clark.deanna@gmail.com.
*Consumer Safety Product Commission
** Food and Drug Administration
Wednesday, September 23, 2009
OWIT-NY Membership Appreciation Night
As Vice President to the Board of the NY Chapter of the Organization of Women in International Trade (OWIT-NY), I definitely felt a desire and responsibility to go around and meet as many of the dozens of women who came out to our event last night at Bryant Park Grill.
The breadth of professionals at these events never ceases to amaze me, with attendees ranging from those in the customs fields, to college professors, to trade policy consultants. It was a wonderful surprise, although it shouldn’t have been surprising, that those I met were as easy going as I am.
I further found some potential authors of articles for the upcoming OWIT-NY newsletter, for which I am the Editor.
As described on the website, OWIT-NY is a non-profit organization that provides support, inspiration, information and networking opportunities to women and men who are active members of the international trade community. I hope you will check out the website and get more involved with one of our national chapters, if not the New York one. Information about OWIT national can be found if you click here.
Questions or comments? Feel free to email me at clark.deanna@gmail.com.
The breadth of professionals at these events never ceases to amaze me, with attendees ranging from those in the customs fields, to college professors, to trade policy consultants. It was a wonderful surprise, although it shouldn’t have been surprising, that those I met were as easy going as I am.
I further found some potential authors of articles for the upcoming OWIT-NY newsletter, for which I am the Editor.
As described on the website, OWIT-NY is a non-profit organization that provides support, inspiration, information and networking opportunities to women and men who are active members of the international trade community. I hope you will check out the website and get more involved with one of our national chapters, if not the New York one. Information about OWIT national can be found if you click here.
Questions or comments? Feel free to email me at clark.deanna@gmail.com.
Monday, September 21, 2009
Classification. Tricky? Or Tricks of the Trade?
Depending on certain factors, such as the complexity of an article or the place from which it is being imported from, the classification of an import can be tricky at times. There are however, no “tricks” to be played when making a declaration on an entry summary as importers have a responsibility to use reasonable care in making classification determinations under the Customs Modernization Act. A failure to do so could lead to delays in entering the goods, not to mention steep penalties. For this reason there are general rules of interpretation, specific heading and subheading provisions and explanatory notes to all guide you in figuring out the correct tariff number.
“Classification,” i.e., the assignment of a tariff number to a product being imported, is one part of making entry, which is the declaration to US Customs I began writing about it an earlier post. One way in which many of us have had some exposure to making an entry declaration, albeit to a another country, is that with sending a present or personal package to someone in a foreign destination. The US Postal Service has a green customs form that must be filled out and this informs (or, in “trade-ease,” “declares” to) the receiving country what the contents are inside the package.
Making an entry for a commercial quantity of imports into the US entails a bit more of a declaration, and classification is one part of the process. A tariff number is made up of 10 digits and is found in the Harmonized Tariff Schedule of the United States (HTSUS). Assigned to each tariff number is a corresponding rate of duty. It is this rate from which a calculation may be done to determine how much in duties US Customs is entitled to receive on an importation. Think of a duty as a tax, kind of like how many states subject consumers to paying a state sales tax on say, a pair of blue jeans, bought at the mall.
The HTSUS is available in hard copy and online and it contains roughly 5,000 descriptions of classifiable articles, arranged into 97 chapters and grouped into 21 sections. Two final chapters, 98 and 99, are special provision chapters allowing for things like temporary duty increases or suspensions, or a special tariff program. For example, two weeks ago President Obama announced an additional duty on certain tires from China. At some point, a tariff number reflecting this temporary duty increase is likely to be found in one of these chapters. As an aside, I have looked through a hard copy of the HTSUS at the Court of International Trade's library and it is pretty neat to see the diversity (not to mention randomness) of articles that are classifiable. Who knew that “dadoed flat jamb” even existed?! For those of you non-carpenters out there, in everyday language, this is a “door jamb,” which, according to wikipedia, is the vertical part of a door frame to which a door is secured.
I cannot provide a detailed lesson in classification here. I can tell you however, that the earlier chapters of the tariff begin with more raw or crude products, and as the chapter numbers rise, so does the complexity of the goods in terms of advanced manufacturing. For example, raw cotton is classifiable in Chapter 52 whereas blue jeans are classifiable under Chapter 62.
Groups of chapters are bunched into sections and for each one, there are section notes. Likewise, each chapter has notes specific to the articles within it, including additional notes specific to the U.S. that describe with greater detail the way in which goods should be classified. Both of the section and chapter notes should be referred to when making a classification determination.
The General Rules of Interpretation (GRI) provide the hierarchy of instructions for how goods should be classified. Each tariff number is made up of 10 digits in the following form - 0123.45.6789 - and the assignment of the appropriate classification begins by looking at the first four digits, which is referred to as the Heading.
There are 6 GRIs and when a classification cannot be determined by the headings and notes alone, then GRI 1 provides that classification is to be determined based on the subsequent GRIs and in sequential order. Therefore, where GRI 1 is insufficient for making a determination, then you look to GRI 2 and its application to attempt to correctly classify a good, and so on and so forth. Such subsequent rules provide guidance for making classification determinations, such as looking at a good's “essential character,” or what a completed article might be in the event of the importation of a disassembled good, or what to do in the event that a good is classifiable under one or more tariff headings.
Once the correct tariff number has been found, then you can see what the rate of duty is. There are 3 types of rates of duty that can be assessed on a good, the most common of which is known as an “ad valorem” rate, which in terms of dollars and cents, is typically a percentage of the total invoiced amount. As I described in my earlier post, under this assessment, an import invoiced at $1000 for which the classification had a corresponding duty rate of 5%, means that $50 would be paid to US Customs in duties.
On occasion a specific rate of duty may be applicable, such as a per piece rate like in the case of a watch movement, or based on weight, such as in the case of a certain type of cotton, classifiable under HTSUS # 5201.00.2200, which has a duty rate of 4.4 cents per kilogram. Finally, there may be combination rates where there is both an ad valorem and specific duty rate, such as in the case of watches, where the other components of a watch are all valued at ad valorem rates. Interestingly enough, due often times to historical reasons, there are some imports, like watches, that are valued not on the final complete article but on various portions which make up the article. Did I mention classification could be tricky?
As for tricks of the trade, it may be worth consulting an expert such as a licensed customs broker or trade attorney to see if your import may be classified under a preferential duty program, such as NAFTA (the North American Free Trade Agreement). Depending on where a good is being imported from, there may be an opportunity to enter your products duty free thanks to a favorable duty treatment agreement between the U.S. and another country, which your trade professional might be aware of. This would not only save the importer money, but those savings could be passed along to the “ultimate consumer,” i.e., your customer.
For more information, you can check out the US Customs Informed Compliance Publication entitled, “Tariff Classification.” Due to the complexity of classification issues, for certain products US Customs has specific publications, such as with textile costumes, children's apparel, and pipe fittings. Questions or comments? Feel free to email me at clark.deanna@gmail.com.
“Classification,” i.e., the assignment of a tariff number to a product being imported, is one part of making entry, which is the declaration to US Customs I began writing about it an earlier post. One way in which many of us have had some exposure to making an entry declaration, albeit to a another country, is that with sending a present or personal package to someone in a foreign destination. The US Postal Service has a green customs form that must be filled out and this informs (or, in “trade-ease,” “declares” to) the receiving country what the contents are inside the package.
Making an entry for a commercial quantity of imports into the US entails a bit more of a declaration, and classification is one part of the process. A tariff number is made up of 10 digits and is found in the Harmonized Tariff Schedule of the United States (HTSUS). Assigned to each tariff number is a corresponding rate of duty. It is this rate from which a calculation may be done to determine how much in duties US Customs is entitled to receive on an importation. Think of a duty as a tax, kind of like how many states subject consumers to paying a state sales tax on say, a pair of blue jeans, bought at the mall.
The HTSUS is available in hard copy and online and it contains roughly 5,000 descriptions of classifiable articles, arranged into 97 chapters and grouped into 21 sections. Two final chapters, 98 and 99, are special provision chapters allowing for things like temporary duty increases or suspensions, or a special tariff program. For example, two weeks ago President Obama announced an additional duty on certain tires from China. At some point, a tariff number reflecting this temporary duty increase is likely to be found in one of these chapters. As an aside, I have looked through a hard copy of the HTSUS at the Court of International Trade's library and it is pretty neat to see the diversity (not to mention randomness) of articles that are classifiable. Who knew that “dadoed flat jamb” even existed?! For those of you non-carpenters out there, in everyday language, this is a “door jamb,” which, according to wikipedia, is the vertical part of a door frame to which a door is secured.
I cannot provide a detailed lesson in classification here. I can tell you however, that the earlier chapters of the tariff begin with more raw or crude products, and as the chapter numbers rise, so does the complexity of the goods in terms of advanced manufacturing. For example, raw cotton is classifiable in Chapter 52 whereas blue jeans are classifiable under Chapter 62.
Groups of chapters are bunched into sections and for each one, there are section notes. Likewise, each chapter has notes specific to the articles within it, including additional notes specific to the U.S. that describe with greater detail the way in which goods should be classified. Both of the section and chapter notes should be referred to when making a classification determination.
The General Rules of Interpretation (GRI) provide the hierarchy of instructions for how goods should be classified. Each tariff number is made up of 10 digits in the following form - 0123.45.6789 - and the assignment of the appropriate classification begins by looking at the first four digits, which is referred to as the Heading.
There are 6 GRIs and when a classification cannot be determined by the headings and notes alone, then GRI 1 provides that classification is to be determined based on the subsequent GRIs and in sequential order. Therefore, where GRI 1 is insufficient for making a determination, then you look to GRI 2 and its application to attempt to correctly classify a good, and so on and so forth. Such subsequent rules provide guidance for making classification determinations, such as looking at a good's “essential character,” or what a completed article might be in the event of the importation of a disassembled good, or what to do in the event that a good is classifiable under one or more tariff headings.
Once the correct tariff number has been found, then you can see what the rate of duty is. There are 3 types of rates of duty that can be assessed on a good, the most common of which is known as an “ad valorem” rate, which in terms of dollars and cents, is typically a percentage of the total invoiced amount. As I described in my earlier post, under this assessment, an import invoiced at $1000 for which the classification had a corresponding duty rate of 5%, means that $50 would be paid to US Customs in duties.
On occasion a specific rate of duty may be applicable, such as a per piece rate like in the case of a watch movement, or based on weight, such as in the case of a certain type of cotton, classifiable under HTSUS # 5201.00.2200, which has a duty rate of 4.4 cents per kilogram. Finally, there may be combination rates where there is both an ad valorem and specific duty rate, such as in the case of watches, where the other components of a watch are all valued at ad valorem rates. Interestingly enough, due often times to historical reasons, there are some imports, like watches, that are valued not on the final complete article but on various portions which make up the article. Did I mention classification could be tricky?
As for tricks of the trade, it may be worth consulting an expert such as a licensed customs broker or trade attorney to see if your import may be classified under a preferential duty program, such as NAFTA (the North American Free Trade Agreement). Depending on where a good is being imported from, there may be an opportunity to enter your products duty free thanks to a favorable duty treatment agreement between the U.S. and another country, which your trade professional might be aware of. This would not only save the importer money, but those savings could be passed along to the “ultimate consumer,” i.e., your customer.
For more information, you can check out the US Customs Informed Compliance Publication entitled, “Tariff Classification.” Due to the complexity of classification issues, for certain products US Customs has specific publications, such as with textile costumes, children's apparel, and pipe fittings. Questions or comments? Feel free to email me at clark.deanna@gmail.com.
Wednesday, September 16, 2009
An Importer’s Bond Requirement
Posting a bond with US Customs is part of the process of entering the goods into the U.S., just as paying duties are. The bond is intended to cover any potential duties, taxes or charges that may accrue with an importation, and can be obtained through a surety company. A “single entry bond” can be used for the entry of a single importation, or for larger commercial importers that import more frequently, a “continuous bond” may be obtained.
Depending on the nature of the product being imported, certain requirements such as a specific license, must accompany it. Often times, other U.S. agencies will require that certain paperwork is included with the entry documentation, such as a Lacey Act declaration for certain wood products, or there will be a requirement that certain information is provided to it in advance of an importation, such as the FDA’s requirement to give advance notice of an imported food’s arrival into the U.S. under what is commonly known as the Bioterrorism Act of 2002. US Customs works together with these other agencies to ensure that all rules are met. When they are not, penalties may be assessed against violators.
US Customs has the ability to request that goods be redelivered to the port for an inspection or some other reason well after an importer has received the goods in the U.S. Therefore, for purposes of full compliance with its regulations and requests, US Customs requires the posting of a bond. Keep in mind that in the event a request is not complied with by an importer, such as goods cannot be returned to the port, there is a good chance that penalties will be assessed. In the event an importer does not pay the penalty, the bond serves as a guarantee that the penalties will be paid (through the surety company).
Bond issues can be confusing and complicated to the novice and even more experienced importers. If you have any questions about bonds, feel free to contact me at clark.deanna@gmail.com.
Depending on the nature of the product being imported, certain requirements such as a specific license, must accompany it. Often times, other U.S. agencies will require that certain paperwork is included with the entry documentation, such as a Lacey Act declaration for certain wood products, or there will be a requirement that certain information is provided to it in advance of an importation, such as the FDA’s requirement to give advance notice of an imported food’s arrival into the U.S. under what is commonly known as the Bioterrorism Act of 2002. US Customs works together with these other agencies to ensure that all rules are met. When they are not, penalties may be assessed against violators.
US Customs has the ability to request that goods be redelivered to the port for an inspection or some other reason well after an importer has received the goods in the U.S. Therefore, for purposes of full compliance with its regulations and requests, US Customs requires the posting of a bond. Keep in mind that in the event a request is not complied with by an importer, such as goods cannot be returned to the port, there is a good chance that penalties will be assessed. In the event an importer does not pay the penalty, the bond serves as a guarantee that the penalties will be paid (through the surety company).
Bond issues can be confusing and complicated to the novice and even more experienced importers. If you have any questions about bonds, feel free to contact me at clark.deanna@gmail.com.
Sunday, September 13, 2009
What is the Process for Importing Goods into the U.S. ?
I met with a potential client on Friday to discuss a product from Brazil that she and her business partner are interested in importing. During our discussion it became clear that while on its face, the product itself is inexpensive, by the time all of the costs involved with importing the good into the U.S. are factored in, it’s a much more expensive venture.
As I drew out a diagram of the entire process, namely from the factory in Sao Paolo to their physical possession in New York City, I realized that though the seller had sent them information pertinent to the transaction, such as the cost of the goods per square meter, the tariff classification (up to the 8 digit level) of the product, and quotes for shipping a 20 ft. container on a vessel, I realized that though they possessed this information, there was no connection to the actual process of how this information translated into the importation of the product.
Therefore, I’d like to spell out some of the basics to importing into the U.S.
As each part of the process requires some detail, I will merely provide a brief introduction now, and through subsequent blog posts, describe each of the other facets to importation in greater detail.
U.S. Customs and Border Protection, formerly of the U.S. Treasury, and now a part of the Dept. of Homeland Security, is the agency responsible for overseeing imports into (and exports out of) the U.S. Whenever a product is imported into the U.S., it is “entered” into our borders upon “entry,” which is a declaration to the government of the article being imported and payment of the requisite duties to the U.S. government, which is essentially a tax on a product based on its invoice value at the duty rate. For example, if I import $1000 worth of merchandise and the duty rate is 5%, I am required to pay $50 in duties.
The duty rate is determined by a product’s tariff number, which is set out in the Harmonized Tariff Schedule of the United States. Countries which are members of the WTO (World Trade Organization) or those with whom the U.S. has a free trade (or other preferential) agreement, benefit from more favorable duty treatment than those who are not, which means that an importation from one of these countries will have a lower duty rate assigned to a product than one that is not.
Entry can be done by an importer and is typically done through a licensed Customs Broker, who through the use of a Power of Attorney, makes entry on behalf of the importer. The broker classifies the merchandise, determines its value and provides the requisite paperwork (invoice, packing list, shipping records, required declarations, etc.) to US Customs. Once the goods have been cleared by US Customs, they are admissible into the U.S.
Other importation issues, which I will discuss in future blog posts as each requires a bit of explanation, include:
• Obtaining a Bond
• Valuation
• Classification
• Marking (country of origin)
• Preferential duty treatment (free trade agreements)
• Other agency requirements (e.g., FTC – packaging statements like "biodegradeable"; FDA – declaration of food imports; CPSC – GCC re apparel and flammability and lead certifications of compliance; TTB – labeling of wine requirements; USDA/APHIS - when a product is considered an endangered species)
• Insurance (risk of loss)
• Transportation of the goods from the port to its final U.S. destination
Questions or comments? Email me at clark.deanna@gmail.com
As I drew out a diagram of the entire process, namely from the factory in Sao Paolo to their physical possession in New York City, I realized that though the seller had sent them information pertinent to the transaction, such as the cost of the goods per square meter, the tariff classification (up to the 8 digit level) of the product, and quotes for shipping a 20 ft. container on a vessel, I realized that though they possessed this information, there was no connection to the actual process of how this information translated into the importation of the product.
Therefore, I’d like to spell out some of the basics to importing into the U.S.
As each part of the process requires some detail, I will merely provide a brief introduction now, and through subsequent blog posts, describe each of the other facets to importation in greater detail.
U.S. Customs and Border Protection, formerly of the U.S. Treasury, and now a part of the Dept. of Homeland Security, is the agency responsible for overseeing imports into (and exports out of) the U.S. Whenever a product is imported into the U.S., it is “entered” into our borders upon “entry,” which is a declaration to the government of the article being imported and payment of the requisite duties to the U.S. government, which is essentially a tax on a product based on its invoice value at the duty rate. For example, if I import $1000 worth of merchandise and the duty rate is 5%, I am required to pay $50 in duties.
The duty rate is determined by a product’s tariff number, which is set out in the Harmonized Tariff Schedule of the United States. Countries which are members of the WTO (World Trade Organization) or those with whom the U.S. has a free trade (or other preferential) agreement, benefit from more favorable duty treatment than those who are not, which means that an importation from one of these countries will have a lower duty rate assigned to a product than one that is not.
Entry can be done by an importer and is typically done through a licensed Customs Broker, who through the use of a Power of Attorney, makes entry on behalf of the importer. The broker classifies the merchandise, determines its value and provides the requisite paperwork (invoice, packing list, shipping records, required declarations, etc.) to US Customs. Once the goods have been cleared by US Customs, they are admissible into the U.S.
Other importation issues, which I will discuss in future blog posts as each requires a bit of explanation, include:
• Obtaining a Bond
• Valuation
• Classification
• Marking (country of origin)
• Preferential duty treatment (free trade agreements)
• Other agency requirements (e.g., FTC – packaging statements like "biodegradeable"; FDA – declaration of food imports; CPSC – GCC re apparel and flammability and lead certifications of compliance; TTB – labeling of wine requirements; USDA/APHIS - when a product is considered an endangered species)
• Insurance (risk of loss)
• Transportation of the goods from the port to its final U.S. destination
Questions or comments? Email me at clark.deanna@gmail.com
Monday, September 7, 2009
Children, Apparel and Textiles: Rules, Rules, and Now... a Final CPSC Rule
The Consumer Product Safety Commission (CPSC) is the U.S. federal agency responsible for protecting consumers from known risks related to the ordinary use of a consumer product and reducing hazards associated with them. Clothing and textiles are considered consumer products and as such are subject to the guidelines set forth by CPSC, which, with respect to this new rule, are the federal rules and regulations found at 16 CFR Part 1500.
Recently, CPSC announced its final determination that certain materials do not exceed the lead content limits specified in the Consumer Product Safety Improvement Act of 2008 (CPSIA), section 101(a). Under this section, a consumer product is considered a banned hazardous substance under the Federal Hazardous Substances Act (FHSA) where it
1.Is a consumer product designed or intended for children 12 years old and younger, i.e., a “children's consumer product,” and
2.Contains more than 300 ppm of lead (as of 8/14/09, formerly 600 ppm through 8/13/09. This rule is subject to change as of 8/14/11, to a lower limit of 100 ppm of lead, unless CPSC determines it is not technologically feasible to have this lower limit)
Until this Final Rule was published, the children's apparel industry, among others, had been scrambling to meet the testing requirements mandated by CPSIA which not only required the testing, but mandated that it be done only by CPSC accredited labs. Major concerns over the lead paint and lead content testing of apparel, non-textile components, such as zippers and buttons, and decals or paints applied to the surface of textiles, had been raised in an effort to comply with the new standards and provide adequate support for the certifications made in the still mandatory “General Certificate of Conformity” (GCC) which is a declaration by an importer, U.S. domestic manufacturer or retailer, certifying to a product's conformance with CPSC rules.
The Final Rule, Lead Content and Children's Apparel:
Whether for children or adults, the main component of a clothing article is its fabric. Certain components such as a zipper or buttons may be either necessary or used as adornment, as is common with children's apparel, however their use with clothing tends to be minimal. Clothing may be 100% of a material such as cotton, or a blend such as polyester and spandex. Lastly, there may be a decorative element of some type such as a decal or rhinestones also sewn or glued onto a garment. All of these fabrics and components are subject to certification that they are in compliance with the CPSIA lead content rules.
In its Final Rule, CPSC announced its determination that “certain products or materials inherently do not contain lead or contain lead at levels that do not exceed the lead content limits under CPSIA, section 101(a),” provided that “these materials have neither been treated or adulterated with the addition of materials that could result in the addition of lead into the product or material.” Included in this list are textiles consisting of
1.Natural fibers, whether dyed or undyed, inc., inter alia, i.e., among other things, cotton, ramie, linen, silk, and alpaca; and
2.Manufactured fibers, whether dyed or undyed, inc., inter alia, rayon, polyester, nylon, acrylic and spandex
In everyday language, this means that lead content testing is no longer required of apparel made up of 100% of, or any blend of, any of these materials because CPSC has determined that “most textile products are manufactured using processes that do not introduce lead or result in an end product that would not exceed the CPSIA's lead limits.” This does not mean, however, that the requirement to provide a GCC has been eliminated, however the underlying testing of a textile made up of one or more of these fabrics, which supports a declaration of conformity on a GCC, is no longer required. Despite being relieved from testing however, manufacturers and importers remain responsible for verifying that the product or material has not been altered or modified so as to cause lead to enter the material or product.
With regards to the other components of a garment, the Final Rule does not relieve the testing requirement for metal and plastic items, such as zippers, snaps and buttons since the CPSC was unable to make a determination that component parts made of plastic or metal are below the mandated lead content limits. In an upcoming rulemaking however, a date for which was not announced by CPSC, CPSC intends to address component part testing, as well as delineate products which may fall into an exemption.
In addition, other components like glass beads and rhinestones also remain subject to CPSIA lead content testing since many leaded glass based products contain lead levels that exceed the statutory limits. A lifting of this testing is not likely to occur as CPSC specifically voted on July 17, 2009 to not exclude these items from the lead content requirements.
BEWARE! CPSC intends to make random inspections of products in the marketplace to assure compliance with CPSIA. For products found to exceed the lead limits, appropriate enforcement action will be taken, which could include monetary penalties and/or criminal liability.
Therefore, when using a new manufacturer or supplier, testing for lead content at the outset of a production would be prudent action for any importer to make to meet its U.S. Customs informed compliance obligations. As discussed briefly below, lead paint requirements for children's apparel still stand. Therefore it would likely be more cost effective to have the lead content and paint testing done at the same time.
The Final Rule and Lead Paint:
The Final Rule still mandates the testing of children's consumer products where a paint has been applied to the surface, or the material or product has been treated with paint or a similar surface coating [16 CFR 1303 and section 14 of Consumer Product Safety Act, as amended by section 102(a) of CPSIA]. Therefore, any apparel with pigments applied to the surface of the textile material must be tested.
This blog post focuses on the Final Rule provisions related to apparel and textiles, however the determinations regarding lead content across various materials and consumer products, including ceramic glaze and clay, precious gemstones and paper, and non-consumer products, like cosmetics and foodstuffs, were also discussed in the published rule, the complete version of which may be found at 74 FR 43031, dated August 26, 2009, which is also the effective date of the Final Rule. It should be noted that any quoted references herein also are taken from this publication. For more information about the Consumer Safety Product Commission, click here to go to the website.
Questions or comments? Email me at clark.deanna@gmail.com
Recently, CPSC announced its final determination that certain materials do not exceed the lead content limits specified in the Consumer Product Safety Improvement Act of 2008 (CPSIA), section 101(a). Under this section, a consumer product is considered a banned hazardous substance under the Federal Hazardous Substances Act (FHSA) where it
1.Is a consumer product designed or intended for children 12 years old and younger, i.e., a “children's consumer product,” and
2.Contains more than 300 ppm of lead (as of 8/14/09, formerly 600 ppm through 8/13/09. This rule is subject to change as of 8/14/11, to a lower limit of 100 ppm of lead, unless CPSC determines it is not technologically feasible to have this lower limit)
Until this Final Rule was published, the children's apparel industry, among others, had been scrambling to meet the testing requirements mandated by CPSIA which not only required the testing, but mandated that it be done only by CPSC accredited labs. Major concerns over the lead paint and lead content testing of apparel, non-textile components, such as zippers and buttons, and decals or paints applied to the surface of textiles, had been raised in an effort to comply with the new standards and provide adequate support for the certifications made in the still mandatory “General Certificate of Conformity” (GCC) which is a declaration by an importer, U.S. domestic manufacturer or retailer, certifying to a product's conformance with CPSC rules.
The Final Rule, Lead Content and Children's Apparel:
Whether for children or adults, the main component of a clothing article is its fabric. Certain components such as a zipper or buttons may be either necessary or used as adornment, as is common with children's apparel, however their use with clothing tends to be minimal. Clothing may be 100% of a material such as cotton, or a blend such as polyester and spandex. Lastly, there may be a decorative element of some type such as a decal or rhinestones also sewn or glued onto a garment. All of these fabrics and components are subject to certification that they are in compliance with the CPSIA lead content rules.
In its Final Rule, CPSC announced its determination that “certain products or materials inherently do not contain lead or contain lead at levels that do not exceed the lead content limits under CPSIA, section 101(a),” provided that “these materials have neither been treated or adulterated with the addition of materials that could result in the addition of lead into the product or material.” Included in this list are textiles consisting of
1.Natural fibers, whether dyed or undyed, inc., inter alia, i.e., among other things, cotton, ramie, linen, silk, and alpaca; and
2.Manufactured fibers, whether dyed or undyed, inc., inter alia, rayon, polyester, nylon, acrylic and spandex
In everyday language, this means that lead content testing is no longer required of apparel made up of 100% of, or any blend of, any of these materials because CPSC has determined that “most textile products are manufactured using processes that do not introduce lead or result in an end product that would not exceed the CPSIA's lead limits.” This does not mean, however, that the requirement to provide a GCC has been eliminated, however the underlying testing of a textile made up of one or more of these fabrics, which supports a declaration of conformity on a GCC, is no longer required. Despite being relieved from testing however, manufacturers and importers remain responsible for verifying that the product or material has not been altered or modified so as to cause lead to enter the material or product.
With regards to the other components of a garment, the Final Rule does not relieve the testing requirement for metal and plastic items, such as zippers, snaps and buttons since the CPSC was unable to make a determination that component parts made of plastic or metal are below the mandated lead content limits. In an upcoming rulemaking however, a date for which was not announced by CPSC, CPSC intends to address component part testing, as well as delineate products which may fall into an exemption.
In addition, other components like glass beads and rhinestones also remain subject to CPSIA lead content testing since many leaded glass based products contain lead levels that exceed the statutory limits. A lifting of this testing is not likely to occur as CPSC specifically voted on July 17, 2009 to not exclude these items from the lead content requirements.
BEWARE! CPSC intends to make random inspections of products in the marketplace to assure compliance with CPSIA. For products found to exceed the lead limits, appropriate enforcement action will be taken, which could include monetary penalties and/or criminal liability.
Therefore, when using a new manufacturer or supplier, testing for lead content at the outset of a production would be prudent action for any importer to make to meet its U.S. Customs informed compliance obligations. As discussed briefly below, lead paint requirements for children's apparel still stand. Therefore it would likely be more cost effective to have the lead content and paint testing done at the same time.
The Final Rule and Lead Paint:
The Final Rule still mandates the testing of children's consumer products where a paint has been applied to the surface, or the material or product has been treated with paint or a similar surface coating [16 CFR 1303 and section 14 of Consumer Product Safety Act, as amended by section 102(a) of CPSIA]. Therefore, any apparel with pigments applied to the surface of the textile material must be tested.
This blog post focuses on the Final Rule provisions related to apparel and textiles, however the determinations regarding lead content across various materials and consumer products, including ceramic glaze and clay, precious gemstones and paper, and non-consumer products, like cosmetics and foodstuffs, were also discussed in the published rule, the complete version of which may be found at 74 FR 43031, dated August 26, 2009, which is also the effective date of the Final Rule. It should be noted that any quoted references herein also are taken from this publication. For more information about the Consumer Safety Product Commission, click here to go to the website.
Questions or comments? Email me at clark.deanna@gmail.com
Wednesday, September 2, 2009
Dept. of Commerce Makes Preliminary Countervailing Duty Finding on Plastic Grocery Bags Out of Vietnam
A countervailing duty is basically an additional tax, derived from the Dept. of Commerce and imposed by U.S. Customs, on a particular product. The effect is intended to cause the foreign import to be more expensive and therefore, more competitive with
In this case, polyethylene retail carrier bags (“PRCBs”), commonly known as plastic grocery bags, among other kinds, from
The
On
With the Dept. of Commerce’s preliminary report (signed on Monday 8/31/09) stating that a finding of countervailing subsidies was made, the International Trade Administration of the Dept. of Commerce’s publicly announced in its "Fact Sheet" a finding of subsidization by the Vietnamese government ranging from 0.20% de minimus to 4.24% in counteravailable subsidies.
In everyday language, this means that the range of subsidies provided to this industry by the Vietnamese government ranged from 0.20%, which is perceived as being insignificant or “de minimus,” because it is so small of an amount as to essentially not be worth the effort to address, to 4.24%.
Having made a preliminary finding, by this Friday (
Manufacturer Name Duty Rate (i.e., extra duty amount to be paid)
Advanced Polybag (none b/c de minimus)
Chin Sheng Company, Ltd. 1.69%
Fotai Vietnam Enterprise Corp. 4.24%
All other producers/exporters from
Of course these are just the preliminary determination figures. Once the final determination is published, those new countervailing duty rates established by the Dept. of Commerce will then be collected by Customs, effective from that date of publication. Stay tuned to the International Trade Commissions' website for additional publications affecting this countervailing duty investigation.
Questions or comments? Email me at clark.deanna@gmail.com
Subscribe to:
Posts (Atom)