Have You Heard That GSP is Back?

The Generalized System of Preferences (GSP) allows for the duty-free treatment of certain goods imported directly from designated beneficiary countries for specific periods of time.

While the GSP had expired on July 29, 2015 it was renewed through December 31, 2017, with a retroactive application between August 1, 2013 and July 28, 2015.  

This means that US Customs is now accepting claims for GSP duty-free merchandise when imports are entered into the US and they are now processing refunds on duties paid, without interest, on merchandise entered during the period that the program had lapsed (i.e., between August 1, 2013 and July 28, 2015) where entries had been filed electronically. Customs is therefore, automatically liquidating, or reliquidating, eligible formal and informal entries made during this lapsed time.

Where entry had not been made electronically however, including entries made by mail, or those by travelers, requests for liquidation must be made by December 28, 2015 pursuant to the procedures set forth in US Customs website under the "GSP Refund Process."

The good news is that now entry filers can  resume filing entry summaries without the payment of estimated duties on  GSP eligible entry summaries. It's also good for those planning importations as realistic price and other projections can be made for, at least, the short term through 2017.

Questions/comments?  Feel free to post below.

Keep up with me at www.fashioncompliance.com or:

On Facebook at www.facebook.com/FashionCompliance by *liking* the page

On Twitter @fashcompliance

New US Customs “Centers for Excellence and Expertise” (CEE)

I attended a US Customs webinar yesterday that explained how the agency is in the process of setting up new “Centers for Excellence and Expertise” (CEE).  These centers – which are virtual – are intended to bring existing expertise together in order to facilitate trade on the part of US Customs and to align its procedures with modern business practices.

Of greater significance however, is that US Customs intends to assign each importer with an account at a CEE to route entry summaries through and to use these virtual environments to move non-revenue collection activity to a CEE for handling protests, the review of prior disclosures and other activities.  Revenue collection however, will continue to be done at the port of entry.

The creation of CEEs are part of US Customs’ “trade transformation efforts,” which also includes an overhaul of 19 CFR Part 111, which are the customs brokers regulations.

CEEs are meant to serve as an information resource for the importing community, be it a large or small importer or broker, US Customs itself, or another government agency.  Customs stated that it has created CEEs by industry in order to focus on industry-specific issues so it can better meet the challenges for that industry.  Unfortunately, with such few and broad categories (listed below) in relation to the thousands of types of imported merchandise, it is questionable as to how well this intention will be met.

The goals of the CEE are:

1)      To facilitate legitimate trade through effective risk management and to “segment” risk so as to get the “good actors” out of the way in order to focus on the riskier participants,

2)      To increase industry-based knowledge within Customs and to better understand the unique practices within an industry, and

3)      To enhance enforcement efforts and to partner with industry stakeholders in order to understand and address industry risks.

As it stands, nine (9) industry groups were identified by Customs for which nine (9) CEEs are to be created.  Four (4) of them have already opened, listed as the first four (4) in the list below, and importers are already welcome to solicit participation in one of them.

Open CEEs:

1)      Electronics (Long Beach, CA)

2)      Pharmaceutical Health and Chemicals (New York)

3)      Automotive and Aerospace (Detroit, MI)

4)      Petroleum, Natural Gas and Minerals (Houston, TX)

Unopened Centers:

5)      Apparel, Footwear and Textiles

6)      Base Metal and Machinery

7)      Consumer Products and Mass Merchandising

8)      Industrial and Manufacturing Materials

9)      Agriculture and Prepared Products

For more information, you can check out this Federal Register Notice at 77 FR 52048 dated August 28, 2012, access a .pdf version here), or email US Customs directly at cee@cbp.dhs.gov.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

The Manufacturer’s I.D. – What Is It?

When merchandise is entered into the U.S., part of the declaration made to US Customs on the entry summary (CBP Form 7501) is that of the Manufacturer Identification Code (MID).

This code is intended to identify the manufacturer of the merchandise and together with the name and address of the invoicing party (whose invoice accompanies the Customs entry), an MID code is constructed.

Special attention should be paid to textile shipments, as the manufacturer should be construed to refer to the actual manufacturer in accordance with 19 CFR §102.23(a) and the Appendix to 19 CFR Part 102 – Textile and Apparel Manufacturer Identification.

This code is required for all entry and entry summaries, including informal entries, filed on CBP form 7501.

So how do we put this code together anyway? The following rules explain how to construct the MID.*

These instructions provide for the construction of an identifying code for a manufacturer or shipper from its name and address. The code can be up to 15 characters in length, with no inserted spaces.

To begin, for the first 2 characters, use the ISO code for the actual country of origin of the goods. The exception to this rule is Canada. “CA” is NOT a valid country for the manufacturer code; instead, show as one of the appropriate province codes listed below:

ALBERTA - XA
BRITISH COLUMBIA - XC
MANITOBA - XM
NEW BRUNSWICK - XB
NEWFOUNDLAND (LABRADOR) - XW
NORTHWEST TERRITORIES - XT
NOVA SCOTIA - XN
NUNAVUT - XV
ONTARIO - XO
PRINCE EDWARD ISLAND - XP
QUEBEC - XQ
SASKATCHEWAN - XS
YUKON TERRITORY - XY

Next, use the first three characters from the first two “words” of the name. If there is only one “word” in the name, then use only the first three characters from the first name. For example, Amalgamated Plastics Corp. would be “AMAPLA” and Bergstrom would be “BER.”

If there are two or more initials together, treat them as a single word. For example, A.B.C. Company or A B C Company would yield “ABCCOM.” O.A.S.I.S. Corp. would yield “OASCOR.” Dr. S.A. Smith yields “DRSA,” Shavings B L Inc. yields “SHABL.”

In the manufacturer name, ignore the English words a, an, and, of, and the. For example, “The Embassy of Spain” would yield “EMBSPA.”

Portions of a name separated by a hyphen are to be treated as a single word. For example, “Rawles-Aden Corp.” or “Rawles – Aden Corp.” would both yield “RAWCOR.” Some names will include numbers. For examples, “20th Century Fox” would yield “20TCEN” and “Concept 2000” yields “CON200.”

Some words in the title of the foreign manufacturer’s name should not be used for the purpose of constructing the MID. For example, most textile factories in Macau start with the same words, “Fabrica de Artigos de Vestuario” which means “Factory of Clothing.” For a factory named “Fabrica de Artigos de Vestuario JUMP HIGH Ltd,” the portion of the factory name that identifies it as a unique entity is “JUMP HIGH.” This is the portion of the name that should be used to construct the MID. Otherwise, all of the MIDs from Macau would be the same, using “FABDE,” which is incorrect.

Similarly, many factories in Indonesia begin with the prefix PT, such as “PT Morich Indo Fashion.” In Russia, other prefixes are used, such as “JSC,” “OAO,” “OOO,” and “ZAO.” These prefixes should be eliminated for the purpose of constructing the MID.

Next, find the largest number on the street address line and use up to the first four numbers. For example, “11455 Main Street Suite 9999” would yield “1145.” A suite number or a post office box should be used if it contains the largest number. For example, “232 Main Street Suite 1234” would yield “1234.” If the numbers in the street address are spelled out, such as “One Thousand Century Plaza,” there will be no numbers in this section of the MID. However, if the address is “One Thousand Century Plaza Suite 345,” this would yield “345.”

When commas or hyphens separate numbers, ignore all punctuation and use the number that remains. For examples, “12,34,56 Alaska Road” and “12-34-56 Alaska Road” would yield “1234.” When numbers are separated by a space, the space is a delimiter and the larger of the two numbers should be selected. For example, “Apt. 509 2727 Cleveland St.” yields “2727.”

Finally, use the first three alpha characters from the city name. “Tokyo” would be “TOK,” “St. Michel” would be “STM,” “18-Mile High” would be “MIL,” and “The Hague” would be “HAG.” Notice that numerals in the city line are to be ignored.

For city-states, use the country name to compose the first three alpha characters. For examples, Hong Kong would be “HON,” Singapore would be “SIN,” and Macau would be “MAC.”

General Rules:

Ignore all punctuation, such as commas, periods, apostrophes and ampersands. Ignore all single character initials, such as the “S” in “Thomas S. Delvaux Company.” Ignore leading spaces in front of any name or address.

Listed below are examples of manufacturer names and addresses and their MID codes:

LA VIE DE FRANCE
243 Rue de la Payees
62591 Bremond, France
MID: FRLAVIE243BRE

20TH CENTURY TECHNOLOGIES
5 Ricardo Munoz, Suite 5880
Caracas, Venezuela
MID: VE20TCEN5880CAR

THE E.K. RODGERS COMPANIES
One Hawthorne Lane
London, England SW1Y5HO
MID: GBEKRODLON

CARDUCCIO AND JONES
88 Canberra Avenue
Sidney, Australia
MID: AUCARJON88SID

N. MINAMI & CO., LTD.
2-6, 8-Chome Isogami-Dori
Fukiai-Ku
Kobe, Japan
MID: JPMINCO26KOB

*These rules are taken from Appendix 2 of DHS’ CBP Form 7501 Instructions, updated March 17, 2011, a copy of which may be obtained here.

Questions/comments? Post below or email me at clark.deanna@gmail.com

Customs Entry and Filing Procedures

Every importer knows that a lack of good entry procedures can lead to delayed, detained, or even seized shipments. Inadvertent classification declarations that lead to additional duty liability are common as well.

Action taken by Customs when this occurs may result in, for example, the issuance of a Notice of Action (Customs Form 29) whereby it applies what it believes is the correct HTSUS number and notifies the importer of the additional duties that must be paid.

The late payment of duties is another common occurrence, so much so that Customs has what I like to call a “parking ticket” approach to addressing the oversight of late payment. This is typically done through an assessment of liquidated damages whereby Customs demands a seemingly large amount of money, or alternatively, allows you to pay a much smaller amount, say $250, provided that it is paid within 60 days of the date of Customs’ notice to the importer. This is known in Customs-ease as the “Option 1” mitigation alternative to payment of the larger liquidated damage amount. This payment may be made through the customs broker or importer.

To give you an overview of Entry Filing, think about it as a two step process. (19 CFR Part 141).

Step 1: Filing an entry that seeks the Immediate Delivery/Release of the shipment (CF 3461), which is done with the shipment Waybill, commercial invoice (or a pro forma invoice when the commercial invoice cannot be produced), packing lists, and such other documentation as is necessary to determine merchandise admissibility.

Keep in mind that while required to produce certain documentation to the Customs Broker, and to Customs on request, most information is transmitted to Customs electronically through the Automated Broker Interface (ABI).

This must be done within 15 calendar days after the arrival of the importing carrier, but will usually be done earlier on vessel shipments (5 days before arrival) and on air shipments, “wheels up” from the foreign airport.

Step 2: Filing a ‘Follow Up’ Entry Summary (CF 7501) that provides greater detail about the shipment along with the duties preliminarily determined to be due (estimated duties.).

This must be filed within 10 working days after the time of entry/release of the goods for delivery under the CF 3461.

For more information on how to fill out the Entry Summary, click here for instructions published by Customs earlier this month.

Questions/comments? Post below or email me at clark.deanna@gmail.com