Informed compliance is a shared responsibility between Customs and the import community wherein Customs effectively communicates its requirements to the trade, and the people and businesses subject to those requirements conduct their regulated activities in accordance with U.S. laws and regulations. A key component of informed compliance is that the importer is expected to exercise reasonable care in his or her importing operations.
Informed compliance benefits both parties:
When voluntary compliance is achieved, Customs resources need not be expended on redundant examinations or entry reviews for the importer’s cargo found to be dependably compliant. From the trade perspective, when voluntary compliance is attained, compliant importers are less likely to have their shipments examined or their entries reviewed.
The Customs Service publishes a wealth of information to assist the import community in complying with Customs requirements. We issue rulings and informed compliance publications on a variety of technical subjects and processes. Most of these materials can be found on-line at www.customs.gov.
We urge importers to make sure they are using the latest versions of any printed materials.

Reasonable care is an explicit responsibility on the part of the importer. Despite its seemingly simple connotation, the term reasonable care defies easy explanation because the facts and circumstances surrounding every import transaction differ, from the experience of the importer to the nature of the imported articles. Consequently, neither the Customs Service nor the importing community can develop a reasonable care checklist capable of covering every import transaction.

The Customs Service recommends that the import community examine the list of questions below. These questions may suggest methods that importers may find useful in avoiding compliance problems and in meeting the responsibilities of reasonable care.

These questions are intended to promote compliance with Customs laws and regulations, but be aware that the list is advisory, not exhaustive. The checklist is intended as a guide and has no legal, binding or precedential effect on Customs or the importing community.
The questions apply whether the importer of record conducts the transactions(s) him- or herself, or whether the importer hires others to do it.

General Questions for All Transactions:
1. If you have not retained an expert (e.g., lawyer, customs broker, accountant, or customs consultant) to assist you in complying with Customs requirements, do you have access to the Customs Regulations (Title 19 of the Code of Federal Regulations), the Harmonized Tariff Schedule of the United States, and Customs Bulletin and Decisions? (All three are available from the Superintendent of Documents, Tel. 202.512.1800.) Do you have access to the Customs Web site at www.customs.gov. Customs Electronic Bulletin Board (CEBB), or other research service that provides the information to help you establish reliable procedures and facilitate compliance with Customs law and regulations?
2. Has a responsible, knowledgeable individual within your organization reviewed your customs documentation to assure that it is full, complete and accurate? If the documentation was prepared outside your organization, do you have a reliable method to assure that you receive copies of the information submitted to Customs, that it is reviewed for accuracy, and that Customs is apprised of needed corrections in a timely fashion?
3. If you use an expert to help you comply with Customs requirements, have you discussed your importations in advance with that person, and have you provided him or her with complete, accurate information about the import transaction(s)?
4. Are identical transactions or merchandise handled differently at different ports or Customs offices within the same port? If so, have you brought this fact to Customs officials’ attention?
Questions by Topic: Merchandise Description & Tariff Classification
Basic Question: Do you know what you ordered, where it was made, and what it is made of?
1. Have you provided a complete, accurate description of your merchandise to Customs in accordance with 19 U.S.C. 1481? (Also, see 19 CFR 141.87 and 19 CFR 141.89 for special merchandise description requirements.)
2. Have you provided Customs with the correct tariff classification of your merchandise in accordance with 19 U.S.C. 1484?
3. Have you obtained a Customs ruling regarding the description of your merchandise or its tariff classification (see 19 CFR Part 177)? If so, have you followed the ruling and apprised appropriate Customs officials of those facts (i.e., of the ruling and your compliance with it)?
4. Where merchandise description or tariff classification information is not immediately available, have you established a reliable procedure for obtaining it and providing it to Customs?
5. Have you participated in a Customs pre-classification of your merchandise in order to get it properly described and classified?
6. Have you consulted the tariff schedules, Customs informed compliance publications, court cases or Customs rulings to help you properly describe and classify the merchandise?
7. Have you consulted with an expert (e.g., lawyer, customs broker, accountant, customs consultant) to assist in the description and/or classification of the merchandise?
8. If you are claiming a conditionally free or special tariff classification or provision for your merchandise (e.g., GSP, HTS Item 9802, NAFTA), how have you verified that the merchandise qualifies for such status? Do you have the documentation necessary to support the claim? If making a NAFTA preference claim, do you have a NAFTA certificate of origin in your possession?
9. Is the nature of your merchandise such that a laboratory analysis or other specialized procedure is advised for proper description and classification?
10. Have you developed reliable procedures to maintain and produce the required entry documentation and supporting information?

Basic Questions: Do you know the “price actually paid or payable” for your merchandise? Do you know the terms of sale? Whether there will be rebates, tie-ins, indirect costs, additional payments? Whether “assists” were provided or commissions or royalties paid ? Are amounts actual or estimated? Are you and the supplier “related parties”?
1. Have you provided Customs with a proper declared value for your merchandise in accordance with 19 U.S.C. 1484 and 19 U.S.C. 1401a?
2. Have you obtained a Customs ruling regarding valuation of the merchandise (see 19 CFR Part 177)? Can you establish that you followed the ruling reliably? Have you brought those facts to Customs attention?
3. Have you consulted the Customs valuation laws and regulations. Customs Valuation Encyclopedia, Customs informed compliance publications, court cases and Customs rulings to assist you in valuing merchandise?
4. If you purchased the merchandise from a “related” seller, have you reported that fact upon entry? Have you assured that the value reported to Customs meets one of the “related party” tests?
5. Have you assured that all legally required costs or payments associated with the imported merchandise (assists, commissions, indirect payments or rebates, royalties, etc.) have been reported to Customs?
6. If you are declaring a value based upon a transaction in which you were/are not the buyer, have you substantiated that the transaction is a bona fide “sale at arm’s length” and that the merchandise was clearly destined to the United States at the time of sale?
7. If you are claiming a conditionally free or special tariff classification or provision for your merchandise (GSP, HTS Item 9802, NAFTA), have you reported the required value information and obtained the documentation necessary to support the claim?
8. Have you produced the required entry documentation and supporting information?

Basic Question: Have you ascertained the correct country of origin for the imported merchandise?
1. Have you reported the correct country of origin on Customs entry documents?
2. Have you assured that the merchandise is properly marked upon entry with the correct country of origin (if required) in accordance with 19 U.S.C. 1304 and any other applicable special marking requirements (watches, gold, textile labeling, etc)?
3. Have you obtained a Customs ruling regarding the proper marking and country of origin of the merchandise (see 19 CFR Part 177)? If so, have you followed the ruling and brought that fact to Customs attention?
4. Have you consulted with a customs expert regarding the correct country of origin/proper marking of your merchandise?
5. Have you apprised your foreign supplier of Customs country-of-origin marking requirements prior to importation of your merchandise?
6. If you are claiming a change in the origin of the merchandise or claiming that the goods are of U.S. origin, have you taken required measures to substantiate your claim (e.g., do you have U.S. milling certificates or manufacturers’ affidavits attesting to production in the United States)?
7. If importing textiles or apparel, have you ascertained the correct country of origin in accordance with 19 U.S.C. 3592 (Section 334, P.L. 103-465) and assured yourself that no illegal transshipment or false or fraudulent practices were involved?
8. Do you know how your goods are made, from raw materials to finished goods, by whom and where?
9. Have you ensured that the quota category is correct?
10. Have you checked the Status Report on Current Import Quotas (Restraint Levels), issued by Customs, to determine if your goods are subject to a quota category with “part” categories?
11. Have you obtained correct visas for those goods subject to visa categories?
12. For textile articles, have you prepared a proper country declaration for each entry, i.e., a single country declaration (if wholly obtained/produced) or a multi-country declaration (if raw materials from one country were transformed into goods in a second)?
13. Can you produce all entry documentation and supporting information, including certificates of origin, if Customs requires you to do so?

Basic Question: Have you determined whether your merchandise or its packaging use any trademarks or copyrighted material or are patented? If so, can you establish that you have a legal right to import those items into and/or use them in the United States?
1. If you are importing goods or packaging bearing a trademark registered in the United States, have you established that it is genuine and not restricted from importation under the “gray-market” or parallel-import requirements of United States law (see 198 CFR 133.21), that you have permission from the trademark holder to import the merchandise?
2. If you are importing goods or packaging that contain registered copyrighted material, have you established that this material is authorized and genuine? If you are importing sound recordings of live performances, were the recordings authorized?
3. Is your merchandise subject to an International Trade Commission or court-ordered exclusion order?
4. Can you produce the required entry documentation and supporting information?

1. Have you assured that your merchandise complies with other agencies’ requirements (e.g., PDA, EPA, DOT, CPSC, FTC, Agriculture, etc.) and obtained licenses or permits, if required, from them?
2. Are your goods subject to a Commerce Department dumping or countervailing-duty investigation or determination? If so, have you complied with Customs reporting requirements of this fact (e.g., 19 CFR 141.61)?
3. Is your merchandise subject to quota/visa requirements? If so, have you provided a correct visa for the goods upon entry?
4. Have you assured that you have the right to make entry under the Customs Regulations?
5. Have you filed the correct type of Customs entry (e.g., TIB, T&E, consumption entry, mail entry)?

Section 333 of the Uruguay Round Implementation Act (19 U.S.C. 1592a) authorizes the Secretary of the Treasury to publish a list of foreign producers, manufacturers, suppliers, sellers, exporters, or other foreign persons found to have violated 19 U.S.C. 1592 by using false, fraudulent or counterfeit documentation, labeling, or prohibited transshipment practices in connection with textiles and apparel products. Section 1592a also requires any importer of record who enters or otherwise attempts to introduce into United States commerce textile or apparel products that were directly or indirectly produced, manufactured, supplied, sold, exported, or transported by such named person(s) to show, to the Secretary’s satisfaction, that the importer has exercised reasonable care to ensure that the importations are accompanied by accurate documentation, packaging and labeling regarding the products’ origin. Under section 1592a, reliance solely upon information from a person named on the list does not constitute the exercise of reasonable care. Textile and apparel importers who have a commercial relationship with any of the listed parties must exercise reasonable care in ensuring that the documentation covering the imported merchandise, its packaging and its labeling accurately identify the importation’s country of origin. This demonstration of reasonable care must rely upon more information than that supplied by the named party.
In order to meet the reasonable care standard when importing textile or apparel products and when dealing with a party named on this list, an importer should consider the following questions to ensure that the documentation, packaging and labeling are accurate regarding country-of-origin considerations. This list is illustrative, not exhaustive:
1. Has the importer had a prior relationship with the named party?
2. Has the importer had any seizures or detentions of textile or apparel products that were directly or indirectly produced, supplied, or transported by the named party?
3. Has the importer visited the company’s premises to ascertain that the company actually has the capacity to produce the merchandise?
4. Where a claim of an origin-conferring process is made in accordance with 19 CFR 102.21, has the importer ascertained that the named party actually performed that process?
5. Is the named party really operating from the country that he or she claims on the documentation, packaging or labeling?
6. Have quotas for the imported merchandise closed, or are they near closing, from the main producer countries for this commodity?
7. Does the country have a dubious or questionable history regarding this commodity?
8. Have you questioned your supplier about the product’s origin?
9. If the importation is accompanied by a visa, permit or license, has the importer verified with the supplier or manufacturer that the document is of valid, legitimate origin? Has the importer examined that document for any irregularities that would call its authenticity into question?

Under 19 U.S.C. 1484, a statutory obligation is imposed on importers to use reasonable care when completing entry documentation so as to enable Customs to, among other things assess duties and collect accurate import statistics. Customs regulation 19 C.F.R. Pt. 171 App. B (1992) provides:
As a general rule, a violation may be determined to be negligent if it results from the offender’s failure to exercise reasonable care and competence to ensure that a statement made is correct.
Information that must be accurate on entry documents includes, but is not limited to: a description of the goods, their value, tariff classification, quantity, special duty or tariff treatment, and country of origin. The failure to use reasonable care in completing the entry can result in fines of up to 2 to 4 times the loss of revenue, or 20 to 40 percent of the value of the merchandise, if the violation did not result in a loss of revenue. Intentional violations can result in fines of up to the value of the merchandise.
Importers can take a number of steps to avoid liability and ensure that they are acting with reasonable care when filing entries by:
? Reviewing proper U.S. Customs Invoice requirements and documenting country of origin of goods or materials;
? Establishing procedures to determine the correct classification and valuation of merchandise; and procedures for the communication of that information to their brokers for use in preparing Customs documents; and
? Initiating a program for the review of entry documents prepared by their brokers, and for the correction of errors.
Importers may also limit liability by correcting inaccurate information submitted to Customs through the use of Supplemental Information Letters, Post Entry Amendments, Reconciliation, and Prior Disclosures.

Six steps you can take to limit or avoid liability and ensure that they are acting with reasonable care when filing entries:

1. Schedule a meeting with your Customs Broker for a comprehensive review of all merchandise you are bringing and planning to import into the United States.
2. Contract with your Broker to obtain Binding Rulings on all merchandise you now import or intend to import.
3. Have your Broker advise you on how to set up an audit proof file system.
4. Review proper U.S. Customs Invoice requirements and documentation of the country of origin of your goods or materials.
5. Establish procedures to determine the correct classification and valuation of merchandise; and procedures for the communication of that information to their brokers for use in preparing Customs documents; and perhaps most important,
6. Initiate a program for the review of entry documents prepared by their brokers, and for the correction of errors.

Of primary interest to the trade community is the compliance assessment, which is the systematic evaluation of an importer’s systems supporting his or her Customs-related operations. The assessment includes testing import and financial transactions, reviewing the adequacy of the importer’s internal controls, and determining the importer’s compliance levels in key areas. Compliance assessments are conducted in accordance with 19 U.S.C. 1509.
The assessment is conducted by an interdisciplinary team composed of a Customs auditor, import specialist, account manager, industry expert (highly knowledgeable of the electronics or auto parts or surgical equipment industries, for example), and possibly other Customs specialists (attorney, inspector, scientist). The compliance assessment utilizes professionally accepted statistical sampling and auditing techniques to review selected import transactions from the company’s previous fiscal year.
Compliance assessments will evaluate the company’s applicable customs operations such as:
Record keeping
Merchandise classification/trade statistics
Merchandise quantities
Antidumping/countervailing duty operations
Quota conformity Merchandise value
Warehouse or foreign trade zone operations
Merchandise transshipment Special trade programs (GSP, CBI, others).

Companies found in compliance with Customs laws and regulations will get a report stating that fact. Companies whose systems are determined to be noncompliant will also get a report and will be asked to formulate, in cooperation with Customs advisors, a compliance improvement plan specifying corrective actions the company will take to increase compliance levels. Serious violations of law or regulation may result in Customs referring the company for a formal investigation or other enforcement actions.
By law. Customs is required to provide the importer with advance notice of an intended assessment and an estimate of its duration. Importers are entitled to an entry conference, during which the assessment’s purpose will be explained and its duration provided. Using information from Customs data bases about the company or the importer’s industry, the compliance assessment team may have prepared questionnaires seeking specific information about the importer’s internal procedures; these questionnaires will also be distributed at the entry conference.
Upon completion of the assessment. Customs will schedule a closing conference, at which its preliminary findings will be explained. A closing conference may not be scheduled for companies found to have serious enforcement issues. If no enforcement action is taken. Customs will provide the company with a written report of the assessment’s results.
The Importer Audit/Compliance Assessment Team Kit (also called the CAT Kit), which provides extensive details of the assessment procedure, can be found at Customs Web site, www.cbp.gov or by calling the Customs Regulatory Audit Division office nearest you.

Compliance Measurement is the primary tool Customs uses to assess the accuracy of port-of-entry transactions and to determine the compliance rate for all commercial importations. By using statistical sampling methods, a valid compliance level for all commercial importations can be obtained. One of the Customs Service’s goals is to assure that at least 99 percent of the import revenues legally owed the United States government are collected. Cargo is sampled for compliance with international trade laws at the port of entry, at the time of entry into the United States. Importers should be aware that misclassification of merchandise, among other violations, will be detected through the compliance measurement process.

Use this checklist when sending documents to us. If you are missing anything, contact the shipper or forwarders local agent appearing on the Arrival Notice immediately. Failure to do so could result in costly delays.

The following basic checklist applies to all shipments. Shipments of products that are also regulated by other government agencies may have additional documentary requirements. Contact us so we can determine what is required.

This is a list with bullet points:

1.) Commercial or other Invoice covering the entire shipment to be imported
2.) Packing List
3.) Ocean Bill of lading or Airwaybill (See Import Basics)
4.) All other documents related to the shipment or required by Customs or Other Government Agency
5.) A properly executed Customs Power of Attorney

Importers have a responsibility to verify information on Customs documents or face possible chares of negligence and assessment of Customs penalties, so found the Court in United States v. Golden Ship Trading Company CIT Slip Op. 2001-7, January 24, 2001.
In an action to recover civil penalties for false statement under 19 U.S.C. 1592, Customs asserted that an importer, Golden Ship Trading, has been negligent in filing entry documents when it identified the country of origin for certain imported Tee-shirts as the Dominical Republic rather than China. While not disputing that the Tee-Shirts were actually from China, Golden Ship Trading claimed it was not negligent because the foreign seller had deceived it when it was told that the country of origin was the Dominican Republic. The foreign seller furnished all of the relevant information necessary for the broker to prepare the entry documents, which Golden Ship Trading signed without questioning.
In rejecting the importer?s argument that it was not negligent, the court said that Golden Ship Trading has failed to exercise reasonable care because it failed to verify the information contained in the entry documents. Under the definition of reasonable care found in the Customs regulations the court concluded that Golden Ship Trading had a responsibility to at least undertake an effort to verify the information on the entry documents. The court noted:
There is a distinct difference between legitimately attempting to verify the entry information and blindly relying on the exporter?s assertions. Had Golden Ship Trading inquired as to the origin of the imported tee-shirts or, at minimum, attempted to check the credentials and business operations of the exporter, it could have made an argument that it attempted to exercise reasonable care and competence to ensure that the entry documents were accurate.
Golden Ship Trading Company, Slip. Op.p.6.

The material contained in this document has been prepared by George R. Tuttle Law Offices for informational purposes only. The information contained in general in nature, and may not apply to particular factual or legal circumstances. In any event, the material does not constitute legal advice or opinions and should not be relied upon as such.

In today’s fast paced business environment, it is not uncommon for importers and brokers to rely on the information provided by a foreign supplier on invoice documents. In Golden Ship Trading, the court took the opportunity to clarify that importers have an affirmative obligation to take the steps necessary to ensure that statements made on the entry are correct.
The court’s decision is a clear pronouncement that importers may not blindly rely on information supplied by their suppliers, or assume that the use of a licensed broker will shield them from liability for erroneous statements made in entry documents.
While the exercise of reasonable care may not have guaranteed success, the lack of any attempt at verification will ensure that the importer will be liable for the false information.
The Importer’s Obligation To Exercise Reasonable Care

Under 19 U.S.C. 1484, a statutory obligation is imposed on importers to use reasonable care when completing entry documentation so as to enable Customs to, among other things assess duties and collect accurate import statistics. Customs regulation 19 C.F.R. Pt. 171 App. B (1992) provides:
As a general rule, a violation may be determined to be negligent if it results from the offender’s failure to exercise reasonable care and competence to ensure that a statement made is correct.
Information that must be accurate on entry documents includes, but is not limited to: a description of the goods, their value, tariff classification, quantity, special duty or tariff treatment, and country of origin. The failure to use reasonable care in completing the entry can result in fines of up to 2 to 4 times the loss of revenue, or 20 to 40 percent of the value of the merchandise, if the violation did not result in a loss of revenue. Intentional violations can result in fines of up to the value of the merchandise.
Importers can take a number of steps to avoid liability and ensure that they are acting with reasonable care when filing entries by:
– Reviewing proper U.S. Customs Invoice requirements and documenting country of origin of goods or materials;
– Establishing procedures to determine the correct classification and valuation of merchandise; and procedures for the communication of that information to their brokers for use in preparing Customs documents; and
– Initiating a program for the review of entry documents prepared by their brokers, and for the correction of errors.
Importers may also limit liability by correcting inaccurate information submitted to Customs through the use of Supplemental Information Letters, Post Entry Amendments, Reconciliation, and Prior Disclosures.

A commercial invoice, signed by the seller or shipper, or his agent, is acceptable for customs purposes if it is prepared in accordance with Section 141.86 through 141.89 of the Customs Regulations, and in the manner customary for a commercial transaction involving goods of the kind covered by the invoice. Importers and brokers participating in the Automated Broker Interface may elect to transmit invoice data via the Automated Invoice Interface or EDIFACT and eliminate the paper document.
The ACE software deployment by CBP in 2016 allows brokers with the proper software, which we have, to receive and transmit invoice data electronically, eliminating the paper document. Contact us for more information.
A commercial invoice, signed by the seller or shipper, or his agent, is acceptable for Customs purposes if it is prepared in accordance with Section 141.86 through 141.89 of the Customs Regulations, and in the manner customary for a commercial transaction involving goods of the kind covered by the invoice.

The invoice must provide the following information, as required by the Tariff Act:
– The port of entry to which the merchandise is destined;
– If merchandise is sold or agreed to be sold, the time, place, and names of buyer and seller; if consigned, the time and origin of shipment, and names of shipper and receiver;
– A detailed description of the merchandise, including the name by which each item is known, the grade or quality, and the marks, numbers, and symbols under which it is sold by the seller or manufacturer to the trade in the country of exportation, together with the marks and numbers of the packages in which the merchandise is packed;
– The quantities in weights and measures;
– If sold or agreed to be sold, the purchase price of each item in the currency of the sale;
– If the merchandise is shipped for consignment, the value of each item in the currency in which the transactions are usually made, or, in the absence of such value, the price in such currency that the manufacturer, seller, shipper, or owner would have received, or was willing to receive, for such merchandise if sold in the ordinary course of trade and in the usual wholesale quantities in the country of exportation;
– The kind of currency;
– All charges upon the merchandise, itemized by name and amount including freight, insurance, commission, cases, containers, coverings, and cost of packing; and, if not included above, all charges, costs, and expenses incurred in bringing the merchandise from alongside the carrier at the port of exportation in the country of exportation and placing it alongside the carrier at the first U.S. port of entry. The cost of packing, cases, containers, and inland freight to the port of exportation need not be itemized by amount if included in the invoice price and so identified. Where the required information does not appear on the invoice as originally prepared, it shall be shown on an attachment to the invoice;
– All rebates, drawbacks, and bounties, separately itemized, allowed upon the exportation of the merchandise;
– The country of origin;
– All goods or services furnished for the production of the merchandise not included in the invoice price.

If the merchandise on the documents is sold while in transit, the original invoice reflecting this transaction and the resale invoice or a statement of sale showing the price paid for each item by the purchaser shall be filed as part of the entry, entry summary, or withdrawal documentation.
The invoice and all attachments must be in the English language, or shall be accompanied by an accurate English translation.
Each invoice shall state in adequate detail what merchandise is contained in each individual package.
If the invoice or entry does not disclose the weight, gauge, or measure of the merchandise necessary to ascertain duties, the importer of record shall pay expenses incurred to obtain this information prior to the release of the merchandise from Customs custody.
Each invoice shall set forth in detail, for each class or kind of merchandise, every discount from the list or other base price which has been or may be allowed in fixing each purchase price or value.
When more than one invoice is included in the same entry, each invoice with its attachments shall be numbered consecutively by the importer on the bottom of the face of each page, beginning with number 1. If an invoice is more than two pages, begin with number 1 for the first page of the first invoice and continue in a single series of numbers through all the invoices and attachments included in one entry. If an entry covers one invoice of one page and a second invoice of two pages, the numbering at the bottom of the page shall be as follows:
Inv. 1, p.l, Inv. 2, p.2; Inv. 2, p.3, etc.
Any information required on an invoice may be set forth either on the invoice or on the attachment.

1. Separate Invoice Required for Each Shipment. Not more than one distinct shipment from one consignor to one consignee by one commercial carrier shall be included on the same invoice.
2. Assembled Shipments. Merchandise assembled for shipment to the same consignee by one commercial carrier may be included in one invoice. The original bills or invoices covering the merchandise, or extracts therefrom, showing the actual price paid or agreed to be paid, should be attached to the invoice.
3. Installment Shipments. Installments of a shipment covered by a single order or contract and shipped from one consignor to one consignee may be included in one invoice if the installments arrive at the port of entry by any means of transportation within a period not to exceed 10 consecutive days.
The invoice should be prepared in the same manner as invoices covering single shipments and should include any additional information which may be required for the particular class of goods concerned. If it is practical to do so, the invoice should show the quantities, values, and other invoice data with respect to each installment, and the identification of the importing conveyance in which each installment was shipped.
4. Production “Assist.” The invoice should indicate whether the production of merchandise involved costs for “assists” (e.g., dies, molds, tooling, printing plates, artwork, engineering work, design and development, financial assistance, etc.) which are not included in the invoice price. If assists were involved, state their value, if known, and by whom supplied. Were they supplied without cost, or on a rental basis, or were they invoiced separately? If the latter, attach a copy of the invoice.
Whenever U.S. Customs requires information on the cost of production of goods for customs valuation, the importer will be notified by the port director. Thereafter, invoices covering shipments of such goods must contain a statement on the cost of production by the manufacturer or producer.
5. Additional Information Required. Special information may be required on certain goods or classes of goods in addition to the information normally required on the invoice. Although the United States importer usually advises the exporter of these special situations, section 141.89 of the Customs Regulations, which covers the requirements for these goods, has been reproduced in the appendix.
6. Rates of Exchange. In general, no rate(s) of exchange may be used to convert foreign currency for customs purposes other than the rate(s) proclaimed or certified in 31 U.S.C. 5151. For merchandise imported from a country having a currency for which two or more rates of exchange have been certified by the Federal Reserve Bank of New York, the invoice will show the exchange rate or rates used in converting the United States dollars received for the merchandise into the foreign currency and the percentage of each rate if two or more rates are used. If a rate or combination of rates used to pay costs, charges, or expenses is different from those used to pay for the merchandise, state that rate or combination of rates separately. Where dollars have not been converted at the time the invoice is prepared, state that fact on the invoice, in which case the invoice shall also state the rate or combination of rates at which the dollars will be converted, or that it is not known what rate or rates will be used. Rates of exchange are not required for merchandise unconditionally free of duty or subject only to a specific rate of duty not depending on value.

If the required commercial invoice is not filed at the time the merchandise is entered, a statement in the form of an invoice (a pro forma invoice) must be filed by the importer at the time of entry. A bond is given for production of the required invoice not later than 120 days from the date of the entry summary, or entry if there is no entry summary. If the invoice is needed for statistical purposes, it must generally be produced within 50 days from the date on which the entry summary is required to be filed.
The exporter should bear in mind that unless he or she forwards the required invoice in time, the American importer will incur a liability under his bond for failure to file the invoice with the port director of Customs before the 120-day period expires.
Although a pro forma invoice is not prepared by the exporter, it is of interest to exporters as it gives a general idea of the kind of information needed for entry purposes. A pro forma invoice indicates what the importer may find necessary to furnish Customs officers at the time a formal entry is filed for a commercial shipment, if a properly prepared customs or commercial invoice is not available at the time the goods are entered. An acceptable format for a pro forma invoice is reproduced in the appendix.
Some of the additional information specified for the commodities under section 141.89 of the Customs Regulations may not be required when entry is made on a pro forma invoice. However, the pro forma invoice must contain sufficient data for examination, classification, and appraisement purposes.

Special invoices are required for some merchandise. See 19 CFR 141.89.
Frequent Errors in Invoicing
Foreign sellers or shippers must exercise care in preparing invoices and other documents used to enter goods into the commerce of the United States in order for their importers to avoid difficulties, delays, or possibly even penal sanctions. Each document must contain all information required by law or regulations, and every statement of fact contained in the documents must be true and accurate. Any inaccurate or misleading statement of fact in a document presented to a Customs officer in connection with an entry, or the omission from the document of required information, may result in delays in merchandise release, the detention of the goods, or a claim against the importer for domestic value. Even though the inaccuracy or omission was unintentional, the importer may be required to establish that he exercised due diligence and was not negligent, in order to avoid sanctions with consequent delay in obtaining possession of goods and closing the transaction. (See 19 U.S.C. 1592.)
It is particularly important that all statement relating to merchandise description, price or value, and amounts of discounts, charges, and commissions be truthfully and accurately set forth. It is also important that the invoices set forth the true name of the actual seller and purchaser of the goods, in the case of purchased goods, or the true name of the actual consignor and consignee when the goods are shipped otherwise than in pursuance of a purchase. It is important, too, that the invoice otherwise reflect the real nature of the transaction pursuant to which the goods were shipped to the United States.
The fundamental rule is that both the shipper and importer must furnish Customs officers with all pertinent information with respect to each import transaction to assist Customs officers in determining the tariff status of the goods. Examples of omissions and inaccuracies to be avoided are:
– The shipper assumes that a commission, royalty, or other charge against the goods is a so-called “nondutiable” item and omits it from the invoice.
– A foreign shipper who purchases goods and sells them to a United States importer at a delivered price shows on the invoice the cost of the goods to him instead of the delivered price.
– A foreign shipper manufactures goods partly with the use of materials supplied by the United States importer, but invoices the goods at the actual cost to the manufacturer without including the value of the materials supplied by the importer.
– The foreign manufacturer ships replacement goods to his customer in the United States and invoices the goods at the net price without showing the full price less the allowance for defective goods previously shipped and returned.
– A foreign shipper who sells goods at list price, less a discount, invoices them at the net price, and fails to show the discount.
– A foreign shipper sells goods at a delivered price but invoices them at a price f.o.b. the place of shipment and omits the subsequent charges.
– A foreign shipper indicates in the invoice that the importer is the purchaser, whereas he is in fact either an agent who is receiving a commission for selling the goods or a party who will receive part of the proceeds of the sale of the goods sold for the joint account of the shipper and consignee.
– Invoice descriptions are vague, listing only parts of numbers, truncated or coded descriptions, or lumping various articles together as one when several distinct items are included.

There are two types of Ocean Bills of Lading; Negotiable and Express, and it is important to understand the difference. Bills of Lading are issued when the vessel sails and all copies, regardless of type, are given to the shipper at origin.
NEGOTIABLE: One Original, endorsed Negotiable Bill of Lading must be surrendered to the issuer or his agent before you can take physical custody of the cargo. Because these documents are valuable, multiple Originals are always issued. The proper procedure for handling them is for any sender in the chain to retain one of the originals in case the courier envelope is lost. Be sure to remind the shipper of this and ask for them to be sent to you or us as soon as possible. If, for any reason, an Original Bill of Lading cannot be obtained, you must contact the shipper and have them request a “telex release” from the steamship line or forwarder at origin. This can be time consuming and result in unwelcome storage charges. It is in your interest to follow the procedure noted above.
EXPRESS: Sometimes also referred to as a SEA WAYBILL, this is a non-negotiable Bill of Lading that is not required to be surrendered. Much the same as an airwaybill it is a document to track and keep track of the shipment. Use of Express or Sea waybills continues to grow as they make the burden of the cargo custody process easier for all parties involved.
How to tell if your B/L is Negotiable or Express:
1. The word “ORIGINAL” on any copy of your bill of lading indicates a Negotiable Bill of Lading. You may also have copies that say “Non-Negotiable” or “Copy”. These are for recordkeeping only and cannot be used to obtain custody of the cargo.
2. The word “EXPRESS” or “SEAWAYBILL” indicates your shipment is moving on a Bill of Lading that does not have to be surrendered for you to take custody of the cargo.
Surrendering the Bill of Lading and Destination charges:
1. Freight cashiering normally processes the bill of Lading release and destination charges at the same time. In the industry it is referred to as “OB/L and charges”. If you have a Negotiable Bill of Lading, be sure to carefully follow item number three below to avoid potential delays in the release of your cargo.
2. Your Arrival Notice will show any destination charges due and to whom they are payable. If your shipment is on a Negotiable B/L, the Arrival Notice may also say “Original B/L Required” or something similar.
3. When surrendering OB/L and charges, endorse one of the Originals on the reverse with the exact name indicated in the Consignee section on the front, attach a copy of the Arrival Notice and your check to it. Use an overnight signature service carrier to deliver it to the party named on the Arrival Notice. If your B/L is “Express” or the Arrival Notice says “Original Surrendered At Origin” or something similar, then a copy of the Arrival Notice and your check payable to the named party is all that needs to be sent. You should always use an overnight signature service carrier when sending valuable documents.

Why is an importer required to post a bond with Customs?

A Customs Bond is required on all commercial shipments of goods entering the commerce of the United States. According to Customs regulations, importers are required to post a bond…
“to protect the revenue of the United States and to assure compliance with any pertinent law, regulation or instruction.’”
Definition
A customs bond is a guarantee from a surety company to the United States government that the principal (importer) will abide by all laws and regulations governing the importation of merchandise into the United States. A bond is not designed or intended to protect the importer. The purpose of a bond is to guarantee that all customs duties, penalties, and other charges assessed by U.S. Customs will be paid and that all trade regulations will be followed. Any corporation, company, or individual who wishes to import goods into the U.S. is required to post a bond. In lieu of a bond, the importer may post cash equivalent to the required bond amount.
What Customs Bonds do
When a Customs Bond is executed, the bond principal (importer) agrees to the following conditions:
1. To pay duties, taxes and charges in a timely manner.
2. To make a complete entry.
3. To produce documents and evidence as requested or required.
4. To redeliver merchandise if requested by Customs.
5. To rectify any issue of non-compliance with provisions of admission.
6. Agreement for examination of merchandise by Customs, and to bear any and all costs associated with such examinations.
7. To comply with special requirements on duty free entries or withdrawals.
8. To comply with U.S. Customs regulations applicable to Customs cargo security
9. To fully comply with all regulatory requirements of the U.S. Customs Service as well as all other government agencies that may have an interest in or regulatory control over your importations.
Role of the Surety Company
When goods are imported into the United States, the importer is responsible for making the goods available to the U.S. Customs Service for inspection, ensuring that marking requirements have been met, making transaction records available for audit and paying estimated or additional duties and fees, where applicable. The surety company issuing the bond guarantees the importer will comply with U.S. Customs regulations. The surety company will be called on for payment when the importer does not fulfill any obligation to the United States government with regard to an importation. If the importer fails to honor the conditions set forth in the bond, the surety company can be obligated to do so in the importer’s place. In turn, the surety company is entitled to full recovery of any loss from the importer.
Two Bond types
There are two types of bonds: the Single Entry Bond (SEB) and the Continuous Entry Bond (CEB). SEBs are valid for one single importation. Single transaction bonds are typically used by importers who import infrequently. CEBs remain in force for 365 days from date of issue and are renewed annually until cancellation. This bond is both cost effective and helpful in obtaining expedited cargo release for the importer who is involved in trade throughout the year. The amount of this bond is usually equal to 10 percent of the total customs duties paid for the previous year or reasonable estimate for the current year. Contact us at [email protected] for details and a cost comparison.

Two types of bonds are available; Single Transaction and Continuous Entry (also referred to as ?Term? or ?Annual?). If you plan to import more than three or four shipments in the next 365 days, call us to determine the most cost effective bond for your situation.
A common misconception among the importing community is that bond amounts are determined by the surety. Bond amounts are actually determined by Customs as set forth in Customs Directive 099 3510-004, ?Monetary Guidelines for Setting Bond Amounts.? Customs Directive 099 3510-004 was issued on July 23, 1991, superseding Customs Directive 3510-02 and 3510-03. For most general merchandise, the bond amount for Single Transaction Bonds must equal the invoice value plus duty and tax.

The new guidelines primarily affected Activity Code 1 Importer or Broker Entry Bonds by changing the minimum Continuous bond amount from $10,000 to $50,000. The new guidelines also changed the determination of certain single transaction bonds. When the entry involves another government agency or is subject to quota and/or visa requirements, the bond amount is equal to three times the entered value plus duty.

Customs user fees were established by the Consolidated Omnibus Budget Reconciliation Act of 1985. This legislation was expanded in 1986 to include a merchandise processing fee. Also in 1986, Congress enacted the Water Resources Development Act, which authorized the Customs Service to collect a harbor maintenance fee for the Army Corps of Engineers. Further legislation has extended the User Fee Program until 2003.
The merchandise processing fee (MPF) is 0.3464 percent ad valorem on formally-entered imported merchandise (generally entries valued over $2,000), subject to a minimum fee of $25.77 per entry and a maximum fee of $497.99 per entry. On informal entries (those valued at less than $2,500), the MPFs are: $2 for automated entries, $6 for manual entries not prepared by Customs, and $9 for manual entries that are prepared by Customs.
Effective January 1,1994, goods imported directly from Canada that qualify under NAFTA to be marked as goods originating in Canada are exempt from the MPF. This applies to all MPF fees: formal, informal, manually prepared, or automated. Goods that do not qualify under NAFTA are subject to all applicable MPFs.
Similarly, effective June 30,1999, goods imported directly from Mexico are exempt from the MPF if the goods qualify under the NAFTA to be marked as goods originating in Mexico.
There is no immediate change to the MPF assessed on goods of Mexican origin. However, effective June 30,1999, the MPF will cease to exist for goods which qualify to be marked as goods of Mexico under NAFTA.
The harbor maintenance fee is an ad valorem fee assessed on port use associated with imports, admissions into foreign trades zones, domestic shipments, and passenger transportation. The fee is assessed only at ports that benefit from the expenditure of funds by the Army Corps of Engineers for maintaining and improving the port trade zones. The fee is 0.125 percent of the value of the cargo and is paid quarterly, except for imports, which are paid at the time of entry. Customs deposits the harbor maintenance fee collections into the Harbor Maintenance Trust Fund. The funds are made available, subject to appropriation, to the Army Corps of Engineers for the improvement and maintenance of United States ports and harbors.

United States customs laws require each imported article produced abroad to be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article permits, with the English name of the country of origin, to indicate to the ultimate purchaser in the United States the name of the country in which the article was manufactured or produced. Articles which are otherwise specifically exempted from individual marking are an exception to this rule. The exceptions are discussed below.

If the article (or the container when the container and not the article must be marked) is not properly marked at the time of importation, a marking duty equal to 10 percent of the customs value of the article will be assessed unless the article is exported, destroyed, or properly marked under Customs supervision before the liquidation of the entry concerned.
It is not feasible to state who will be the “ultimate purchaser” in every circumstance. Broadly stated, an “ultimate purchaser” may be defined as the last person in the United States who will receive the article in the form in which it was imported. Generally, if an imported article will be used in the United States in manufacture that results in an article having a name, character or usage different from that of the imported article, the manufacturer is the ultimate purchaser. If an article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. A person who subjects an imported article to a process which results in a substantial transformation of the article is the ultimate purchaser, but if the process is merely a minor one which leaves the identity of the imported article intact, the processor of the article will not be regarded as the ultimate purchaser.
When an article (or its container) is required to be marked to indicate its country of origin, the marking is sufficiently permanent if it will remain on the article (or its container) until it reaches the ultimate purchaser. When an article is of a kind which is usually combined with another article subsequent to importation but before delivery to an ultimate purchaser, and the name indicating the article’s country of origin appears in a place on the article so that the name will be visible after such combining, the marking shall include, in addition to the name of the country of origin, words or symbols which clearly show that the origin indicated is that of the imported article only and not that of any other article with which the imported article may be combined after importation. For example, if marked bottles, drums, or other containers are imported empty, to be filled in the United States, they shall be marked with such words as “Bottle (or drum or container) made in (name of country).” Labels and similar articles so marked that the name of the article’s country of origin is visible after it is affixed to another article in this country shall be marked with additional descriptive words such as “label made (or printed) in (name of country)” or words of similar import.
In any case in which the words “United States” or “American” or the letters “U.S.A.” or any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality in which the article was not manufactured or produced, appear on an imported article or container, and those words, letters, or names may mislead or deceive the ultimate purchaser about the actual country of the origin of the article, there shall also appear, legibly and permanently, in close proximity to such words, letters or name, the name of the country of origin preceded by the words “made in,” “product of,” or other words of similar meaning.
If marked articles are to be repacked in the United States after release from Customs custody, importers must certify on entry that they will not obscure the marking on properly marked articles if the article is repacked or that they will mark the repacked container. If the importers do not repack, but resell to re-packers, importers must notify the re-packers of the marking requirements. Failure to comply with the certification requirements may subject importers to penalties and/or additional duties.

The following articles and classes or kinds of articles are not required to be marked to indicate the country of their origin, i.e., the country in which they were grown, manufactured, or produced. However, the outermost containers in which these articles ordinarily reach the ultimate purchaser in the United States must be marked to indicate the English name of the country of origin of the articles.
Art, works of. Articles classified subheads 9810.00.15, 9810.00.25, 9810.00.40, and9810.00.45, HTSUS.
Articles entered in good faith as antiques and rejected as unauthentic.
Bagging, waste.
Bags, jute.
Bands, steel.
Beads, unstrung.
Bearings, ball, 5/8-inch or less in diameter.
Blanks, metal, to be plated.
Bodies, harvest hat.
Bolts, nuts, and washers.
Briarwood, in blocks.
Briquettes, coal or coke.
Buckles, 1 inch or less in greatest dimension.
Burlap.
Buttons.
Cards, playing.
Cellophane and celluloid in sheets, bands, or strips.
Chemicals, drugs, medicinals, and similar substances, when imported in capsules, pills, tablets, lozenges, or troches.
Cigars and cigarettes.
Covers, straw bottle.
Dies, diamond wire, unmounted.
Dowels, wooden.
Effects, theatrical.
Eggs.
Feathers.
Firewood.
Flooring, not further manufactured than planed, tongued and grooved.
Flowers, artificial, except bunches.
Flowers, cut.
Glass, cut to shape and size for use in clocks, hand, pocket, and purse mirrors, and other glass of similar shapes and size, not including lenses or watch crystals.
Glides, furniture, except glides with prongs.
Hairnets.
Hides, raw.
Hooks, fish (except snelled fish hooks).
Hoops (wood), barrel.
Laths.
Livestock.
Lumber, except finished.
Lumber, sawed.
Metal bars except concrete reinforcement bars, billets, blocks, blooms, ingots, pigs, plates, sheets, except galvanized sheets, shafting, slabs, and metal in similar forms.
Mica not further manufactured than cut or stamped to dimension, shape, or form.
Monuments.
Nails, spikes, and staples.
Natural products, such as vegetables, fruit, nuts, berries, and live or dead animals, fish and birds; all the foregoing which are in their natural state or not advanced in any manner further than is necessary for their safe transportation.
Nets, bottle wire.
Paper, newsprint.
Paper, stencil.
Paper, stock.
Parchment and vellum.
Parts, for machines imported from same country as parts.
Pickets (wood).
Pins, tuning.
Plants, shrubs, and other nursery stock. Plugs, tie.
Poles, bamboo.
Posts (wood), fence.
Pulpwood.
Rags (including wiping rags).
Rails, joint bars, and tie plates of steel.
Ribbon.
Rivets.
Rope, including wire rope, cordage, cords, twines, threads, and yarns.
Scrap and waste.
Screws.
Shims, track.
Shingles (wood), bundles of, except bundles of red-cedar shingles.
Skins, fur, dressed or dyed.
Skins, raw fur.
Sponges.
Springs, watch.
Stamps, postage and revenue, and government-stamped envelopes and postal cards bearing no printing other than the official imprint thereon.
Staves (wood), barrel.
Steel, hoop.
Sugar, maple.
Ties (wood), railroad.
Tiles, not over 1 inch in greatest dimension.
Timbers, sawed.
Tips, penholder.
Trees, Christmas.

Unless an article being shipped to the United States is specifically named in the foregoing list, it would be advisable for an exporter to obtain advice from U.S. Customs before concluding that it is exempted from marking. If articles on the foregoing list are repacked in the United States, the new packages must be labeled to indicate the country of origin of the articles contained therein. Importers must certify on entry that, if they repackage, they will properly mark the repackaged containers; if they do not package, but resell to repackagers, notification of the marking requirements will be given to such repackagers. Failure to comply with the certification requirements may subject importers to penalties and marking duties.

The following classes of articles are also excepted from marking to indicate the country of their origin. (The usual container in which one of these articles is imported will also be excepted from marking.)
– An article imported for use by the importer and not intended for sale in its imported or any other form.
– An article which is to be processed in the United States by the importer or for his account otherwise than for the purpose of concealing the origin of the article and in such manner that any mark of origin would necessarily be obliterated, destroyed, or permanently concealed.
– An article with respect to which an ultimate purchaser in the United States, by reason of the character of the article, or by reason of the circumstances of its importation, must necessarily know the country of origin even though the article is not marked to indicate its origin. The clearest application of this exemption is when the contract between the ultimate purchaser in the United States and the supplier abroad insures that the order will be filled only with articles grown, manufactured, or produced in a named country.
– Weights, analytical and precision, in sets. Wicking, candle. Wire, except barbed.

The following classes of articles are also excepted from marking to indicate the country of their origin:
– Articles that are incapable of being marked.
– Articles that cannot be marked prior to shipment to the United States without injury.
– Articles that cannot be marked prior to shipment to the United States, except at an expense economically prohibitive of their importation.
– Articles for which the marking of the containers will reasonably indicate the origin of the articles.
– Crude substances.
– Articles produced more than 20 years prior to their importation into the United States.
– Articles entered or withdrawn from warehouse for immediate exportation or for transportation and exportation.

Although such articles are exempted from marking to indicate their country of origin, the outermost containers in which the articles will ordinarily reach the ultimate purchaser in the United States must be marked to show the country of origin of such articles.
When marking the article’s container will reasonably indicate the article’s country of origin, the article itself may be exempt from such marking. This exemption applies only when the articles will reach the ultimate purchaser in an unopened container. For example, articles which reach the retail purchaser in sealed containers marked clearly to indicate the country of origin come within this exception. Materials to be used in building or manufacture by the builder or manufacturer who will receive the materials in unopened cases likewise come within the exemption. The following articles, as well as their containers, are excepted from marking to indicate the country of their origin:
– Products of American fisheries that are free of duty.
– Products of possessions of the United States.
– Products of the United States exported and returned.
– Articles valued at not more than $200 (or $100 for bona fide gifts) that are passed without entry.

Special country-of-origin marking rules for goods of a NAFTA country are addressed in Customs publication No. 571, NAFTA: A Guide to Customs Procedures.
Special Marking Requirements
The country of origin marking requirements are separate and apart from any special marking or labeling required on specific products by other agencies. It is recommended that the specific agency be contacted for any special marking or labeling requirements.
Certain articles are subject to special country of origin marking requirements: Iron and steel pipe and pipe fittings; manhole rings, frames, or covers; and compressed gas cylinders must generally be marked by one of four methods: die-stamped, cast-in-mold lettering, etching (acid or electrolytic) or engraving. In addition, none of the exceptions from marking discussed above are applicable to iron and steel pipe and pipe fittings.
The following articles and parts thereof shall be marked legibly and conspicuously to indicate their origin by die-stamping, cast-in-the-mold lettering, etching (acid or electrolytic), engraving, or by means of metal plates that bear the prescribed marking and that are securely attached to the article in a conspicuous place by welding, screws, or rivets:
Knives, clippers, shears, safety razors, surgical instruments, scientific and laboratory instruments, pliers, pincers, and vacuum containers.
Watch movements are required to be marked on one or more of the bridges or top plates to show (1) the name of the country of manufacture, (2) the name of the manufacturer or purchaser, and (3) in words, the number of jewels, if any, serving a mechanical purpose as frictional bearings.
Clock movements shall be marked on the most visible part of the front or back plate to show (1) the name of the country of manufacture, (2) the name of the manufacturer or purchaser, and (3) the number of jewels, if any.
Watch cases shall be marked on the inside or outside of the back cover to show (1) the name of the country of manufacture, and (2) the name of the manufacturer or purchaser.
Clock cases and other cases provided for in Chapter 91, HTSUS, are required to be marked on the most visible part of the outside of the back to show the name of the country of manufacture.
The terms “watch movement” and “clock movement” refer to devices regulated by a balance wheel and hairspring, quartz crystal, or any other system capable of determining intervals of time, with a display or system to which a mechanical display can be incorporated. “Watch movements” include devices that do not exceed 12 mm in thickness and 50 mm in width, length, or diameter; “clock movements” include devices that do not meet the watch movement dimensional specifications. The term “cases” includes inner and outer cases, containers, and housings for movements, together with parts or pieces, such as, but not limited to, rings, feet, posts, bases, and outer frames, and any auxiliary or incidental features, which (with appropriate movements) serve to complete the watches, clocks, time switches, and other apparatus provided for in Chapter 91, HTSUS.
Articles required to be marked in accordance with the special marking requirements in Chapter 91 must be conspicuously and indelibly marked by cutting, die-sinking, engraving, stamping, or mold-marking. Articles required to be so marked shall be denied entry unless marked in exact conformity with these requirements.
Movements with opto-electronic display only and cases designed for use therewith, whether entered as separate articles or as components of assembled watches or clocks, are not subject to the special marking requirements. These items need only be marked with the marking requirements of 19 U.S.C. 1304.
Parts of any of the foregoing not including those above mentioned.
In addition to the special marking requirements set forth above, all watches of foreign origin must comply with the usual country of origin marking requirements. Customs considers the country of origin of watches to be the country of manufacture of the watch movement. The name of this country should appear either on the outside back cover or on the face of the dial.
Title IV of the Tariff Suspension and Trade Act of 2000 (P.L. 106-476), also known as the Imported Cigarette Compliance Act of 2000, imposes special requirements on the importation of cigarettes and other tobacco products. Importers of cigarettes or other tobacco products are urged to contact the United States port of entry at which their merchandise will arrive for information about the new requirements.
Marking ? False Impression
Section 42 of the Trademark Act of 1946 (15 U.S.C. 1124) provides, among other things, that no imported article of foreign origin which bears a name or mark calculated to induce the public to believe that it was manufactured in the United States, or in any foreign country or locality other than the country or locality in which it was actually manufactured, shall be admitted to entry at any customhouse in the United States.
In many cases, the words “United States,” the letters “U.S.A.,” or the name of any city or locality in the United States appearing on an imported article of foreign origin, or on the containers thereof, are considered to be calculated to induce the public to believe that the article was manufactured in the United States unless the name of the country of origin appears in close proximity to the name which indicates a domestic origin.
Merchandise discovered after conditional release to have been missing a required country of origin marking may be ordered redelivered to Customs custody. If such delivery is not promptly made, liquidated damages may be assessed against the Customs bond. (See 19 CFR 141.113[a]; cf., 19 CFR Part 172 and Customs Form 4647.)
An imported article bearing a name or mark prohibited by Section 42 of the Trademark Act is subject to seizure and forfeiture. However, upon the filing of a petition by the importer prior to final disposition of the article, the port director of Customs may release it upon the condition that the prohibited marking be removed or obliterated or that the article and containers be properly marked; or the port director may permit the article to be exported or destroyed under Customs supervision and without expense to the government.
Section 43 of the Trademark Act of 1946 (15 U.S.C. 1125) prohibits the entry of goods marked or labeled with a false designation of origin or with any false description or representation, including words or other symbols tending to falsely describe or represent the same. Deliberate removal, obliteration, covering, or altering of required country-of-origin markings after release from Customs custody is also a crime punishable by fines and imprisonment (19 U.S.C. 1304[1]).

Textile Products. All textile fiber products imported into the United States shall be stamped, tagged, labeled, or otherwise marked with the following information as required by the Textile Fiber Products Identification Act, unless exempted from marking under Section 12 of the Act:
– The generic names and percentages by weight of the constituent fibers present in the textile fiber product, exclusive of permissive ornamentation, in amounts of more than five percent, in order of predominance by weight, with any percentage of fiber or fibers required to be designated as “other fiber”, or “other fibers” appearing last. Fibers present in amounts of five percent or less must be designated as “other fibers.”
– The name of the manufacturer or the name or registered identification number issued by the Federal Trade Commission of one or more persons marketing or handling the textile fiber product. A word trademark, used as a house mark, registered in the United States Patent Office, may be used on labels in lieu of the name otherwise required, if the owner of such trademark furnishes a copy of the registration to the Federal Trade Commission prior to use.
– The name of the country where processed or manufactured.
In order to enforce the Textile Fiber Products Identification Act, a commercial invoice covering a shipment of textile fiber products exceeding $500 in value and subject to the labeling requirements of the Act is required to show the information noted in Chapter 10, in addition to the information ordinarily required on the invoices.
In addition to labeling requirements, the importation of textiles and textile products may, pursuant to Section 204 of the Agricultural Act of 1956, be subject to quota, visa or export-license requirements and additional entry requirements including declarations identifying the fabricated components.
Regulations and pamphlets containing the text of the Textile Fiber Products Identification Act may be obtained from the Federal Trade Commission, Washington, DC 20580.
Wool. Any product containing woolen fiber imported into the United States, with the exception of carpet, rugs, mats, upholsteries, and articles made more than 20 years prior to importation, shall be tagged, labeled, or otherwise clearly marked with the following information as required by the Wool Products Labeling Act of 1939:
– The percentage of the total fiber weight of the wool product, exclusive of ornamentation not exceeding five percent of the total fiber weight, of: (1) wool, (2) recycled wool, (3) each fiber other than wool if the percent by weight of such fiber is five percent or more, and (4) the aggregate of all other fibers.
– The maximum percent of the total weight of the wool product, of any nonfibrous loading, filling, or adulterating matter.
– The name of the manufacturer or person introducing the product into commerce in the United States; i.e., the importer. If the importer has a registered identification number issued by the Federal Trade Commission, that number may be used instead of the individual’s name.
For the purpose of enforcing the Wool Products Labeling Act, a commercial invoice covering a shipment of wool products exceeding $500 in value and subject to the labeling requirements of the act is required to show the information noted in Chapter 10.
The provisions of the Wool Products Labeling Act apply to products manufactured in the United States as well as to imported products.
Pamphlets containing the text of the Wool Products Labeling Act and the regulations may be obtained from the Federal Trade Commission, Washington, DC 20580.
Fur. Any article of wearing apparel imported into the United States and made in whole or in part of fur or used fur, with the exception of articles made of new fur of which the cost or manufacturer’s selling price does not exceed $7, shall be tagged, labeled, or otherwise clearly marked to show the following information as required by the Fur Products Labeling Act:
– The name of the manufacturer or person introducing the product into commerce in the United States; i.e., importer. If the importer has a registered identification number, that number may be used instead of the individual’s name.
– The name or names of the animal or animals that produced the fur as set forth in the Fur Products Name Guide and as determined under the rules and regulations.
– That the fur product contains used or damaged fur where such is the fact.
– That the fur product is bleached, dyed, or otherwise artificially colored when such is the fact.
– That the fur product is composed in whole or in substantial part of paws, tails, bellies, or waste fur when such is the fact.
– The name of the country of origin of any imported furs contained in a fur product.
For the purpose of enforcing the Fur Products Labeling Act, a commercial invoice covering a shipment of furs or fur products exceeding $500 in value is required to show the information noted in Chapter 10.
Dog or cat fur. The importation, exportation, transportation, distribution, or sale of any product that consists, or is composed in whole or in part, of any dog fur, cat fur, or both, is prohibited. Any such product that is imported, exported, transported, distributed, or sold will be seized and forfeited, and penalties may be imposed against any person who violates this law. In addition, anyone found to have violated this prohibition may be barred from importing or exporting any fur product. This prohibition does not apply to the importation, exportation, or transportation, for noncommercial purposes, of personal pets that are deceased, including a pet preserved through taxidermy.
The provisions of the Fur Products Labeling Act apply to fur and fur products in the United States as well as to imported furs and fur products. Regulations and pamphlets containing the text of the Fur Products Labeling Act may be obtained from the Federal Trade Commission, Washington, DC 20580.

(Excerpts from an article by George R. Tuttle Law Offices)

If your merchandise is being entered under a ‘parts’ or ‘accessories’ classification, be careful; that may be incorrect and could cause problems on a Customs audit. We can help.
Importers have a legal responsibility to exercise reasonable care when classifying merchandise and making entry under the Customs Modernization Act of 1993. For assistance in classifying your merchandise, please contact us.
On March 5, 2002, the Court of Appeals for the Federal Circuit affirmed an important “parts and accessories” decision by the Court of International Trade in Rollerblade v. U.S., Slip op. 01-1049.
Rollerblade, Inc. imported protective gear designed, tested, manufactured, and marketed expressly for use with in-line roller skates. On entry, the company classified the protective gear as an “accessory” to its in-line skates under subheading 9506,70.2090, free of duty. Customs rejected the “accessory” claim and re-classified the protective gear as residual “other” sports equipment under subheading 9506.99.6080 at a duty rate of 4% ad valorem. Rollerblade protested the change in classification, but Customs denied the protest. Rollerblade then contested the denial of the protest before the Court of International Trade, arguing that Customs erred in its interpretation of the scope of the term “accessory”.
In affirming Customs’ classification of the protective gear, the Court of International Trade said that the dictionary definition of the term “accessory” restricted the term to items that relate “of” or “to” the main article with which they are used. The Court concluded the protective gear did not satisfy the definition required to be considered “accessories” of the in-line skates because they did not bear a direct relationship to the skates; the protective gear fastened to the person, not the skates. The Court further noted that the protective gear was only related to the activity of skating, and not the skates themselves and determined they were, therefore, properly classified under the residual “other” sports equipment provision in subheading 9506.99.
On appeal, Rollerblade argued the protective gear might constitute a “part”. The Court of Appeals for the Federal Circuit however, defined a “part” as “an essential element or constituent integral portion of the whole, but which can be separated, replaced, etc”. Webster’s New World Dictionary 984 (3d College Ed. 1988). The Court concluded that the term “part”, like the term “accessory”, must have a direct relationship to the primary article, rather than to the general activity in which the primary article is used.
Like Rollerblade, some importers and brokers often classify imported articles under a provision for parts and accessories for the article with which they are used. Under the Rollerblade decision, however, this classification may be incorrect unless the imported article relates directly to the main article with which it is intended to be used, or is an essential element to the article with which it will be used, but which can be separated and/or replaced. If the imported merchandise does not meet this test, then it is likely that the article should be classified elsewhere.

On March 28, 2003, The United States Patent and Trademark Office (the ?PTO?) published the most sweeping changes in the U.S. Trademark laws in more than 20 years. As of November 2, 2003, U.S. trademark owners can rely upon their domestic registrations or applications to file a single ?international? application seeking simultaneous registration in over 57 countries. In addition, existing owners of international registrations can ?extend? those registrations to the United States to secure all of the rights of U.S. trademark registration, even without ever using their brand names in this country.

– If you import products into the United States you must make sure that you have the right to use the brand name in the domestic marketplace, that you are properly licensed by the international trademark owner, that the license is recorded with both Customs and the Trademark Office and that the international trademark owner has done everything possible to protect your territorial rights in the domestic marketplace.
– If you currently own a brand name in the United States, you must examine your operating business structure, existing licensees and distribution agreements, Customs and Trademark Office recordation?s and your current intellectual property portfolio to determine whether you can benefit from the newest basis for international registration of your brand name and/or whether you are adequately protected in both the United States and other countries of manufacture, distribution, import or export.
– If you export goods for distribution in the United States, you must ensure U.S. trademark registration and learn whether your current business operations will allow you to rely upon that U.S. registration to seek international registrations that would not otherwise be available to you. You should also secure Customs recordation?s of all application licensing, manufacturing and distribution rights.