Challenges Dealing with Customs on Import Issues

Presented By:Robin Grove

Parties presenting todayPresenters:

Robin Grove- Licensed Customs broker/Freight Forwarder Importation 101 Examinations: Cause and Effect

CBP- Naveeda Merza/Glen Fox- Agriculture supervisors Customs exam process Wood Packaging Hitch hiker Pests

Western Maritime- Carlos Ramirez- Availability process Driver Challenges Trouble shooting

Importation 101

What is a Customs Broker, and how do they facilitate the process?

What is a International freight forwarder? The Maritime Lego set and It’s parts Incoterms and shipping language Acronyms Examinations- Cause and effect

What Do Customs Brokers Do?Customs Broker: The import Specialist

The customs broker is a highly-trained import professional. Licensed by the U.S. Department of the Treasury and homeland security, the customs broker must possess thorough knowledge of tariff schedules and Customs regulations and keep abreast of the amendments made through constant changes in the law and administrative regulations.

The complexity of the job is evident when one considers that for every shipment entering the United States there is an official greeting: 500 pages of Customs regulations and thousands of tariff items. The broker must be well-versed in determining proper classifications and dutiable value, and be fully aware of the vast number regulatory agencies that must be adhered to.

The broker's operation often transcends Customs, calling for contact with over 40 other government agencies, such as the U.S. Department of Agriculture (USDA) on meat importation, the Environmental Protection Agency (EPA) on vehicle emission standards or the Food and Drug Administration (FDA) on product safety.

The job does not stop there, the customs broker is also asked to act in behalf of an importer to be the traffic coordinator and documentation conduit between the Steamship lines, airlines, ports, truckers and other entities. Customs brokers are facilitating payments to various parties during the transaction and transportation.

The broker is often then requested to send one invoice with itemized costs incurred, but requests a return of funds upon delivery to the importer. This outlay of money is normally done as a courtesy as brokers are not financial institutions.

What Do Freight Forwarders Do?Freight Forwarder: Transportation Architect

The international freight forwarder is popularly known as the "Transport Architect." Ocean freight forwarders are licensed by the Federal Maritime Commission (FMC). International air cargo agents are accredited by the International Air Transportation Association (IATA).

The freight forwarding professional advises clients of the best rates, routings and modes of transporting goods to or from any area in the world. Using the vast resources at their disposal, forwarders find the "right match" of services available so that products are moved by the most timely and cost-effective means. The large volume of freight handled by forwarders gives them advantages not always available to either individual shippers or integrated carriers.

The professional forwarder is also aware of the ever-changing regulations affecting cargo movements, such as foreign documentation requirements, hazardous materials rules, U.S. government regulations, special packaging or handling restrictions, and any applicable licensing provisions.

"Customized" services to fit the clients' operational needs are the forwarder's specialty. Forwarders coordinate arrangements for storage, pick-and-pack operations, consolidations or full-container movements as well as inland transportation to provide clients with true door-to-door service. From assisting with initial quotations or preparation of pro-forma invoices, the banking clients' documents for collection, the full-service, professional freight forwarder is the most reliable partner one can have in international trade.

The Maritime Lego Set

The Maritime Lego set and Its parts.

Basic Parts- 1) Steamship Lines- Owns- Vessels, containers, chassis and other various

equipment, and have the responsibility to document and report to the governmental agencies all cargo stowed on their vessels. They must also provide proof of disposition of customs clearance and release from all other agencies. Lines are responsible for confirmed release of goods as instructed by the shipper to secure goods payment. They also must plan their vessels accordingly to maximize weight distribution, organize strategic port loading and unloading vessel stowage. They are responsible to obtain port agreements for labor, and payment of city fees and demurrage.

2) Ports- Local tariffs, city income, and legislative responsibility. 3) Terminal Operators- organize union labor, and work for the steamship line to

check in/release cargo as above obligations, and are subcontracted by the lines. 4) Labor- Union- ILWU- ILA etc 5) Intermodal Transportation- Railroads, motor carriers, barges. 6) Government- Rules, regulations, and security concerns.

The Maritime Lego set and Its parts.

Basic Parts- 1) Steamship Lines- Owns- Vessels, containers, chassis and other various

equipment, and have the responsibility to document and report to the governmental agencies all cargo stowed on their vessels. They must also provide proof of disposition of customs clearance and release from all other agencies. Lines are responsible for confirmed release of goods as instructed by the shipper to secure goods payment. They also must plan their vessels accordingly to maximize weight distribution, organize strategic port loading and unloading vessel stowage. They are responsible to obtain port agreements for labor, and payment of city fees and demurrage.

2) Ports- Local tariffs, city income, and legislative responsibility. 3) Terminal Operators- organize union labor, and work for the steamship line to

check in/release cargo as above obligations, and are subcontracted by the lines. 4) Labor- Union- ILWU- ILA etc 5) Intermodal Transportation- Railroads, motor carriers, barges. 6) Governmental Rules, regulations, and security concerns.

Vessel at birth discharging containers.

On Dock facility

Container stacks waiting for chassis or export loads.

BASIC INCOTERMS-

EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.The seller will not contract for any transportation.

International Carriage NOT Paid by Seller

FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded.This term can be used for any mode of transport.

FAS - Free Alongside Ship, named ocean port of shipment.Ocean shipments that are NOT containerized.

FOB - Free On Board vessel, named ocean port of shipment.This term is used for ocean shipments only where it is important that the goods pass the ship's rail.

• International Carriage Paid by the Seller

CFR - Cost and Freight, Named ocean port of destination.This term is used for ocean shipments that are not containerized.

CIF - Cost, Insurance and Freight, named ocean port of destination.This term is used for ocean shipments that are not containerized.

CPT - Carriage Paid To, named place or port of destination.This term is used for air or ocean containerized and roll-on roll-off shipments.

CIP - Carriage and Insurance Paid To, named place or port of destination.This term is used for air or ocean containerized and roll-on roll-off shipments.

Arrival At Stated Destination

• DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.This term is used for any mode of transportation.

DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.This term is used for any mode of transportation.

EXW FCA FAS FOB CFR CIF CPT CIP DAF DES DEQ DDU DDP

SERVICES

Ex WorksFree

Carrier

Free Alongside Ship

Free Onboard Vessel

Cost & Freight

Cost Insurance & Freight

Carriage Paid To

Carriage Insurance

Paid To

Delivered At Frontier

Delivered Ex Ship

Delivered Ex Quay

Duty Unpaid

Delivered Duty

Unpaid

Delivered Duty Paid

Warehouse Storage

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Warehouse Labor

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Export Packing

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Loading Charges

Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Inland Freight

BuyerBuyer/Seller*

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Terminal Charges

Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Forwarder's Fees

Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller

Loading On Vessel

Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Ocean/Air Freight

Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller

Charges On Arrival At Destination

Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Buyer Buyer Seller Seller Seller

Duty, Taxes & Customs Clearance

Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller

Delivery To Destination

Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller

Incoterms 2000 Chart of responsibility

Freight Acronyms• O/F- Ocean Freight• Baf- bunker adjustment factor• Caf- currentcy adjustment factor• Thc- Terminal handling charge• AMS- Automated manifest system• CUC- Chassis usage surcharge• GRI- General rate increase• PSS- Peak season surcharge• ISF-Importer security filing• o/w- Overweight surcharge• ETD- Estimated time of departure• ETA- Estimated time of arrival• MLB- Mini Land Bridge• TEU- Twenty foot equivalent unit• ACE- Automated customs Environment• PMS- Periodic monthly statement• C-TPAT- Customs Trade Partnership against Terrorism• Twic-Transportation worker Identification credential• Flip- Crane movement to transfer an overweight container from one chassis to another.• Vacis- Vehicle and cargo inspection team (movable x-ray machine)

Examinations-Cause and EffectSection 484 of the Tariff Act (19 U.S.C 1484)- The importer of record is responsible for using reasonable care to enter, classify and determine the value of

imported merchandise and to provide any other information necessary to enable the CBP to assess duties properly, collect accurate statistics, and determine whether other applicable legal requirements, if any, have been met.

The objective, U.S. Customs and Border Protection Commissioner Alan Bersin has said to his leadership, is to make U.S. business “as successful as possible” Because there is no national security without economic security”

Examinations- Cause and effect ISF: Import Security Filing (10+2)1. Importer of Record #2. Consignee3. Buyer (Owner)4. Seller (Owner)5. Ship to Parties6. Manufacturer (Supplier)7. Country of origin8. HTS Codes9. Consolidator (Stuffer)10. Container Stuffing Location

Suggestions to the Exporter/ Importer for Faster Clearance of Your Merchandise

1. Include all information required on your commercial /customs invoices. Piece count and container # should be declared and match the bill of lading.

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

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

4. Show a detailed description on your invoice of each item of merchandise contained in your shipment with country of origin (manufacture).

5. Comply with the provisions of any special laws of the United States that may apply to your goods. Ie- Lacy Act, Solid wood packaging material, Country of origin marking etc.

6. Mark your goods legibly and conspicuously with the country of origin.7. Fumigate containers if possible, especially during the winter months.8. Establish sound security procedures at your facility and while transporting your

goods for shipment. Do not give narcotic smugglers the opportunity to introduce narcotics into your shipment.

C-TPAT- Customs Trade Partnership Against Terrorism-

Record Keeping and ComplianceC-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S Border security. A reduced number of CBP inspections- x-ray/Compliance. Priority processing for CBP inspections. Assignment of a C-TPAT Supply Chain security Specialist (SCSS) who will work with the company to

validate and enhance security throughout the company’s international supply chain. Eligibility to attend C-TPAT supply chain security training seminars.

Record Keeping and Compliance-Record Keeping-As a general rule, any record required to be made, kept and rendered for examination or

inspection under Part 163 must be keep to 5 year from the date of entry.Compliance- On Dec 8. 1993 Title VI of the North American Free Trade Agreement Implementation Act,

also known as the Customs Modernization or “Mod Act” became effective.Two new concepts that emerged from this act are “ informed compliance” and “shared responsibility”

which are premised on the idea that in order to maximize voluntary compliance with laws and regulations of CBP, the trade community needs to be completely and clearly informed of it’s legal obligations. In addition the Mod Act imposes a greater obligation on CBO to provide the public with outreach and information.

Importation Made Simple• As you can see. Importing foreign goods can

be simple with the right partners. Make sure to contact us prior to purchase of your foreign goods. This will enable you to properly navigate the waters with professional guidance.

• Thank you

Robin GroveMasterpiece International 310 872-0000 cell310 534-0430 home office