How to Import into the U.S.How to Import into the U.S.

Presented byPresented byChas W. Watson Chas W. Watson LCB, CCSLCB, CCS

What we will cover:What we will cover:

-’Inco terms’ and why they are important-’Inco terms’ and why they are important

-Basic documentation-Basic documentation

-The HTSUS and classification -The HTSUS and classification

-The ‘mechanics’ of an import transaction-The ‘mechanics’ of an import transaction

-NAFTA and other special trade provisions-NAFTA and other special trade provisions

-Informed Compliance and Reasonable Care-Informed Compliance and Reasonable Care

-Marking and other issues-Marking and other issues

-Embargos and Sanctions-Embargos and Sanctions

-Security-Security

-New/Pending Issues-New/Pending Issues

Inco termsInco termsMode of Transport and the Appropriate Inco term 1990Mode of Transport and the Appropriate Inco term 1990

ANY MODE OF EXW Ex Works (…Named Place)ANY MODE OF EXW Ex Works (…Named Place)

TRANSPORT TRANSPORT FCAFCA Free Carrier (…Named Place) Free Carrier (…Named Place)

INCLUDINGINCLUDING CPTCPT Carriage Paid to (…Named place of destination) Carriage Paid to (…Named place of destination)

MULTIMODALMULTIMODAL CIP Carriage and Insurance paid to place of destination)CIP Carriage and Insurance paid to place of destination)

DAF DAF Delivered at Frontier (…Named Place) Delivered at Frontier (…Named Place)

DDUDDU Delivered Duty Unpaid (…Named Place of destination) Delivered Duty Unpaid (…Named Place of destination)

DDPDDP Delivered Duty Paid (…Named place of destination) Delivered Duty Paid (…Named place of destination)

AIR TRANSPORTAIR TRANSPORT FCA FCA Free Carrier (…Named Place) Free Carrier (…Named Place)

RAILRAIL FCA FCA Free Carrier (…Named Place)Free Carrier (…Named Place)

TRANSPORTTRANSPORT

SEA AND INLANDSEA AND INLAND FASFAS Free Alongside Ship (…Named Port of shipment) Free Alongside Ship (…Named Port of shipment)

WATERWAYWATERWAY FOBFOB Free on Board (…Named Port of shipment) Free on Board (…Named Port of shipment)

TRANSPORTTRANSPORT CFR CFR Cost and Freight (…Named Port of destination) Cost and Freight (…Named Port of destination)

CIFCIF Cost, Insurance and Freight (..Named port of Cost, Insurance and Freight (..Named port of destination)destination)

DESDES Delivered Ex Ship (…Named Port of destination) Delivered Ex Ship (…Named Port of destination)

Basic Basic DocumentationDocumentation

1. Commercial Invoice1. Commercial Invoice

2. Packing List2. Packing List

3. Shipping Documents3. Shipping Documents

4. Insurance Certificate 4. Insurance Certificate

What is your classification/What is your classification/ rate of duty? rate of duty?

1. Found in HTSUS1. Found in HTSUS 2. Role of a Customs Broker2. Role of a Customs Broker 3. Caution-Your supplier may be 3. Caution-Your supplier may be

giving you incorrect information!giving you incorrect information! 4. Binding Rulings4. Binding Rulings

Order your ProductOrder your Product Use a Purchase Order, not just an e-mail. This PO Use a Purchase Order, not just an e-mail. This PO

should cover:should cover:

Terms-EXW, FOB Cover with own insurance. CIF, Terms-EXW, FOB Cover with own insurance. CIF, DDP, DDU, Shipper covers.DDP, DDU, Shipper covers.

Who to ship by, name of forwarder?Who to ship by, name of forwarder?

Who to consign to?Who to consign to?

What document to prepare & where to send?What document to prepare & where to send?

Methods of PaymentMethods of Payment 1. Cash in Advance1. Cash in Advance

2. Open Account2. Open Account

3. Bank Draft3. Bank Draft

4. International Irrevocable Letter of Credit 4. International Irrevocable Letter of Credit

Note: In many cases you may be required to pay for Note: In many cases you may be required to pay for the product before the supplier will ‘release’ the the product before the supplier will ‘release’ the Bill of Lading to you. Bill of Lading to you.

Typical Air Freight ImportTypical Air Freight Import

Ship per your purchase order either by Ship per your purchase order either by your chosen forwarder (FOB or EXW) or your chosen forwarder (FOB or EXW) or their forwarder (CIF,DDP)their forwarder (CIF,DDP)

Document distribution simpleDocument distribution simple Moves from airport to airportMoves from airport to airport Less handling=Good thingLess handling=Good thing Pick up documents upon notificationPick up documents upon notification File entry/obtain Customs releaseFile entry/obtain Customs release Delivery via truckDelivery via truck

Typical Ocean ImportTypical Ocean Import

Ship per your purchase orderShip per your purchase order Document distribution/proceduresDocument distribution/procedures In-bond/Paired/’Outport’/RLFIn-bond/Paired/’Outport’/RLF Payment of THC/Collect Payment of THC/Collect

Freight/Loading chargesFreight/Loading charges Lots of handlingLots of handling Exams! VACIS/APHIS/Tailgate/Full Exams! VACIS/APHIS/Tailgate/Full

strip/Radiationstrip/Radiation

Entry ProcessEntry Process CBP3461 Entry/Immediate DeliveryCBP3461 Entry/Immediate Delivery Delivery OrderDelivery Order CBP7501CBP7501 OGA’s!OGA’s! Payment of dutyPayment of duty CF28/29CF28/29 LiquidationLiquidation

Methods of reducing duty Methods of reducing duty liabilityliability

TIBTIB CarnetsCarnets Warehouse EntryWarehouse Entry Foreign Trade ZoneForeign Trade Zone Duty DrawbackDuty Drawback

Informed Compliance & Informed Compliance & Reasonable CareReasonable Care

Q.-How to stay compliant???Q.-How to stay compliant??? Have a reliable Customs brokerHave a reliable Customs broker Communicate with your brokerCommunicate with your broker Importer is responsible! Importer is responsible! Multiple Multiple

brokers/Ports=Consistency brokers/Ports=Consistency concernsconcerns

Informed Compliance & Informed Compliance & Reasonable CareReasonable Care

Record keeping Record keeping think taxes(5 years)think taxes(5 years)

Country of origin Country of origin marking each marking each imported article produced abroad to be marked in imported article produced abroad to be marked in a conspicuous place as legibly, indelibly, and a conspicuous place as legibly, indelibly, and permanently as the nature of the article permits, permanently as the nature of the article permits, with the English name of the country of origin, to with the English name of the country of origin, to indicate to the ultimate purchaser in the U.S. the indicate to the ultimate purchaser in the U.S. the name of the country in which the article was name of the country in which the article was manufactured or produced.manufactured or produced.

Special Tariff ProvisionsSpecial Tariff Provisions

NAFTA-CA and MXNAFTA-CA and MX GSPGSP Other FTA-(IL, D, E, J, JO,MA, etc)Other FTA-(IL, D, E, J, JO,MA, etc) Returned Goods of U.S. originReturned Goods of U.S. origin Foreign Goods returned after repairForeign Goods returned after repair

FTA Key PointsFTA Key Points

Qualification CriteriaQualification Criteria Direct shipmentDirect shipment Proper markingProper marking Penalties for incorrect informationPenalties for incorrect information Country of shipment is not always Country of shipment is not always

the country of origin!the country of origin!

NAFTA ‘CERT’NAFTA ‘CERT’

NAFTA CriteriaNAFTA Criteria

ValuationValuation Method of payment Method of payment Terms of saleTerms of sale Assists/rebates/royaltiesAssists/rebates/royalties Relationship to shipper/sellerRelationship to shipper/seller Keep your transaction documentedKeep your transaction documented

Other Customs IssuesOther Customs Issues

TextilesTextiles Quota/Visa restrictionsQuota/Visa restrictions Firearms/munitionsFirearms/munitions Anti-dumping/Countervailing dutyAnti-dumping/Countervailing duty Special steel remedySpecial steel remedy Embargoed goodsEmbargoed goods

SomeSome current trade current trade Embargos/SanctionsEmbargos/Sanctions

CubaCuba IranIran North KoreaNorth Korea SudanSudan SyriaSyria BurmaBurma/Myanmar /Myanmar Note: Not all articles or all trade, but you need to perform due Note: Not all articles or all trade, but you need to perform due

diligence before you engage in tradediligence before you engage in trade

SecuritySecurity C-TPATC-TPAT Expand the bordersExpand the borders Know your supplierKnow your supplier Report suspicious activityReport suspicious activity 10+2 (Importer Security Filing)10+2 (Importer Security Filing)

New/Pending IssuesNew/Pending Issues

First Sale/Earlier SaleFirst Sale/Earlier Sale Softwood Lumber Act 2008Softwood Lumber Act 2008

Questions?Questions?