Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 54 views

    International Trade

    Uploaded by

    nkhokha3931
    The document discusses the basics of international trade and importation processes. It outlines the key steps in the importation process including purchasing goods from abroad, shipping, receiving goods, paying suppliers, and distributing finished goods. It also covers important related topics like customs implications, assigning customs compliance tasks, moving goods across borders per NAFTA and Mexican regulations, tariff classification, country of origin marking, communications, and fixing mistakes. Maintaining accurate records and coordinating with brokers is important for legal compliance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    International Trade

    Uploaded by

    nkhokha3931
    54 views21 pages
    The document discusses the basics of international trade and importation processes. It outlines the key steps in the importation process including purchasing goods from abroad, shipping, receiving goods, paying suppliers, and distributing finished goods. It also covers important related topics like customs implications, assigning customs compliance tasks, moving goods across borders per NAFTA and Mexican regulations, tariff classification, country of origin marking, communications, and fixing mistakes. Maintaining accurate records and coordinating with brokers is important for legal compliance.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses the basics of international trade and importation processes. It outlines the key steps in the importation process including purchasing goods from abroad, shipping, receiving goods, paying suppliers, and distributing finished goods. It also covers important related topics like customs implications, assigning customs compliance tasks, moving goods across borders per NAFTA and Mexican regulations, tariff classification, country of origin marking, communications, and fixing mistakes. Maintaining accurate records and coordinating with brokers is important for legal compliance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    54 views21 pages

    International Trade

    Uploaded by

    nkhokha3931
    The document discusses the basics of international trade and importation processes. It outlines the key steps in the importation process including purchasing goods from abroad, shipping, receiving goods, paying suppliers, and distributing finished goods. It also covers important related topics like customs implications, assigning customs compliance tasks, moving goods across borders per NAFTA and Mexican regulations, tariff classification, country of origin marking, communications, and fixing mistakes. Maintaining accurate records and coordinating with brokers is important for legal compliance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 21

    International Trade Basics

    FOCUS Business Solutions, Inc.


    Offshore Manufacturing Summit
    San Carlos, MX
    October 19-20, 2006
    Topics
    • Overview of importing process
    • Customs implications
    • Assigning task of customs compliance
    • Moving raw materials and goods
    – Southbound
    – Northbound
    • Customs Border & Protection (CBP)
    • Harmonized tariff classification
    • NAFTA
    • ADW’s
    • Country of origin marking
    • Communications
    • Fixing mistakes
    Executive Level View of an Importation

    • Foreign purchase
    • Purchase order issued
    • Goods are shipped
    • Goods are received
    • Payment made to foreign supplier
    • Finished goods shipped to customer

    Departments involved: Engineering, purchasing, logistics,


    shipping/receiving, accounts payable…
    Customs Implications
    • Foreign purchase
    – Trade program requirements must be met
    • Purchase order issued
    – Dutiable assists must be declared
    • Goods are shipped
    – Freight charges can reduce duties owed
    – Importer must hire a customshouse broker
    • Goods are received
    – Overages/shortages
    • Payment made to foreign supplier
    – Amount paid or payable
    • Finished goods shipped to customers
    – Duty Drawback
    Assigning the Task of Customs Compliance

    • Knowledge is required for other disciplines:


    – Engineering
    – Purchasing
    – Logistics
    – Accounting/Finance
    • Knowledge required for Customs compliance:
    – Experience, Experience, Experience
    • Customs laws and regulations
    • Harmonized tariff classification
    • Trade programs
    Moving Raw Materials and Goods

    • Southbound to Mexico
    – Raw materials are consolidated by The Offshore
    Group
    – Offshore prepares necessary paperwork to submit
    to Mexican customs broker
    – Offshore in conjunction with Mexican broker
    assign harmonized tariff classifications
    – Mexican broker prepares the Mexican entry
    (Import Pedimento and Export Pedimento) and
    submits to Mexican Customs
    Moving Raw Materials and Goods

    • Southbound to Mexico
    – Duty Implications
    • Definitive Importations – 10 -15% duty rate
    • Temporary Importation
    – PROSEC rate: 0-5%
    – NAFTA rate: Usually duty free (0%)
    – Offshore can advise PROSEC status
    – To obtain NAFTA rate, customer must obtain/supply
    NAFTA certificates to Offshore
    – Importer of record into Mexico:
    • Maquilas Tetakawi
    • Manufacturas Zapaliname
    Moving Raw Materials and Goods

    • Importer of Record – Northbound from Mexico


    – As Importer of Record, responsibilities include:
    • Exercise of reasonable care
    • Determination of harmonized tariff
    classification number
    • Duties, taxes, fines & penalties
    • Selection of U.S. Customsbroker
    • Transmission of packing slip data to Offshore
    • Prepare Assembly Worksheet Descriptions
    (ADW’s)
    Moving Raw Materials and Goods
    • Importer of Record – Northbound from Mexico (cont’d)
    – As Importer of Record, responsibilities include:
    • Obtain NAFTA certificates for raw materials
    moving southbound
    • Qualify finished goods for NAFTA treatment
    • Respond to requests from CBP
    • Participate in Reconciliation program
    • Compliance with all other CBP laws and
    regulations
    – CBP is enforcing agency for over 60 other
    governmental agencies
    Customs Border & Protection (CBP)

    • U.S. Customs and Border Protection’s top priority is


    to keep terrorists and their weapons from entering the
    United States. While welcoming all legitimate
    travelers and trade, CBP officers and agents enforce
    all applicable U.S. laws. CBP prevents narcotics,
    agricultural pests and smuggled goods from entering
    the country and also identifies and arrests those with
    outstanding criminal warrants. On a typical day last
    year, CBP officers welcomed 1.2 million people at the
    nation’s 314 land, air and seaports while denying
    entry to more than 3,000 inadmissible visitors.
    Harmonized Tariff Classification

    • One of the most critical and complex


    components of an import transaction
    – Knowledge needed to classify properly:
    • Fit, form, function, material, and General Rules of
    Interpretation
    – Determines duty rate
    – Critical for NAFTA determination and support
    • CBP offers a “Binding Ruling” program
    – CBP issues definitive opinion on tariff
    classification
    Harmonized Tariff Schedule Classification

    Valves for Aircraft Engines

    Other Parts of Aircraft 8803.30.0030 FREE


    Hydraulic Valve 8481.20.0040 2%

    Check Valve 8481.30.2090 5%

    Brake Caliper Pin


    Other Non-Threaded 7318.29.0000 2.8%
    Articles
    Other Articles of Metal 7326.90.8587 2.9%
    Brakes and Parts 8708.39.5050 2.5%
    Thereof
    NAFTA

    • Important to understand NAFTA rules of origin


    and how they impact:
    – NAFTA qualification process
    – Sourcing decisions
    • Tariff shift vs. Regional Value Content (RVC)
    percentage
    • Importance of correct HTS numbers
    • NAFTA Audits
    NAFTA vs. Unconditionally Duty Free HTS
    Numbers
    • Unconditionally duty free Items are free of duty
    regardless of NAFTA or other trade agreements
    • Merchandise Processing Fee (MPF) is assessed on
    shipments from Canada or Mexico, unless NAFTA is
    claimed
    – MPF amount: .21% of Entered Value
    – MPF minimum: $25.00 per Entry
    – MPF maximum: $485.00 per Entry
    • Refunds for duty and MPF can be obtained one year
    from date of import
    Assembly Description Worksheets (ADW’s)

    • ADW’s are similar to production Bills of Material


    • Important to keep ADW’s updated to reflect changes
    in values
    – Changes could alter NAFTA declaration
    • ADW’s should reflect all costs associated with raw
    materials and production of finished good
    • ADW’s should be reviewed on annual basis
    Country of Origin Marking
    • Every article imported into the USA must be marked
    to indicate it’s country of origin, unless excepted by
    law
    • If excepted by law, the outermost container must be
    marked to indicate the country of origin of the
    contents
    • NAFTA marking rules of origin apply to articles
    produced in Mexico or Canada and shipped to the
    USA
    • With regards to articles to be further processed in the
    USA, the Federal Trade Commission governs use of
    “Made in the U.S.A.”
    Advance Notices and Communications

    • Important to notify Offshore, customs broker,


    and NAFTA provider of new part production
    – Offshore can advise dutiable status on
    importation of raw materials into Mexico
    – NAFTA provider can advise of NAFTA eligibility
    – Both of above require time and usually can’t be
    done on moments notice
    • Duties can quickly accrue before it’s realized
    that a part is crossing the border without
    benefit of NAFTA
    Advance Notices and Communications

    • Communicate, Communicate, Communicate


    – Offshore
    – Broker
    – NAFTA/Customs provider
    • Use caution in communicating with CBP
    – Understand purpose of any request for
    information
    – Understand impact of duty on prior shipments
    Fixing Mistakes

    • Fixing mistakes require amendment to Customs


    entry
    • Be aware of time constraints
    • Method of amendment depends on liquidation status
    of entry
    – SIL/PEA: Prior to liquidation
    – Protests: 180 days from liquidation
    – 520(d) 1 year from date of importation
    – Prior Disclosure: Anytime prior to commencement
    of formal investigation
    Summary

    • As importer of record company is subject to legal


    requirements
    • Classification of materials and finished Goods should
    be as accurate as possible
    • NAFTA can be complex and has potential to expose
    company to penalty actions
    • Keep ADW’s updated
    • Communicate with appropriate parties
    • Fix mistakes when discovered
    • Make conscious decision who should handle
    Customs responsibilities
    Additional Information

    • Contact:
    Steve Haywood (734) 362-1000 ext. 224
    FOCUS Business Solutions, Inc.
    2674 W. Jefferson Ave.
    Suite 100
    Trenton, MI 48183
    shaywood@focus-solutions.net

    Also: http://www.cbp.gov/

    You might also like