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    Chapter Heading/Sub heading 2402.20 Cigarettes containing tobacco
    2402.20.80 00 is the classification for cigarettes containing tobacco, other than containing clove, and Paper-wrapped.
    The general rate of duty is $1.05/kg+2.3%
    Footnote 3 to the general duty rate states that 3/ Imports under this provision may be subject to Federal Excise Tax (26 U.S.C. 5701).

    26 U.S. Code § 5701
    (a)Cigars
    On cigars, manufactured in or imported into the United States, there shall be imposed the following taxes:
    (1)Small cigars
    On cigars, weighing not more than 3 pounds per thousand, $50.33 per thousand.

    The question states that the imported cigars do not exceed 3 pounds per 1,000 cigarettes.
    The total amount of IRS Excise Tax on 72,000 small cigarettes is $50.33 x 72 = $3,623.76

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    Chapter 98 of the HTSUS deals with Special Classification Provisions. As per U.S. Note 1 to this Chapter, the provisions of this chapter are not subject to the rule of relative specificity in general rule of interpretation 3(a). Any article which is described in any provision in this chapter is classifiable in said provision if the conditions and requirements thereof and of any applicable regulations are met.

    SUBCHAPTER XIII of Chapter 98 deals with ARTICLES ADMITTED TEMPORARILY FREE OF DUTY UNDER BOND

    U.S. Note 1. (a) to Subchapter XIII states that the articles described in the provisions of this subchapter, when not imported for sale or for sale on approval, may be admitted into the United States without the payment of duty, under bond for their exportation within 1 year from the date of importation, which period, in the discretion of the Secretary of the Treasury, may be extended, upon application, for one or more further periods which, when added to the initial 1 year, shall not exceed a total of 3 years, except that (1) articles imported under heading 9813.00.75 shall be admitted under bond for their exportation within 6 months from the date of importation and such a 6-month period shall not be extended, …

    Note 5 states that articles may be admitted under heading 9813.00.75 only on condition that the Secretary of the Treasury shall have found that the foreign country from which the articles were imported allows, or will allow, substantially reciprocal privileges in respect of similar imports to such country from the United States; and if the Secretary finds that a foreign country has discontinued, or will discontinue, the allowance of such privileges, the privileges of heading 9813.00.75 shall not apply thereafter in respect of imports from such foreign country.

    The article description in the tariff for Heading/Subheading 9813.00.75 is Automobiles, automobile chassis, automobile bodies, cutaway
    portions of any of the foregoing and parts for any of the foregoing, finished, unfinished or cutaway, when intended solely for show purposes.
    The prescribed General rate of duty is Free, under bond, as prescribed in U.S. note 1 to this subchapter.

    Here, a privately held U.S. corporation, imports five automobiles intended solely for show purposes. They will not be offered for sale. Their country of origin is the United Kingdom, which allows reciprocal privileges for similar imports to their country. The automobile shows in the U.S. will last three months but the shows have been extended and the automobiles will be in the U.S. for an additional three months.This duration does not exceed the 6 months.

    This meets the criteria of U.S. Note 1. (a) that articles imported under heading 9813.00.75 shall be admitted under bond for their exportation within 6 months from the date of importation and such a 6-month period shall not be extended.

    Since the country of origin of the imported automobiles is UK which allows substantially reciprocal privileges in respect of similar imports to such country from the United States, the conditions specified in Note 5 are also satisfied.

    The correct classification is 9813.00.75 which is answer choice B.
    9813.00.35 is an incorrect classification as it deals with automobiles and other vehicles and craft that are temporarily imported for races, not for show.
    Heading 8706 classifies Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705: This is not applicable here as this import is a special case of temporary importation under bond without payment of duty.

    admin
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    Additional information necessary to answer this question is provided in the commercial invoice. As per the commercial invoice provided with this question, the goods are valued at $3,900 and the terms of payment are 2%, Net 15 Days, which means that a 2% discount is offered post import if the payment is made within 15 days of delivery.

    As per 19 CFR 152.103(a)(4), any rebate of, or other decrease in, the price actually paid or payable made or otherwise effected between the buyer and seller after the date of importation of the merchandise will be disregarded in determining the transaction value under § 152.103(b).

    On July 17, 2004, Mr. Thorton Mellon notifies his broker that he has just forwarded Fashion the World, Inc., money for the shipment minus an early payment discount. On July 18, 2004, at 12:01 a.m. the aircraft arrives at Seattle with the intent to unlade.

    Here, the importer has availed of the rebate or discount prior to the date of import and so this discount will not be disregarded in determining the transaction value. The discount is availed of and the price is paid prior to import not after the date of importation.

    3900 – 2% = 3900 – (3900×2/100) = 3900 – 78 = $3,822 which is answer choice B.

    admin
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    19 CFR 152.102(f) “Price actually paid or payable” means the total payment (whether direct or indirect, and exclusive of any charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller.

    Here, Household Makeovers, Inc., placed an order with its affiliated Chinese manufacturer, Painted Spaces, for 3,000 wooden paintbrushes consisting of 90% natural (i.e., horsehair) and 10% synthetic bristles with a width of 3”.

    Price List (C.I.F. Port of Los Angeles), negotiated annually between Household Makeovers, Inc. and Painted Spaces, applies to both affiliated and unaffiliated parties:

    $2.00 per brush greater than 3”
    $1.59 per 3” brush
    $1.35 per 1” brush

    Since the price list applies to both affiliated and unaffiliated parties, it can be accepted as the transaction value in an arms length transaction.

    The paintbrushes are repackaged in the U.S. with disposable gloves, painters’ tape, an acrylic 1” paintbrush, a 12” diameter stainless steel container for holding paint and one quart of white paint. However, these are domestic goods which are added to the imported goods by repackaging post import, and so these goods are irrelevant for calculating entered value for import.

    Actual freight, insurance and other costs incidental to the international shipment = $579.
    The c.i.f. price will include these elements of cost due to international freight and insurance.

    The brushes imported from China are 3″ brushes that cost $1.59 c.i.f.
    Quantity = 3000
    Price c.i.f. = 3000×1.59 = $4,770
    The c.i.f. value does not include any domestic freight and so the estimated calculated costs for foreign inland freight for this shipment of $325 is irrelevant. However, we have to deduct the charges for international freight and insurance from the c.i.f. value to derive the entered value.
    $4,770 – $579 = $4,191

    Answer choice B is the correct answer.

    admin
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    Post count: 70

    19 CFR §102.13 De Minimis.
    (a) Except as otherwise provided in paragraphs (b) and (c) of this section, foreign materials that do not undergo the applicable change in tariff classification set out in § 102.20 or satisfy the other applicable requirements of that section when incorporated into a good shall be disregarded in determining the country of origin of the good if the value of those materials is no more than 7 percent of the value of the good or 10 percent of the value of a good of Chapter 22, Harmonized System.
    (b) Paragraph (a) of this section does not apply to a foreign material incorporated in a good provided for in Chapter 1, 2, 3, 4, 7, 8, 11, 12, 15, 17, or 20 of the Harmonized System.
    (c) Foreign components or materials that do not undergo the applicable change in tariff classification set out in § 102.21 or satisfy the other applicable requirements of that section when incorporated into a textile or apparel product covered by that section shall be disregarded in determining the country of origin of the good if the total weight of those components or materials is not more than 7 percent of the total weight of the good.

    The question requires us to identify the circumstances in which foreign materials that do not undergo the required tariff shift when incorporated into a good shall be disregarded in determining the country of origin of the good.

    In option A, the value of the smoked rubber sheets exceeds 7% of the value of the natural rubber sheets and so it cannot be disregarded.

    Option C cannot be disregarded for similar reasons.

    In Options D and E, the percentage of the sugar and milk is 7% or less but the finished products are maple sugar classifiable under subheading 1702.20 and milk classifiable under subheading 0402.99. The condition in 19 CFR §102.13(a) does not apply to a foreign material incorporated in a good provided for in Chapter 1, 2, 3, 4, 7, 8, 11, 12, 15, 17, or 20 of the Harmonized System. Therefore, foreign materials that do not undergo the applicable change in tariff classification set out in § 102.20 or satisfy the other applicable requirements of that section when incorporated into a good of Chapters 17 and 4 shall NOT be disregarded in determining the country of origin of the good if the value of those materials is no more than 7 percent of the value of the good. Therefore, answer choices D and E are also ruled out. We are then left with only answer choice B by a process of elimination.

    In B, milk, produced in Brazil, which contains 55% by weight of milk solids, is used in the Canadian production of a chocolate-based milk drink (2202.90), which represents 8% of the value of the chocolate drink. Foreign materials that do not undergo the applicable change in tariff classification set out in § 102.20 or satisfy the other applicable requirements of that section when incorporated into a good shall be disregarded in determining the country of origin of the good if the value of those materials is no more than 10 percent of the value of a good of Chapter 22, Harmonized System. Here, the value of the milk produced in Brazil is only 8% which is less than 10% of the value of the finished product viz. Canadian production of a chocolate-based milk drink that is classified in Chapter 22. Since the value of the foreign material is below the de minimis limit of 10% allowed in this case, this foreign material can be disregarded in determining the country of origin of the Canadian milk drink.

    Answer choice B is therefore correct.

    admin
    Keymaster
    Post count: 70

    Q. 47
    The classification of the Ladies hat crocheted to shape from unspun dyed raffia. Lined, trimmed w/grosgrain ribbon hat band, not sewn is 6505.00.9075 and its duty rate is 20.7 cents per kg + 7.5% of invoice value.
    Here, the quantity of the hats is 2,728 kgs and so the specific duty payable is 2,728 x $0.207 = $564.70
    The price is $9000.00 DDP New York. The Delivered Duty Paid price includes the cost of international freight, insurance, and customs duties paid to the destination in New York so these elements need to be deducted to arrive at the assessable value for customs duty determination.
    The goods are arriving in NY by Italian Airlines so no HMF is applicable. However, MPF is applicable at the rate of 0.3464% in addition to the basic customs duty rate of 7.5%. Total duties and fees are 7.5%+0.3464% = 7.8464%.

    First step to determine customs transaction value is to deduct the specific duty of $564.70.
    $9,000 – $564.70 = $8,435.30
    Next step is to deduct the ad valorem duties from this figure and to do that we need to divide $8,435.30 by 1.078464 = $7,821.59 which is the entered value.
    7.5% of the entered value is 7,821.59 x .075 = $586.62
    MPF is 7,821.59 x .003463 = $27.09
    Ad valorem duties paid is 586.62 + 27.09 = $613.71
    Total duties paid is $613.71 + $564.70 = $1,178.41 which is answer choice D.

    Q. 49
    Men’s 100% knit cotton sleeveless muscle shirt (2256 kg) 25 doz 24.80 USD ea. $7440.00
    6110 Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted:
    6110.20 Of cotton:
    6110.20.10 Containing 36 percent or more by weight of flax fibers
    6110.20.20 Other
    Other
    Men’s or boys’:
    6110.20.20.67 Knit to shape articles described in statistical note 6 to this chapter
    6110.20.20.69 Other
    The HTSUS classification of men’s 100% knit cotton muscle shirt is 6110.20.20.69 and it is subject to 16.5% duty. It is imported by air, so HMF is not applicable but it is subject to MPF at 0.3464%. So the total duties and fees are 16.5+ 0.3464 = 16.8464% of the entered value.
    The total duty paid DDP value is $7,440.00 which is inclusive of duties and fees paid at the rate of 16.8464%.
    If we assume the value of the entered shirts to be y, the value inclusive of duties and fees will be y + 16.8463% of y = y + y(16.8464/100) = y+y(0.168464) = y(1+0.168464) = y(1.168464) = 7,440
    Therefore, y = 7,440/1.168464 = $6,367.33, which is the entered value.
    Since the value inclusive of duties and fees paid is $7,440, the amount of duties and fees paid = 7,440 – 6,367.33 = $1,072.67.
    Answer choice A is correct.

    admin
    Keymaster
    Post count: 70

    Here, the tents are made of polyester fabric from Taiwan. Tents made of synthetic fiber are classifiable under heading 6306 of the HTSUS.

    19 CFR § 102.21(c) General rules. Subject to paragraph (d) of this section, the country of origin of a textile or apparel product will be determined by sequential application of paragraphs (c) (1) through (5) of this section and, in each case where appropriate to the specific context, by application of the additional requirements or conditions of §§ 102.12 through 102.19 of this part.

    (1) The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.

    (2) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

    19 CFR § 102.21(e) Specific rules by tariff classification.

    (1) The following rules will apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:

    HTSUS 6301–6306: Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

    Here, the tent was made of polyester fabric from Taiwan. By sequential application of the rules of origin for textiles and the specific rules by tariff classification, the country of origin of the tents is Taiwan since the polyester fabric comprising the tent was formed by a fabric-making process in Taiwan.

    admin
    Keymaster
    Post count: 70
    in reply to: Bond riders #10825

    CBP Form 5106 is the Create/Update Importer Identity Form. Can you please provide the complete question, answer choices, and official answer with citation/s?

    admin
    Keymaster
    Post count: 70

    The applicable regulations are as follows:

    19 CFR § 102.21 – Textile and apparel products

    19 CFR § 102.21(b)(2) A fabric-making process is any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope, or fabric strips and results in a textile fabric.

    19 CFR § 102.21(b)(5) A textile or apparel product is any good classifiable in Chapters 50 through 63, Harmonized Tariff Schedule of the United States (HTSUS) …

    19 CFR § 102.21(c) General rules. Subject to paragraph (d) of this section, the country of origin of a textile or apparel product will be determined by sequential application of paragraphs (c) (1) through (5) of this section and, in each case where appropriate to the specific context, by application of the additional requirements or conditions of §§ 102.12 through 102.19 of this part.

    (1) The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.

    (2) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

    19 CFR § 102.21(e) Specific rules by tariff classification.

    (1) The following rules will apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:

    HTSUS 6213–6214: Except for goods of heading 6213 through 6214 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6213 through 6214 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

    Here, there is no single country, territory, or insular possession in which the good was wholly obtained or produced. Therefore, the first rule cannot be applied to determine the country of origin of the scarves.

    Since we have to apply the rules of origin sequentially we now look at the second rule and it states that the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

    The information provided in the question states that the scarves are imported into the US directly from Italy, and correctly entered under heading 6214. When we look at 19 CFR § 102.21(e) Specific rules by tariff classification for HTSUS 6213–6214, it is stated that except for goods of heading 6213 through 6214 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6213 through 6214 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

    The scarves classified under 6214 are not included in goods of heading 6213 through 6214 provided for in paragraph (e)(2). Therefore, the country of origin of a scarves classifiable under heading 6214 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process. We are told in the question that silk yarn is manufactured in Korea and then sent to China where it is woven into fabric. Since the fabric-making process occurred in China, the country of origin of these silk scarves classified under heading 6214 is China. This answer is derived by applying the textile rules of origin sequentially.

    admin
    Keymaster
    Post count: 70

    19 CFR § 144.38(f) Textiles and textile products. Textiles and textile products subject to quota, visa or export license requirements in their condition at the time of importation may not be withdrawn from warehouse for consumption if during the warehouse period there has been a change by manipulation or other means:

    (3) From one textile category to another textile category.

    In this case, 250 blouses and skirts under quota categories 341 and 342, respectively but these quota categories were full and so this merchandise was placed in a bonded warehouse waiting to see if the categories opened up again before the end of the year. One month later, the importer decided to sew the blouses and skirts together into dresses. The dresses were covered by a different quota category 336. This quota category was open.

    However, as per the terms of 19 CFR § 144.38(f) textiles and textile products subject to quota, visa or export license requirements in their condition at the time of importation may not be withdrawn from warehouse for consumption if during the warehouse period there has been a change by manipulation or other means from one textile category to another textile category.

    Here the imported textile products were blouses and skirts under quota categories 341 and 342. These were placed in a bonded warehouse and then sown together into dresses which are covered by a different quota category 336. There was a change in quota category of these textile products from 341 and 342 to 336 by manipulation or other means viz. sewing. Therefore, the dresses may not be withdrawn from warehouse for consumption due to the change from one quota category to another during the warehouse period.

    Answer A is therefore correct.

    admin
    Keymaster
    Post count: 70

    See 19 CFR § 141.89 Additional information for certain classes of merchandise.
    Chemicals – Furnish the use and Chemical Abstracts Service number of chemical compounds classified in Chapters 27, 28 and 29, HTSUS.

    Since the chemical compounds, petroleum coke and petroleum bitumen, are classified under HTS heading 2713, the additional information that must be furnished in an invoice covering a shipment of these goods is the use and Chemical Abstracts Service number of the chemical compounds classified in Chapter 27, which is answer choice D.

    admin
    Keymaster
    Post count: 70

    This is a data entry error while entering the answer key information in the database as the explanation for Q 17 was entered incorrectly for Q 18 and will be corrected shortly. The correct answer choice for Q 18 is D but the correct explanation as per the official answer key for the April 2018 exam is Time of Entry 19 CFR 141.68 and 19 CFR 151.69.

    However 19 CFR § 151.69 refers to Transfer or exportation of part of sampling unit which is not really relevant here. 19 CFR § 141.68 prescribes how to determine Time of entry and it provides the relevant explanation.

    admin
    Keymaster
    Post count: 70
    in reply to: Test questions #10547

    The format is similar in the official exam and the question paper will identify the category and provide several questions related to that category below it. Each category may have several questions under it. For instance some of the categories in the April 2022 exam were as follows:

    Category I – Automated Commercial Environment (ACE) Questions 1 – 3
    Category II – Foreign Trade Zone (FTZ)/Warehouse Questions 4 – 10
    Category III – Marking Questions 11 – 13

    Examples of question formats under each category are as follows:

    Category II – Foreign Trade Zone (FTZ)/Warehouse
    4. The operator of a FTZ shall record all shortages and overages as required on which document?
    A. An annual reconciliation report
    B. A blanket application form for admission of merchandise
    C. CBP Form 214
    D. CBP Form 301
    E. CBP Form 214-A

    5. Which CBP Form is required to admit merchandise into the Foreign Trade Zone (FTZ)?
    A. CBP Form 214
    B. CBP Form 3461
    C. CBP Form 3495
    D. CBP Form 6043
    E. CBP Form 7501

    We are continuously adding new tests but it takes some time to do the data entry and checking on the software. Right now we have added tests up to April 2022 exam and there are 28 full length online old practice exams on the site as of Oct 11, 2022.

    admin
    Keymaster
    Post count: 70
    in reply to: Quiz 1, Question 4 #10534

    4. Products of Countries Designated Beneficiary Developing Countries for Purposes of the Generalized System of Preferences (GSP)

    (c) Articles provided for in a provision for which a rate of duty of “Free” appears in the “Special” sub column followed by the symbols “A” or “A*” in parentheses are those designated by the President to be eligible articles for purposes of the GSP pursuant to section 503 of the Trade Act of 1974.

    (d) Articles provided for in a provision for which a rate of duty of “Free” appears in the “Special” sub column of rate of duty column 1 followed by the symbol “A*” in parentheses, if imported from a beneficiary developing country set out opposite the provisions enumerated below, are not eligible for the duty-free treatment provided in subdivision (c) of this note:

    7113.11.50 India; Thailand

    Though the answer choice mentions 7113.11.2000, it appears that the tariff was amended subsequently to make jewelry classifiable under 7113.11.50.

    admin
    Keymaster
    Post count: 70
    in reply to: Quiz 5, Question 8 #10533

    § 18.12 Entry at port of destination.
    (a) Arrival procedures. Merchandise received under an immediate transportation entry at the port of destination may be admitted to a FTZ, entered into a bonded warehouse, entered for consumption, transportation and exportation, immediate exportation, immediate transportation, or any other form of entry, within 15 calendar days from the date of arrival at the port of destination and is subject to all the conditions pertaining to merchandise entered at a port of first arrival.

    However, here the merchandise has been in General Order for over seven months from the date of original importation. All the options A to E are permissible only within 15 calendar days from the date of arrival at the port of destination but that time limit has passed here. Therefore, we need to look at the provisions of §127.2.

    § 127.2 Withdrawal from general order for entry or exportation.
    (a) Exportation within 6 months from date of importation. Merchandise in general order may be exported without examination or appraisement if the merchandise is delivered to the exporting carrier within 6 months from the date of importation. This merchandise may be entered within 6 months from date of importation for immediate transportation to any port of entry designated by the consignee.

    (b) After expiration of 6 months from date of importation. Entry for immediate transportation shall be permitted after the expiration of the 6-month period only for the purpose of filing an entry for consumption at the port of destination.

    In terms of § 127.2(b) since the merchandise has been in General Order for over seven months from the date of original importation, entry for immediate transportation shall be permitted … only for the purpose of filing an entry for consumption at the port of destination.

    Therefore B is the correct answer.

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