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in reply to: Quiz 4, Question 5 #10532
The old version of 19 CFR 113.26(a) as published in the Federal Register of October 19, 1984 stated that Bonds including the application, if required by § 113.12, and riders may be filed up to 30 days before the effective date in order to provide adequate time for Customs administrative review and processing. Since then, this regulation has been amended to revise the time limit to 60 days. Since this question is from an old exam, the reference material prescribed at that time provided for the shorter time limit of 30 days.
in reply to: Quiz 7, Question 3 #10531Prohibited means the item is forbidden by law to enter the United States. Examples of prohibited items are dangerous toys, cars that don’t protect their occupants in a crash, bush meat, or illegal substances like absinthe and Rohypnol. Restricted means that special licenses or permits are required from a federal agency before the item is allowed to enter the United States. Examples of restricted items include firearms, certain fruits and vegetables, animal products, animal by products, and some animals.
Activity 1 of the Attachment to Directive 3510-004 lists certain categories of imported merchandise where the bond will be executed in an amount which is not less than three times the total entered value of the merchandise. Para 1 lists 1. MERCHANDISE SUBJECT TO OTHER AGENCY REQUIREMENTS WHERE FAILURE TO REDELIVER COULD POSE A THREAT TO THE PUBLIC HEALTH AND SAFETY
These are restricted items where special licenses or permits are required from a federal agency before the item is allowed to enter the United States and therefore for these items the bond will be required to be executed in an amount which is not less than three times the total entered value of the merchandise.
in reply to: Quiz 8, Question 11 #10530The articles described in the provisions of subchapter XIII of Chapter 98, 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.
A. Steel tubing imported to be heat treated and processed into another article that will then be exported to Great Britain.
This item is classifiable under 9813.00.05 Articles to be repaired, altered or processed (including processes which result in articles manufactured or produced in the United States)
B. A motor vehicle entered for the purpose of EPA emissions testing and then being returned to Mexico
This item is classifiable under 9813.00.30 Articles intended solely for testing, experimental or review purposes, including specifications, photographs and similar articles for use in connection with experiments or for study.
C. Cameras and associated equipment imported for the use of a non- resident importer in the production of a movie. The cameras and associated equipment will accompany the non-resident when he/she returns home.
This item is classifiable under 9813.00.50 Professional equipment, tools of trade, repair components for equipment or tools admitted under this heading and camping equipment; all the foregoing imported by or for nonresidents sojourning temporarily in the United States and for the use of such nonresidents.
D. Samples imported for use in taking orders for merchandise by a salesperson who will take the samples out of the U.S. when he/she is finished taking orders.
This item is classifiable under 9813.00.20 Samples solely for use in taking orders for merchandise.E. Aspirin tablets imported in a bulk container, repacked in retail bottles which then are exported to Canada for labeling.
This item is not classifiable under subchapter XIII of Chapter 98 and is therefore does NOT qualify for entry under a Temporary Importation Bond, not imported for sale or for sale on approval.
E is therefore the correct answer.For the October 2022 US Customs Broker License Exam (CBLE), the prescribed reference material includes the Harmonized Tariff Schedule of the United States (Basic Edition 2021). You can purchase a print copy from the government book store and other sources but make sure you have the 2021 Basic Edition for the October 2022 CBLE.
in reply to: Quiz 1, Question 10 #10525§ 152.105
(c) Prices. The deductive value of the merchandise being appraised is whichever of the following prices (as adjusted under paragraph (d) of this section) is appropriate depending upon when and in what condition the merchandise concerned is sold in the United States:(1) If the merchandise concerned is sold in the condition as imported at or about the date of importation of the merchandise being appraised, the price is the unit price at which the merchandise concerned is sold in the greatest aggregate quantity at or about such date.
(d) Deductions from price. The price determined under paragraph (c) of this section will be reduced by an amount equal to:
(1) Any commission usually paid or agreed to be paid, or the addition usually made for profit and general expenses, in connection with sales in the United States of imported merchandise that is of the same class or kind, regardless of the country of exportation, as the merchandise concerned;
(2) The actual costs and associated costs of transportation and insurance incurred with respect to international shipments of the merchandise concerned from the country of exportation to the United States;
(3) The usual costs and associated costs of transportation and insurance incurred with respect to shipments of the merchandise concerned from the place of importation to the place of delivery in the United States, if those costs are not included as a general expense under paragraph (d)(1) of this section;
(4) The customs duties and other Federal taxes currently payable on the merchandise concerned by reason of its importation, and any Federal excise tax on, or measured by the value of, the merchandise for which vendors in the United States ordinarily are liable; and
(e) Profit and general expenses; special rules.
(h) Unit price in greatest aggregate quantity. The unit price will be established after a sufficient number of units have been sold to an unrelated person. The unit price to be used when the units have been sold in different quantities will be that at which the total volume sold is greater than the total volume sold at any other unit price.
Here, the unit price sold in the greatest aggregate quantity is $15 per carton (300 cartons). The cartons of watermelons are appraised under deductive value. Under the applicable rules cited above, international and domestic freight and insurance charges are to be deducted, customs duties are to be deducted, and either profits and general expenses or commissions are to be deducted.
-Profit & General Expenses:$1.50
-Commissions:$1.50
-Transportation & Insurance from Mexico to Nogales, Arizona:$1.00
-Transportation & Insurance from Nogales, Arizona, to Tucson, Arizona:$0.85
(not included as a general expense)
-Customs Duties:$1.14Therefore deductive value = 15 – 1.50 – 1- 0.85 -1.14 = $10.51 which is answer choice D.
in reply to: Quiz 2, Question 9 #10524§ 152.103(4) Rebate. 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).
Answer choice C would be the correct answer in terms of § 152.103(4) since a rebate would be a downward adjustment of the price, and such rebates are disregarded in determining transaction value if made after the date of importation.
It may also be noted that § 152.103(b) refers to additions to price actually paid or payable.
(1) The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States, plus amounts equal to:
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(v) The proceeds of any subsequent resale, disposal, or use of the imported merchandise that accrue, directly or indirectly, to the seller.in reply to: “Instant Shipment” #10523Could you please post the questions with official answers and their citations to understand the context?
Are you referring to immediate delivery?
§ 10.101 Immediate delivery.
(a) Shipments entitled to immediate delivery. Shipments consigned to or for the account of any agency or office of the United States Government, or to an officer or official of any such agency in his official capacity, shall be regarded for purposes of these regulations as shipments the immediate delivery of which is necessary within the purview of section 448(b), Tariff Act of 1930, as amended (19 U.S.C. 1448(b)).in reply to: Quiz 5, Question 18 #10522§ 152.103 Transaction value.
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(d) Assist. If the value of an assist is to be added to the price actually paid or payable, or to be used as a component of computed value, the Center director shall determine the value of the assist and apportion that value to the price of the imported merchandise in the following manner:(1) If the assist consist of materials, components, parts, or similar items incorporated in the imported merchandise, or items consumed in the production of the imported merchandise, acquired by the buyer from an unrelated seller, the value of the assist is the cost of its acquisition. If the assist were produced by the buyer or a person related to the buyer, its value would be the cost of its production. In either case, the value of the assist would include transportation costs to the place of production.
(2) If the assist consists of tools, dies, molds, or similar items used in the production of the imported merchandise, acquired by the buyer from an unrelated seller, the value of the assist is the cost of its acquisition. If the assist were produced by the buyer or a person related to the buyer, its value would be cost of its production. If the assist has been used previously by the buyer, regardless of whether it had been acquired or produced by him, the original cost of acquisition or production would be adjusted downward to reflect its use before its value could be determined. If the assist were leased by the buyer from an unrelated seller, the value of the assist would be the cost of the lease. In either case, the value of the assist would include transportation costs to the place of production. Repairs or modifications to an assist may increase its value.
Example 1.
A U.S. importer supplied detailed designs to the foreign producer. These designs were necessary to manufacture the merchandise. The U.S. importer bought the designs from an engineering company in the U.S. for submission to his foreign supplier.
Should the appraised value of the merchandise include the value of the assist?No, design work undertaken in the U.S. may not be added to the price actually paid or payable.
Example 2.
A U.S. importer supplied molds free of charge to the foreign shipper. The molds were necessary to manufacture merchandise for the U.S. importer. The U.S. importer had some of the molds manufactured by a U.S. company and others manufactured in a third country.
Should the appraised value of the merchandise include the value of the molds?Yes. It is an addition required to be made to transaction value.
(e) Apportionment.(1) The apportionment of the value of assists to imported merchandise will be made in a reasonable manner appropriate to the circumstances and in accordance with generally accepted accounting principles. The method of apportionment actually accepted by Customs will depend upon the documentation submitted by the importer. If the entire anticipated production using the assist is for exportation to the United States, the total value may be apportioned over (i) the first shipment, if the importer wishes to pay duty on the entire value at once, (ii) the number of units produced up to the time of the first shipment, or (iii) the entire anticipated production. In addition to these three methods, the importer may request some other method of apportionment in accordance with generally accepted accounting principles. If the anticipated production is only partially for exportation to the United States, or if the assist is used in several countries, the method of apportionment will depend upon the documentation submitted by the importer.
(2) Interpretative note. An importer provides the producer with a mold to be used in the production of the imported merchandise and contracts to buy 10,000 units. By the time of arrival of the first shipment of 1,000 units, the producer has already produced 4,000 units. The importer may request Customs to apportion the value of the mold over 1,000, 4,000, 10,000 units, or any other figure which is in accordance with generally accepted accounting principles.
§ 152.102(a)(3) The following apply in determining the value of assists …
(i) The value of an assist that is available in the public domain is the cost of obtaining copies of the assist.Here, similar die cast tools are available for purchase at $10,000, so the die cast tools are available in the public domain for a price of $10,000 only. Therefore this is the price to be applied in determining the value of the assist. Freight charges for moving the die cast to its production site are $1,000. The value of the assist would include transportation costs to the place of production which is $10,000 here. So the value of the assist is 10,000 + 1,000 = $11,000.
This value has to be apportioned over the production of 2,600 units using this dedicated die cast that will be sold in the U.S.
Therefore, the apportioned cost of the die cast tools per unit of goods sold in the US will be (10,000+1,000)/2,600 = $4.23This official answer appears incorrect, and this question may be appealable.
in reply to: Marking 102.21 Question #10521Yes, the classification of tents under heading 6205 is a forced classification and not a correct one but as you pointed out, that is likely to influence how the specific rules of origin to goods falling under heading 6205 are to be applied.
in reply to: Quiz 1, Question 6 #10520The provision 19 CFR 111.22 has been deleted from the regulations.
in reply to: Quiz 1, Question 8 #1051919 CFR § 111.1 Customs business. “Customs business” means those activities involving transactions with CBP concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges assessed or collected by CBP on merchandise by reason of its importation, and the refund, rebate, or drawback of those duties, taxes, or other charges. “Customs business” also includes the preparation, and activities relating to the preparation, of documents in any format and the electronic transmission of documents and parts of documents intended to be filed with CBP in furtherance of any other customs business activity, whether or not signed or filed by the preparer. However, “customs business” does not include the mere electronic transmission of data received for transmission to CBP and does not include a corporate compliance activity.
§ 111.2 License and district permit required.
License –
(1) General. Except as otherwise provided in paragraph (a)(2) of this section, a person must obtain the license provided for in this part in order to transact customs business as a broker.(2) Transactions for which license is not required –
(i) For one’s own account. An importer or exporter transacting customs business solely on his own account and in no sense on behalf of another is not required to be licensed, nor are his authorized regular employees or officers who act only for him in the transaction of such business.
(ii) As employee of broker –
(A) General. An employee of a broker, acting solely for his employer, is not required to be licensed where:
(1) Authorized to sign documents. The broker has authorized the employee to sign documents pertaining to customs business on his behalf, and has executed a power of attorney for that purpose. The broker is not required to file the power of attorney with the port director, but must provide proof of its existence to Customs upon request; or
(2) Authorized to transact other business. The broker has filed with the port director a statement identifying the employee as authorized to transact customs business on his behalf. However, no statement will be necessary when the broker is transacting customs business under an exception to the district permit rule.
(B) Broker supervision; withdrawal of authority. Where an employee has been given authority under paragraph (a)(2)(ii) of this section, the broker must exercise sufficient supervision of the employee to ensure proper conduct on the part of the employee in the transaction of customs business, and the broker will be held strictly responsible for the acts or omissions of the employee within the scope of his employment and for any other acts or omissions of the employee which, through the exercise of reasonable care and diligence, the broker should have foreseen. The broker must promptly notify the port director if authority granted to an employee under paragraph (a)(2)(ii) of this section is withdrawn. The withdrawal of authority will be effective upon receipt by the port director.
(iii) Marine transactions. A person transacting business in connection with entry or clearance of vessels or other regulation of vessels under the navigation laws is not required to be licensed as a broker.
(iv) Transportation in bond. Any carrier bringing merchandise to the port of arrival or any bonded carrier transporting merchandise for another may make entry for that merchandise for transportation in bond without being a broker.
(v) Noncommercial shipments. An individual entering noncommercial merchandise for another party is not required to be a broker, provided that the requirements of § 141.33 of this chapter are met.
(vi) Foreign trade zone activities. A foreign trade zone operator or user need not be licensed as a broker in order to engage in activities within a zone that do not involve the transfer of merchandise to the customs territory of the United States.
Answer choice A is a transaction on one’s own account for which a license is not required under § 111.2(2)(i).
Answer choice B is a foreign trade zone user engaging in activities within a zone that does not involve the transfer of merchandise to the customs territory of the United States which does not require a license under § 111.2(2)(vi).
C is clearing a vessel which is a marine transaction that does not require a license under § 111.2(2)(iii).
E is a bonded carrier transporting merchandise for another may make entry for that merchandise for transportation in bond without being a broker which does not require a license under § 111.2(iv).That leaves us D as the correct answer by a process of elimination. A Temporary Importation Bond is not covered under the exceptions in § 111.2.
in reply to: Quiz 1, Question 10 #10518Under 19 U.S. Code Part VI – Miscellaneous Provisions – 19 U.S. Code 1641 The failure of a customs broker that is licensed as a corporation, association, or partnership to have, for any continuous period of 120 days, at least one officer of the corporation or association, or at least one member of the partnership, validly licensed shall result in the revocation by operation of law of its license.
Therefore answer choice B that the broker has 120 days to replace Mary or the permit will be revoked by operation of law is the correct answer.
in reply to: Quiz 1, Question 9 #1051719 CFR § 111.2(b) District permit –
(1) General. Except as otherwise provided in paragraph (b)(2) of this section, a separate permit (see § 111.19) is required for each district in which a broker conducts customs business.
(2) Exceptions to district permit rule –
(i) National permits. A national permit issued to a broker under § 111.19(f) will constitute sufficient permit authority for the broker to act in any of the following circumstances:
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(D) Representations after entry summary acceptance. After the entry summary has been accepted by Customs, and except when a broker filed the entry as importer of record, a broker who did not file the entry, but who has been appointed by the importer of record, may orally or in person or in writing or electronically represent the importer of record before Customs on any issue arising out of that entry or concerning the merchandise covered by that entry even though the broker does not have a permit for the district within which those representations are made, provided that, if requested by Customs, the broker submits appropriate evidence of his right to represent the client on the matter at issue.
…The provisions of 19 CFR 111.2(b)(2)(i)(D) would apply when the broker has a national permit issued under § 111.19(f) which will constitute sufficient permit authority for the broker to act in the given circumstances. Here the question contains incomplete information as it does not state whether the broker has a national permit. Therefore, it is not possible to answer this correctly and it may be an appealable question.
in reply to: Quiz 16, Question 16 #10516The definition of “records” set out in 19 C.F.R. § 111.1 identifies records as “those documents identified in § 162.1a of this chapter and kept as provided in § 162.1b of this chapter.”
19 C.F.R. § 162.1a(a) provides:
(a) . . . “Records” means:
(1) Statements, declarations, books, papers, correspondence, accounts, technical data, automated record storage devices (e.g., magnetic discs and tapes), computer programs necessary to retrieve information in a usable form, and other documents which:
(i) Pertain to any importation, or to the information contained in the documents required by law or regulation under the Tariff Act of 1930, as amended, in connection with the entry of merchandise;
(ii) Are of the type normally kept in the ordinary course of business; and
(iii) Are sufficiently detailed:
(A) To establish the right to make entry,
(B) To establish the correctness of an entry,
(C) To determine the liability of any person for duties and taxes due, or which may be due, the United States,
(D) To determine the liability of any person for fines, penalties, and forfeitures, and
(E) To determine whether the person has complied with the laws and regulations administered by the Customs Service; and
(2) Any other documents required under laws or regulations administered by the Customs Service.19 C.F.R. § 162.1b(a) provides,
(a) . . . Any owner, importer, consignee, or their agent who imports, or knowingly causes to be imported, any merchandise into the Customs territory of the United States, shall make and keep records as defined in § 162.1a(a).19 C.F.R. § 111.21 states, that each broker shall keep current in a correct, orderly, and itemized manner records of account reflecting all his financial transactions as a broker. He shall keep and maintain on file a copy of each entry made by him with all supporting records, except those documents he is required to file with Customs, and copies of all his correspondence and other records relating to his Customs business.
Brokers are thus required to retain accounting records as they pertain to the broker’s financial transactions (answer choice (A)), as well as copies of entries filed for clients (answer choice (B)).
Section 141.46 provides:
Before transacting Customs business in the name of his principal, a customhouse broker is required to obtain a valid power of attorney to do so. He is not required to file the power of attorney with a port director. Customhouse brokers shall retain powers of attorney with their books and papers, and make them available to representatives of the Department of the Treasury. . . .
Since this provision requires brokers to retain powers of attorney authorizing the broker to conduct customs business for clients, answer choice (C) is incorrect.Section 111.43 requires each licensee to “display its permit in the principal office within the district so it may be seen by anyone transacting business in the office. Photocopies of the permit shall be conspicuously posted in each branch office within the district. Photocopies of the license also may be posted.” Since this provision requires a broker to retain her permit to conduct business, or copy thereof, at her principal office and at all branch offices, answer choice (D) is incorrect.
Having eliminated answer choices (A), (B), (C), and (D), answer choice (E) is the correct answer to question 62. Further, 19 C.F.R. § 111.3(b)(2) requires the broker to file the authorization statement identified in answer (E) with Customs, rather than retain it herself. Additionally, pursuant to 19 C.F.R. § 111.21, documents required to be filed with Customs do not have to be retained by the broker. Therefore, a broker is not required to retain such an authorization at her place of business.
19 C.F.R. § 111.23(a)(1) indicates that the place of retention may be other than the broker’s place of business. Specifically, a broker may keep the records required to be retained by § 111.21 at a centralized storage location upon providing written notice to Customs. See 19 C.F.R. § 111.23(a)(1) (e). Accordingly, the regulations indicate that at least answer choices (A) and (B) (accounting records and entries) are also technically correct responses to question 62 because, pursuant to § 111.23(a)(1) (e), these documents are not necessarily required to be retained by the broker at her place of business.
This question may therefore be an appealable one due to potentially having more than one correct answer.
in reply to: Quiz 1, Question 3 #10515§ 111.36 Relations with unlicensed persons.
(b) Service to others not to benefit unlicensed person. Except as otherwise provided in paragraph (c) of this section, a broker must not enter into any agreement with an unlicensed person to transact customs business for others in such manner that the fees or other benefits resulting from the services rendered for others inure to the benefit of the unlicensed person.(c) Relations with a freight forwarder. A broker may compensate a freight forwarder for referring brokerage business, subject to the following conditions:
(1) The importer or other party in interest is notified in advance by the forwarder or broker of the name of the broker selected by the forwarder for the handling of his Customs transactions;
(2) The broker transmits directly to the importer or other party in interest:
(i) A true copy of his brokerage charges if the fees and charges are to be collected by or through the forwarder, unless this requirement is waived in writing by the importer or other party in interest; or
(ii) A statement of his brokerage charges and an itemized list of any charges to be collected for the account of the freight forwarder if the fees and charges are to be collected by or through the broker;
…What these provisions mean is that in general, a broker must not enter into any agreement with an unlicensed person to transact customs business for others in such manner that the fees or other benefits resulting from the services rendered for others inure to the benefit of the unlicensed person. However, there is an exception to this rule that a broker may compensate a freight forwarder for referring brokerage business, subject to certain conditions.
Therefore, answer choice E is correct, as it correctly states the exception to the rule.
Answer choice A is incorrect because it states that a broker may never enter into an agreement with an unlicensed person to transact Customs business for others, if the fees resulting from such services rendered for others benefit the unlicensed person. The statement that a broker may “never” enter into an agreement where an unlicensed person receives benefits from the services rendered is not correct as there is an exception in the rules for agreements with freight forwarders who may refer business to the broker and receive a benefit for such referrals. -
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