Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog
Learn the Basics of Customs and International Trade Policy and Procedure
Archive for the "Valuation" Category
In general, a commercial invoice should provide enough information for a Customs and Border Protection (CBP) Officer to determine if the goods being imported are admissible, and if so, what the correct rate of duty should be applicable based on its Harmonized Tariff Number.
Customs does not provide a specific format for a commercial invoice, however they do provide the elements that should be on an invoice in 19 C.F.R. 141.85.
At a minimum, an invoice should:
1. Describe the item clearly
2. Give the quantity
3. State the value (either price paid, or estimated value based on other considerations.) Give both the value in foreign currency and U.S. dollars
4. Country of Origin (where the item was made)
5. Where it was purchased
6. Name of the business or person selling the merchandise
7. Location of the business or person selling the merchandise
8. Name and address of business or person buying the merchandise, and if different from the importer
9. The U.S. address of the person or business the goods are being shipped to
In addition, Footwear is unique and Customs requires more detail; these additional requirements may be viewed at 19 C.F.R. 141.89. The additional invoice one must include with all their shipments is the “Interim Footwear Invoice.” A sample of a interim footwear invoice can be found here.
When Customs believes that there should be a change in classification or an increase in duty they are required to issue what is called a “Notice of Action” – Customs Form 29. A notice of action signifies Customs intentions to change the way current and possibly future shipments will be treated. The notice will provide the importer with two possible Customs actions; “Action Taken” or “Action Proposed.”
1. Action Taken – Once Customs indicates that Action has been taken, any increase in duties can only be addressed via protest or 520 claim.
2. Action Proposed – When Customs indicates Action proposed, the importer is given 20 days to convince Customs that the increase or change in classification is unfounded.
The importer should carefully respond to any Notices of Action issued by Customs as any decision will have an impact on the way business is conducted.
Contact us today at 347-512-9007 for legal assistance in responding to the Notice of Action.
When goods are presented at the border for entry into the United States, Customs, at the point of liquidation, makes a final determination as to the classification and valuation, or other requirements pertaining to the imported goods. How does Customs make that determination? Customs uses the information provided by the importer such as the commercial invoice and other documentation at the time of entry. Issues arise when Customs finds that the information given to them is inaccurate, incomplete, or insufficient whereby Customs cannot formulate a decision. Customs may give the importer an opportunity to add additional information, clarify what was provided, or provide a sample of the imported product in order for Customs to make a final determination.
The means by which Customs does this is via a Request for Information – Customs Form 28 (CF 28) – see it here. The importer must be cautious; responding to Customs’ questions may have future effects. Importers should ask themselves, why is Customs asking me this question, and what effect will my answer have on my shipments. This is the opportunity to make your case to Customs for present and future treatment.
The importer has 30 days to respond in writing to Customs from the date of issuance. If not possible to respond within that time frame a request for an extension can be asked for and usually obtained from the Customs Import Specialist handling the matter. If a Request for Information is not responded to, Customs will most often presume the least favorable interpretation of the facts, thus leaving the importer in a financial disadvantage. Therefore, it is vital that CF 28 be responded to properly and with the help of an experienced person who can guide the importer in the appropriate direction.
Contact us today at 347-512-9007 regarding a CF 28 you received, time is of the essence!
The duty, taxes, and Customs’ fees due on an imported article are its percentage of its DUTIABLE VALUE. The dutiable value is determined by the process of appraisement. Generally, appraisement is calculated by determining the transaction value of the goods, i.e. the price actually paid or payable for the goods when sold for export into the United States. Usually, the the price paid or payable is based on the F.O.B price at the port of export and shipping it onto the carrier.
Improper valuation of goods affects the duty liability. If the value of the goods is in excess of its proper value, the importer will pay a greater amount than necessary. Conversely, under declaring the value of goods may result in costly penalties. Our firm assists importers in appraising the value of goods as well as preparing and submitting binding rulings to Customs for calculating the correct value of goods.
The following costs are included in the price actually paid or payable:
1. Selling Commissions – Any commission paid to the seller’s agent (anyone who is related to , controlled, by, works for, or on behalf of the manufacturer or seller).
2. Assists – Anything that the buyer provides to the manufacturer and/or seller directly or indirectly either free of charge or for less than the arms length price for which he would have charged the buyer.
3. Royalties or License fees – Fees that the buyer must pay directly or indirectly as a condition of sale for export to the United States.
4. Packing Costs – Any costs incurred by the buyer for labor and materials to make them ready for exportation.
5. Proceeds of subsequent sale – Generally, if subsequent to the importation an importer pays or is required to pay more for the imported goods than was declared at the time of entry, those additional payments are part of the price paid for the goods.
Happy Importing 🙂