International Trade Update
If you are an importer or a company involved in U.S. imports you know that we’ve been in a long period of uncertainty and change and looking into my “crystal ball” for the rest of 2019 it is clear to me that we’ll face more of the same through the new year arrives. I’d like to highlight what I feel are the “hot button” issues for you to consider.
Section 301 Exclusions
Section 301 of the Trade Act of 1974 provides the United States with the authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services. Many importers who import from China have become intimately familiar with the additional duties being assessed on many products under Section 301.
Currently about 50% of the products imported from China are on one of the three lists (tranches) and are subject to additional duty of 25%. One bit of good news is that for importers of products that are covered by List 3 there is an open window within which you can file for a product exclusion and avoid the 25% additional duties. That window closes on Sept. 30th so you have to act quickly to take advantage of this opportunity.
For importers granted an exclusion the additional duties paid since List 3 took effect (on Sept. 24, 2019) would be refunded. This could be huge for some companies; is your company one that can benefit from an exclusion? Contact us today for more details.
Beware of illegal “duty avoidance” schemes
We are hearing from some importers who have been approached by their suppliers with supposed ways to avoid the additional China duties. While there are a few legal options to reduce your duty exposure, many of the schemes we’ve heard about are illegal and can lead to both civil and even criminal penalties against an importer.
It is illegal to “trans-ship” your product from China to another country before it is shipped to the U.S. in order to claim a country of origin other than China. Don’t do it!
While it may be possible to avoid China duties by sending your products to another country for further manufacturing before shipping them to the U.S., the rules are very complex regarding country of origin and importers must exercise due diligence before claiming the origin for their goods. This one is very tricky and we’d highly suggest you get expert advice (contact us) before you act.
U.S. Customs expects every importer to exercise due diligence and reasonable care in all their import transactions. This includes properly vetting your suppliers and ascertaining the correct HTS classification and country of origin for your products. Talk to an expert about this today – firstname.lastname@example.org.
Customs focuses enforcement efforts on Free Trade Agreements
There are a number of free trade agreements (FTA) negotiated between the U.S. and certain trading partners and importers can obtain duty free or reduced duty status for their goods if those goods are from one of those partner companies and if their goods meet the FTA requirements. Examples include NAFTA, GSP, US/Korea FTA, US/Peru FTA and others.
As you might expect, Customs looks closely at these agreements since they allow importers to pay no duty or greatly reduced duty rates. There has been a history of non-compliance with these programs so Customs is putting their efforts into weeding out those non-compliant importers.
If you want to know more about these Free Trade Agreements or have questions about complying with the FTA requirements please contact us.
CTPAT Certification – NOW is the time
CTPAT is the Customs Trade Partnership Against Terrorism, a voluntary program that allows importers to get certified by Customs demonstrating that the importer is taking the necessary steps to keep their supply chain secure. Certified CTPAT importers see fewer exams and shipment delays and are less likely to be heavily impacted should a security breach occur involving imports into the U.S.
CTPAT is undergoing a number of changes and the program is likely to become more difficult in the coming months. Importers would be wise to act now and get certified before the changes take effect and we can help.
Please contact me if you have questions or need assistance in getting CTPAT certified. Email me email@example.com.
- Posted by Steve Fodor
- On July 24, 2019