Business
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IBM-416-Chapter3-ImportingHTC1.pptShopping, Purchasing or Outsourcing ??
Chapter 3
Fundamentals of Importing
Key Elements for Successful Importing
General business knowledge & experience.
Knowledge of the import process.
Knowledge of the product
Knowledge of the costs
Access to low cost supply
Relationship with supplier (s).
Ability to establish a market
Knowledge of price structure.
Knowledge of the domestic market.
Ability to sell to a specific market efficiently.
Working capital.
Working relationship with “Professional Partners”
Customs Broker/Customs Attorney
Freight Forwarder
Banker
Attorney
Accountant
Sourcing Products
- Where to look for leads:
Consulates
Trade Directories
Trade Journals
Internet
US Government
Personal Contacts
- What to ask for:
Catalogs
Price Lists
Samples
References
What’s up for Negotiation
- Price
- Quantity
- Lead times
- Payment Terms
- Currency
- Terms of Trade
- Shipping Arrangements
While Negotiating…
- Shop for …
Freight Forwarder…shipping costs
Customs House Broker
Local Trucking Company (if needed)
- Research…
Duty Rates
Ad Valorem - % of invoice value
Specific – specified per uom (unit of measure) cost
Compound – both Ad Valorem & Specific
Based on:
Country of Origin
Commodity
While Negotiating…
- Create the packaging
Creative
Protective –
Weather resistant
Damage resistant
Master Carton Labeling
Item Number
Quantity
Ultimate Consignee
Country of Origin
May include weight & dimensions
Clearing Customs
- Use a CHB (customs house broker) !!!!!
Prices & services vary so shop around
Acts under Power of Attorney on behalf of importer….importer is liable for violations
Main Services
Prepare & file customs entries
Arrange to pay duties
Release of goods in customs custody
Clearing Customs
- The 5 Steps of entering goods
The Entry
Inspection
Valuation & Appraisment
Classification
Liquidation
- Goods are not legally entered until…
The shipment has arrived at US PORT
Documents are processed
Duties are paid
Delivery is authorized by customs
Clearing Customs
- 2 Part Process
Documents to release goods are presented
Documents for duty & statistics are presented
- Within 5 days of arrival the following documents must be filed with customs:
Entry Manifest
Evidence of right to make entry (POA)
Commercial Invoice
Packing List
Other required docs for admissibility
- Within 10 days of release of goods:
Entry summary for consumption
Duty deposit
Customs Examination
- To determine:
Value of goods & dutiable status
Labeling requirements
Prohibited materials
Correctly invoiced
Excess or shortages per invoice
Meets all special legal requirements
Some goods may be weighed, gauged or measured.
Import Duties & Quotas
- Duty – tax on imported products
- Duty Rates
Based on:
Country of Origin
Commodity
Types of Duty
Ad Valorem - % of invoice value
Specific – specified per uom (unit of measure) cost
Compound – both Ad Valorem & Specific
- Quotas
Quantity of product allowed to be imported during a calendar period
Based on:
Country of Origin
Commodity
Identifying H Code
- Harmonized Tariff Code
Issued by International Chamber of Commerce
HTS/HS Code – used to identify item description
Standard coding system used worldwide
US Import Duties applied to Harmonized Tariff Schedule by U.S. International Trade Commission
www.usitc.gov
Identifying Duty Rates
- Issued by International Trade Commission
- Enforced by US Customs
- How to identify duty rates
www.usitc.gov – Tariff Information Center
Harmonized Tariff Schedule (HTS)
General Notes Country Listing
GSP Listing
Trade Agreements thru remainder of Notes
US Tariff online by Chapter
Select Chapter 1-99 based on product description
Cross reference HS Code & Country of Origin
Identifying Duty Rates
- Rate of Duty Column 1
- The rates of duty in column 1 are rates which are applicable to all products other than those of countries identified for Duty Column 2.
- Column 1 is divided into two subcolumns –
General
General or normal trade relations (NTR) rates which are applicable to products of those countries which are not entitled to special tariff treatment
Identifying Duty Rates
Special
Reflects rates of duty under one or more special tariff treatment programs described and identified in parentheses immediately following the duty rate specified in such subcolumn.
Products must be properly classified
All of the legal requirements for eligibility are met
Where a product is eligible for special treatment under more than one program, the lowest rate of duty shall be imposed.
Where no special rate of duty is provided for a provision, or where the country from which a product otherwise eligible for special treatment was imported is not designated as a beneficiary country under a program appearing with the appropriate provision, the rates of duty in the "General" subcolumn of column 1 shall apply.
Classifying Exports
- How to find your Schedule B for exports
Schedule B number is based on the Harmonized Tariff System
The Schedule B number will be almost identical to the HS number
Go To: www.census.gov
Business – Export Codes - Schedule B Search
Enter Keyword – Search
Select Appropriate Option & Review for compliance
Used on Shipper’s Export Declaration to gather US Export Trade Statistics
