Everything in the U.S. Customs regarding cargo is built around ENTRY DOCUMENTATION.
The word ENTRY as referred to U.S. Customs means FILING OF DOCUMENTS.
Per 19 CFR 141.0, "Entry" means that documentation required by Sec. 142.3 of this chapter to be filed with the appropriate Customs officer to secure the release of imported merchandise from Customs custody, or the act of filing that documentation.
There are THREE TYPES of filing documents:
- SUBMISSION - Voluntary delivery for preliminary review. HAS NO LEGAL STATUS. U.S. Customs just review documents and confirms that it is correct OR shows to errors.
- FILING - OFFICIAL delivery documents to U.S. Customs in proper form. HAS THE LEGAL STATUS.
Proper forms must have NO CLERICAL ERRORS.
Mast be with DUTY CHECK ATTACHED.
- As exception PRESENTATION. For for QUOTA ONLY.
Broker - Agent for principal
Importer of Record - The importer of record is the individual or firm liable for payment of all duties and meeting all statutory and regulatory requirements incurred as a result of importation
Freight Forwarder - arrange transportation including documents for transport (do not responsible for customs documents)
Carrier - (a) Common carrier - for public, (b) Privet carrier - carry own goods only.
Bill of Lading - Actually is Sipping Receipt. (a) Negotiable - can be signed like a check, (b) Non-Negotiable - cannot be signed.
Commercial Import - anything to do with business
Country of Origin - where goods (1) Grown; (2) Made; (3) Mined; (4) Manufactured; (5) under where Substantial Transformed.
Substantial Transformation means, that goods:
- Must have a NEW NAME
- Must have a NEW CHARACTER
- NEW USE
Otherwise goods must be totally changed. Example: assembled from foreign parts.
!!! DUTY & QUOTA ARE BASED ON Country of Origin !!!
Country of Export - where goods were sold or shipped with shipped having precedence over sold.
|Country of Origin||Country of Export||?||USA|
|Germany ||Switzerland ||France |
|1. Made in "A" and flown directly to the USA. Then C/O="A" & C/E="A"|
|2. Made in "A", Stored in "B", and flown from "B" to the USA. Then C/O="A", C/E="B"|
If goods stored and shopped from "B", then C/Export is "B"!!!
|3. Made in "A" and Tracked it trough "B' to "C", and put on ship in "C" to the USA. Then C/O="A", C/E="A"|
Transshipment under Trough Bill of Lading for export DOES NOT CHANGE Country of Export!!!
Happens all the time. Especially for land locked countries.
- Country of Export determines VALUATION.
To determine the valuation DATE OF EXPORT must be determined.
- Country of Export determines COUNTRY where SHIPPED FROM
- DATE OF EXPORT determines CURRENCY CONVERSATION and it is the last day in Country of Export REGARDLESS OF REASON!!!
Example: A ship departure from a port of Country of Export and then, due to mechanical problems, came back to the port Country of Export. Then DATE OF EXPORT IS the last day in Country of Export REGARDLESS OF REASON!!! Currency will be converted on the DATE OF EXPORT. It is important to understand that date of export is NOT a date when goods left a city, but the day when they left the Country of Export REGARDLESS OF REASON!!!
ExFactorty - price does not include any freight and insurance
FOB-point - Free On Board to point. Seller pays freight and insurance to board at the vessel-point.
Example: FOB Bremen, Germany; Vessel OOCL "Gold Star"/ V123
FAS-point - Free Along Side to point. Seller pays freight and insurance to a dock next to the ship.
Important!: Point must name address and # of the dock.
CAF-point - Cost, Insurance, Freight to point.
Point is very important! Do not mix Sea port to Airport etc. Must be specified properly.
TIME OF ENTRY:
The rates of duty, GSP eligibility, quota status, priority and time limits for liquidation are all determined by the time of entry!
Merchandise for which entry is requested must be entered by the Importer of Record within 15 calendar days.
In general, the RELEASE DATE is the time of entry.
Entry documentation may be submitted BEFORE the merchandise arrives within the limit of port.
ENTRY DOCUMENTATION REQUIRED TO SECURE RELEASE:
- Customs form CF 3461, except CF 7533 can be used for goods imported from a contiguous country.
- Evidence of the right to make entry.
- Rated invoice.
- Packing list if appropriate.
- Other documents required by other federal government agencies (OGAs) for a particular shipment.
- All entries must be covered by a bond or secured by cash deposit. (with certain limited exceptions).
The CF 7501 or 3311, as appropriate, will serve as BOTH the Entry and Entry Summary
Estimated duty must be deposited with U.S. Customs at the time of filing of entry documentation or the entry summary (when it serves as both entry and entry summary)
|CF 3461||CF 7501|| |
|Arrival/Entry ||Summary ||Liquidation |
|15 calendar days from a date of entry||10 working days||1 year from a day of entry|
|Arrival means a date when a ship entered in a port limit with intention to unlade (time of arrival) ||Payment with duty must be attached||U.S. Customs exhausts all legal interests|
Entry form CF 3461 - "IMMEDIATE DELIVERY-ENTRY":
- Minimum documents to secure conditional release.
- Importer of Record.
- Admissibility along with country of origin and valuation (if quote items)
- Must be filed in 15 calendars days after arrival.
- CF 3461 Establishes time of entry. LEGALLY.
IMPORTANT!: Time of entry is time WHEN RELEASED BY U.S. CUSTOMS. But not a day when CF 3461 is given to U.S. Customs. (Normally the same day. However delays may occur. The broker/importer has a right to designate to Customs that the date of presentation of the entry will be the entry date. If the date is not specifically designated, the date of release will be the date of entry).
- Post a bound.
Posting bond is a warrant to to U.S. Customs. Bond is an insurance policy. U.S. Customs is the beneficiary.
However, bond put a lien on a merchandise (that means, if duty are not paid in 10 working days, i.e. 7501 is on time, then insurance company can take right over the merchandise). One bond can serve multiply purposes.
Entry Summary form CF 7501:
- Complete information & permanent record.
- Includes payment of duties and other fees.
- Must be filed in 10 working days of the date of entry (filing 3461).
Liquidation: 1 year from a day of entry U.S. Customs exhausts all legal interests.
TYPES OF ENTRIES:
- Formal - Commercial goods valued over $2,000. IMPORTANT!: $2,000 NON invoice value, but Customs value. Must have a bond.
- Informal - (1) Commercial goods under $2,000; (2) Any noncommercial goods regardless of value. (3) U.S. goods return valued under $10,000. No bond require.
This is general description of a customs entry (i.e., customs clearance) involving an initial customs declaration made by the importer or importer's agent (a customs broker), normally resulting in the release of the cargo from customs custody, followed by a process which allows CBP (U.S. Bureau of Customs and Border Protection) to further scrutinize the importers declaration (HTS classification, valuation, duty computation, etc.,) and compliance with other requirements affecting the importation, collect additional information about the transaction. This leads to either:
1. Acceptance by CBP of the importer's declaration, or,
2. A CBP imposed change to this declaration with respect to tariff classification, customs entered value, some other information associated with the entry and/or fact of importer compliance with entry requirements.
One way or the other, a formal entry is different from an informal entry in that it is a 2-step process requiring CBP to "finalize" it after initial cargo release, an event known as entry liquidation (the only exceptions being a transportation entry, an entry under a temporary import bond, or an informal entry deemed as self-liquidating).
Because imported goods are released before CBP has made a determination that the importer's declaration is correct, an importer is required to provide CBP with an importer customs bond as security that the importer will be responsible for providing needed information, taking actions required by CBP, and paying customs duty found due on the import.
The requirement for a formal entry is typically based on value. According to CBP document(s) relating to the ABI system, a "formal entry" is defined "as the documentation required (either electronic or paper) to secure the release of imported merchandise that is either valued in excess of $2000, or if valued less than $2000, would otherwise require the submission" (of documents known as a formal entry). CBP may require a formal entry for any importation at their discretion.
There are also a few cases in which a formal entry may be waived for higher value imports (e.g., household goods, personal effects, and American goods returned inspected and determined by marking or other criteria to be clearly of U.S. origin).
TYPES OF FORMAL ENTRY:
- CONSUMPTION ENTRY (90%) - Entered for U.S. Commerce with the intent of being sold after it passes U.S. Customs clearance.
- IMMEDIATE DELIVERY - (1) Goods from Canada and Mexico; (2) Fresh fruits and vegetables and other perishable; (3) To of for the account of any Federal government agency.
Used in some cases by making application for a Special Permit for Immediate Delivery on CF 3461 prior to the arrival of merchandise. If approved, then shipment will be released immediately after arrival. Duty must be paid within 10 working days of the release.
- WAREHOUSE ENTRY - Entered in bonded warehouse. Must be in bond. Do not pay duty and taxes.
The goods may remain in a Customs bonded warehouse up to FIVE years from the date of importation. During those FIVE years the goods may be re-exported or withdrawn for consumption. Perishable, explosives, etc are prohibited.
It still filed on CF 7501, but without a payment of duty. If goods will be withdrawn for consumption, then value declared on the original entry remains the same. However duty rate in effect at the time of withdraw.
Moving the goods in another bonded warehouse in the same port can be made under Delivery Ticket (CF 6043).
If moved to another port, a Re-warehouse Entry must be filed on a CF 7501.
- FOREIGN TRADE ZONE
- TRANSPORTATION ENTREE - For transportation trough territory of the USA. Must be in bond. Do not pay duty and taxes. (1) Entry for immediate transportation without appraisement; (2) Warehouse withdrawal for transportation; (3) Warehouse withdrawal for exportation; (4) Entry for transportation and exportation; (5) Entry for exportation.
CF 7512 used for entries: IT (In Transit); T&E (Transportation and Exportation); WDT&E (Warehouse Withdrawal for Transportation and Exportation); WDE (Warehouse Withdrawal for Exportation)
Entry for immediate transportation without appraisement is UNIQUE (CF 7512) because it is the only form of entry that my be made by someone other than Custom Broker. "Anyone with interest".
- TRADE FARE - Strictly for trade fare.
- APPRAISEMENT ENTRY - When value of goods is unknown. (1) Goods damaged on voyage that was not the fault of the shipper: by fire, rusted, etc.; (2) Goods recovered from a wrecked, stranded, or sunken vessel; (3) Household goods used aboard and personal effects returned by the owner for his own use, not for sale; (4) Gifts to a person in U.S.; (5)Tools of trade of person arriving in the USA; (6) Personal effects of U.S. Citizen who died aboard; (7) Secondhand articles; (8) Articles deteriorated prior to exportation; (9) Articles imported which are not purchased or considered a commercial transaction.
All types of entries 1-7 must be to be filed within 15 days of arrival.
- MAIL ENTRY - Do not have to be filed within 15 days. It is EXCEPTION.
This is a simplified type of consumption entry procedure that can be used for low value commercial shipments and non-commercial shipments such as personal effects or gifts. An informal entry is considered self-liquidating (i.e., there is no entry liquidation process following release of the cargo) and the importer does not have to provide CBP (U.S. Bureau of Customs and Border Protection) with a customs bond.
According to CBP document(s) relating to the ABI system, an "informal entry" is defined "as the documentation required (either electronic or paper) to secure the release of imported merchandise that is either valued less than $2000, or if valued in excess of $2000, would otherwise be released on an informal entry (e.g., personal effects & household goods)."
An informal entry can be filed electronically or made using several different paper Customs Forms provided directly to the customs inspector according to the type goods and/or circumstances of entry (forms can be downloaded from the CBP web site Forms page at http://www.customs.gov/xp/cgov/toolbox/forms/ ):
1. CF 7512, Entry Summary, used as an informal entry document for dutiable shipments not exceeding $2000 in value, for duty payment, receipt and release of dutiable goods.
2. CF 3299 Declaration for Free Entry of Unaccompanied Articles, used for free entry of household goods and personal effects - must be completed and signed by owner of goods .
3. CF 3311 Declaration for Free Entry of Returned American Products, commonly referred to as American goods returned (AGR), used for entry of U.S. origin goods valued at up to $10,000, subject to verification by CBP prior to release (formal entry required for those valued over $10,000).
4. CF 7523 Entry and Manifest of Merchandise Free of Duty, Carrier's Certificate and Release, used for entry of goods which are unconditionally duty free
For more information on informal entries, refer to 19 CFR 143.21 through 28. See also definitions for formal entry and Section 321 release.
INFORMAL ENTRIES ARE CONSIDERED FOR:
- American goods returned for repair or alteration in value under $10,000 (AGR).
CF 3311 - Declaration of American Goods Return.
- AGR Under $2,000 (except 250 group)
- AGR under $10,000 returned for repair and to be exported from the USA.
- AGR under $10,000 rejected by foreign buyer. Require CF 3311 AND CF 7501. However it is still informal entry. No bond require and no duty on it.
All entries over $10,000 must be done as FORMAL entries.
- American goods returned after being rejected by the foreign purchaser.
- Any installment, not exceeding $2000 in value, of a shipment arriving at different times.
- A portion of one consignment, as long as it does not exceed $2000.
- Household and personal effects or tool of trade.With exceptions:
- Dangerous goods;
- If it contains over $250 of certain merchandise. The amount is frozen since 1930 by U.S. Union for U.S. Union protection. (Examples: gloves, shoos, textile, matrices etc. This items are covered in Sections 7,8,11,12 of Harmonize tariffs. Many of those items are subject to visa or quota).
- Books under certain classification imported by a library or other eligible institution.
MULTIPLE ENTRY SUMMARY can be done for number of shipments, which come from the same importer for the same consignee if:
- Goods arrive in ONE WEEK.
- 10 working days begins from the date of the first entry.
- Minimum quantity is one box or one metric ton in bulk.
RIGHT MAKE ENTRY - IMPORTER OF RECORD:
Right to make entry is the proof that you are an Importer of Record (not necessarily to be a consignee).
Importer of Record - Customs call them legally responsible for EVERYTHING. The importer of record is the individual or firm liable for payment of all duties and meeting all statutory and regulatory requirements incurred as a result of importation
- Who name is a shipments are cleared under.
- Responsible for clearance goods with Customs.
- Responsible for duty payments.
- Responsible to confirm all legal requirements of federal agencies.
- Customs will go after and sue the Importer of Records if something is wrong with a shipment.
Who can make entry? CFR19.141.11 - (1) Owner; (2) Purchaser; (3) U.S. Customs Broker.
PROOFS OF HAVING RIGHT OF ENTRY:
- Simple possession (bought goods and carry in your own vehicle or you are a privet carrier, what is the same)
- If goods are carried by a common carrier: (1) Original Bill of Lading; (2) An extract or a copy certified by the carrier of Bill of Lading (sample: Non-Rated BOL); (3) Carrier's Certificate CF 7529 issued by the carrier. Confirms that you are in fact the individual who has the right to make entry; (4) Blanket carrier's release. For same items, which importing over and over again by using the same carrier.
If non above are available, must to put a bond with Customs and Customs will give 120 days to produce a new BOL or a copy of BOL.
If for some reasons no owner and no consignee are available, then CHB files "Actual Owner's Declaration" CF 3347 (CFR 19.141.20). CHB normally would not do that, except for example an owner of goods is is outside of the USA and cannot sign for the goods. Then within 90 days CHB file another CF 3347 and transfers the right to the actual owner. Everything must be done in bonds.
If Importer of Record is NOT U.S. resident (company) then must have:
- A Power of Authority to U.S. Custom Broker.
- Must designate U.S. domestic Agent for Service and Process within the state where entry is made (CHB is normally is).
- Must have a bond in the U.S. domestic surety.
U.S. Custom broker must have a POWER OF AUTHORITY in order to act as a custom broker on behalf of client.
ORIGINAL OF POWER OF AUTHORITY must be kept in CHB office (not at Customs), original only, at all the time. If Customs cannot have the original, then broker will be fined $1000.
Important: Power of Authority is valid UNTIL IT IS REVOKED with one exception: FOR PARTNERSHIPS IT IS VALID FOR A TWO YEARS ONLY.
Who can sign the Power of Authority?
- If an ownership - the owner only.
- If a partnership - one of the partners.
- If a corporation - (1) President; (2) Vice-president; (3) Secretary; (4) Treasurer.
No one else can sign. Even a boarder director etc.