What Every Member of the Trade Community Should Know …

[Pages:37]What Every Member of the Trade Community Should Know About:

Entry

AN INFORMED COMPLIANCE PUBLICATION MARCH 2004

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NOTICE: This publication is intended to provide guidance and information to the trade community. It reflects the position on or interpretation of the applicable laws or regulations by U.S. Customs and Border Protection (CBP) as of the date of publication, which is shown on the front cover. It does not in any way replace or supersede those laws or regulations. Only the latest official version of the laws or regulations is authoritative.

Publication History First Published: March 2004

PRINTING NOTE: This publication was designed for electronic distribution via the CBP website () and is being distributed in a variety of formats. It was originally set up in Microsoft Word97?. Pagination and margins in downloaded versions may vary depending upon which word processor or printer you use. If you wish to maintain the original settings, you may wish to download the .pdf version, which can then be printed using the freely available Adobe Acrobat Reader?.

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PREFACE

On December 8, 1993, Title VI of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs Modernization or "Mod" Act, became effective. These provisions amended many sections of the Tariff Act of 1930 and related laws.

Two new concepts that emerge from the Mod Act are "informed compliance" and "shared responsibility," which are premised on the idea that in order to maximize voluntary compliance with laws and regulations of U.S. Customs and Border Protection, the trade community needs to be clearly and completely informed of its legal obligations. Accordingly, the Mod Act imposes a greater obligation on CBP to provide the public with improved information concerning the trade community's rights and responsibilities under customs regulations and related laws. In addition, both the trade and U.S. Customs and Border Protection share responsibility for carrying out these requirements. For example, under Section 484 of the Tariff Act, as amended (19 U.S.C. 1484), the importer of record is responsible for using reasonable care to enter, classify and determine the value of imported merchandise and to provide any other information necessary to enable U.S. Customs and Border Protection to properly assess duties, collect accurate statistics, and determine whether other applicable legal requirements, if any, have been met. CBP is then responsible for fixing the final classification and value of the merchandise. An importer of record's failure to exercise reasonable care could delay release of the merchandise and, in some cases, could result in the imposition of penalties.

The Office of Regulations and Rulings (ORR) has been given a major role in meeting the informed compliance responsibilities of U.S. Customs and Border Protection. In order to provide information to the public, CBP has issued a series of informed compliance publications, and videos, on new or revised requirements, regulations or procedures, and a variety of classification and valuation issues.

This publication, prepared by the International Trade Compliance Division, ORR, is a review of the requirements that attach to the "entry" of imported merchandise. We sincerely hope that this material, together with seminars and increased access to rulings of U.S. Customs and Border Protection, will help the trade community to improve voluntary compliance with customs laws and to understand the relevant administrative processes.

The material in this publication is provided for general information purposes only. Because many complicated factors can be involved in customs issues, an importer may wish to obtain a ruling under Regulations of U.S. Customs and Border Protection, 19 C.F.R. Part 177, or to obtain advice from an expert who specializes in customs matters, for example, a licensed customs broker, attorney or consultant. Reliance solely upon general information in this publication may not be sufficient to show the exercise of reasonable care in specific transactions.

Comments and suggestions are welcomed and should be addressed to the Assistant Commissioner at the Office of Regulations and Rulings, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, NW, (Mint Annex), Washington, D.C. 20229.

Sandra L Bell Acting Assistant Commissioner Office of Regulations and Rulings

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INTRODUCTION.......................................................................................... 8

ENTRY REQUIRED .....................................................................................8

General Rule ................................................................................................................ 8 Exceptions to Entry Requirement ................................................................................. 8

RIGHT TO MAKE ENTRY ...........................................................................8

Persons Who Can Enter Merchandise ......................................................................... 8 "Financial Interest" in Imported Merchandise ............................................................... 9 Self-Filing vs. Hiring a Broker....................................................................................... 9

TYPES OF ENTRY ......................................................................................9

Different Entry Types.................................................................................................... 9 Consumption Entries ? Formal and Informal .............................................................. 10

ENTRY PROCESS ....................................................................................10

Two-Step Process ...................................................................................................... 10 Exception to Two-Step Process: "Live Entry" ............................................................ 10

CONSEQUENCES OF LATE FILING OF ENTRY DOCUMENTS ............11

"General Order" .......................................................................................................... 11 Demand for Liquidated Damages............................................................................... 11

TIME OF ENTRY .......................................................................................11

Significance of Time of Entry...................................................................................... 11 Recognized Times of Entry ........................................................................................ 12

BOND REQUIREMENTS...........................................................................12

Bond Required to Obtain Release.............................................................................. 12 Basic Importation Bond Conditions ............................................................................ 13 Transfer of Liability by Means of Superseding Bond .................................................. 13

SPECIAL PERMIT FOR IMMEDIATE DELIVERY ....................................13

Entry vs. Special Permit ............................................................................................. 13 Qualifying Circumstances........................................................................................... 14

EXAMINATION, DETENTION AND RELEASE ........................................14

RECALL OF MERCHANDISE RELEASED FROM CBP CUSTODY........14

ADDITIONAL INFORMATION...................................................................16

The Internet................................................................................................................ 16 Customs Regulations ................................................................................................. 16

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Customs Bulletin ........................................................................................................ 16 Importing Into the United States................................................................................. 17 Informed Compliance Publications ............................................................................. 17 Value Publications...................................................................................................... 18 "Your Comments are Important"................................................................................. 19

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INTRODUCTION

The act of entering merchandise consists of the filing of paper or electronic documents with the United States Customs and Border Protection (CBP) containing sufficient information to enable CBP to determine whether imported merchandise may be released from CBP custody. It also includes the filing with CBP of the declared value, classification and rate of duty applicable to the merchandise, and such other information as is necessary to enable CBP to properly assess duties, collect accurate statistics, and determine whether other applicable requirements of law have been met. All such filings must be done using "reasonable care."

ENTRY REQUIRED

General Rule

As a general rule, all merchandise imported into the United States is required to be entered, unless specifically excepted. Importation occurs when a vessel or aircraft laden with goods arrives within a port of entry with the intent to discharge its cargo, or upon arrival within the Customs territory of the United States if by vehicle or train. The "Customs territory of the United States" includes only the States, the District of Columbia, and Puerto Rico. The types of imported merchandise for which no entry is required are described below.

Exceptions to Entry Requirement

Specific exemptions from entry apply to merchandise described in General Note 3(e) of the Harmonized Tariff Schedule of the United States (HTSUS), to certain vessels, to instruments of international traffic, and to certain railway locomotives and cars from Canada and Mexico. The General Note 3(e) exemptions include corpses and accompanying coffins and flowers; telecommunications transmissions; business records and data; articles returned from space; undeliverable articles returned within 45 days and which have remained in the custody of the carrier or foreign customs service; and aircraft parts or equipment removed from U.S. registered aircraft in international traffic because of accident, breakdown or emergency and returned within 45 days of removal.

RIGHT TO MAKE ENTRY

Persons Who Can Enter Merchandise

Only certain persons may enter goods. The term "person" in this context means businesses as well as individuals. The entry law, codified at 19 U.S.C. ? 1484, limits the right to make entry to the "owner or purchaser" of imported merchandise, or to a licensed "customs broker" who has been appointed by the owner, purchaser, or consignee of the merchandise. Licensed customs brokers are easy to identify, because they are individuals or businesses that have been issued a customs brokers license by

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