| U.S Customs || Duties and Rates || Harmonized
Tariff Schedule || Penalties || Countervailing Duties |
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The U.S. Customs Service administers the Tariff Act of 1930, as amended. Title VI of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), known as the Customs Modernization Act, amended many sections of the Tariff Act of 1930 and related laws, effective December 8, 1993. Under a new theory, the concepts of  "informed compliance" and "shared responsibility" were introduced with these changes. The theory of Congress is that if the trade industry is informed and made aware of Customs rules and responsibilities, voluntary compliance with Customs laws and regulations will be maximized.  The Customs Service was directed to provide the public with more relevant information concerning duties and rights of the trade community when Customs laws are in applied to transactions. It is also a potential problem for the importer who does not assume the new responsibilities.
Customs shares responsibilities with the Trade industry in meeting import requirements. Under Section 484 of the Tariff Act, as amended, 19 U.S.C. Section 1484, the importer of record is responsible for using reasonable care to enter, classify and value imported merchandise, and provide any other information necessary to enable Customs to properly assess duties, collect accurate statistics and determine whether any other applicable legal requirement is met. The Customs Service is then responsible for fixing the final classification and value of the merchandise. When an importer of record fails to exercise reasonable care in classification or valuation,  penalties may be imposed.
The Office of Regulations and Rulings has been active in the distributing information about Customs compliance responsibilities. Even though a tremendous amount of information is made available, this is an area of regulation with complicated issues, and often, large amounts of money at stake. Importers may obtain advanced rulings under Customs Regulations, 19 C.F.R. Part 177, or obtain advice from licensed Customs Brokers, attorneys or others who specialize in Customs matters.
The U.S. Customs Service is also a major border enforcement agency, with enforcement responsibility for many other government agencies. In addition, Customs watches for hazardous products, protects domestic industry and labor against unfair foreign competition, detects and investigates smuggling and and illegal international trafficking in arms, munition and currency, and acts of terrorism at U.S. ports of entry.
Title 19 Customs Duties
All goods imported into the United States are subject to duty or duty-free entry in depending upon classification of items in the Harmonized Tariff Schedule of the United States.  (See 19 U.S.C. 1202.) When dutiable, ad valorem, specific, or compound rates may be assessed. An ad valorem rate, the type most often applied, is a percentage of value of the merchandise, such as five percent ad valorem. A specific rate is a specified amount per unit of weight or other quantity. A compound rate is a combination of ad valorem rate and a specific rate.
Rates for imported goods may vary by country of origin. Much merchandise is charged under the "normal trade relations" rates in the General column under column 1 of the tariff schedule.This rate was previously referred to as "most-favored-nation" status rate, and is lower than the full or "statutory" rates in column 2 of the tariff schedule. Free rates are provided for many subheadings in columns 1 and 2 of the tariff schedule. Duty-free status is also available under various conditional exemptions which are reflected in the Special column under column 1 of the tariff schedule. Importer must demonstrate qualification for a conditional exemption from duties.
A common duty exemption occurs with the Generalized System of Preferences (GSP). Merchandise qualifies for duty-free entry under the Generalized System of Preferences when it is from a beneficiary developing country and meets certain other criteria. Other exemptions include certain personal exemptions, exemptions for articles for scientific or other institutional purposes, and exemptions for returned American products.
The Customs Service makes its decision on the dutiable status of merchandise when the entry is liquidated after the entry documents have been filed. An exporter, importer, or other interested party may get advance information on any matter affecting the dutiable status of merchandise by writing to the port director where the merchandise will be entered or to the National Commodity Specialist Division, New York, NY 10048, or to the U.S. Customs Service, Attention: Office of Regulations and Rulings, Washington, DC 20229. Detailed information on the procedures applicable to decisions on prospective importations is given in 19 CFR Part 177.
The importer may disagree with the dutiable status after the entry has been liquidated. A decision at this stage of the entry transaction is requested by filing a protest and application for further review on Customs Form 19 within 90 days after liquidation (see CFR part 174). If the Customs Service denies a protest, litigation against the Government may be necessary for determination.
Generally, liability for payment of duty becomes fixed at the time an entry for consumption or for warehouse is filed with Customs. The obligation for payment is upon the person or firm in whose name the entry is filed. When goods have been entered for warehouse, liability for paying duties may be transferred to any person who purchases the goods and desires to withdraw them in his or her own name. Payment to a  customs broker does not relieve importer from liability for duties, taxes, and other debts owed to Customs if not paid by broker. However, if entry is made in name of a customs broker, the broker may obtain relief from statutory liability for payment of increased or additional duties found due if the actual owner of goods is named, and declaration by owner in which owner agrees to pay the additional duty and  bond of owner are both filed by broker with the port director within 90 days of date of entry.
The Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes  is published pursuant to the Omnibus Trade and Competitiveness Act of 1988 (1) the then current Harmonized Tariff Schedule; (2) statistical annotations and related statistical information formulated under section 484(f) of the Tariff Act of 1930 (19 U.S.C. 1484(f)); and (3) such other matters as the Commission considers to be necessary or appropriate to carry out the purposes enumerated in the Preamble to the Harmonized System convention. THE HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES The 2000 Harmonized Tariff Schedule
United States International Trade Commission is an independent, quasi-judicial federal agency that provides objective trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement. This agency updates and publishes the Harmonized Tariff Schedule of the United States.
Code of Federal Regulations Title 19 - Customs Duties
Section 592 of the Tariff Act of 1930, as amended (19 U.S.C. 1592), generally provides that any person who by fraud, gross negligence, or negligence, enters, introduces, or attempts to introduce merchandise into the commerce of the United States by means of any material and false electronically transmitted data, written or oral statement, document or act, or by any omission which is material, will be subject to a monetary penalty. In limited circumstances, the merchandise may be seized to insure payment of the penalty, and forfeited if the penalty is not paid. The civil fraud statute has been applied by the Customs Service in cases involving individuals and companies in the United States and abroad that have negligently or intentionally provided false information concerning importations into the United States.Title 18, United States Code, Section 542, a criminal fraud statute also provides sanctions for presenting false information to Customs officers, providing a maximum of two years' imprisonment, a fine, or both, for each violation involving importation or attempted importation.
Also, under Section 596 of the Tariff Act of 1930, as amended, 19 U.S.C. 1595a(c), the Customs Service is required to seize and forfeit all merchandise which is stolen or smuggled, and controlled substances and certain contraband articles. Merchandise may be seized and forfeited if: its importation is restricted or prohibited because of a law relating to health, safety or conservation, the merchandise is lacking a federal license required for the importation, the merchandise or packaging is in violation of copyright, trademark, trade name, or trade dress protections; the merchandise is intentionally or repetitively marked in violation of country of origin marking requirements; or the importation of the merchandise is subject to quantitative restrictions requiring a visa or similar document from a foreign government, and the document presented with the entry is counterfeit.
Additionally, federal laws relating to criminal activities commonly known as "money laundering" created criminal and civil provisions that, along with fines and imprisonment, enable the government to prosecute persons for, and to seize and forfeit property involved in or traceable to, violations of the Money Laundering Control Act or Bank Secrecy Act. Importation fraud violations are included as specified unlawful activities or predicate offenses within the Money Laundering Control Act. Criminal penalties include imprisonment for up to 20 years for each offense and fines of up to $500,000, or both, and a civil penalty up to twice the value of the property involved in the offense.
With certain exceptions, when any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation, pays or bestows, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article or merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, then upon the importation of such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production, or has been changed in condition by remanufacture or otherwise, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. 19 U.S.C. Section 1303 Countervailing duties.
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