Chapters 23 & 24 - Video Review On-Demand Webinar Session 7

Transcription

1 Customs Broker Exam Review Session Seven Chapter CFR, Part 191 DUTY DRAWBACK What is drawback? Drawback is the refund of certain duties, fees and taxes when previously imported goods exported or destroyed, Inc. 1

2 What can you draw back? Eligible Duties paid on consumption entry Marking duties Internal revenue taxes Merchandise Processing Fee For unused merchandise drawback only! Ineligible Harbor Maintenance Fee AD/CVD Merchandise Processing Fee Except for unused merchandise drawback Conditions for drawback Export U.S. Possession FTZ as Zone Restricted Destroy Who can claim drawback The Exporter or Destroyer UNLESS He/she assigns that right , Inc. 2

3 Types of Drawback Rejected Merchandise USC 1313(c) Unused Merchandise D.I. USC 1313(j)(1) Sub. USC 1313(j)(2) Manufacturing D.I. USC 1313(a) Sub. USC 1313(b) Drawback Forms CBP Form 7551 Drawback Entry CBP Form 7552 Delivery Certificate CBP Form 7553 Notice of Intent Export or destroy Copies and completion instructions are in your References book CBP 7551 Drawback Entry Identifies Product HTS Duty rate 1. P, VP, S or T 2. Full partner 3. Owner 4. Employee with a POA 5. Individual on own behalf 6. LCB with a POA Type of drawback Method of filing, etc. Must be signed by authorized person ( 191.6), Inc. 3

4 CBP 7552 Certificate of Delivery Used if imported goods are sold to person claiming drawback ( ) Identifies who will get the check Company X Imports product and pays duty Sells product to 7552 CD Company Z Exports product CBP 7553 Notice of Intent Filed prior to export or destruction Unused Rejected Filed prior to destruction Manufacturing Direct or substitution Time frame for filing depends on type of claim Can get waiver if approved ( ) Submission of CBP 7553 NOI Claim Submit Return Examine Unused Rejected Destroy 2 WD prior 5 WD prior 7 WD prior 2 WD 2 WD 4 WD Within 5 WD Within 5 WD, Inc. 4

5 Failure to file CBP 7553 NOI Claim denied One (1) time exemption Letter to PD Why not filed Can rule in 90 days OK Claim will be processed No Can file an appeal within 30 days of denial Rejected Drawback Wrong color, size, product, specification, whatever Three years Three years Import to export Export to claim Rejected Process Exporter CBP 5 WD Prior CBP 7553 NOI No response? OK to proceed Response? 5 WD to inspect 2 WD to Request Inspection, Inc. 5

6 Rejected Claim Submit CBP 7551 Entry CBP 7553 NOI Proof of export/destruction Brief letter explaining reason for rejection Retain all documents for 3 years after payment of claim Unused Drawback Three years Direct identification ( ) Substitution ( ) Three Years Three Years Import to export Export to claim Unused Process Exporter CBP 2 WD Prior CF7553 NOI No response? OK to proceed 2 WD to Request Inspection Response? 5 WD to inspect, Inc. 6

7 Unused Claim Submit CBP 7551 Entry CBP 7553 NOI Proof of export/destruction CBP 7552 If required Retain all documents for 3 years after payment of claim When is claim paid? Exporter CBP How long?? Original entry has to be liquidated! Accelerated payment Accelerated payment Submit drawback package Include bond in package Single or continuous Cover estimated amount of drawback Request accelerated payment PD approves and sent to GAO within 3 weeks Check issued in 4 to 6 weeks , Inc. 7

8 Manufacturing Drawback Imported articles and parts used in the manufacture of products that are exported. Requires good pre-planning Must enter into a contract with US Government General Drawback Ruling Boiler plate ruling put forth by CBP Manufacturer sends Acceptance letter To PD where entries will be filed & liquidated CBP sends Acknowledgement letter Assigned unique number used on all entries Found in Appendix A of Part 191 Expires if not used in 5 years Specific Drawback Ruling Manufacturer requests ruling Sent to HQ, not port Promises to comply with regulations Describes process Promises to maintain proper controls HQ issues acceptance letter Assigned unique number used on all entries Found in Appendix B of Part 191 Expires if not used in 5 years, Inc. 8

9 Direct Identification Five years Import to export Export to claim Five years Three years 19 CFR Substitution Three years Receipt from supplier to export Export to claim Three years Three years 19 CFR Another way to look at it Five (5) years from import to export Three (3) years to manufacture after receipt Three (3) years to file claim Import Original buyer 5 years Sells to Manufacturer 3 years Export, Inc. 9

10 How it works Wheels from France Wheels from USA Unicycles 100 Unicycles 100 Export 100/week 400/month Domestic 100/week 400/month Receipts Production French Domestic Export Domestic Week Wheels Wheels Sales Sales Total Sales Totals unicycles a month total Claiming Drawback Used in Must be used when there are multiple products and no valuable waste Appearing in Based on quantity of imported material in the exported article; not used if multiple products Used in less valuable waste Claimed on quantity of imported goods used to produce the exported article, less valuable waste (a) (c) Abstract or Schedule Abstract Schedule Actual Production Records Predicted Production Total quantity used during a time period Quantity of merchandise per unit of product (d), Inc. 10

11 Inventory Accounting Methods FIFO First in, first out LIFO Last in, first out Low-to-High Blanket Average Nuggets Records kept for 3 years after payment Drawback amount ( 191.3) 99% for duties and taxes 100% if exported from Customs custody Not eligible for drawback HMF, ADD, CVD, Over Quota Rate on Ag product, maybe MPF Definitions Predecessor Original person due drawback Successor Manufacturer or producer to whom the predecessor has transferred drawback rights, Inc. 11

12 Touching up a claim Amending a claim Changes must be made within three years after date of export/destruction Liquidated entries may not be amended but can be protested Perfecting a claim Additional paperwork is required by CBP 30 days to provide NAFTA Drawback Lesser of the two rule ( ) Manufacturing drawback only Finished product is exported to Canada or Mexico Drawback based on lesser of the CA or MX duty compared to US duty Eligible for full drawback ( ) CA or MX imported for manufacturing Same condition drawback claims Customs Brokers Chapter CFR, Part 111, Inc. 12

13 Customs business Transactions with CBP concerning: Entry and admissibility of goods Classification and valuation Payment of duty, taxes and other charges Refund, rebate or drawback of those duties, taxes and other charges Preparation of documents in connection with the above along with the electronic transmission thereof 111.1(a) NOT the mere electronic transmission of data received for transmission to CBP!! License not Required Importer s own account or as an employee of a broker Marine Transactions Transportation in Bond Noncommercial shipments Foreign-trade zone activities And if you don t have a license? $10,000 per incident $30,000 in aggregate 111.4, Inc. 13

14 Exam eligibility Requirements U.S. Citizen Attained age of 18 years Not an officer or employee of the U.S. Government Individual License 21 years of age or older Be of good moral character Citizen of the United States and NOT an employee or officer of US Government Pass the test with 75% or higher (a) Forms and Fees CBP Form 3124E Exam Application (08/11) Fee of $200 CBP Form 3124 Application for Customs Broker License Current fee ($200) Fingerprints and fee ($32.49 as of 11/2011) ( &.96(a)), Inc. 14

15 3-years to apply After passing test, you have three (3) years after date of notification letter to apply (a) Broker Other Licenses Broker Partnership One member who is a broker Association or corporation: Empowered under articles to transact Customs business At least one officer who is a broker (b) and (c) Permits Issued in district where license is issued o Application fee waived o Only pay $138 for permit Need separate permit for other districts o $100 permit fee o $138 annual user fee o Never, ever prorated Revoked because fee not paid? o Must pay application AND user fee ($238), Inc. 15

16 Open another office Orlando (18) Ft. Lauderdale (52) Miami (52) Same district No additional permit required Responsible supervision Different district Need permit for that district Employ licensed person Responsible supervision Permit Waiver Permit waiver may be granted if broker works in a larger geographical area that contains two ports in different districts Mr. Broker Must prove ability to provide responsible supervision at both ports (d)(2) Permit Waiver Nogales, AZ District 26 Columbus, NM District 27, Inc. 16

17 National permit Place employee in client s facility File electronic drawback claims without permit in district where filed Applied for and renewed annually at port where license issued! National Customs Automation Program (NCAP) participation remote filing Represent after filing without permit in district where filed 111.2(b)(2) Application information in (f) License and Permit Fees License $200 take the exam $200 + finger print fee with license application Permit (including National Permit) Application fee Free at port that issued license, otherwise $ Annual User Fee - $ never prorated Triennial Status Report Currently $100 Records Records to keep - all of em How long to keep Entries 5 years after date of entry Warehouse 5 years after last withdrawal Other requirements in 163 Powers of Attorney 5 years (b)(2)(ii) After revocation Ceases to be active client Two entries in 12 month period , Inc. 17

18 Employee Information Within 10 calendar days of 30 consecutive days of employment Within 30 calendar days of termination when employed longer than 30 consecutive days What to Report Social security number Date and place of birth Current home address Last prior home address 3 prior years employment record After initial report, then with Broker s Triennial Status report Qualifying Member Leaves Written Notice Broker must immediately notify customs (c) Letter to Assistant Commissioner Date of termination Copy to Port Director in permitted ports Port Director Asst Comm, Inc. 18

19 Financial Management Money from government to client Sixty (60) days (Can keep any owed!) Must have authority of client to accept and endorse Money from client to government On or before due date by due date Money from client to government after due date Five (5) working days Triennial Status Report Started February 1, 1985 and due every three years ( (d)) Next one due in 2012 (85, 88, 91, 94, 97, 00, 03, 06, 09, 12, 15...) Current address and brokerage activities Active or not Fee currently is $100 ( (d)) (d) Sent to port where license issued Status Report Timing Due by February 1 st Not received by March 1 st Customs suspends license On March 31 st Customs notifies broker to file in 60 calendar days or license will be revoked No response then, license Revoked! (d), Inc. 19

20 Loss by Operation of Law Partnership or Corporation 120 days to replace qualifying broker license is REVOKED Permit 180 days to replace qualifying broker permit is REVOKED Don t be sad back with session 8 before you know it!, Inc. 20