CBP Compliance: Tariff Classification, Valuation, Country of Origin/Marking, Quota, Free Trade Agreements, CBP Rulings, Broker Compliance, CTPAT, FTZs and Bonded Facilities

OFW’s attorneys have decades of experience in handling all aspects of CBP compliance.  We regularly assist importers in the food, drug, medical products, and cosmetics industries.  Our experience is not limited to these industries, however, and our attorneys have represented importers of products as diverse as artist canvas, aluminum extrusions, machinery, furniture, and more.

We provide guidance and assistance regarding the full spectrum of CBP compliance issues and tasks, including:

• Tariff Classification.  Tariff classification, or the process of determining which HTSUS tariff provision most appropriately describes an imported product, is subject to complex and specialized rules.  OFW’s attorneys routinely help importers stay compliant in this key area while successfully identifying opportunities for duty savings.

• Valuation.  Because the duty associated with many tariff provisions is set as a percentage of declared customs value, determining valuation is a key part of the entry process.  OFW is well versed in this complex area, including related party valuation issues and declaration of assists and required additions to value.  We can also assist in obtaining significant duty savings through use of the first sale rule.

• Country of Origin.  An imported product’s country of origin may determine its eligibility for tariff preferences and other benefits, as well as whether it is subject to trade sanctions and other restrictions.  This determination is very fact-intensive and may vary product by product.  OFW’s attorneys use their deep experience in this area to both ensure that importers stay compliant in this area and identify benefits that may be obtained by shifts in country of origin such as lawful tariff engineering.

• Marking.  With certain exceptions, every good imported to the United States must be marked at time of entry so as to indicate its country of origin to the ultimate purchaser.  Failure to comply with these requirements may give rise to marking penalties and other consequences.  We provide guidance pre-importation on correct marking; aid with reconditioning and other compliance measures if problems arise post-importation; and provide advice if improper marking is used by competitors.

• Made in the USA/FTC.  “Made in the USA” claims are governed by the Federal Trade Commission, which has been increasingly active in enforcing its requirements in this area.  We routinely provide guidance as to proper use of qualified and unqualified claims.

• Free Trade Agreements.  Significant duty savings may be obtained under free trade agreements such as the USMCA and DR-CAFTA.  We routinely provide guidance as to whether goods qualify for benefits under these agreements.

• Quota.  The United States limits the volume of certain goods that may enter the United States via absolute or tariff rate quotas.  Failure to adhere to these complex requirements may result in significant duty increases for the unwary importer or a bar to entry of the goods during a quota period.  OFW’s attorneys are well-versed in handling goods subject to U.S. quotas on dairy products, sugar, and other products.

• Chapter 98 Special Tariff Provisions.  Importers may obtain significant duty savings from use of the special tariff provisions contained in Chapter 98 of the HTSUS, including goods assembled abroad with components of U.S. origin, goods exported from the U.S. and returned which have not been advanced or improved in condition abroad, and goods imported for actual use in agriculture.  Our attorneys routinely provide guidance in this area, and have obtained numerous CBP rulings providing significant duty savings.

• Section 301 and Section 232 Tariffs.  The very significant additional tariffs placed on Chinese-origin products currently remain in place.  We provide advice as to whether these tariffs and certain exceptions to them provided by the USTR are applicable, and have successfully obtained numerous refunds of these tariffs via the CBP protest process.

• Intellectual Property Rights.  Our attorneys have deep experience in the area of CBP protection of intellectual property rights.  We routinely aid our clients to record their trademarks with CBP; draft training materials to guide CBP in detecting imports of goods infringing upon our clients’ intellectual property rights; and engage in training sessions with CBP.

• Importer Compliance Programs.  Importers often turn to OFW’s attorneys for aid in setting up CBP compliance programs.  In many instances, we have aided first time importers who are first entering the U.S. market.  In others, we have prepared comprehensive CBP-related SOPs and compliance manuals for established importers and have otherwise aided them to strengthen their compliance activities.

• Broker Compliance.  In addition to representing importers to the U.S. market, our attorneys provide guidance and representation to numerous customs brokers.  We aid our broker clients in drafting compliance manuals and setting up compliance programs, and provide advice on customs broker regulations (including the recent modernizations).

• FTZs and Bonded Facilities.  Foreign trade zones (“FTZs”) provide an opportunity for duty savings, as goods which undergo operations such as manufacture or processing in the FTZ may be subject to a lower duty rate for finished products when they are withdrawn from the FTZ for consumption in the U.S.  OFW provides guidance as to the eligibility of goods for these duty saving activities and assists with all necessary actions to implement these strategies.  We also provide guidance as to storage of goods in bonded warehouse facilities.

• CBP Binding Rulings and Requests for Internal Advice.  The CBP binding ruling process allows importers to obtain guidance which is binding on both CBP and the importer as to the classification and valuation of imported goods, their eligibility for preferential duty treatment under free trade agreements and other programs, and other entry-related issues.  OFW’s attorneys have obtained numerous favorable rulings for their clients under this procedure, resulting in both duty savings and certainty of CBP treatment of imported goods.  Where potential disagreements have arisen, we have successfully used the internal advice procedure to obtain guidance from Customs Headquarters.

• Antidumping & Countervailing Duty/Department of Commerce Scope Rulings.  OFW attorneys frequently provide advice regarding CBP’s administration of antidumping and countervailing duties imposed by the Department of Commerce; errors in importing goods subject to these complex trade remedies can result in enormous liability for importers.  We have also obtained a number of rulings from the Department of Commerce finding that our clients’ goods do not fall within the scope of the relevant antidumping and/or countervailing duty order; where our client has received an adverse scope ruling, we have successfully sued to have these orders set aside at the Court of International Trade.

• CTPAT.  CBP developed the Customs Trade Partnership Against Terrorism (“CTPAT”) program to offer benefit to importers and others that take prescribed measures to strengthen their supply chain security in return for certain benefits.  The CTPAT program has recently been enhanced by the addition of a forced labor component, and the provision of new benefits such as skipping to the head of the line for consideration of petitions on UFLPA detentions in return for implementation of certain forced-labor related due diligence and preventative requirements.  OFW aids importers in the cost-benefit analysis of whether participation in the CTPAT program is right for them, and assists those who wish to participate with designing and implementing CTPAT requirements.