TRADE COMPLIANCE

All businesses with international transactions must have compliance procedures in place. Proactively developing a compliance program helps to keep your company operating smoothly, limits the threat of penalties, and enhances supply chain management.

Within the U.S. alone, importers and exporters are bound by the regulations enforced by – at the very least – Customs and Border Protection, Bureau of Industry and Securities, Department of Commerce, Department of State, Office of Foreign Asset Controls, etc.

Many of the scenarios impacting your supply chain are ones that operational personnel may not be trained to handle, such as record keeping requirements, CBP-approved valuation methods, or Free Trade Agreement

M-PACT can help develop the compliance program that is right for you, whether that is a focused program or a generalized program for all of your compliance needs.

The program is presented in a detailed compliance manual that is organized by trade subjects and any scenario relevant to your operations. Brief desk procedures are provided in order to ensure that operations personnel have a compliance checklist for international transactions.

Harmonized tariff classifications enable governments to collect statistics on international trade in an objective way. The classification code determines the rate of duty and whether the goods are subject to quotas, restraints, embargoes or other restrictions.

The global Harmonized System requires that all participating countries accept the same 6-digit classification codes. Individual countries define merchandise at a more specific level. The U.S. uses an additional 4 digits.

All goods entering the territory of the United States must be assigned a 10-digit HTS classification code according to the Harmonized Tariff Schedule (HTS) of the United States, administered by the U.S. International Trade Commission.

Goods exporting to the U.S. are assigned a 10-digit Schedule B code, which is administered by the U.S. Census Bureau, Foreign Trade Division.

The HTS and Schedule B codes are the same for the first 6 digits, but may vary at 8 or 10 digits. There are more HTS classifications than Schedule B.

M-PACT Solutions is available to assist you to determine the correct import and export classifications for the United States and for select countries around the world.

The Customs Modernization Act (Mod Act) of 1993 fundamentally altered the relationship between importers and CBP by shifting to the importer, the legal responsibility for declaring the value, classification and rate of duty applicable to entered merchandise.

Do you:

  • Buy or sell to related parties?
  • Utilize assists by providing services, materials, tools, or molds to your vendors?
  • Purchase goods on consignment?
  • Use selling agents paid on commissions?
  • Account for packing costs?

Each of these scenarios can affect valuation. If unsure about any of these scenarios, contact M-PACT for a review of your valuation compliance.

Importers, exporters, carriers, and brokers are required to keep their U.S. Customs and Border Protection (CBP) records and entry documents for five years from date of entry, or five years from the date of the activity that required the maintenance of the records.  “Records” are any information kept that pertains to the following:

  • Importation, declaration of entry
  • Transportation or storage of merchandise
  • Filing of a Drawback claim
  • NAFTA export Certificate of Origin
  • Collection and payment of fees and duties to CBP

If you are asked by CBP to produce such records, the entry records must be produced within 30 calendar days of receipt of the demand.  If a record keeper fails to produce such records, CBP may assess penalties and/or fines. The experts at M-PACT can help you develop a Recordkeeping Compliance Program that will establish company policies that will be compliant with CBP laws and regulations and meet the general recordkeeping requirements.

It is easy to determine country of origin if your product is produced in one country. But, it can sometimes be very difficult to determine country of origin if your product is produced in multiple countries that contain components from many other countries. That is when you need an expert to examine your product, the manufacturing process and your import documents to determine the correct country of origin.  Let M-PACT be that expert!