Importing and Exporting - Module 3: Entry Process for Imports

What is required for customs to determine whether merchandise can be released from its custody?

• Only the invoice of the merchandise

• Filing of the essential documents

• Physical inspection of the merchandise

• Only the payment of estimated duties

Answer explanation

The correct answer is Filing of the essential documents. Customs authorities require a comprehensive set of documents to verify the legality, value, and origin of imported goods. These documents typically include: Commercial invoice, Packing list, Bill of lading or airway bill, Import license (if required), Certificate of origin, Customs entry forms. These documents provide the necessary information for customs to assess duties, ensure compliance with regulations, and determine whether the merchandise can be released.

Which program allows for the electronic accomplishment of the entry process?

• Electronic Customs Entry System

• Global Entry Interface

• Automatic Broker Interface program

• Digital Trade Facilitation Network

Answer explanation

The correct answer is the Automatic Broker Interface program (ABI).   This is a Customs and Border Protection (CBP) program that allows customs brokers and importers to electronically file entry documentation with CBP.   It streamlines the customs clearance process, reducing paperwork and processing time. It is the primary electronic method for filing customs entries.

What must be filed if goods are to be released from customs on entry documents?

• Import declaration

• Entry summary for consumption

• Export certificate

• Proof of payment

Answer explanation

The correct answer is Entry summary for consumption. This is the formal document that importers or their customs brokers file with customs to declare the imported goods and provide the necessary information for duty assessment and release. It is the key document that triggers the final steps in the customs clearance process.

When is the product released by customs?

• After physical inspection

• Once the complete entry is filed and estimated duty is deposited

• Upon arrival at the port of entry

• After random sampling

Answer explanation

The release of products by customs is most accurately described as occurring: Once the complete entry is filed and estimated duty is deposited. The customs clearance process involves the submission of necessary documentation, the assessment of duties and taxes, and the payment of those fees. Therefore, the release of goods is contingent upon the completion of these steps

What must be posted before filing the entry summary?

• Import license

• Customs clearance certificate

• Bond

• Shipping manifest

Answer explanation

The correct answer is: Bond. A customs bond is essentially a financial guarantee that the importer will comply with all applicable customs laws and regulations, including the payment of duties and taxes. It provides assurance to the custom office that they will receive the necessary funds, even if the importer fails to pay. It is very common that a bond must be in place before the entry summary is filed.

What does the liquidation of an entry entail?

• Determining the value of imports and calculating duties

• Inspecting the physical condition of goods

• Confirming the country of origin

• Auditing the importer’s financial records

Answer explanation

In the context of customs, "liquidation of an entry" refers to the final calculation and determination of the duties owed on imported goods. Specifically, it primarily entails: Determining the value of imports and calculating duties. Liquidation is essentially the final accounting process where Customs and Border Protection (CBP) reviews the entry documentation, verifies the declared value of the goods, and calculates the final amount of duties and taxes owed. This process solidifies the final duty amount.

Which entries do not require liquidation?

• Temporary importation bond entries

• Formal entries

• Entries for immediate consumption

• Permanent importation bond entries

Answer explanation

The correct answer is: Temporary importation bond entries. These entries involve goods that are imported temporarily and are expected to be exported within a specified period. Because these goods are not intended for permanent entry, they are not typically subject to the same liquidation process as goods intended for consumption.  

How is the applicable rate of exchange for customs purposes determined?

• Based on the importer’s preference

• Based on the date of goods' exportation

• Based on the customs officer’s discretion

• Based on the date of goods' arrival

Answer explanation

The applicable rate of exchange for customs purposes is typically determined based on the date of goods' exportation. So, the correct answer is: Based on the date of goods' exportation

If an importer disagrees with the liquidation of an entry, what can they do?

• File a protest in writing within ninety days

• Appeal to the international trade court

• Request a re-inspection of goods

• File a complaint with the local chamber of commerce

Answer explanation

The correct answer is File a protest in writing within ninety days. In most customs jurisdictions, including the United States, if an importer disagrees with a customs liquidation (the final determination of duties and taxes), they have the right to file a formal protest. This is a specific legal process for challenging the customs agency's decision. There is typically a strict time limit for filing a protest, which is often 90 days from the date of liquidation.

What is the first factor considered in valuing imported goods?

• Computed value

• Transaction value

• Deductive value

• Market value

Answer explanation

The first factor considered in valuing imported goods, according to the World Trade Organization (WTO) Valuation Agreement and most customs administrations, is transaction value.   This is the price actually paid or payable for the goods when sold for export to the country of importation, with certain adjustments. It's the most straightforward and preferred method.