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WorksheetsTariff Law Examination - COMPRE
Total questions: 100
Worksheet time: 50mins
In cases where the exporting Member State and importing Member State have different tariff classifications for a good subject to preferential tariffs, which rate should be applied to imported goods?
at the lowest preferential rate
at the higher preferential rate
either A or B
None of the choices
This refers to the practice of paying uniform duty on certain categories of goods disregarding the quality, quantity, and the actual value of the goods.
Duty Benchmark
Duty uniformity
Duty consistency
Duty conformity
In cases of Compulsory Acquisition, the Bureau shall pay the importer the value of the goods equal to ___________________
Assessed customs value plus any duties paid
Declared customs value plus any duties paid
Assessed dutiable value plus duties and tax paid
Declared dutiable value plus duties and tax paid
It is the main mechanism for the realization of AFTA.
Common Effective Preferential Tariff Scheme
ASEAN Integration System of Preferences Scheme
ASEAN Trade in Goods Agreement Scheme
ASEAN Economic Community Scheme
This Tariff Reform Program further liberalized the trade environment by reducing the level and spread of tariff rates towards a uniform level of protection across all sectors which promote global competitiveness, simplify tariff structure for ease of customs administration and provide a level playing field for local manufacturers vis-a-vis foreign competition.
Tariff Reform Program I
Tariff Reform Program II
Tariff Reform Program III
Tariff Reform Program IV
The comparable price at the date of sale of the like product in the ordinary course of trade when destined for consumption in the country of export or origin.
Price difference
Normal value
Export value
Dumped value
This refers to 'overall assessment' that the material injury suffered by the domestic industry is the direct result of the importation of the dumped imports.
Causality
Material injury
Adjustment Plan
Serious Injury
What is the Philippine Legislation on the imposition of anti-dumping measure?
RA 8751
RA 8752
RA 8753
RA 8800
In a dumping case, the Secretary of the Commission as the case may shall be motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than ________ of export price or the volume of dumped imports or injury is negligible.
one percent (1%)
two percent (2%)
three percent (3%)
five percent (5%)
The percentage of the total annual volume of imports of an 'agricultural product to the corresponding total volume of domestic consumption of the said product in the country in the three (3) immediately preceding years for which data are available.
Critical circumstances
Minimum Access Volume
Trigger volume
Market access opportunity
The Secretary of Agriculture shall issue a department order requesting the Commissioner of Customs, through the Secretary of Finance, to impose an addition special safeguard duty on an agricultural product, consistent with Philippine international treaty obligations, if its actual ____________ is less that its trigger price.
FOB import price
EXW import price
CIF import price
None of the choices
How much should be the additional special safeguard duty if the price difference exceeds ten percent (10%) of the trigger price but is at most forty percent (40%) of the trigger price.
0
30%
20%
50%
Each Member State shall provide a list of the names, addresses, specimen signatures and specimen of official seals of its issuing authority, in hard copy format only. When a Member State only issues e-Form D, that Member State need not provide a list of specimen signatures and specimen of official's seals of its issuing authority.
First statement is TRUE; Second statement is FALSE
First statement is FALSE; Second statement is TRUE
Both statements are TRUE.
Both statements are FALSE.
When shall a production of Proof of Origin can be waived?
a. In the case of consignments of goods originating in the exporting Member State with FOB not exceeding USD 200.00.
b. Goods sent through the post with FOB not exceeding USD 200.00
Both A and B
Neither A or B
In Manila International Container Port last January 17, 2025, the importer has presented a Certificate of Origin D as supporting documents in the entry to avail the preferential tariff treatment under a certain agreement. The value of the shipment is $ 12,000.00 excluding the value of indirect materials at $ 4, 680.00. Upon checking, the CO Form D was issued by former official issuing authority of the exporting Member state, not in the list compiled by ASEAN Secretariat. Is the goods can be imported under preferential tariff treatment?
Yes, because CO Form D has a validity period of 12 months from issuance
Yes, because the CO Form D are duly completed and signed by authorized signatory
No, because certified true copy of the CO Form D should be presented
No, the CO Form D shall not be honored by the receiving Member State
Under the provisions of ATIGA Agreement, Thailand exported 100,000 pieces of galvanized corrugated steel sheets with width 1,200 mm classified under AHTN Code 7210.41.00 to the Philippines. In the Philippines, the goods have a 10% MFN rate of duty (per E.O 61, s. 2011), AKFTA rate of 0% (per E.O 812, s. 2009) and ATIGA rate of 0% (per E.O 850 s. of 2009). And the said goods are ATIGA originating and a CO Form D was issued for its shipment. Upon checking, the CO Form D bears signature and seal of issuing authority electronically. Can the importer still avail the preferential tariff treatment for the galvanized corrugated steel sheets?
No, because it does not fulfill the Rule 7 of the Operational Certification Procedures of ATIGA
No, because the CO Form D shall bear signature and seal of issuing authority both manually and electronically.
Yes, because the CO Form D is in ISO paper size
Yes, because electronically applied signature and seal of issuing authority is accepted.
In case the importer of the galvanized corrugated steel sheets loss the CO Form D, what shall be done in order for him to still avail the preferential tariff treatment?
a. Make his exporter send to him the triplicate copy of the CO Form D
b. Request for a copy of the duplicate copy to the issuing authority
c. The exporter apply for a certified true copy of the original and triplicate copy -CO Form D
d. Both A and C
The issuing authority shall retain the application of CO Form D and all other documents related to such application for not less than 3 years from the date of expiration of the CO Form D.
True
False
True, this is in accordance to Rule 17 of ATIGA OCP
False, because the documents shall be retain only for 2 years
In case of the application of a Certified Exporter, who shall retain all documents related to such application?
Competent Authority
Issuing authority
Importer
Either A or B
Country A and Country B are both members of ASEAN and have a free trade agreement (FTA) in place. Country A imports a product from a non-ASEAN member and applies processing to it. Can Country A include the value of the processing in the accumulation of ASEAN origin?
Yes, as long as the non-ASEAN member country has a preferential trade agreement with Country A.
No, the ATIGA Accumulation Rule only allows for accumulation of origin within the ASEAN region.
Yes, regardless of the origin of the imported product.
No, the ATIGA Accumulation Rule does not consider processing as a factor for accumulation.
Country X, a member of ASEAN, exports a product to Country Y, a non-ASEAN member, for further processing. Country Y then re-exports the finished product back to Country X. How would the ATIGA Accumulation Rule treat the origin of the finished product?
The finished product would be considered of ASEAN origin due to the initial export from Country X.
The finished product would be considered of non-ASEAN origin since the processing took place outside the ASEAN region.
The ATIGA Accumulation Rule does not apply to products exported to non-ASEAN members.
The origin of the finished product would depend on the specific rules of origin under the FTA between Country X and Country Y.
Company A produces a product in an ATIGA member country. The FOB value of non-originating materials used in the production is $5,000, and the FOB value of the final product is $15,000. What is the Regional Value Content (RVC) percentage?
20%
30%
40%
50%
Country Z is a member of ASEAN and has entered into an FTA with Country W, a non-ASEAN member. The ATIGA Accumulation Rule allows for the accumulation of origin between ASEAN member countries. What happens when Country Z imports a product from Country W and processes it before exporting it to another ASEAN member?
The product would be considered of non-ASEAN origin, regardless of the processing in Country Z.
The product would be considered of ASEAN origin if the value added in Country Z meets the required threshold.
The ATIGA Accumulation Rule does not apply to products originating from non-ASEAN members.
The origin of the product would depend on the specific rules of origin under the FTA between Country Z and Country W.
Under the ATIGA Accumulation Rule, what is the purpose of the regional value content (RVC) calculation?
To determine the percentage of value added within the ASEAN region.
To establish the total value of imported goods for accumulation purposes.
To calculate the tariff rates for products under the ATIGA.
To assess the overall economic impact of the ATIGA Accumulation Rule on member countries.
Country P, a member of ASEAN, imports a component from Country Q, a non-ASEAN member, to be used in the production of a final product. If the component is not of ASEAN origin, what would be the impact on the origin of the final product under the ATIGA Accumulation Rule?
The final product would be considered of non-ASEAN origin, regardless of the value added in Country P.
The final product would be considered of non-ASEAN origin unless the value added in Country P exceeds a specified threshold.
The final product would be considered of ASEAN origin if the component is incorporated in Country P.
The ATIGA Accumulation Rule does not consider the origin of components in determining the origin of the final product.
For not wholly-obtained or produced goods to qualify as originating goods at the exporting AMS, materials used to produce said goods are required to have undergone a CTC or a specific manufacturing or processing operation. These rules shall only apply to which of the following materials?
Originating materials
Non-originating materials
ASEAN originating materials
Neutral materials
Determine which among the following non-originating parts and components are not compliant with the CTH requirement of the ATIGA ROO for chandeliers with integrated fans classified under AHTN code 9405.10.99.
Electric switches (AHTN code 8536.50.32)
Electric fan component (AHTN code 8414.51.99)
Glass parts (AHTN code 9405.91.90)
Steel bolts and nuts (AHTN code 7318.15.10)
To be eligible for preferential tariff, can a CTC criterion of the ROO be applied to scissor blades imported from USA and classified under AHTN code 8213.00.00 used in the production of school scissors classified under AHTN code 8213.00.00 in Indonesia for export to the Philippines under the ATIGA?
Yes, apply Change in Chapter
Yes, apply Change in Tariff Heading
Yes, apply Change in Tariff Subheading
CTC criterion cannot be applied
Which one among the following goods does not satisfy the requirement of wholly obtained goods under ATIGA Article 27 (c)- "Goods obtained from live animals in the exporting Member State?
Horse mane
Cobra venom
Swine offal
Golden snail eggs
In Country X, local producers sell stainless steel cookware at an average price of $50 per unit. However, over the past year, imports of similar cookware from Country Y have been consistently sold in the domestic market at $30 per unit—40% below the local price. Despite being similar in quality and design, the imported products remain significantly cheaper across multiple sales channels, including large retail chains and online platforms. Which of the following best describe this scenario?
Price depression
Price suppression
Price undertaking
Price undercutting
Disposable plastic pocket lighters classified under AHTN code 9613.1010 manufactured in Malaysia with the following details:
Which of the following ROO should be applied for the subject goods to be eligible for preferential tariff treatment when exported to the Philippines under the ATIGA?
RVC 40%
Wholly-obtained or produced
CTH
CTSH
In determining the country of origin of a product, which rule provides exceptions to the Change in Tariff Classification Criteria (CC, CTH, or CTSH) for specific goods?
Exception Rule
Alternative Rule
Supplementary Rule
Residual Rule
Under the Exception Rule, let's consider the example of a product falling under heading 48.16, which includes carbon paper, self-copy paper, and other copying or transfer papers. The product specific rule for this heading states the following: RVC (40) or CTH except from heading 48.09 (carbon paper, self-copy paper, and other copying or transfer papers whether or not printed, in rolls or sheets). What does this mean?
The product must have a regional value content of 40% to qualify as originating.
The product must be classified under a specific tariff heading, except if it falls under heading 48.09.
The product must undergo a specific production process to be considered originating.
The product must meet certain characteristics or specifications to be eligible for origin determination.
In some cases, conferment of origin can be determined based on different circumstances. Which rule allows for alternative criteria in establishing the origin of a product?
Exception Rule
Alternative Rule
Supplementary Rule
Residual Rule
Supplementary Rule refers to additional requirements imposed alongside another rule to complete the conferment of origin for a particular good. What are these additional requirements typically related to?
Labeling and packaging of the product
Environmental sustainability standards
Production process or characteristics of the final product
Intellectual property rights protection
An FTA (Free Trade Agreement) may incorporate a provision known as de minimis, which allows a good to qualify as originating even if a certain percentage of non-originating materials fail to satisfy the change in tariff classification requirement. What does de minimis provision typically specify?
The maximum value of non-originating materials that can be included in the final product.
The minimum value of non-originating materials required for a product to be considered originating.
The percentage of non-originating materials allowed in the final good's free-on-board value.
The specific goods or industries exempted from the change in tariff classification requirement.
Which is the threshold value of non-originating materials used in the production of export goods that did not undergo the required CTC to qualify as originating under the De Minimis provision of the ATIGA ROO?
40% of the FOB value of the finished goods
10% of the FOB value of the export goods
20% of the CIF value of non-originating goods
No such provision exists under the ATIGA ROO, all non-originating materials must comply with the CTC criterion.
Under the ATIGA, what origin criterion shall be applied to goods not covered by Annex 3 (Product Specific Rule) or Attachment 1 (substantial transformation criterion for textiles and textiles products?)
WO
RVC 40 or CTH
CTSH + RVC 35
The goods are not eligible for tariff concession under the ATIGA.
What incoterm/s does the export price equate to?
Ex-works and Free Carrier
Ex-works and Free on Board
Ex-works and Free Alongside Ship
Ex-works only
Which of the following is not considered a purpose why goods undergone minimal operations and processes?
To ensure preservation of goods in good condition for the purposes of transport or storage.
To facilitate shipment or transportation.
For packaging or presenting goods for sale.
None of the choices.
The objective of this trade remedy measure is to assist farmers whose products were previously protected by Quantitative restrictions that have been tarrified.
Anti-dumping measure
Countervailing measure
General Safeguard measure
Special Safeguard measure
What subsidy cannot be subjected to either countervailing measures or other disciplines under the Agreement?
Subsidies based on export performance
Subsidy limited to an enterprise
Subsidy limited to an industry
Research activities conducted by firm
Voluntary undertaking is an offer by the government of the exporting country to eliminate or limit the subsidy. Or it can be a voluntary commitment by the foreign exporter and/or importer that they will increase their prices or will cease exporting to the Philippines at the subsidized price.
First statement is true while the second statement is false
First statement is false while the second statement is true
Both statements are false
Both statements are true
An importation of 1,500 kgs of clear float glass from Vietnam has arrived at Port of Manila last December 05, 2024. The consignee of such shipment was found out to be Yum Meh Corporation located at Bacoor, Cavite. The declared customs value of the shipment was $3.00 per kilogram. Meanwhile, a similar importation has arrived few weeks after that shipment which was consigned to a sister corporation of Yum Meh Corp, located at Cavinti, Laguna. The latter's customs value amounted to $3.00 per kilogram. What type of transaction exists on that particular importation?
Arm's Length Transaction
Transaction Value
Export price transaction
Import price transaction
Its duty is to ascertain and at all times be informed whether there are discriminations against the commerce of the Philippines.
Secretary of Finance
Tariff Commission
Department of Agriculture
Department of Trade and Industry
Under the CTC or specific manufacturing or processing operation, the origin of accessories, spare parts, tools and instructional or other information materials presented with the good shall not be taken into account in determining whether the good qualifies as an originating good if their quantities and value are customary for the imported good. If a good is subject to the RVC ROO, the value of the accessories, spare parts, tools and instructional or other information materials shall not be taken into account as the value of the originating or non-originating materials, as the case may be, in calculating the RVC of the originating good.
Both statements are correct.
Both statements are incorrect.
First statement is correct while the second one is incorrect.
Second statement is correct while the first statement is incorrect.
In the case where products are not imported directly from the country of origin but are exported to the Philippines from an intermediate country, the price at which the products are sold from the country of export to the Philippine shall normally be compared with the comparable price in the country of origin. However, comparison may be made with the price in the country of origin, if for example, the products are merely transhipped through the country of export
Both statements are correct.
Both statements are incorrect.
First statement is correct while the second one is incorrect.
Second statement is correct while the first statement is incorrect.
Blu-ray players imported without their remote controls and AV cables were classified under HS 8521.90. Which one of the following rules was applied?
GIRs 3(b) and 6
GIRs 2(a) and 6
GIRs 1 and 6
GIR 2(b)
An importation of TVs with built-in VHS player/recorder, a composite good made up of different component, was classified in HS 85.28. Heading 85.28 covers "Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus." Which of the GIRs below was applied?
GIR 1
GIR 3(c)
GIR 3(b)
GIR 3(a)
A package containing a bottle of whiskey and two wine glasses was classified in the heading for whiskey, considering the wine as the essential component of the set. Which GIR was applied for said classification?
GIR 3(b)
GIR 3(a)
GIR 5(a)
GIR 5(b)
Which among the following is not a qualification for an imported goods to qualify preferential tariff rate under ACFTA?
It is placed under the NT list importing country and ST list exporting countries.
It is Wholly-Obtained or complied with at least 40% Regional Value Content (RVC) rule or under the Product Specific Rules (PSR)
With Certificate of Origin (CO) Form "E"
In the Exporter's ST list with tariff rates of 10% or below (Reciprocity Rule).
From the illustration below, determine which rate to apply under the AKFTA.
7%
3%
5%
0%
If the good is imported into another FTA Party and then re-exported, it may be eligible for a "BACK-TO-BACK CERTIFICATE" to enable it to retain originating status on the basis of the original certificate of origin. A back-to-back certificate is not required in a case of simple transshipment of the good through a participating Party, i.e. where it is not imported into that Party.
Both statements are correct.
Both statements are incorrect.
First statement is correct while the second one is incorrect.
Second statement is correct while the first statement is incorrect.
Which of the following is not a member of APEC?
Australia
Brazil
Canada
Peru
Under the tariff reciprocity rule, determine which rate to apply on the below if the goods originate in China.
NT rate (Exporting country): 10%
MFN rate (Importing country): 25%
ST rate (Importing country): 20%
25%
10%
20%
0
Under the tariff reciprocity rule, determine which rate to apply on the below if the goods originate in China.
ST rate (Exporting country): 20%
MFN rate (Exporting country): 20%
NT rate (Importing country): 0%
MFN rate (Importing country): 1%
ST Rate 20%
MFN Rate 20%
0%
1%
Under which one of the following rules can an assembly of unassembled parts to finished electric fan can possibly considered originating if its classification is in accordance with GIR 2a?
CC
CTSH
CTH
RVC 40
Imported goods in sets for retail sale consisting of different items which by themselves are classifiable under different heading under the AHTN are in all cases, to be classified according to the provision of Rule 3 of the GIRs
True
False
Both "a" and "b"
Neither of the choices
Determine the GIR used in the importation of Computer tables made of wood and a metal frame, imported in disassembled condition and packed in plastic then paperboard box. Subject articles are classified under Heading 94.03 which covers "Other furniture and parts thereof."
GIR 1 & 5a
GIR 1, 2a & 5b
GIR 2a & 5b
GIR 1, 2b & 6
A gift in a box containing a set of a silk necktie and a pair of cotton handkerchiefs was classified in the heading for ties considering that the price of the tie is twice as much as the handkerchief. Ties are classifiable under 6215.10, determine the GIR used in the importation.
GIR 2b, 5a & 6
GIR 1, 2a & 5b
GIR 3a, 5b & 6
GIR 4, 5b & 6
In order for an importer to be sure on the proper classification of a commodity 3 months prior to his intended importation, what particular mandate of the Tariff Commission can he avail of?
Flexible clause
Promotion of foreign trade
Advance ruling
Safeguard
An importation from Japan consisted of several pure-bred breeding equestrian horses classified under AHTN 0101.21.00 and covered by PJEPA with rate of 0%. Subject horses have an MFN and ATIGA rate of 3% and 0%, respectively. If these horses have a Japan MFN rate of 1%, deemed wholly obtained under the governing ROO, and was covered by a CO Form JP, what should be the applicable import duty rate?
3% MFN rate
0% PJEPA rate
0% ATIGA rate
1% Japan MFN rate
A product covered by a CO Form "E", exported to the Philippines was deemed originating by the governing ROO of the ACFTA and eligible to avail of the Phil. preferential ACFTA rate of duty, if it complies with which one among the following?
The product is in the NT list of Indonesia (exporter) and in the ST list of the Philippines.
The product is in the NT list of China (exporter) with NT rate of 3% and in the ST list of the Philippines.
The product is in the NT list of Viet Nam (exporter) and in the EHP list of the Philippines.
The product is in the NT list of the Philippines with NT rate of 5% (current MFN rate is 7% ad valorem) and on the ST list of the China (exporter) with tariff rate of 8%.
Under the ACFTA, a participating party exported its originating product with the appropriate Certificate of Origin to the Philippines. The product was included in the ST list of the exporting country with tariff rate of 10%. The product was included in the Philippines' NT list with preferential tariff rate of 3% and an MFN rate of 15%. What would be the import duty applied to this product?
15% MFN rate of duty of the Philippines
3% ACFTA rate of duty of the Philippines
EHP rate of the Philippines
10% rate of duty, the same as that of the exporting country's ST rate
Under the AKFTA, if the Philippines exported an originating product classified under its NT list with applied rate of 0% to Korea, which classified the product under its ST list with ST rate of 7%, what tariff rate will be applied by Korea to the Philippine product covered by CO Form "AK"?
NT rate of Korea
MFN rate of the Philippines.
ST rate of Korea
EHP rate of Korea
Under the ACFTA, China exported an originating product classified under its NT list with applied rate of 0% to the Philippines which also classified the product under its NT list with ACFTA rate of 3%. If the Phil. MFN rate is 5% and the shipment covered by a CO Form "E", what tariff rate will be applied by the Philippines to the Chinese product?
0%, equal to the NT rate of China
3% ACFTA rate of the Philippines.
NT rate of China if with notification
5% MFN rate of the Philippines
Which one among the following choices is not a requirement to be satisfied in order to be eligible for the preferential tariff under the ACFTA?
The product should be classified in the NT list of both participating countries
The product should be originating under the ROO requirements of the ACFTA
The shipment should have a duly issued CO Form "E"
As per the ACFTA's Reciprocity Rule, the product should be classified under the ST list of the exporting participant with a tariff rate above 10% and classified under the NT list of the importing participant
Which one among the following statements is erroneous in relation to ASEAN FTAs with dialogue partners?
A product imported into the Philippines from Indonesia and covered with a CO Form "E".
A product of China with ST rate of 10% can avail of tariff preference by virtue of the tariff reciprocity principle under ACFTA when it is imported into the Philippines where the product is classified under its NT list.
One of the requirements for an imported product to avail of tariff preference under the AJCEP is for it to be accompanied with CO Form AJ issued by the competent government authority of the exporting participant.
A product of China with ST rate of 8% exported to the Philippines where the product is also classified under its ST list with rate of 10%, can still avail of the tariff preference granted under the Reciprocity Rule of the ACFTA Agreement.
A fundamental principle of the World Trade Organization that allows member countries/economies to seek derogation from particular GATT/WTO obligations when its economies or trade circumstances, so warrant is called-
Consultations
Waiver
Quantitative restrictions
Trade without discrimination
Proper tariff classification requires proper interpretation of the dash system under the AHTN. Which among the following is NOT?
Comparison between subheadings of the same number of dashes in any subheading
Comparison between 6 digit subheadings with the same dash level within a heading
Comparison between 8 digit subheadings within a 6 digit subheading
Comparison between subheading of the same number of dashes within a given subheading
A Philippine importer needs to purchase perishable goods from a supplier in another country. The supplier requires a relatively fast and secure payment method, but the importer also needs some assurance that the goods will be shipped as agreed. Which mode of payment would be most suitable for this transaction?
Letter of Credit (LC) could be used because it provides security for both parties, but it might not be the best option due to the processing time involved, which could be detrimental to perishable goods.
Documents Against Payment (DP) would be most suitable because it offers a good balance of speed and security, as the supplier is assured of payment before releasing the shipping documents, and the importer has some assurance that the goods will be shipped.
Documents Against Acceptance (DA) might seem appropriate for releasing documents, but it presents a higher risk for the supplier as they rely on the importer's promise to pay after receiving the documents, which is less ideal for perishable goods.
Open Account (OA) would not be suitable because it involves a high level of trust and risk for the supplier, as payment is made after the goods are delivered, which is not ideal for transactions involving perishable items where timely payment is crucial.
A company is importing specialized, high-value machinery and has negotiated a 90-day deferred payment arrangement with the supplier. The supplier wants some assurance of payment, but the importer needs time to inspect the machinery upon arrival before making the final payment. Which mode of payment aligns best with this arrangement?
A Letter of Credit (LC) with deferred payment terms could be used, as LCs can accommodate deferred payments, but this option introduces more complexity and costs compared to other methods.
Documents Against Payment (DP) would not be suitable because it requires the importer to make payment before the release of the shipping documents, which contradicts the 90-day deferred payment agreement.
Documents Against Acceptance (DA) or Open Account (OA) would be most suitable, as DA allows for the release of documents upon the importer's acceptance of a draft, providing the agreed-upon payment deferral, while OA is similar but relies more on trust and less on formal documentation.
Direct Remittance (DR) is not appropriate because it is a simple transfer of funds and does not provide a mechanism for structured deferred payments or the exchange of shipping documents.
An importer is considering using either Documents Against Payment (DP) or Documents Against Acceptance (DA) for an upcoming transaction. Which of the following statements BEST describes the key difference in risk exposure for the exporter between these two methods, and how does this difference affect the timing of when the exporter receives payment?
In both DP and DA, the exporter faces the same level of risk, as payment is guaranteed by the importer's bank, and the timing of payment is identical, occurring upon the release of shipping documents.
The exporter has less risk in DP because payment is received before the release of shipping documents, while in DA, the exporter bears a higher risk as payment is received after the importer has accepted the draft and received the documents; this difference results in earlier payment for the exporter under DP.
DA offers less risk for the exporter because the importer's acceptance of the draft creates a legally binding obligation to pay, whereas DP delays payment until the goods arrive, increasing the exporter's storage costs.
Both DP and DA involve the same risk for the exporter, which is primarily the risk of currency fluctuation, and the timing of payment is the same, with payment occurring only after the importer has sold the goods to their customers.
A small exporter with limited capital is preparing to ship a large order to a buyer in a politically unstable country. The exporter cannot afford any payment delays or defaults. Which payment method would you recommend minimizing their risk, and what specific step should they prioritize to ensure the method's effectiveness?
I would recommend Open Account (OA) because it's the simplest method, and the exporter should prioritize negotiating a very high interest rate on late payments to compensate for potential delays.
I would recommend Documents Against Acceptance (DA) because it allows the buyer some flexibility in payment terms, and the exporter should prioritize obtaining export credit insurance to cover the risk of non-payment.
I would recommend Documents Against Payment (DP) because it ensures payment before the release of documents, and the exporter should prioritize verifying the buyer's creditworthiness thoroughly.
I would recommend a Letter of Credit (LC) confirmed by a reputable bank in the exporter's country because it provides the highest security, and the exporter should prioritize ensuring strict compliance with all LC terms and conditions to avoid discrepancies that could delay payment.
Which of the following statements about Incoterms® 2020 is NOT correct?
Incoterms define contractual obligations regarding the transfer of goods.
Incoterms govern the transfer of title and ownership of goods.
Incoterms are published by the International Chamber of Commerce.
Incoterms reduce misunderstandings in cross-border trade.
A seller agrees on EXW, but also loads the goods on the buyer’s truck without charge. Unless otherwise stated, the risk:
Remains with the seller until loading is complete.
Transfers to buyer when goods are available for loading.
Transfers to buyer when export clearance is obtained.
Transfers upon arrival at buyer’s warehouse
The common feature of all C‑terms (CPT, CIP, CFR, CIF) is that:
Risk and cost transfer at the same point.
Seller contracts and pays for carriage.
Seller unloads at destination.
Seller pays import duties.
Which action would NOT violate the seller’s obligations under EXW (Makati Plant)?
Refusing to assist in export clearance when buyer requests it and offers to pay.
Loading the goods onto buyer’s truck without extra charge.
Failing to package goods suitably for export.
Omitting commercial invoice in the package.
A Manila trader agrees to supply coffee beans DAP, buyer’s warehouse in Australia. Australia imposes an unexpected fumigation inspection fee upon arrival, payable before release. Unless otherwise agreed, who bears this cost?
Seller—the fee is part of delivery charges.
Buyer—the fee is part of import clearance.
Split equally under Incoterms default.
The carrier.
Which of the following would most likely result in a contractual dispute if the parties use EXW (exporter's warehouse, Jakarta) but the buyer fails to arrange for pickup on the agreed date?
Seller refuses to store the goods beyond the agreed date and charges a warehousing fee.
Seller loads the goods into buyer's truck at no additional cost.
Buyer later asks seller to handle export clearance as a favor.
Buyer fails to insure the goods during transit from Jakarta to Manila.
The requirement of CTC is that ALL non-originating materials must undergo the required tariff shift, however, the de minimis rule provides an additional possibility to qualify as “originating”, a material that cannot meet the required “tariff shift”. A material may still be originating if the value of the non-originating materials that do not undergo the CTC do not exceed the agreed percentage of the adjusted value of the good. What is the de minimis percentage for ACFTA?
does not exceed 10% of the FOB value of the good
not exceeding 10% by weight
not exceeding 7%
None of the choices
A company in Country X exports a product to Country Y under a preferential trade agreement. However, Country X classifies the product under a tariff category with a 5% duty, while Country Y classifies it under a different category with a 3% duty. Given the difference in tariff classification between the exporting and importing Member States, which tariff rate should be applied to the imported goods?
A. the goods shall be released at the MFN rates
B. at the higher preferential rate, subject to the compliance of the applicable ROO, subject to imposition of penalty or other charges
C. either A or B
D. None of the choices
Vietnam exported 100,000 pieces of various steel slabs, each with a width of 1,200 mm and classified under AHTN Code 7210.41.00, to the Philippines under the ATIGA framework. As per the Philippine regulations, the goods are subject to a 10% MFN tariff (E.O. 61, s. 2011), but enjoy a 0% rate under both AKFTA (E.O. 812, s. 2009) and ATIGA (E.O. 850, s. 2009). A valid Certificate of Origin Form D confirming the goods' ATIGA origin was issued for the shipment, bearing an electronic signature and seal of the issuing authority. Given this, is the importer still eligible to claim preferential tariff treatment under ATIGA for this importation?
No, because it does not fulfill the Rule 7 of the Operational Certification Procedures of ATIGA
No, because the CO Form D shall bear signature and seal of issuing authority both manually and electronically.
Yes, because the CO Form D is in ISO paper size
Yes, because electronically applied signature and seal of issuing authority is accepted.
Which of the following statements is true regarding the de minimis rule under the ATIGA Rules of Origin?
It allows for a maximum of 10% non-originating materials in the final product.
It exempts certain products from meeting the Regional Value Content (RVC) requirement.
It applies only to products with a low FOB value.
It is not recognized under the ATIGA Rules of Origin.
According to the WTO Agreement on Customs Valuation, which of the following is true regarding the transaction value method?
It is the preferred method of valuation for all types of goods.
It is based on the selling price in the country of importation.
It excludes certain specified elements from the value declared for customs purposes.
It is used only when the importer and exporter are related parties.
What is the basis for dutiable value in the case of a retrospective discount in customs valuation?
Declared value at the time of importation
Actual price paid or payable after importation
Market value at the time of importation
Supplier's invoice value
Which of the following situations would likely require adjustments to the declared customs value for valuation purposes?
The importer and exporter have a long-standing business relationship.
The goods are subject to a preferential tariff agreement.
The transaction involves goods with fluctuating market prices.
The customs authorities are unable to verify the accuracy of the declared value.
Which of the following is NOT a condition for using the transaction value method for customs valuation?
The goods must be sold for export to the country of importation.
There must be no restrictions on the disposition of the goods by the buyer.
The price paid or payable must not include any additional payments for the buyer's marketing efforts.
The buyer and seller must not be related, or if they are, the relationship must not influence the price.
Which of the following is NOT considered when determining whether a transaction value is acceptable for customs valuation purposes?
Currency exchange rates at the time of importation.
Discounts offered to unrelated buyers in the same quantity.
Commissions paid by the importer to the exporter's agent.
After-sales service agreements between the importer and exporter.
Which of the following does not constitute a sale?
Micro Trade Firm in Valenzuela will purchase various stationeries from Dynamic Supplies in Italy.
Samsung Tech in Laguna imported a 1x20 container of electronic accessories to one of their affiliates – Comptech in Australia to refurbished their supplies for the upcoming holiday season.
As per the agreement between Buyer A in Marikina and Seller B in Japan, buyer A will pay for the goods in a 90 days term as stated in the invoice.
All of the choices constitutes a sale.
Which of the following is not considered as a “no sale transaction”?
Free consignments like gifts, samples and promotional items.
Goods imported by intermediaries, who do not purchase the goods and who sell them after importation.
Goods imported under a hire, or leasing contract.
All of the choices constitutes a “no sale transaction”.
Which of the following is not an allowed restriction in application of Method 1.
A seller of automobiles requires his buyer not to sell or exhibit them prior to a fixed date which represents the beginning of a model year.
An importer of live bees that needs to present a certificate/permit from BAI and BPI.
The importer can only sell the imported goods in bundles.
The importer is limited to distribute the imported goods in Cebu province only.
The buyer and seller agreed that the seller would deliver the goods directly to the buyer’s warehouse, and to simplify the process for the importer, the seller would also handle import clearance and cover import duties and taxes. The commercial invoice shows a lump-sum price of $100,000 DDP Sta. Rosa, Laguna. Since post-importation charges are not itemized in the invoice, the customs broker declared the dutiable value as "$100,000 plus insurance." Is the customs broker correct in adding the insurance cost to the DDP value when determining the dutiable value?
No, because there is no objective and quantifiable data to compute for the insurance.
Yes, because DDP value has no insurance coverage yet and to compute for the dutiable value there needs to be a dutiable insurance.
Yes, because the shipment has no insurance coverage.
No, because insurance is already included in the DDP price.
Which of the following is not a condition for the application of Method 4.
The imported goods being valued or identical/similar imported goods have been sold in the domestic market in the Philippines in the same condition as when they were imported.
Domestic sale of the imported goods being valued or of identical/similar imported goods must have taken place at or about the time of importation of the goods being valued.
The local purchaser must not be related to the importer from whom the imported goods were bought and must have not supplied any assist to the foreign producer, either directly or indirectly.
If no sales of the imported or of identical /similar goods took place at or about the time of importation of the goods being valued, it is permitted to use sales of the imported goods or identical/similar goods, sold in the Phils. in the same condition as imported, at the earliest date after importation of the goods being valued but before expiration of 45 days after such importation.
On which of the following situations we can consider that there exists a relationship between the buyer and the seller.
Buyer A purchased goods to Seller C. Seller C is a business partner of Seller B who is the uncle of Buyer A.
Buyer A purchased goods to Seller A. Buyer A holds 5 percent of voting stock of Machinery Inc, a company owned by Seller A’s cousin.
Buyer A purchased goods to Seller B. To expedite the transaction, Seller B asked Manager A in their sub branch to uplift the goods from their store instead which is an affiliate of Buyer A.
All of the choices show relationship between the buyer and the seller.
If upon verification of the relationship between the buyer and seller, the Collector of Customs has doubts that their relationship influenced the PAPP, what would be the next action of the Collector of Customs?
Communicate the ground/s to the importer and the importer shall be given a reasonable opportunity to respond.
Proceed in the application of Method 2.
Settles the issue thru the Valuation and Classification Review Committee.
Elevate the matter to the seller and shall be given a reasonable opportunity to provide documents regarding the transaction between the buyer.
Dutiable value shall be determined under Method six on the basis of:
The selling price in the Philippines of the goods produced in the Philippines.
The price of goods in the domestic market of the country of exportation.
The price of goods for export to the Philippines.
Dutiable value under Method Six can be determined using the prices mentioned above.
Under Method six, how can the usage of Method 2 be flexibly interpreted?
It could flexibly be interpreted that identical imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; dutiable values of identical imported goods already determined under the provisions Methods Two and Three could be used.
It could flexibly be interpreted that identical imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; dutiable values of identical imported goods already determined under the provisions Methods Four and Five could be used.
It could flexibly be interpreted that identical imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; dutiable values of identical imported goods already determined under the provisions Methods Three and Four could be used.
None of the choices.
Country X, an ASEAN Member State (AMS), has seen a significant increase in the importation of a specific agricultural product that is not distinctly classified in the existing ASEAN Harmonized Tariff Nomenclature (AHTN). Due to the high trade volume and economic importance of this product, the government of Country X wants to request the inclusion of a specific ASEAN subheading for it. What should Country X do to address this issue?
Request the inclusion of a new tariff line/ASEAN subheading in the AHTN, as the product has significant trade importance for the country.
Unilaterally create a new tariff subheading in its national tariff system without consulting ASEAN.
Stop the importation of the product until it is officially recognized in the AHTN.
Use an existing general tariff subheading without requesting any changes, even if it does not accurately reflect the product’s significance in trade.
XYZ Trading, a multinational company, has been consistently exporting and importing a specific raw material. During the last three years before the latest tariff review, the total trade value of this product has averaged US$900,000 per year. The company requests the inclusion of a new ASEAN Harmonized Tariff Nomenclature (AHTN) subheading for this product, citing its significance in international trade. As the reviewing authority, would you approve the request for a new AHTN subheading?
Yes, because the product is actively traded in international markets.
No, because the total trade value does not meet the required threshold.
Yes, but only if the company provides additional justification for its request.
No, unless the trade volume significantly increases in the coming years.
