7. Reasonable Care Checklists

 

7. Reasonable Care Checklists 

Reasonable care is an explicit responsibility on the part of the importer. Despite  its seemingly simple connotation, the term reasonable care defies easy explanation  because the facts and circumstances surrounding every import transaction differ, from the  experience of the importer to the nature of the imported articles. Consequently, neither  CBP nor the importing community can develop a reasonable care checklist capable of  covering every import transaction. 

CBP recommends that the import community examine the list of questions below.  These questions may suggest methods that importers may find useful in avoiding  compliance problems and in meeting the responsibilities of reasonable care. 

 These questions are intended to promote compliance with CBP laws and  regulations, but be aware that the list is advisory, not exhaustive. The checklist is  intended as a guide and has no legal, binding or precedential effect on CBP or the  importing community. 

The questions apply whether the importer of record conducts the transactions(s)

him- or herself, or whether the importer hires others to do it. 

General Questions for All Transactions: 

1. If you have not retained an expert (e.g., lawyer, customs broker, accountant, or  customs consultant) to assist you in complying with CBP requirements, do you  have access to the CBP Regulations (Title 19 of the Code of Federal Regulations),  the Harmonized Tariff Schedule of the United States (generally referred to as the  Harmonized Tariff Schedule), and CBPBulletin and Decisions? (All three are  available from the Superintendent of Documents, Tel. 202.512.1800.) Do you  have access to the CBP Website at www.cbp.gov, or other research service that  provides the information to help you establish reliable procedures and facilitate  compliance with CBP law and regulations? 

2. Has a responsible, knowledgeable individual within your organization reviewed  your CBP documentation to assure that it is full, complete and accurate? If the  documentation was prepared outside your organization, do you have a reliable  method to assure that you receive copies of the information submitted to CBP,  that it is reviewed for accuracy, and that CBP is apprised of needed corrections in  a timely fashion? 

3. If you use an expert to help you comply with CBP requirements, have you  discussed your importations in advance with that person, and have you provided  him or her with complete, accurate information about the import transaction(s)? 

4. Are identical transactions or merchandise handled differently at different ports or  CBP offices within the same port? If so, have you brought this fact to CBP  officials’ attention? 

Questions by Topic: Merchandise Description & Tariff Classification 

Basic Question: Do you know what you ordered, where it was made, and what it is made  of? 

Have you provided a complete, accurate description of your merchandise to CBP  in accordance with 19 U.S.C. 1481? (Also, see 19 CFR 141.87 and 19 CFR  141.89 for special merchandise description requirements.) 

Have you provided CBP with the correct tariff classification of your merchandise  in accordance with 19 U.S.C. 1484? 

Have you obtained a CBP ruling regarding the description of your merchandise or  its tariff classification (see 19 CFR Part 177)? If so, have you followed the ruling  and apprised appropriate CBP officials of those facts (i.e., of the ruling and your compliance with it)? 

Where merchandise description or tariff classification information is not  immediately available, have you established a reliable procedure for obtaining it  and providing it to CBP? 

Have you participated in a CBP classification of your merchandise in order to get  it properly described and classified? 

Have you consulted the tariff schedules, CBP informed compliance publications,  court cases or CBP rulings to help you properly describe and classify the  merchandise? 

Have you consulted with an expert (e.g., lawyer, customs broker, accountant,  customs consultant) to assist in the description and/or classification of the  merchandise? 

If you are claiming a conditionally free or special tariff classification or provision  for your merchandise (e.g., GSP, HTS Item 9802, NAFTA), how have you  verified that the merchandise qualifies for such status? Do you have the  documentation necessary to support the claim? If making a NAFTA preference  claim, do you have a NAFTA certificate of origin in your possession? 

Is the nature of your merchandise such that a laboratory analysis or other  specialized procedure is advised for proper description and classification? 

Have you developed reliable procedures to maintain and produce the required  entry documentation and supporting information? 

Valuation 

Basic Questions: Do you know the “price actually paid or payable” for your  merchandise? Do you know the terms of sale? Whether there will be rebates, tie-ins,  indirect costs, additional payments? Whether “assists” were provided or commissions or  royalties paid ? Are amounts actual or estimated? Are you and the supplier “related  parties”? 

Have you provided CBP with a proper declared value for your merchandise in  accordance with 19 U.S.C. 1484 and 19 U.S.C. 1401a? 

Have you obtained a CBP ruling regarding valuation of the merchandise (see 19  CFR Part 177)? Can you establish that you followed the ruling reliably? Have you  brought those facts to the attention of CBP?

Have you consulted the CBP valuation laws and regulations, CBP Valuation  Encyclopedia, CBP informed compliance publications, court cases and CBP  rulings to assist you in valuing merchandise? 

If you purchased the merchandise from a “related” seller, have you reported that  fact upon entry? Have you assured that the value reported to CBP meets one of  the “related party” tests? 

Have you assured that all legally required costs or payments associated with the  imported merchandise (assists, commissions, indirect payments or rebates,  royalties, etc.) have been reported to CBP? 

If you are declaring a value based upon a transaction in which you were/are not  the buyer, have you substantiated that the transaction is a bona fide “sale at arm’s  length” and that the merchandise was clearly destined to the United States at the  time of sale? 

If you are claiming a conditionally free or special tariff classification or provision  for your merchandise (GSP, HTS Item 9802, NAFTA), have you reported the  required value information and obtained the documentation necessary to support  the claim? 

Have you produced the required entry documentation and supporting  information? 

Country of Origin/Marking/Quota 

Basic Question: Have you ascertained the correct country of origin for the imported  merchandise? 

Have you reported the correct country of origin on CBP entry documents? 

Have you assured that the merchandise is properly marked upon entry with the  correct country of origin (if required) in accordance with 19 U.S.C. 1304 and any  other applicable special marking requirements (watches, gold, textile labeling,  etc)? 

Have you obtained a CBP ruling regarding the proper marking and country of  origin of the merchandise (see 19 CFR Part 177)? If so, have you followed the  ruling and brought that fact to the attention of CBP? 

Have you consulted with a customs expert regarding the correct country-of origin/proper marking of your merchandise?

Have you apprised your foreign supplier of CBP country-of-origin marking  requirements prior to importation of your merchandise? 

If you are claiming a change in the origin of the merchandise or claiming that the  goods are of U.S. origin, have you taken required measures to substantiate your  claim (e.g., do you have U.S. milling certificates or manufacturers’ affidavits  attesting to production in the United States)? 

If importing textiles or apparel, have you ascertained the correct country of origin  in accordance with 19 U.S.C. 3592 (Section 334, P.L. 103-465) and assured  yourself that no illegal transshipment or false or fraudulent practices were  involved? 

Do you know how your goods are made, from raw materials to finished goods, by  whom and where? 

Have you ensured that the quota category is correct? 

Have you checked the Status Report on Current Import Quotas (Restraint  Levels), issued by CBP, to determine if your goods are subject to a quota category  with “part” categories? 

Have you obtained correct visas for those goods subject to visa categories? 

For textile articles, have you prepared a proper country declaration for each entry,  i.e., a single country declaration (if wholly obtained/produced) or a multi-country  declaration (if raw materials from one country were transformed into goods in a  second)? 

Can you produce all entry documentation and supporting information, including  certificates of origin, if CBP requires you to do so? 

Intellectual Property Rights 

Basic Question: Have you determined whether your merchandise or its packaging use  any trademarks or copyrighted material or are patented? If so, can you establish that you  have a legal right to import those items into and/or use them in the United States? 

1. If you are importing goods or packaging bearing a trademark registered in the  United States, have you established that it is genuine and not restricted from  importation under the “gray-market” or parallel-import requirements of United  States law (see 198 CFR 133.21), or that you have permission from the trademark  holder to import the merchandise?

2. If you are importing goods or packaging that contain registered copyrighted  material, have you established that this material is authorized and genuine? If you  are importing sound recordings of live performances, were the recordings  authorized?  

3. Is your merchandise subject to an International Trade Commission or  court-ordered exclusion order? 

4. Can you produce the required entry documentation and supporting information?  Miscellaneous 

Have you assured that your merchandise complies with other agencies’  requirements (e.g., FDA, EPA, DOT, CPSC, FTC, Agriculture, etc.) and obtained  licenses or permits, if required, from them? 

Are your goods subject to a Commerce Department dumping or  countervailing-duty investigation or determination? If so, have you complied with  CBP reporting requirements of this fact (e.g., 19 CFR 141.61)? 

Is your merchandise subject to quota/visa requirements? If so, have you provided  a correct visa for the goods upon entry? 

Have you assured that you have the right to make entry under the CBP  Regulations? 

Have you filed the correct type of CBP entry (e.g., TIB, T&E, consumption entry,  mail entry)? 

Additional Questions for Textile and Apparel Importers 

Section 333 of the Uruguay Round Implementation Act (19 U.S.C. 1592a)  authorizes the Secretary of the Treasury to publish a list of foreign producers,  manufacturers, suppliers, sellers, exporters, or other foreign persons found to have  violated 19 U.S.C. 1592 by using false, fraudulent or counterfeit documentation, labeling,  or prohibited transshipment practices in connection with textiles and apparel products.  Section 1592a also requires any importer of record who enters or otherwise attempts to  introduce into United States commerce textile or apparel products that were directly or  indirectly produced, manufactured, supplied, sold, exported, or transported by such  named person(s) to show, to the Secretary’s satisfaction, that the importer has exercised  reasonable care to ensure that the importations are accompanied by accurate  documentation, packaging and labeling regarding the products’ origin. Under section  1592a, reliance solely upon information from a person named on the list does not  constitute the exercise of reasonable care. Textile and apparel importers who have a commercial relationship with any of the listed parties must exercise reasonable care in  ensuring that the documentation covering the imported merchandise, its packaging and its  labeling, accurately identify the importation’s country of origin. This demonstration of  reasonable care must rely upon more information than that supplied by the named party. 

In order to meet the reasonable care standard when importing textile or apparel  products and when dealing with a party named on this list, an importer should consider  the following questions to ensure that the documentation, packaging and labeling are  accurate regarding country-of-origin considerations. This list is illustrative, not  exhaustive: 

1. Has the importer had a prior relationship with the named party? 

2. Has the importer had any seizures or detentions of textile or apparel products that  were directly or indirectly produced, supplied, or transported by the named party? 

3. Has the importer visited the company’s premises to ascertain that the company  actually has the capacity to produce the merchandise? 

4. Where a claim of an origin-conferring process is made in accordance with 19  CFR 102.21, has the importer ascertained that the named party actually performed  that process? 

5. Is the named party really operating from the country that he or she claims on the  documentation, packaging or labeling? 

6. Have quotas for the imported merchandise closed, or are they near closing, from  the main producer countries for this commodity? 

7. Does the country have a dubious or questionable history regarding this  commodity? 

8. Have you questioned your supplier about the product’s origin? 

9. If the importation is accompanied by a visa, permit or license, has the importer  verified with the supplier or manufacturer that the document is of valid, legitimate  origin? Has the importer examined that document for any irregularities that would  call its authenticity into question?