Customs Procedures & Risk Management Flashcards

Which U.S. law introduced the 'informed compliance' and 'reasonable care' obligations for importers?

Answer: Customs Modernization Act of 1993 (Mod Act)

The Mod Act shifted responsibility to importers to use reasonable care in classification, valuation and entry.

Under 19 CFR Part 163, how long must importers generally retain entry records?

Answer: 5 years from the date of entry

Most import records must be kept for five years from the date of entry.

In a U.S. Foreign-Trade Zone (FTZ), when are customs duties generally paid?

Answer: When goods leave the zone and enter U.S. commerce

Duty is owed only when merchandise is entered for consumption into U.S. commerce; re-exports from the zone avoid duty.

An 'inverted tariff' benefit in an FTZ allows a manufacturer to do what?

Answer: Pay duty at the lower rate of the finished product instead of the higher rate on components

When the finished product carries a lower duty than its inputs, the FTZ user may elect the finished-product rate.

U.S. duty drawback allows a refund of up to what percentage of duties paid on imported goods later exported or destroyed?

Answer: 99%

Drawback refunds up to 99% of eligible duties, taxes and fees.

Which is NOT one of the standard risk treatment options?

Answer: Ignore without documentation

Valid options are avoid, reduce, transfer or accept; acceptance must be a documented, informed decision.

What is 'residual risk' in an AEO security risk assessment?

Answer: Risk that remains after controls have been applied

Residual risk is what remains after mitigation measures and must be monitored or accepted.