Customs Procedures & Risk Management Flashcards

An exporter receives a letter of credit that requires shipment 'not later than July 31' but the goods are ready on August 2. What is the most appropriate course of action?

Answer: Request an amendment to the letter of credit to extend the shipment date before shipping

Under UCP 600, a late shipment is a discrepancy that banks will typically reject; the correct action is to request an LC amendment before the goods are shipped.

Which entity is responsible for administering and enforcing U.S. economic sanctions programs?

Answer: Office of Foreign Assets Control (OFAC)

OFAC, part of the U.S. Treasury Department, administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals.

What is a 'routed export transaction' under the EAR?

Answer: A transaction where the foreign buyer controls the export process and selects the U.S. forwarding agent

In a routed export transaction, the foreign principal party in interest authorizes a U.S. agent to facilitate export on their behalf, shifting certain EEI filing responsibilities.

Which document specifically certifies that goods meet the importing country's phytosanitary requirements?

Answer: Phytosanitary certificate

A phytosanitary certificate is issued by a national plant protection organization certifying that plants or plant products meet the importing country's plant health requirements.

What is the primary function of an Importer of Record (IOR) in a U.S. import transaction?

Answer: To bear legal responsibility for ensuring goods comply with all U.S. import laws and paying applicable duties

The IOR is legally responsible to CBP for the accuracy of the entry, compliance with import regulations, and payment of all duties, fees, and taxes.

Under NAFTA's (now USMCA's) rules of origin, what does 'tariff shift' refer to?

Answer: A non-originating input that undergoes a specified change in tariff classification during production in a member country

Tariff shift (change in tariff classification) is a rule of origin criterion requiring that non-originating materials be transformed enough to change their HTS classification at a specified level.

Which risk mitigation strategy involves distributing export shipments among multiple carriers and routes to reduce supply chain vulnerability?

Answer: Carrier diversification

Carrier diversification spreads risk by avoiding over-reliance on a single carrier or route, reducing the impact of disruptions from strikes, capacity constraints, or route closures.