CES Customs Procedures & Risk Management 2 — Questions and Answers
Question 1: Which U.S. government program allows importers and exporters to receive expedited border processing in exchange for enhanced security measures?
- Customs-Trade Partnership Against Terrorism (C-TPAT) (Correct answer)
- Automated Export System (AES)
- Trade Compliance Certification Program (TCCP)
- Export Administration Regulations (EAR)
Correct answer: Customs-Trade Partnership Against Terrorism (C-TPAT)
C-TPAT is a voluntary program where companies agree to strengthen supply chain security in exchange for expedited CBP processing.
Question 2: When a U.S. exporter discovers a material error in a previously filed Electronic Export Information (EEI), what is the required corrective action?
- File a corrected EEI in AES within 4 business days of discovery (Correct answer)
- File a corrected EEI in AES within 10 business days of export
- Notify the Census Bureau in writing within 30 days
- No correction is needed if the shipment has already departed
Correct answer: File a corrected EEI in AES within 4 business days of discovery
Exporters must file a corrected EEI in AES within 4 business days of discovering a material error or omission.
Question 3: Which document serves as the primary contract of carriage between an exporter and an ocean freight carrier?
- Commercial invoice
- Bill of lading (Correct answer)
- Certificate of origin
- Packing list
Correct answer: Bill of lading
The bill of lading is the legal contract between the shipper and carrier that also serves as a receipt for goods and a document of title.
Question 4: Under the Foreign Corrupt Practices Act (FCPA), which of the following payments to a foreign official is generally permissible?
- A payment to win a government contract
- A facilitating payment to expedite routine government action (Correct answer)
- A payment disguised as a consulting fee to obtain business
- A political donation made through a third-party agent
Correct answer: A facilitating payment to expedite routine government action
The FCPA includes a narrow exception for facilitating payments made to expedite routine governmental actions such as processing permits or providing utilities.
Question 5: What is the Harmonized Tariff Schedule (HTS) classification principle known as 'General Rule of Interpretation 1'?
- Classification is determined by the component that gives the article its essential character
- Classification is determined according to the terms of the headings and any relative section or chapter notes (Correct answer)
- Goods are classified under the heading that provides the most specific description
- Unfinished articles are classified as if complete when they have the essential character of the finished article
Correct answer: Classification is determined according to the terms of the headings and any relative section or chapter notes
GRI 1 establishes that classification is determined first by the terms of the headings and any legal notes, before applying other rules.
Question 6: A company's export compliance program is most effective when it includes which key element?
- Annual third-party audits only
- Top-level management commitment combined with written policies and employee training (Correct answer)
- Reliance solely on freight forwarder expertise
- A one-time legal review of all export transactions
Correct answer: Top-level management commitment combined with written policies and employee training
BIS and OFAC both recognize that effective export compliance programs require visible leadership commitment, documented policies, training, and internal audits.
Question 7: Which incoterm requires the seller to deliver goods cleared for export, loaded on the buyer's nominated vessel, with the seller bearing all costs and risks up to that point?
- CFR (Cost and Freight)
- FOB (Free On Board) (Correct answer)
- CIF (Cost, Insurance and Freight)
- FAS (Free Alongside Ship)
Correct answer: FOB (Free On Board)
Under FOB, the seller delivers goods on board the vessel nominated by the buyer at the named port, bearing all risks and costs to that point including export clearance.
CES Customs Procedures & Risk Management 2
Which U.S. government program allows importers and exporters to receive expedited border processing in exchange for enhanced security measures?