Practice Test Geeks(CIM) Certified Inventory Manager Practice Test
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Regulatory & Customs Compliance Flashcards

7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory & Customs Compliance flashcards as text

  1. What is the primary purpose of C-TPAT (Customs-Trade Partnership Against Terrorism)?

    Answer: To improve supply chain security in exchange for expedited customs processing

    C-TPAT is a voluntary U.S. government-business initiative that strengthens supply chain security while offering benefits like fewer inspections and priority processing.

  2. Under Incoterms 2020, which term requires the seller to deliver goods to a named port with all export duties paid, but import duties are the buyer's responsibility?

    Answer: FOB (Free on Board)

    Under FOB, the seller is responsible for export customs clearance and loading goods onto the vessel; the buyer assumes risk and import duties from that point.

  3. A company exports dual-use items (goods with both commercial and military applications). Which U.S. regulation primarily governs these exports?

    Answer: Export Administration Regulations (EAR)

    The EAR, administered by the Bureau of Industry and Security, controls the export of dual-use commercial items that could have military or proliferation applications.

  4. What is the significance of a 'reasonable care' standard in U.S. customs compliance?

    Answer: Importers are legally required to exercise due diligence to ensure the accuracy of their customs declarations

    The Customs Modernization Act established that importers bear the legal responsibility to exercise reasonable care in all customs filings and transactions.

  5. An inventory manager notices that a supplier is listing undervalued prices on commercial invoices to reduce duty payments. This practice is called:

    Answer: Customs fraud / undervaluation

    Customs undervaluation is the fraudulent practice of declaring a lower transaction value than actually paid to reduce duty payments, which violates customs law.

  6. What does a 'Free Trade Agreement' (FTA) primarily affect in inventory management?

    Answer: Duty rates on goods that meet rules of origin requirements between partner countries

    FTAs reduce or eliminate tariffs on qualifying goods that meet specific rules of origin criteria, directly reducing landed cost for inventory.

  7. Which of the following best describes 'transshipment fraud' in international trade?

    Answer: Routing goods through a third country to falsely claim origin and avoid duties or sanctions

    Transshipment fraud involves routing goods through an intermediate country to disguise their true origin and evade applicable tariffs, quotas, or trade restrictions.