CIM Regulatory & Customs Compliance 2 — Questions and Answers
Question 1: Which U.S. government agency is primarily responsible for enforcing customs laws and collecting import duties?
- U.S. Customs and Border Protection (CBP) (Correct answer)
- Bureau of Industry and Security (BIS)
- Federal Trade Commission (FTC)
- Department of Transportation (DOT)
Correct answer: U.S. Customs and Border Protection (CBP)
U.S. Customs and Border Protection (CBP) is the primary agency responsible for enforcing customs laws and collecting duties on imported goods.
Question 2: What is the purpose of a Harmonized Tariff Schedule (HTS) code in international trade?
- To classify goods for customs duty assessment and trade statistics (Correct answer)
- To identify the country of origin of imported goods
- To certify that goods meet safety standards
- To authorize export of controlled items
Correct answer: To classify goods for customs duty assessment and trade statistics
HTS codes classify imported goods into standardized categories used to determine applicable duty rates and collect trade statistics.
Question 3: A company imports components under a bonded warehouse arrangement. What key benefit does this provide?
- Duties are deferred until goods are withdrawn for domestic consumption (Correct answer)
- Goods are permanently exempt from import duties
- The company receives a tax credit equal to the duty amount
- Import inspections are bypassed for bonded goods
Correct answer: Duties are deferred until goods are withdrawn for domestic consumption
Bonded warehouses allow importers to store goods without paying duties until the goods are released for domestic sale or consumption.
Question 4: Under the Foreign Corrupt Practices Act (FCPA), which inventory-related activity would constitute a violation?
- Paying a foreign customs official to expedite clearance of a shipment (Correct answer)
- Filing an amended customs entry to correct a classification error
- Requesting a duty drawback refund from CBP
- Using a licensed customs broker for import filings
Correct answer: Paying a foreign customs official to expedite clearance of a shipment
The FCPA prohibits bribing foreign government officials, including customs officials, to obtain or retain business advantages.
Question 5: What does 'duty drawback' allow U.S. manufacturers to do?
- Recover duties paid on imported materials that are later exported in finished products (Correct answer)
- Avoid paying duties on goods imported for domestic sale
- Reclassify goods under a lower tariff code after importation
- Transfer duty liability to a foreign supplier
Correct answer: Recover duties paid on imported materials that are later exported in finished products
Duty drawback is a refund of up to 99% of duties paid on imported materials when those materials are incorporated into exported finished goods.
Question 6: Which document serves as the primary contract between a shipper and a carrier in international freight?
- Bill of Lading (Correct answer)
- Commercial Invoice
- Packing List
- Certificate of Origin
Correct answer: Bill of Lading
The Bill of Lading is the contract of carriage between the shipper and carrier, serving as a receipt for goods and a document of title.
Question 7: A U.S. importer discovers that goods were misclassified under the wrong HTS code, resulting in underpayment of duties. What is the correct course of action?
- File a prior disclosure and amended entry with CBP to correct the error (Correct answer)
- Continue using the incorrect code to avoid drawing attention
- Wait to see if CBP audits the entry before taking action
- Destroy the import records to eliminate evidence of the error
Correct answer: File a prior disclosure and amended entry with CBP to correct the error
Filing a prior disclosure with CBP reduces penalties significantly and is the legally required corrective action when importers discover duty underpayments.
CIM Regulatory & Customs Compliance 2
Which U.S. government agency is primarily responsible for enforcing customs laws and collecting import duties?