CPP Global Sourcing & Import Regulations 2

Question 1

A buyer discovers that a supplier in a free trade agreement (FTA) country is using components sourced from a non-FTA country. What is the primary concern?

Accepted Answer

Rules of origin compliance

Answer

Rules of origin determine whether goods qualify for preferential FTA tariff rates; using non-qualifying components can disqualify the product.

Question 2

Which U.S. government agency is primarily responsible for enforcing import regulations and collecting customs duties?

Accepted Answer

U.S. Customs and Border Protection (CBP)

Answer

U.S. Customs and Border Protection (CBP) is the primary agency responsible for enforcing import regulations and collecting duties at the border.

Question 3

What does the term 'landed cost' include when evaluating global sourcing decisions?

Accepted Answer

Purchase price, freight, insurance, duties, and all delivery costs

Answer

Landed cost includes all costs to deliver goods to the buyer's facility: purchase price, freight, insurance, duties, taxes, and handling fees.

Question 4

A 'bonded warehouse' allows importers to:

Accepted Answer

Store goods under CBP supervision and defer duty payment until goods enter commerce

Answer

A bonded warehouse is a secure facility where imported goods can be stored under CBP supervision with duty payment deferred until the goods are released.

Question 5

Which Incoterm transfers maximum risk to the buyer at the earliest point in the shipment?

Accepted Answer

EXW (Ex Works)

Answer

Under EXW, the seller's only obligation is to make goods available at their premises; the buyer bears all costs and risks from that point forward.

(CPP) Certified Purchasing Professional Practice Test

(CPP) Certified Purchasing Professional Practice Test

CPP Global Sourcing & Import Regulations 2