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TRANSACTIONAL

C-TPAT | Container Security Initiative | Port Security Initiative | Supply Contracts | Invoices | Letters of Credit | Commission Agreements | Assists

C-TPAT

Customs - Trade Partnership Against Terrorism (C-TPAT) is a voluntary initiative of the CBP.  Members of the trade community participate by entering into an agreement with Customs to take specific actions to ensure the security of the supply chain, and to protect the supply chain from terrorism.  In exchange, the Custom Service will subject the importations to a lower degree of scrutiny.  Further, in the event of a heightened terrorist alert, some or all importations of non C-TPAT certified importers could be stopped or significantly delayed.

Container Security Initiative

The Container Security Initiative (CSI) is an effort by CBP to protect the country from terrorist attacks resulting from materials brought into the United States in containers.  By pre-verifying the bill of lading and related actions, the security of containers is enhanced.

Port Security Initiative

The Port Security Initiative (PSI) is an effort by CBP to protect the borders of the United States.  In order to prevent the unauthorized introduction of items into the stream of commerce and trade, the U.S. has entered into agreements with port operators, both in the U.S. and elsewhere, in which the port operators agree to provide enhanced security.  In exchange, merchandise and ships moving between these secure ports are subject to a reduced degree of scrutiny.

Supply Contracts

A supply contract is an agreement entered into between a U.S. importer and a foreign supplier which the importer agrees to buy a portion of its needs from a manufacturer and the manufacturer agrees to sell certain minimum quantities to the importer.  While many importers and foreign manufacturers operate without benefit of a contract, a prudent importer/foreign manufacturer may wish to enter into these contracts to guarantee the price, quality and availability of needed products.

Invoices

An invoice is the document reflecting the sale of goods or services between two parties.  It is a necessary part of any import transaction.  If an actual invoice does not exist, a pro forma invoice must be crafted.

Letters of Credit

A letter of credit is a device by which a payment can be made by the buyer after the seller has performed its obligations.  It is a conditional agreement to pay where the instrument of payment is triggered by some external act.

In import transactions, the negotiation of the Letter of Credit often requires the presentation of a bill of lading proving that the goods were placed on a vessel.

Commission Agreements

Certain transactions result in an assist to the foreign seller and this assist must be taken into account in the calculation of duties.  One type of assist can be the payment of monies to a third party.  However, if a formal buying commission agreement is entered into, and if other facts can be established, the commission payment can be deemed non-dutiable.      

Assists

On occasion the importer will provide a manufacturer with some item or service of value used in the production of the imported product. This can take the form of material provided or something less tangible such as a blueprint or drawing. These items or services are of value to the manufacturer and are presumed to reduce the price. As the price no longer reflects the full value of the merchandise, the amount of these items or services must be included with the value declared to Customs.