Glossary of Customs and Trade Terms

Ad Valorem - Literally means According to Value. It is the primary method by which Customs duties are calculated. An Ad Valorem duty is a duty based on the value of the merchandise. This is in contrast to specific duties which are calculated on the weight, volume or item count and compound duties which are a combination of ad valorem and specific duties.

Antidumping Duty - An additional duty imposed by the United States against specific products from certain countries in order to "offset" the unfair pricing of the imported product. These duties, at least in theory, are not punitive in nature, these duties are imposed at the end of an antidumping duty investigation. An Antidumping investigation is a complex investigation conducted by two U.S. agencies, the International Trade Administration and the International Trade Commission.

Antidumping Duty Deposit - The deposit collected by the U.S. Customs Service at the time of entry of merchandise subject to an antidumping duty order. The deposit is based on the most recently concluded review. The actual amount to be paid will depend on the results of the administrative review, if any, for the period in question and the actual duties may be higher or lower.

Assists - Something of value provided by an importer to a foreign producer. The value of the assist needs to be added to the transaction value when calculating Customs value. Typical assist include tooling, packaging, and parts.

Compound Duty - A duty which is calculated based on both the value of the goods as well as the weight, volume or number.

Consumer Product Safety Commission - The agency charged with the duty to protect U.S. consumers from dangerous goods, such as toys that present a risk of choking in children under the age of 3. The U.S. Customs Service has the primary responsibility for enforcing CPSC requirements at the time of entry.

Countervailing Duty - A duty unilaterally imposed by the United States against specific products from certain countries in order to offset improper subsidies provided by the government of that country. It is imposed at the end of a countervailing duty investigation. A CVD investigation is a complex investigation conducted by two U.S. agencies , the International Trade Administration and the International Trade Commission.

Countervailing Duty Deposit - The deposit collected by the U.S. Customs Service at the time of entry of merchandise subject to a countervailing duty order. The deposit is based on the most recently concluded review. The actual amount to be paid will depend on the results of the administrative review, if any, for the period in question and the actual duties may be higher or lower.

Customs Service - A part of the Treasury Department which is charged with the primary responsibility for administering the Customs Laws of the United States. Among its key areas of responsibility are the examination of all merchandise which enters the United States and the collection of duty on those entries. The Customs Service administers more than 400 laws for over 40 agencies, including the Fish and Wildlife Service, the Food and Drug Administration, the Federal Trade Commission, and the Consumer Product Safety Commission.

Customs Value - The value assigned to merchandise at the time of entry. It is used as the basis for assessing the amount of duty and taxes owed and for other purposes. It can be calculated in a number of ways, but the preferred method of valuation is transaction value.

Customshouse Broker - The licensed individual or company who assists the importer in the import transaction by preparing the import documents and files them with the Customs Service. Brokers are licensed by the U.S. Customs Service.

Department of Commerce - A Cabinet level department which has the responsibility for administering the International Trade Laws. It is also charged with the duty to both regulate and assist U.S. exporters. Agencies within the Commerce Department include the International Trade Administration, and the Bureau of Export Administration.

Drawback - A process by which a U.S. exporter can receive a return of duties which were paid upon importation of merchandise at the time of, and by reason of, the export. A number of types of drawback are available including same-condition drawback, substitution drawback and manufacturing drawback.

Entry - Entry has two meanings. The first describes the formal process (i.e. the entry process) by which the documentation necessary for the importation of specific items of merchandise in to the United States is presented to the Customs Service. The second describes a specific document, or more generally, all of the documents needed for entry. The entry papers consist of a number of specific items including a Customs Form 7501 (the Customs Entry) and a commercial invoice, as well as any specific additional documents which need to be filed for certain types of merchandise (for example, an origin declaration with certain textile products). Customs is moving toward a paperless system and some of these documents may now be "electronic" in nature.

HTSUS (Harmonized Tariff Schedule of the United States) - The tariff nomenclature presently used by the United States. It is harmonized with the tariff schedules of the major trading nations of the world in that it follows a basic structure and has same basic language. The rates of duty and the specific provisions do, however, vary from country to country.

International Trade Administration - Part of the U.S. Department of Commerce. It serves two roles. On one hand, it is the agency charged with investigating, reviewing and calculating the amounts of countervailing and antidumping duty, and on the other hand it is responsible for helping promote U.S. business in foreign markets. In the latter role it sponsors trade missions and trade fairs outside of the United States.

International Trade Commission - An independent commission which grew out of the Tariff Commission. It has two primary responsibilities: The first is to conduct investigations into various aspects of international trade. These investigations can be informational, such as those requested by Congress to aid in the drafting of legislation, or decisional, such as determining whether a party has been injured in an antidumping duty investigation. A second responsibility is to provide advice to the President on any modifications necessary to keep the HTSUS of the U.S. up-to-date.

Specific Duty - A duty which is calculated based on the volume, weight or item count, as opposed to value. Under the various trade agreements signed by the U.S., this is not a favored method of calculation and is being phased out.

Transaction Value - The normal basis for Customs value. It is the price paid or payable for the merchandise between two unrelated parties, plus certain additions in five categories.

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