Passport to U.S. Customs Compliance

• Types of origin rules, non-preferential and preferential rules
• Applying the appropriate rules of origin for different tariff determinations
  • Substantial transformation test
  • Textile and apparel rules
• Understanding the criteria for substantial transformation, including how a product’s name, character, or use must change during the manufacturing process
• How to eliminate duties through origin changes (IEEPA, 232, 301, etc.)
• Ensuring compliance with country-specific labeling and marking requirements to avoid penalties and facilitate smooth customs clearance
• Working with your supplier to get the origin information you need

• USMCA:
  • Review the preferential rules of origin outlined in General Note 11(b)
  • Applicability of Section 301 China tariffs
    • Importation of goods from Mexico: Complications regarding the common use of Chinese parts and components in Mexico
    • Proving origin: A product can qualify as USMCA-origin for preferential duty treatment while still being exposed to Section 301 tariffs if the substantial transformation threshold is not met
  • Documentation relating to the information required on the 7501 Entry Summary Form
  • Labor content rules for certain types of goods
  • Review certificates and ensuring your company has all required documents on hand at the time of importation
  • Confirm that your country-of-origin determinations properly apply all the USMCA requirements beyond the normal tariff shift rules
  • Product tracing: Tracing product’s components to confirm they are accurately reporting their country of origin

Toward solidifying your understanding of this session, the instructors will take you through a series of hypothetical scenarios, sample records, and how to put the “rubber to the road.” Ample time will be left for Q&A. Attendees will be able to ask questions and benchmark with fellow attendees via anonymous audience polling.

• How to use the Harmonized Tariff Schedule and where importers make mistakes
  • Understanding HTSUS structure and framework
  • Applying the General Rules of Interpretation, heading terms, relevant section, and chapter notes, heading and subheading notes, general notes, and explanatory notes, and using the rulings as guides
• Navigating the ambiguities in HTS classification, especially for products that can fit multiple descriptions
• Special HTS classification resulting in increased duties (chapter 99, 301, 232, IEEPA) or decreased duties (chapter 98, goods returned, Us government imports, agricultural imports, samples/test products, temporary imports)
• Communication with vendor/procurement/engineering teams on any product changes, such as material composition

• Understanding the impact of proper classification on duty rates
• What to do when classifying unusual goods and working through grey areas
• Key pitfalls to avoid
• Mitigating risks and CBP rulings
• Understanding impact of reinstated 301 tariffs on classification
• Responding to directed disclosure and government requests for information

How to Classify a “Set” and How to Handle “Parts of a Product” In this classification exercise, the instructors will take you through a real-life case study on how to use the Harmonized Tariff Schedule to properly classify your products and how to handle “sets” and “parts of a product”. Session leaders will first discuss how to interpret the relevant definitions, then lead an interactive discussion on how to correctly classify these items, making sure to highlight common and lesser-known mistakes to avoid. Attendees will be able to ask questions and benchmark with fellow attendees via anonymous audience polling.

• Transaction value: Is there a sale?
• Transaction value of identical or similar merchandise
• Deductive value: First unrelated party
• Computed value: Consideration of variances for merchandise under appraisement
• A derived (fall‐back) method reasonably adjusted to circumstances
• Allocation of NRE (assists) to prototypes versus production units
• Contract drafting – whether intercompany or otherwise – with milestone payments

Clarifying the Essentials and How to Put Theory into Practice

• Valuation checklist: Regulations, process, methodologies, forms
• Examining the transaction value process – Defining a “related party transaction” – When not to use transaction value
• Making sense of the other five valuation methodologies and when they should be applied (transaction value of identical merchandise, transaction value of similar merchandise, deductive value, computed value, derivative method)
• CASE STUDY: Fall back method ruling request
• Understanding assists, royalties and other additions as part of the dutiable value
• Identifying the different types of deductions and how deductions are determined – What you need to prove eligibility for a deduction
• Review of sample invoices: How to identify and correct mistakes before it’s too late
• Understanding transfer pricing – when you can rely on tax transfer pricing studies, and the latest word from CBP

• First sale for export: Leveraging lower transaction values earlier in the supply chain
  • Overview of first sale valuation and use of first sale rule to lower Section 301, IEEPA, and other tariff increases
  • Identification of suppliers for first sale valuation to maximize savings
  • Determining whether your suppliers are candidates for first sale
  • Status of Whitehouse (D-RI) and Bill Cassidy (R-LA) “First Sale” Bill which would close first sale “loophole”
• Unbundling: Separating non-dutiable charges that are not subject to duty
• Transfer pricing: Aligning intercompany and transfer pricing to optimize declared values

Toward solidifying your understanding of this session, the instructors will take you through a series of hypothetical scenarios and how to put the “rubber to the road.” Ample time will be left for Q&A. Attendees will be able to ask questions and benchmark with fellow attendees via anonymous audience polling.

Given the uncertainty surrounding the implementation of new tariffs by the United States and the potential for retaliatory tariffs by targeted countries, it is essential that importers dig into the impact of these policies and develop plans to mitigate the financial and other negative consequences. A strategic tariff-mitigation strategy can result in significant savings for businesses in an era marked by uncertainty in international markets.

• Implementing tariff engineering strategies:
  • Considering minor modifications to products or production processes to shift classification to a lower tariff bracket
  • Conducting a thorough review of the Harmonized Tariff Schedule of the United States is essential for this strategy
  • FTZs versus Bonded Warehouses
  • Reciprocal tariff exemptions
  • Tariff-specific price adjustment provisions with suppliers or customers
• Tariff unstacking
• Assessing refund eligibility: Determining whether duties are stacked contrary to EO 14289
• Understanding anticipated increased enforcement: False Claims Act, transshipment tariff enforcement risk mitigation
• Getting a handle on your import operations to better understand the potential impacts of tariffs on your business
  • Identifying all importer-of-record (IOR) numbers associated with your company at all divisions and subsidiaries.
  • Taking stock of all customs brokers used by your organization over the last five years, and determining which ones are still active
  • Identifying which types, which product lines, or which divisions each broker is handling.
  • Pulling the Automated Commercial Environment (ACE) data with all your company’s identified IORs to gather the data needed to analyze import trends and the accuracy of information submitted to Customs at the time of entry.
  • Collaborating with procurement teams to anticipate future orders, including for new products, suppliers, and sourcing regions under consideration.

• Build compliance into your culture, not just your filing system: Treat customs documentation as a shared due diligence responsibility across finance, logistics, procurement, and legal to better withstand a potential audit
• Managing complexity through automation:
  • Automated systems: Streamline customs declarations, tariff classification, and other critical documentation
  • Adopt digital customs record keeping platforms that are searchable, secure, and auditable
  • Cloud-based platforms
  • Automated timestamping for version control
  • Encryption and role-based access permissions
• Who is required to maintain records? Where are they stored?
• Keep origin documentation watertight
  • Maintain supplier declarations, long-term supplier statements, and certificates of origin in a structured archive
• Record the “why” behind classifications and valuations
  • It’s not enough to show the customs code or declared value; CBP increasingly wants to know you arrived there
• Use technology to track and trace in real time
  • Tamper-proof records could dramatically cut disputes between customs, carriers, and shippers

Toward solidifying your understanding of this session, the instructors will take you through a series of hypothetical scenarios, and how to put the “rubber to the road.” Ample time will be left for Q&A. Attendees will be able to ask questions and benchmark with fellow attendees via anonymous audience polling.

Geopolitical volatility continues to disrupt global supply chains. How are multinational companies re-routing goods, identifying sourcing vulnerabilities and reviewing contractual terms to keep supply chains moving, particularly for advanced technology and raw materials?/p>

• How industry is approaching supply chain diversification for access to advanced technology and raw materials amid increasing geopolitical volatility
• Re-aligning the US/China trade connection: The global impacts of this tense bilateral relationship
• Downstream supply chain impacts from the Iran war
• Demand planning: Managing cost pressures for raw materials supply and finished goods as tariffs continue to change

• Leveraging AI, automation and other technologies as an essential missing piece of the puzzle for competitive supply chains
• Reviewing the contract: Understanding the scope of force majeure clauses, and holding other party to existing pricing terms
• Conducting an audit for sourcing vulnerabilities

Toward solidifying your understanding of this session, the instructors will take you through a series of hypothetical scenarios, sample license applications, and how to put the “rubber to the road.” Ample time will be left for Q&A. Attendees will be able to ask questions and benchmark with fellow attendees via anonymous audience polling.

• Using AI and ERP data to flag origin changes, tariff exposure, FTA eligibility issues
• AI for:
  • Classification, and origin: Supporting DOJ and CBP expectations with defensible, documented controls instead of “we trusted the supplier”
  • Summarizing CBP rulings
  • Exacting data from commercial invoices
  • Cleaning and standardizing messy import spreadsheets
• Ensuring that AI-enhanced tax enforcement complies with fundamental legal principles

• What triggers a CBP audit
  • Red flags and errors that lead to penalty actions
    • When does a company fail to act with reasonable care?
  • How CBP determines civil penalty amounts
  • Determining “mitigation options”
  • CBP enforcement plans and priorities going forward

• Audit Notice and Process
  • Types of audits:
    • Focused Assessment Audits
    • Assessment Compliance Audits
    • Quick Response Audits
    • Audit Surveys
  • Auditing specific focus areas
    • Tariff classification
    • Valuation
    • Country of Origin
    • Filing a Prior Disclosure (PD) to obtain legal protection if penalties are found at commencement of audit

Session leaders will first take you through the key do’s and don’ts for managing an audit.

In advance of this last unit, participants will complete an assignment that will serve as a comprehensive review of all previous modules. The questions will be based on a case study of an import transaction from A to Z. Participants will share their responses to the assignment questions, followed by feedback from the expert instructors. There will also be ample time for additional, extended Q&A!