Posts Tagged ‘Customs’


 

Foreign Supplier Verification Program Frequently Asked Questions

FSVP Produce


What is the Foreign Supplier Verification Program (FSVP)?

FSVP is a program set in place by the Food and Drug Administration (FDA). This requires U.S. buyers to make sure they are importing from foreign producers that are manufacturing under the same standards as domestically made foods. It consists of various information retained by the U.S. importer such as hazard analysis of the producers, controls, monitors programs, and specific record keeping requirements.

What is the FSVP compliance date for importers subject to the Produce Rule?

All Importers whose large foreign suppliers are required to be compliant with the Produce Rule will also be required to be compliant with FSVP on July 26th, 2018.

Who is subject to the Produce Rule?

Growers and Manufacturers of vegetables and fruits that are normally consumed raw and that are fresh or minimally processes, such as cut and washed, are subject to the produce rule, such as tomatoes, cucumbers, and blueberries. This does not include frozen fruit or vegetables or items that need to undergo further processing (such as a process to minimize contamination or cooking). This would include squash, coffee beans, and navy beans.

What new information must I include on my invoices?

For your Customs Broker to clear your entry with the FDA, they will now need to know who the FSVP Importer is, the FSVP importer’s DUNS number, and the FSVP importers IRS number. Without this information, the entry will be held.

Who is the FSVP Importer?

The FSVP Importer must be a U.S. Company. When items have been sold this is usually the U.S. buyer of the goods. If there is not buyer, then it is the receiver of the goods in the U.S. If there is no final receiver, such as items going to a fulfillment facility, you can have a U.S. FSVP Agent indicated on the documents, who agrees to take on the responsibilities of the FSVP Importer.

How does this affect Foreign suppliers?

Although the FSVP Importer is technically the U.S. company, there is a large amount of information that the FSVP Importer is required to have on file and verified regarding your manufacturing facility. These can range from lab results, your food safety plans, and other information. If you do not have these available, but they are a requirement for the U.S. company to buy your goods and bring them into the state, they may move on to purchasing from someone who has provided them the required information.

Also, as the foreign supplier, if you are the Importer of Record as well, you will need to make sure you speak with your buyers to confirm with them that they are aware of the FSVP rule, are working to be in accordance with it before July 26th, and that they have provided you their DUNS number and email address.

What does the FDA consider a Large Foreign Supplier?

FDA considered a large facility a facility that is neither a small or very small supplier. This would be a business (including any subsidiaries and affiliates) employing 500 full-time equivalent employees or more.

FDA also lists the definition of full-time equivalent as: “a term used to represent the number of employees of a business entity for the purpose of determining whether the business qualifies for the small business exemption. The number of full-time equivalent employees is determined by dividing the total number of hours of salary or wages paid directly to employees of the business entity and of all of its affiliates and subsidiaries by the number of hours of work in 1 year, 2,080 hours (i.e., 40 hours × 52 weeks). If the result is not a whole number, round down to the next lowest whole number.”

Where can I ask more questions regarding the Foreign Supplier Verification Program?

You can call us anytime to find out more information on importing produce into the U.S. and all the subsequent regulations and governing authorities such as the FDA.

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How To Import Antiques Into Canada Duty Free

antiquebooks_glassesDid you know – Articles (other than spirits or wines) produced more than 50 years prior to the date of accounting (the date the goods clear Customs) are duty free?

How do I take advantage of duty free status?

Articles produced more than 50, but less than 100 years ago:

  • Annex Code (9989) covers articles (other than an age exceeding 100 years, spirits or wines) produced more than 50 years prior to the date the goods clear Customs.
  • You must indicate the year in the description of the goods.
  • Articles over 50 years old (up to 100 years old) are to be classified using their regular tariff classification, followed by the use Annex Code 9989 – This will make those goods duty free.

Articles produced more than 100 years ago:

  • These articles are considered antiques and tariff (9706.00.00.10) is to be used for antique furniture or tariff (9706.00.00.90) for antiques other than furniture.
  • Tariff (9706.00) does not apply to the other articles of chapter 97.
  • You must also indicate the year in the description of the goods and they are to be classified in their own tariff of chapter 97. (i.e. original paintings, original sculptures and engravings, collections of minerals, botanicals etc.).

For more information on duty-free treatment for antiques, please contact Pacific Customs Brokers.

Have questions about duty on personal and commercial imports of antiques? Leave them for us in our comments section below or email Ask Your Broker.

 

 

CBP VS CBSA Valuation History

Shipments to Canada - Non-Resident Importers The direct to market program for Non-Resident Importer’s (NRI) can be key if you have the sales volume. While this is an excellent way to take advantage of lower duty rates for importing directly from an offshore country,valuation for Customs declaration remains a critical component of your customs compliance.

The United States and Canada differ on interpretation of the valuation rules. Lets take a look at the history and review how we arrived with customs valuation rules as they are today.

History:

Governments have collected customs duties since the beginnings of international
trade. It is recorded that Athens applied 20 percent import duties on
corn and other goods, while the Romans, from well before the time of Julius
Caesar, depended upon customs revenues to support the expansion and maintenance
of their empire. And, where a tax must be collected, there will be
disputes over rates and methods….

Today: In 1947, the General Agreement on Tariffs & Trade (GATT) negotiations concluded that the customs value should not be arbitrary or fictitious. Since then, there are agreements on how to determine the value for customs declarations.

Currently the valuation rules on are based on the implementation of the GATT Agreements. In 1994 the World Trade Organization established and implemented (based on those existing GATT agreements) the Customs Valuation Agreement (CVA) that all WTO members must abide by.   Valuation rules are necessary for many reasons and are valuable for use in:

  • Determining and collecting revenue
  • Producing trade statistics
  • Implementing and monitoring trade agreements
  • Monitoring quantitative restrictions (quota)

Still the interpretation of these rules are different for different countries.

The basic method for determining value is the transaction value method: the price paid or payable of goods being imported with certain adjustments when sold for export to the country of importation. This is where the interpretation has been the subject of many reviews and debates.

This is another significant difference between Canada and the USA with respect to a US company acting as a NRI and thinking they can use the ‘first sale rule’ for their direct imports into Canada.

In the US the “first sale rule” allows (under certain conditions) for the importers to use the price payable by the buyer (middleman) for imports into the USA. For example: a buyer (middleman) secures a sale of merchandise bought for $20,000. and then in turn sells the goods to the retailer for $30,000. The goods in the meantime are being exported from China into the USA with the final buyer being the importer. The value used meets the condition for using the valuation under the first sale rule. (lesser value of $20,000.).

Some countries in the World Trade Organization (WTO) have legislated and refined the interpretation of these valuations rules successfully while some have not.

Take the USA, Japan and the European Union, while they have had much discussion and even congressional reviews and debates, these countries still allow (with certain conditions met ) the “first sale rule”. Canada and Australia have already abolished the “first sale rule” through legislation 10 years ago.

Canada deems under the transaction value method that the value for customs be: the price paid or payable (with adjustments) by the first purchaser IN   Canada. In other words the value should be the last sales value before import and not the first sale. How does this change the example given above ?

In order to declare the lesser value ($20,000.) the importer must be the middleman and must reside in Canada.   If the middleman happens to be a USA company acting as a NRI for their sales to Canada and has their goods shipped directly from the offshore country they buy from, the value used for customs must be the price paid or payable by the first Canadian purchaser, not the price paid by the middleman under the “first sale rule”

This is critical to the NRI and compliance under valuations rules for doing business in Canada. Many USA companies do not realize this difference and declare the sales price they paid, leaving them at risk in the event of an audit by CBSA.

If you are a NRI selling to Canada, review your procedures and ensure you are using the correct valuation for Canada. When in doubt contact Pacific Customs Brokers for a complete review of the valuation methods and regulations for your imports into Canada.