Customs Undervaluation – It’s a Crime

Customs Valuation is a procedure to determine the customs value of imported goods. The customs value is essential to calculate the total duty to be paid on an imported good. As part of its agreement with the World Trade Organization (“WTO”), the U.S. is part of an internationally standardized system of valuing imports. This standardized system allows for CBP to protect revenue, ensure reasonable care from importers, and accurately calculate Census trade statistics. Accordingly, it is critical to declare the value of importations accurately and compliantly. 

The U.S. Customs and Border Protection (CBP) valuation methodology (as well as a summary of relevant Customs rulings) are described in detail in the Valuation Encyclopedia (i.e., the best resource on valuation inquiries). CBP permits merchandise to be valued according to one of the six valuation methods listed below. The methods are applied sequentially from first to last until an applicable value is determined. If the first method does not apply, the importer must then evaluate the second, and so on, until an appropriate method applies. The only exception to this sequential evaluation requirement is when evaluating between deductive value and computed value – an importer may choose to use the computed value before the deductive value.

Methods of Valuation:

  1. The transaction value of imported merchandise (the majority of imports use transaction value – i.e., the price paid or payable plus assists (see below))
  2. The transaction value of identical merchandise
  3. The transaction value of similar merchandise
  4. Deductive value
  5. Computed […]

Encryption Controls under the Export Administration Regulations

Encryption is generally defined as the process of converting information or data into a code, especially to prevent unauthorized access. Put simply, encryption makes a wide range of technologies more secure. Since 1996, most encrypted technology is controlled by the EAR. Some encrypted technology, which has military-related functionalities, is controlled by the International Traffic in Arms Regulations (“ITAR”). This article provides an overview of encryption controls under the EAR, outlines license exceptions for certain encrypted technologies, and provides best practices for export compliance.

Background on Export Administration Regulations

Over 95% of the world’s population is outside of the United States. Opportunities abound for U.S. companies that export. However, exporting is a privilege and not a right. U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (“EAR”).

Administered by the U.S. Commerce Department, the EAR is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. U.S. exporters have an important responsibility to adhere to the EAR. Violations of the EAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned.

Encryption Controls

According to 15 CFR 742.15:

“Encryption items can be used to maintain the secrecy of information, and thereby may be used by persons abroad to harm U.S. national security, foreign policy and law enforcement interests. The United States has a critical interest in ensuring that […]

Export Filing Requirements for Puerto Rico & the U.S. Virgin Islands

Did you know that shipments from the 50 U.S. states to Puerto Rico and the U.S. Virgin Islands generally requires an Electronic Export Information (“EEI”) filing under the U.S. Census Bureau’s Foreign Trade Regulations? This article provides an overview of Foreign Trade Regulations export filing requirements generally, outlines the requirements for Puerto Rico and the U.S. Virgin Islands, and outlines what you can do to optimize your export compliance.

[…]

By |2022-07-07T12:52:42-04:00January 11, 2022|EAR, EEI, Export, International Trade, ITAR, U.S. Census Bureau|Comments Off on Export Filing Requirements for Puerto Rico & the U.S. Virgin Islands

What are Routed Export Transactions?

The U.S. Census Bureau requires Routed Export Transactions to be accurately reported in the Electronic Export Information (“EEI”) that is filed for certain export shipments. This article provides an overview of the U.S. Census Bureau’s export filing requirements, an explanation of what a Routed Export Transaction is, an outline of the Census Bureau’s policies pertaining to Routed Export Transactions, specifically, and offers insight into what you should do to be proactive about your export compliance.

[…]

COVID-19’s Impact on 2020 Trade Flows

COVID-19’S IMPACT ON 2020 TRADE FLOWS

Diaz Trade Law’s President, Jennifer Diaz,  and Associate Attorney, Sharath Patil, are enthusiastic to announce that our article, “COVID-19’S IMPACT ON 2020 TRADE FLOWS” was published by the Customs and International Trade Bar Association (CITBA) in its Spring 2021 newsletter. Below is the article for your reading pleasure.

[…]

ACE: Auditing Your Export History

If a company or individual believes they have violated export control regulations and the U.S. government is unaware of this violation, proactively and voluntarily disclosing the potential wrongdoing can substantially reduce penalties. A key component of filing a successful voluntary self-disclosure (“VSD”) is uncovering and providing the correct data. Diaz Trade Law has significant experience analyzing ACE export data to evaluate your export compliance and submit successful VSDs that substantially mitigate penalties.

[…]

By |2021-10-07T14:55:38-04:00May 13, 2021|ACE, Best Practices, EAR, EEI, Export, HTS, International Trade, ITAR, Supply Chain, U.S. Bureau of Industry and Security (BIS), U.S. Census Bureau|Comments Off on ACE: Auditing Your Export History

Exporting 101 – Introduction to Export Controls

On April 30, 2021, the Bureau of Industry and Security (“BIS”) announced that it had fined FLIR Systems, Inc. $307,922 for an egregious violation of the Export Administration Regulations (“EAR”) for misrepresentations made in commodity jurisdiction (“CJ”) requests. A BIS spokesperson said: “BIS will not tolerate exporters that provide inaccurate or incomplete representations related to export regulations and laws.”

This recent announcement is a textbook example of why it is important to obtain counsel and be  both proactive and truthful in regards to your export compliance. Whether you are new to exporting or looking to understand the foundations of export controls, including a discussion of recent penalty cases like FLIR’s (so they do not happen to you), or a seasoned professional looking to understand the latest developments, this one-hour webinar is a must attend. Register today to hear directly from the following expert duo:

[…]

Submitting a Voluntary Self-Disclosure to Census

Diaz Trade Law’s President, Jennifer Diaz,  and Associate Attorney, Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Submitting a Voluntary Self-Disclosure to Census”! Below is the article reproduced with permission for your reading pleasure. We’d love to hear your feedback!

You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

 

 

 

 

 

 

[…]

By |2022-04-25T16:33:43-04:00May 4, 2021|Bloomberg, Bloomberg Export, Export, International Trade, U.S. Census Bureau|Comments Off on Submitting a Voluntary Self-Disclosure to Census
Go to Top