Dutiable deductions: Yours for the taking

“Things as certain as death and taxes, can be more firmly believ’d.”

Daniel Dafoe, The Political History of the Devil, 1726

We can definitively say there’s a third you can add to that list:

“If you overpay Customs, they won’t send you a refund. If you underpay Customs, they’ll send you a bill.”

Tom Case, December 9, 2021

The reason for this is that CBP is in the business of collecting money – not returning it. If you doubt this for a second, we’ll take some time to cover the burden of proof on drawback claimants and the “you’re wrong until we can’t find a reason that you’re not right,” approach CBP takes to approving protests.

For this reason alone, it is of the utmost importance that importers realize before we submit an entry that we know every single opportunity that exists to lower an entered value to the legally permissible amount, ensuring the lowest amount of duty is calculated and tendered to the US government.

CBP has produced compendia of materials on the correct entered value. From CBP Informed Compliance publications through to the regulations themselves, what does and does not contribute to the price paid or payable at the time of importation is the cornerstone of calculating a landed cost for importation. 

Here are three simple things that can be used to reduce the declared amount to Customs, thereby potentially reducing the ad valorem, Section 301 or antidumping duties.

Get to an FCA valuation. Freight charges are non-dutiable and CBP considers everything involved in getting a container to the pier or airport to be a dutiable cost. The ocean freight and inland intermodal can both be deducted if they can be substantiated. Prepaid freight charges are permitted, but a rated bill of lading or arrival notice is required to take the deduction. Be prepared, though. If CBP is in a mood to challenge, they’ll likely demand proof of the amount paid by the shipper and that amount had better match the figure on the supporting document.

Is there US origin or content? Seen more frequently in entries under USMCA or DR-CAFTA, American raw materials exported to make the finished goods should be properly itemized. Only the materials and labor happening outside the US are what duty is based on and importers will need production records to support those claims.

Look for eligible NDC’s, or non-dutiable charges. What constitutes an NDC? Packaging, US engineering, US-supplied tools and molds – all of which could contribute to the final value of an item but can be accounted for at the time of entry.

These are three more common ways to reduce the entered value, but remember that not unlike claiming a deduction with the Internal Revenue Service, be prepared to present evidence if challenged.

Camelot has a staff of licensed customs brokers and Certified Customs Specialists who understand the complex rules surrounding valuation. Contact us for a complimentary review and analysis to see if there are both potential future savings or duty recoveries from eligible entries.

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