A quick explanation of substantial transformation:As mentioned in the earlier post - Country of Origin - substantial transformation is the degree to which processing of an article leads to a new article, with a different name, character, and use. In addition, Customs uses a second method known as the “tariff shift” i.e. change in tariff classification, which is also used to determine substantial transformation. As of now, there are no uniform rules that settle country of origin questions. As a result, substantial transformation can be highly subjective and tend to[...]
What is the "Country of Origin?" Generally, the country of origin refers to the country where the product was grown, produced, or manufactured. This is easily applied when the product is produced in one country using domestic materials. For example, a bicycle that is manufactured in India using components all made in India has the country of origin "Made in India." However, today it is unrealistic to think that all materials, components, and labor all stem from the same country. Using the bicycle example, the wheels may be from USA,[...]
What are countervailing duties?Countervailing duties, similar to anti-dumping is a trade remedy to neutralize foreign economic threat. Specifically, countervailing duties are duties imposed by the U.S. government against tax reduction, grants, bounties, or any other subsidy provided by a foreign government on exported goods.For example, in our country the government provides corn growers a tax credit whereby they pay them to use their corn for ethanol instead of food.Who determines if a countervailing duty is applicable?Same as in the anti-dumping matters, "Commerce determines whether the alleged . . . subsidizing[...]
What are anti-dumping duties? Duties imposed against goods from foreign countries that are sold significantly lower in their country of origin or comparable third country markets - destroying the U.S. market for that product in the process. For example: Company X, an exporter from China is selling massive quantities of iPod's to U.S. resellers for the wholesale price of $50 a piece when the average price for an iPod sold at wholesale price in China is $200 a piece. So what? A great deal is just that, a great deal,[...]
What is "Drawback"? A program that provides a refund for a majority of goods that are exported or destroyed after importation into the United States.If the goods are exported or destroyed drawback permits Customs to refund 99% of the duties when the goods were imported into the U.S. The only difficult part about drawback is that you must maintain precise compliance with the drawback rules and regulations - the government is not going to just return money willy nilly. The importer must fill out the drawback application before exportation.There are[...]
DISCLAIMER: The content of this website has been prepared by the Abady Law Firm, P.C., for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel. The Abady Law Firm, P.C., did not produce and is not responsible for the content of off-site legal resources. The materials on this site may constitute advertising under various state ethics rules.