Customs Broker License Exams

October 2013

1. Stainless steel tattooing needles are designed for use in a hand-held, tattooing machine that features a self-contained electric motor? The needles are dipped in ink and placed in the hand-held machine that utilizes a vibratory action to drive the needle in an up-and-down fashion. This causes the needle tips to pierce the top layer of skin and deposit the ink into the second or dermal skin layer. What is the classification of the stainless steel tattooing needles?

2. Your client is importing ”Grobig”, a product described as a natural fertilizer manufactured in Peru, exclusively from plant matter. This fertilizer is used to grow fruits and vegetables. ”Grobig” is imported in tablet form, in eight kilogram, retailready packages. What is the tariff classification for this product?

3. What is the tariff classification of a utility knife with a retractable steel blade?

4. A woman's reversible outerwear jacket is constructed with one side made from 50% polyester and 50% cotton knit fabric; the other side is made from 100% polyester woven fabric. A recent CBP laboratory analysis found that the polyester fabric meets the requirements for water resistance in Chapter 62 Additional U.S. Note 2 to the Harmonized Tariff Schedule of the United States (HTSUS). The garment reaches the mid-thigh area and features a full front opening secured by seven snap button closures and a hemmed bottom. What is the classification of the described woman’s reversible outerwear jacket?

5. What is the classification of 2,2,4-Trimethylpentane?

6. What is the classification of a plastic ”toy” bone with nubs designed specifically for a dog such that, when squeezed, will emit a squeaking sound?

7. The advertising material and marketing literature on a decorative glass bottle indicate that it will be marketed exclusively as a decorative article, and that it was not designed to hold food or beverages. The glass comprising this bottle was engraved. The article has a blue color; the manufacturer of the product indicates that the outer surface of the glass was painted blue. The manufacturer also states that the glass contains 7.0 % lead monoxide by weight. The bottle is being sold by the foreign shipper to the American importer for the price of $3.50 FOB. What is the applicable HTSUS subheading for this merchandise?

8. A warp knit cut pile of fabric is composed of 100% polyester and has been embellished with four widely spaced parallel rows of embroidery of cotton thread running the length of the fabric. The product weighs 260 g/m2 , measures 138 centimeters in width, and will be imported from India in the piece. Without the embroidery, the knit cut pile fabric would be classified in HTS 6001.92 with a duty rate of 17.2% ad valorem. What is the classification and rate of duty of the described warp knit cut pile fabric?

9. A fabric is woven of carded wool and chenille yarns, with the chenille yarns visible on only one side of the fabric. The fabric is composed of 86% carded wool and 14% polyester filament, weighs 426 g/m2 , is 60 inches in width, and will be used for upholstery. What is the classification for the described fabric?

10. What is the classification of a wine made from fresh white grapes, with an excess pressure of 3.5 bars at 20 degrees C, with an alcohol content of 12 percent by volume, imported in 1 liter bottles, and valued at $4.50 per liter?

11. An aileron servo-control assembly, also known as a flap actuator, is a fly by wire electro-hydraulic servo-actuator positions in-board flight control surfaces on an aircraft in response to commands from the flight control computer system. The flap actuator is essentially comprised of a hydraulic cylinder with a position sensing transducer and various control valves. Fluid flow to the actuator is supplied by the aircraft’s hydraulic systems. What is the classification of an aileron servo-control assembly?

12. What is the tariff classification of a computerized walk-through metal detector at an airport that allows an individual to pass through its archway and will generate signals including a flashing light and audible alarm to warn the operator that a metal article has been detected?

13. Cranberry flavored fruit snacks are comprised of apple and carob fruit extract, apple juice concentrate, peach juice concentrate, mashed apple concentrate, cranberry juice concentrate, fruit pectin and trace amounts of the following: other flavoring agents, glazing agent and wheat starch. The product is described as gummy-like, bite-sized fruit shaped snacks, packaged for resale in small individual pouches. What is the classification for the described cranberry flavored fruit snacks?

14. What is the classification of a bleached, plain weave linen fabric, 130 centimeters in width and weighing 225 g/m2 , containing 87% flax fibers, 10% silk fibers and 3% textured polyester filament?

15. Golfing International Inc. is importing golf bags into the port of Miami from China. The bags are constructed with a base of molded plastic that is fully covered on the outermost surface with 100% nylon textile material. The top component of the bag is fitted for the clubs and holds them in place. The clubs are imported and sold separately. What is the classification for the golf bags?

16. What is the classification for lentils?

17. What is the classification for a liquid ”coffee creamer” said to be a blend of fresh milk, fresh cream and sucralose (a sweetener)? The product’s fat content is 14%.

18. Copper wire from Germany is exported to Japan where the wire is processed with coaxial insulation. The wire is then imported into the US, cut to length and attached to connectors. What is the classification of the product?

19. Importer ”Sail for a Dream” buys sails for boats of synthetic fibers from Mexico at a unit price of $22.95 per sail. What is the classification for this merchandise?

20. A round, steel wire measures 1.25millimeters in diameter is described as stainless steel and contains by weight less than 1.2 % of carbon, more than 10.5% chromium, and 2.0% nickel? What is the classification for the described round, steel wire?

21. A woman’s pullover blouse is constructed from 100% polyester woven fabric. The sleeveless garment features a round neckline, partial self-fabric tightening at the waist, and a hemmed bottom. What is the classification of the described woman’s pullover blouse?

22. What is the classification of artificial flowers that resemble a bouquet of daisies, are made of paper, and are assembled by binding with flexible materials?

23. What is the classification of Butyl methacrylate? Its chemical formula can be pictured as:

24. A new, disassembled, non-military helicopter (with an unladen weight of 1,900 kilograms) and associated equipment (fire extinguisher, logbooks and flight manuals, medical stretcher) are imported together from France. Each finished helicopter is disassembled prior to export to the United States to avoid damage and for ease of shipment. Consequently, all models of the helicopter have basic standard equipment (fuselage, landing gear, rotor assembly, tail assembly, etc.) at the time of importation. However, some models are unique for particular uses, and their MSRP (Manufacturer Suggested Retail Price) reflects these individual features. What is the classification of the described helicopter and its associated equipment?

25. What is the classification of a fabric 60 inches in width and weighing 345 g/m2 , woven in a satin weave using blue yarns in the warp and black yarns in the weft, with a composition by weight of 90% cotton and10% elastomeric yarns?

26. What is the classification for a women’s 90% cotton and 10% polyester outerwear knit T-shirt?

27. Which Free Trade Agreement (FTA) does not provide an exemption from paying Merchandise Processing Fees (MPF)?

28. A woven cotton dress is shipped from Israel directly to the United States as a finished product. The cotton fabric for the dress was woven in Pakistan and comprises 64% of the value of the finished garment. The polyester contrast trim fabric was woven in Puerto Rico and constitutes 5% of the value of the finished garment. The labor to cut and sew the dress in Israel constitutes 31% of the value. The dress is imported directly from Israel to the United States. Which of the following is true?

29. Which Special Program Indicator (SPI) identifies the African Growth and Opportunity Act (AGOA - non-textiles) products?

30. Which country is not a signatory to the Dominican Republic-Central America-United States Free Trade Agreement?

31. Where in the HTS can the general ”NAFTA Change in Tariff Classification Rules” be located?

32. Assuming that substantial transformation, 35 percent value added, and other conditions listed under the Generalized System of Preferences (GSP) are met, which of the following products would not qualify for preferential tariff treatment under the GSP?

33. Which of the following does not qualify as a ”wholly obtained good or a good produced entirely in the territory of Korea and/or the United States” under the U.S.- Korea Free Trade Agreement?

34. Marcel, a U.S. importer, imports certain traditional baskets from producers in South Sudan. These baskets are shipped by way of Greenland, where all invoices and other documents show Greenland as the final destination they remain under the relevant Customs authority’s control. Upon arrival in Greenland, the baskets are coated with a unique fish oil to improve shine and enable the bowl to stick to slippery glass surfaces. The baskets are then loaded onto new shipping pallets due to severe damage to the old pallets from the initial transatlantic shipment; without this reloading, the baskets would be damaged with any further shipment. The JFK port director, where the baskets are ultimately to be imported, is satisfied that the import stems from the transaction between the producers and Marcel. Which of the following is the principle reason that the baskets imported into the United States through JFK should not be considered direct imports from South Sudan to the United States?

35. A proposed civil penalty at the culpability level of fraud will be assessed at:

36. An importer of record received a penalty at the culpability level of negligence for violation of 19 U.S.C. sec. 1592. The loss of duties is $30,000 and domestic value is $100,000. What is the civil penalty amount that can be assessed?

37. An importer (petitioner) files an initial petition on a liquidated damages case and it was denied. There is more than one year remaining on the statute of limitations. How many days does the importer have to file supplemental petition?

38. CBP has discovered that ABC IMPORT SERVICES COMPANY (”ABC”) has conducted customs business without a license on behalf of an importer. This is the third such violation by ABC. If CBP finds these circumstances to be ”particularly aggravated”, what is the maximum penalty that can be assessed against ABC?

39. An importer discloses violations of 19 USC sec. 1592 that were the result of gross negligence. The violations resulted in $10,000 in actual loss of duty, which the importer tendered to CBP. How is the penalty for these violations calculated?

40. A person who is a non-participant in the Recordkeeping Compliance Program fails to comply with a lawful demand for the production of an entry record as a result of negligence. Such person shall be subject to a monetary penalty of:

41. Which if the following people may request confidential treatment of its name and address contained in an inward manifest?

42. The Port Director shall notify the importer on a ______________________ to arrange to properly mark the articles or containers, or to return all released articles to Customs and Border Protection’s custody for marking, exportation, or destruction. A Customs form is a CBP form.

43. Which process listed below is not considered an operation incidental to assembly?

44. The CBP Regulations specify that written notice of the alternative storage method for records must be provided to CBP at least _________ before implementation of the alternative storage method.

45. Articles for the Commodity Credit Corporation can be entered duty-free into the United States. Which of the following statements is not true?

46. The conditional release of products subject to section 801(a) of the Federal Food, Drug, and Cosmetic Act may be extended if written or electronic notice of sampling, detention, or other U.S. Food and Drug Administration (FDA) action is issued to the bond principal (i.e. importer of record). Within how many days of the release of the merchandise can the action be issued to the bond principle?

47. Which U.S. government agency administers and enforces economic and trade sanctions?

48. CBP facilitates the enforcement of Environmental Protection Agency regulations. When importing vehicles regulated under the Clean Air Act, the vehicle must have a certificate of conformity. This certificate validates compliance with emission standards to meet admissibility requirements. However, if the importer is a/an _______________, then a certificate of conformity is not required.

49. Which of the following information is CBP not specifically required to provide to the importer or interested party when commercial merchandise is detained?

50. An antique upholstered oak chair, valued at $15,000, manufactured in Germany was entered under 9706.00.0040 by an importer/retailer. Upon review, import documentation revealed that the chair was made in 1915. What is the duty owed to CBP?

51. An importer provides a machine to a manufacturer for use in the production of imported merchandise, free of charge. The cost of the machine was $50,000 and the cost for transporting the machine to the manufacturing facility was $4,500. Which declaration is appropriate for the entered value of the machinery?

52. The following items are all grounds for rejection of the use of transaction value, EXCEPT:

53. Importer ABC Company wishes to purchase trademarked shirts from seller 123 Limited. The price of the shirts is $75.00 each. 123 Limited will not sell unless ABC Company pays an additional fee of $3.00 per shirt for the right to the trademark. What type of additional fee is this?

54. Hyundai USA imports a purchase of 2,500 brand new 2014 Elantras invoiced at $40,000 each, ex-factory, from its affiliated parent company, Hyundai South Korea. Hyundai South Korea normally charges an additional $200 per Elantra. However, Hyundai South Korea owed Hyundai USA $250,000 which was paid on a previous shipment and have deducted this from the invoice price. The related party transaction does not influence the price paid to the parent company. The seller requires the buyer not to sell or exhibit the merchandise before the model year. Invoice values are also listed in the following amounts: ocean freight $2,000, and marine insurance $1,850. What is the transaction value of the merchandise?

55. A C.F. shipment has an invoice value of $5,000 and a weight of 12,000 kilograms. The duty rate is 10% plus two cents per kilogram. Included in the invoice price are: brokerage fees of $50, ocean freight costs of $600, and duty. (Minimum merchandise processing fee of $25 applies, and there are no other applicable fees.) The merchandise was imported January 31, 2012. However, the buyer and seller agreed to a price reduction of $500 on February 4, 2012 (before the entry summary) to reflect a ”new customer” discount. What should the entered value of the shipment be?

56. The computed value of imported merchandise would include all of the following EXCEPT:

57. Angels Accessories imports barrettes and sells them to retail stores in the United States. Angels Accessories pays Sunshine Manufacturing Company (an unrelated company) in China $5,000 to produce 10,000 barrettes. Angels Accessories also: (1) Pays an additional $500 to Sunshine Manufacturing Company for a mold to be used in the production of the imported shipments of barrettes. The mold will be used in the production of this shipment only. (2) Provides Sunshine Manufacturing Company with Angels Accessories own U.S. produced detailed sketches of design specifications for the barrettes, free of charge, although it costs Angels Accessories $100 to produce them. (3) Provides Sunshine Manufacturing Company with certain metal fasteners, which Angels Accessories acquires from an unrelated company in Thailand, for $300, to be incorporated in the imported barrettes. Which one of the following is the correct appraised value for the imported barrettes?

58. Entry value must be reported to CBP in U.S. dollars. When a transaction is in foreign currency, the date that should be considered for converting that currency to dollars is:

59. Which of the following is the transaction value of a shipment whose details are as follows: o $200,000 entered amount o CIF LA Duty Paid, merchandise processing fee (MPF) included o Price includes $2,000 ocean freight charges and $300 marine insurance. o The actual duty rate is 10% o The actual MPF rate is 0.21%

60. Port code _________ is not a part of the Customs territory of the United States.

61. What is the appropriate form used to file a protest with CBP?

62. A Customs bonded warehouse proprietor must take a physical inventory of all merchandise in the warehouse, or periodic cycle counts of selected categories of merchandise. Merchandise must be counted at least _____________ each year.

63. Small Manufacturing Inc. imports aluminum sheets to be molded into air conditioning covers. The sheets were imported on July 3, 2011 under a Temporary Importation under Bond. What is the maximum amount of time (including extensions) that Small Manufacturing Inc. has to export the air conditioning covers?

64. When filing an application for admission of merchandise into a Foreign Trade Zone, what form is used to apply for a zone status?

65. Which of the following pieces of information is not a required data element on an invoice of imported merchandise?

66. Pursuant to drawback recordkeeping requirements, all records that pertain to the filing of a drawback claim shall be retained for a minimum of :

67. What term is defined as the final computation or ascertainment of duties on entries for consumption?

68. What is the appropriate entry type for quota merchandise with Anti-Dumping Duties/ Countervailing Duties withdrawn from a warehouse?

69. A Customs-Trade Partnership Against Terrorism (C-TPAT) Certified nominal consignee designates a C-TPAT Certified licensed customs broker to make entry on its behalf. What entity must appear as the importer of record on the entry?

70. A gray market good is a:

71. CBP may detain a good that bears a copying or simulating (i.e., confusingly similar) trademark for _____ days.

72. The recordation of a copyright with CBP shall remain in effect for _____ unless the copyright ownership expires before that time.

73. Of the following, which is not among the required duties and responsibilities of a licensed customs broker?

74. Each licensed customs broker must file a status report with CBP every three years. What is the required fee that must accompany this report?

75. How long is a licensed customs broker required to retain Power of Attorney documentation if it is still in effect?

76. A licensed customs broker receives a check payment for duties and fees applicable to an entry from his or her client after the payment due date is passed. An importer sends a check, payable to a licensed customs broker, for duty and fees applicable to an entry where the duty and fees were not paid timely to CBP. When is the licensed customs broker required to remit the payment for duties and fees to CBP?

77. What written notification must be provided by a licensed customs broker to his or her client on, or attached to, a Power of Attorney executed on or after September 27, 1982?

78. The licensed customs broker has obtained a new client, a nonresident corporation located in Germany. The corporation is not qualified to conduct business under law in the state with the customs district in which its agent is empowered to perform the delegated authority. What documentation must the licensed customs broker obtain prior to filing the entry?

79. Matthew Geller took the Customs broker license exam in April 2008, at the port of Portland, Oregon, and obtained his license on October 2008 through the port of Seattle. One month later, Matthew started working for Chuang’s Customhouse Brokers (CCB). CCB has an employer-employee agreement that specifically requires CCB to pay the triennial status report fees of all employees who hold broker licenses. Matthew discovers that his name and license number are listed as revoked in an August 8, 2013 Federal Register for non-payment of his triennial fee. Today is October 1, 2013. However, CCB’s corporate license qualifier assures Matthew with the following statement: ”Don’t worry. The triennial fee payment responsibility falls on CCB because Matthew designated CCB as agent to pay it. Since CCB’s license qualifier signed off on the agency agreement, the responsibility for all employee triennial filings rests with CCB. I do, however, suggest informing CBP of the employer-agency agreement before the next triennial is due.” The port of Seattle had complied with suspension notice requirements. Which of the following is a true statement?

80. Broker Nelson Pliakas hires Eric Brennan, a former world-renowned badminton star, who fell from grace after being convicted of committing felony assault against a rival badminton player. CBP denies Nelson’s request for approval to employ Eric. Nevertheless, Nelson continues to employ Eric, which comes to CBP’s attention after Eric makes a threat to one of Nelson’s clients with the intent to defraud that client. Based on the information provided, which of the following is a true statement?