Issue 294, February 16, 2001
Effective March 1, 2001, if your imported goods are subject to a Term of Sale that includes non-dutiable charges (freight, insurance, etc.), you will no longer be allowed by Customs to report unsubstantiated deductions or estimates. Only actual amounts will be permitted.

Therefore, it is your responsibility as the importer of record to arrange to have such information reflected on the import invoice. Without a statement of the specific amount of such charges being included, no deduction can be made. This may impact your duty payment to Customs accordingly.

Additionally, when your terms of sale reflect a selling amount that includes such non-dutiable charges, and if not specifically itemized on the invoice or supported with other documentation, you are now required (by way of your broker filer) to transmit electronically via ABI a "$2.00 CIF Flag" which connotes that the included non-dutiable charges are unknown.

For trade statistical purposes, Customs treats this flag as an indicator of potential noncompliance as it potentially distorts trade statistics. If you are able to determine the actual costs after entry summary filing, it is your responsibility to report those amounts to Customs.

Both the issuance of TD-20 (the proper deductions for freight and other costs incident to international shipment, foreign inland freight and post importation transportation costs from the price actually paid or payable in determining transaction value) and the Customs HQ memorandum of December 28, 2000, command the discontinuance of such unsupported deductions. If "actual" charges are reflected in documents outside the commercial invoice (airway bills, ocean bills of lading, manifest, confirming letters from the importer of record), we can continue to use such data at your direction as the importer of record. Such documents must be included as part of the entry summary (CF7501) package when presented to Customs.

If you have any questions, please contact your local Danzas AEI representative or the author below.

Our contributing writer, Daniel See, CHB, is the Director of Technical Services, Regulatory and Compliance for Danzas AEI and can be reached via email or at 248-263-8812.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.