Invoices And Rates Of Exchange in International Shipping

In international shipping, invoices must be attached when you make an entry, signed by the seller, shipper, or his agent, and prepared by CFR 19.141.86

U.S. Customs Commercial Invoices CAN be in any language; HOWEVER, this must be accomplished by accurate English translation.

• Commercial entries in international shipping require Commercial Invoice(s).
• All commercial entries of value over $2000 must be formal.
• Customs does not accept commercial invoices with No retail value or No value declared.
  - use NCV for no commercial value
  - use NVD for no value declared

The invoice in international shipping must provide the following information, as required by the Tariff Act:

1. The port of entry to which the merchandise is destined;
   
   
2. The names of the buyer and seller;
   
   
3. A detailed description of the merchandise;
   
   
4. The quantities with weights and measurements;
   
   Each invoice in international shipping shall state in adequate detail what merchandise is contained in each package.
   Suppose the invoice or entry does not disclose the weight, gage, or measure of the merchandise necessary to ascertain duties. In that case, the consignee shall pay expenses incurred to obtain this information before the release of the merchandise from Customs custody.
   
   
5. The purchase price of each item;
   
   
6. The type of currency;
   
   
7. All charges upon the merchandise, itemized by name and amount, including international shipping freight, Insurance, commission, and cost of packing; and if not included above, all charges, fees, and expenses incurred in bringing the merchandise from alongside the carrier at the first U.S. port of entry;
   
   Some charges CAN be deducted from the invoice FOR DUTY. Example: If included in the Commercial Invoice price, international freight can be removed for DUTY.
   
   
8. All rebates and drawbacks, separately itemized, are allowed upon the exportation of the merchandise;
   
   
9. The country of origin;
   
   
10. All goods or services furnished for the production of the merchandise in international shipping are not included in the invoice price.

Other commercial invoice requirements in international shipping:

• When more than one invoice is included in the same entry, a notation of all invoices attached to CF 3461 must be written.
  
  Special numbering requirements:
  
  Each invoice in international shipping with its attachments shall be numbered consecutively on the bottom of the face of each page, beginning with the number 1. If the invoice is more than two pages, start with number 1 for the first page of the first invoice and continue in a single series of numbers through all the invoices and attachments included in one entry.
  
  Invoice 1, page 1
  Invoice 2, page 2
  Invoice 2, page 3
  
  THE PURPOSE OF THE LIST (NOTATION) NUMBERING REQUIREMENT IS TO SHOW THAT THERE ARE NO MISSING PAGES.
  
  If other items are missing in the invoice, then IT MUST BE INSURED BY BONDS.
• The country of origin must be indicated in the invoice.
• Related or NOT Related. It shows if there is a relationship between a seller and the buyer.
• International freight insurance is NON-Dutiable. If not included in the invoice, it must be indicated to take it off duty.
• You must indicate the Harmonized tariff# and duty rate. It must be written for every single item line by line.
• Summary of value in a commercial invoice:
  
  Below is the formula
  

  IV	- Invoice Value
  (-) NDC	- Non-Dutiable Charges
  (+) AMMV	- Added To Make Market Value
  (=) NEV/CV	- Net Entered Value / Customs Value

  NEV/CV is the actual value that customs charge a duty on.
  Duty is always based on NEV/CV, but not in IV.
  
  If there was a DEPOSIT paid and it is deducted from a commercial invoice, then it must be ADDED as AMMV.
  
  International shipping freight and Insurance are always NDC.
  
  Example 1:

  IV	- Invoice Value	300 keyboards per 100 yen = Packing materials =	30,000 yen 500 yen
  (-) NDC	- Non-Dutiable Charges	International freight & Insurance =	2,000 yen
  (+) AMMV	- Added To Make Market Value	Deposit deducted from the commercial invoice =	10,000 yen
  		TOTAL CIF Miami, FL =	42,500 yen
  (=) NEV/CV	- Net Entered Value / Customs Value		40,500 yen
  Currency converging 1 yen = $0.5, then $20,250 is NEV/CV for duty.

  Example 2: Determining commercial shipment with a value less than $2,000 (as an informal entry).

  !!! The value is based on NEV/CV but not on IV !!!
  IV = $2,100, and freight is included
  (-) freight $200
  NEV/CV = $1,900 - THEN IT IS INFORMAL ENTRY!!!

SPECIFIC REQUIREMENTS:

I. SEPARATE INVOICE IS REQUIRED FOR EACH INTERNATIONAL SHIPMENT. Not more than one distinct shipment from one consignor to one consignee by one commercial carrier shall be included on the same invoice.

II. ASSEMBLED SHIPMENTS: Merchandise assembled for an international shipment to the same consignee by one commercial carrier may be included in one invoice. The original bills or invoices covering the merchandise or extracts should be attached to the invoice, showing the actual price paid or agreed to be paid.

III. INSTALLMENT SHIPMENTS: Installments of international shipment covered by a single order or contract and shipped from one consignor to one consignee may be included in one invoice if the installments arrive at the port of entry by any means of transportation within a period not to exceed 10 consecutive days.

The invoice for international shipping should be prepared in the same manner as invoices for single shipments.

IV. PRODUCTION 'ASSIST": The invoice should indicate whether the production of the merchandise involved costs for "assists" (i.e., dies, molds, tooling, engineering work) which are not included in the invoice price. If assistance was involved, the value of the aid must be shown on the invoice for international shipping.

V. PRO FORMA INVOICE: If a seller has no original commercial invoice, then PRO FORMA INVOICE can be generated for customs upon proof of value, such as a receipt for the goods bought, cashier slip, or even a credit card receipt.

If no invoice is available for customs in international shipping (lost, for example), PROFORMA INVOICE can be generated for customs. However, bonds must be posted. U.S. Customs will accept it and give 120 days to produce a commercial invoice. If no commercial invoice is produced within 120 days, then customs go against the bonds.

NO COMMERCIAL INVOICES FOR INTERNATIONAL SHIPMENTS ARE NEEDED:

1. International shipping with a value under $500
2. Goods are being international shipped, repaired, or returned
3. International shipments for the U.S. Federal Government
4. Non-commercial international shipments with any value

If merchandise shipped internationally is sold while in transit:

The original invoice reflecting this transaction and the resale invoice or a statement of sale showing the price paid for each item by the purchaser shall be filed as part of the international shipping entry or entry summary.

To put it plainly - TWO invoices must be provided
1. For what you bought
2. For what you sell

Customs must see that international shipping goods are not sold for less to pay a lower duty rate.

Related or Not-Related:

RATES OF EXCHANGE IN INTERNATIONAL SHIPPING

Foreign invoice values must be converted into U.S. dollars.

To find a currency conversion rate, you must find a date of export.
Date of Export = Currency Conversion Rate Date.

If the international shipment calls on several ports in the country of export, the date the international shipment leaves the last port in that country will be the date of export and, thus, determine the currency conversion rate.

The rates, published in the Treasury Decisions, are available via ABI or may be placed in the broker's "Iockbox" periodically by Customs. Certain countries with more stable currencies are converted at the same rate for three months (quarterly). Germany and Japan are examples of countries with quarterly rates. Other countries have a daily rate published, which must be applied.

5% factor: U.S. Customs publishes currency conversion rates QUARTERLY on the first date of every quarter. However, there is a 5% factor. The 5% factor means that if a daily rate on the date of export exceeds 5% a quarterly rate, then the DAILY rate must be used for currency conversion, but not a quarterly rate published by customs. If goods were shipped on a weekend or a holiday date of a foreign country or Federal Bank of New York holiday, then the currency conversion rate must be used ON A BUSINESS DAY PRIOR to THE DAY OF THE WEEKEND ON HOLIDAY.

Rounding rules:
1. When converting to U.S. currency, amounts $0.49 and less are rounded to the nearest dollar, and amounts $0.50 and higher are rounded to the nearest dollar. These rules are detailed in 159.3.
2. If duty is $1.00 or less per unit, except for alcoholic beverages, fractional quantities of less than a 1/2 unit will be disregarded, and more than a 1/2 unit will be rounded up to the next whole unit. If the duty exceeds $1.00 per unit, the exact quantity will be computed with fractions extended to two decimals.

Alcoholic beverages in international shipping are subject to Internal Revenue taxes computed on proof gallons. The duty is calculated as follows:
1. CD Distilled spirits - Duties and taxes are figured on the exact quantities in each case or container, with fractional gallons extended to 3 decimals.
2. Wine is computed based on wine gallons and will be calculated to the nearest 1/10th gallon.

Summary:

Exceptions:

1. Warehouse Entry:
   Time of entry = Date of withdrawal
   Duty rate = Date of withdrawal
2. Immediate Transportation:

FALSE INVOICES

Each importer is required to disclose all facts of the international shipping transaction to Customs. Failure to do so can be considered "withholding information." Each Customs Broker's responsibility is to convey to the importer that he must disclose all information on the entry documents. Section 592 of the Tariff Act of 1930 states, "If any person enters or introduces, or attempts to enter or introduce, into the commerce of the United States and imported merchandise using any fraudulent statement, or is guilty of any willful act of omission, the merchandise shall be subject to forfeiture."

There are three classifications of violations in international shipping: fraud, gross negligence, and negligence.

1. FRAUD: Fraud is a violation resulting from an act or acts that defraud the revenue or otherwise violate
Section 592 of the Tariff Act of 1930 was deliberately done to defraud the revenue or otherwise violate the statute.

2. GROSS NEGLIGENCE: Gross negligence is a violation resulting from an act or acts done with actual knowledge of or wanton disregard for the relevant facts and with indifference or disregard for the offenders' obligation under the statute, done without demonstrable intent to defraud the revenue or violate the regulation.

3. NEGLIGENCE: Negligence is a violation resulting from an act or acts done through the failure to exercise due care in ascertaining or recording the truth of the facts or with failure to use due care in establishing the offender's obligations under the statute done without demonstrable intent to defraud the revenue or violate the law.

The penalty for civil fraud is the merchandise itself and, if it is not available, the domestic value of the merchandise.

The importer in international shipping is responsible for the documents and statements received from the seller. Fraud does not involve errors in translation, carton count, and the like since there is no In!?n1 to defraud the revenue. However, administrative penalties are still imposed.

Section 592 of the Tariff Act of 1930 reads as follows:

If any consignor, seller, owner, importer, consignee, agent or other person or persons enters or introduces, or attempts to enter or submit, into the commerce of the United States any imported merchandise by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any untrue statement, written or verbal, or by standards of any inaccurate or fraudulent practice or appliance what so ever, or makes any false statement in any declaration under the provisions of section 485 of the Act (relating to declaration on entry) without reasonable cause to believe the truth of such statement, or aids or procures the making of any such false statement as to any matter material thereto without good reason to accept the fact of such statement, whether or not the United States shall or may be deprived of the lawful duties, or any portion thereof, accruing upon the merchandise, or any part thereof, embraced or referred to in such invoice, declaration, affidavit, letter, paper, or statement, or is guilty of any willful act or omission by means whereof the United States is or may be deprived of the lawful duties or any portion thereof accruing upon the merchandise or any part thereof, embraced or referred to in such invoice, declaration, affidavit, letter, paper or statement, or affected by such act or omission, such merchandise, or the value thereof, to be recovered from such person or persons, shall be subject to forfeiture, which forfeiture shall only apply to the whole of the merchandise or the value thereof in the case of package containing the particular article or articles of merchandise to which such fraud or false paper or statement relates. The arrival of any merchandise consigned for sale within the territorial limits of the United States remains the property of the shipper or consignor. The acceptance of a false or fraudulent invoice thereof by the consignee or the agent of the consignor, or the existence of any other facts constituting an attempted fraud, shall be deemed, for this section, to be an attempt to enter such merchandise notwithstanding that no actual international shipping entry has been made or offered.