Quiz 4

Question 1

Pre carriage

Answer 1

the domestic transportation in the exporting country

Question 2

Main carriage

Answer 2

the international transportation between the exporting country and the importing country

Question 3

On Carriage

Answer 3

, the domestic transportation in the importing country

Question 4

Incoterms rules follow international trade ____ and are always reflecting the way shipping is ______

Answer 4

practices, conducted

Question 5

Incoterms® rules formally define the following aspects of an international sale:

Answer 5

Which tasks will be performed by the exporter
Which tasks will be performed by the importer
Which activities will be paid by the exporter
Which activities will be paid by the importer
The exact point which responsibilities transfers from exporter to importer

Question 6

The 4 important factors of choosing an incoterms rule

Answer 6

The type of product being sold

The method of shipment

The ability/ willingness of the ex and imp to perform the involved tasks.

The amount of trust placed by either of parties

Question 7

The 2 groups of Incoterms Rules

Answer 7

7 incoterms rules for any transportation method

4 incoterms rules for ocean transport only (oldest terms of trade)

Question 8

The 7 incoterm Rules for Any mode of transport are

Answer 8

Ex-Works (EXW)
Free Carrier (FCA)
Carriage Paid To (CPT)
Carriage and Insurance Paid To (CIP)
Delivered at Terminal (DAT)
Delivered At Pace (DAP)
Delivered Duty Paid (DDP)

Question 9

The 4 Incoterms Rules for ocean transport only are

Answer 9

Free Alongside Ship (FAS)
Free on Board (FOB)
Cost and Freight (CFR)
Cost, insurance, and freight (CIF)

Question 10

Scope

Answer 10

The type of products for which an incoterm rule can be used

Question 11

Modality

Answer 11

The mode of transport for an incoterm rule

Question 12

syntax

Answer 12

The way the rule has to be stated on invoices and paperwork

Question 13

The EXW rule can be used for any type of goods, but unlike the other rules

Answer 13

International Chamber of Commerce wants EXW to be used for small packages that are picked up by express packages services, such as FedEx or DHL.

Question 14

The responsibilities for the exporter are typically

Answer 14

1. packaging the goods for the international voyage
2. provide the importer with the documents necessary to clear the goods for export in the exporting country and clear customs in the importing country.

Question 15

Responsibilities for the importer are typically

Answer 15

Doing everything else after the exporter does their part

Question 16

the responsibility for the good shifts from exporter to importer when

Answer 16

the exporter makes the goods available to the importer.

Question 17

Under the FCA Incoterms® rule, there are two choices regarding the delivery of the goods. The exporter and importer can agree on:

Answer 17

exporter loads the goods at its place of business on a truck (means of conveyance) provided by the importer.

exporter loads the goods on its own truck and delivers them to the carrier’s place of business (still loaded on a truck )

Question 18

Carrier’s further responsibility from the FCA Premises

Answer 18

Unload the goods from the truck.

Question 19

Under carriage paid to, delivery takes place when

Answer 19

goods are loaded in the first means of conveyance

Question 20

Under the CIP rule, the exporter must provide

Answer 20

insurance for the goods that provides coverage A of the Institute Cargo Clauses.

Question 21

The amount of insurance is always _____ percent of the value of the goods.

Answer 21

110

Question 22

Duty

Answer 22

the amount of tax paid on an imported good

Question 23

The amount of duty that an importer has to pay is determined by three factors:

Answer 23

The type of goods (their classification)
The value of the goods (their valuation)
The country from which the goods originated (the rules of origin)

Question 24

The tariff rate is

Answer 24

is the rate at which an import is taxed; also called the duty rate

Question 25

For almost all countries, the classification of goods follow the

Answer 25

Harmonized System (HS) of Classification

Question 26

. Every product has an international ______ which is used to determine the product’s tariff rate. Countries can add up to ___ additional digits.

Answer 26

6 digit code, 4

Question 27

Classification numbers for US golf shoes; Example: 6402.12.05 / Golf Shoes 30 / For men 60 / For Women 90 / For other people

Answer 27

The first six digits represent the “root” of the international coding. The last four digits are “country- specific.’’

Question 28

The correct classification of an imported good is generally

Answer 28

made by the importer and then verified by the Customs Office.

Question 29

The classification of an incomplete or unfinished product is that of the

Answer 29

finished product

Question 30

shipments that contain all of the subassemblies for a final product should be classified as the ________rather than as individual parts. This is true of chemical compounds as well.

Answer 30

final product

Question 31

When there is a doubt between 2 classifications,

Answer 31

the one with the most specific description is the correct one.

Question 32

When there is no category under which a specific product can be classified,

Answer 32

then the classification that should be used is that of a product that would be most like it.

Question 33

When comparing classifications, only descriptions at the same level should be compared. Why?

Answer 33

it is not appropriate to compare a heading to a subheading,

Question 34

Most duty is collected based on the ___ of goods

Answer 34

value

Question 35

Ad valorem

Answer 35

customs terminology regarding duty that is collected

Question 36

For customs’ purposes, valuation is

Answer 36

is generally the amount billed by the exporter and shown on the invoice.

Question 37

Dutiable amount

Answer 37

the amount on which duty is calculated; the landed value of goods interpreted as the CIP or CIF value of goods.

Question 38

If the invoice is for an FAS transaction,

Answer 38

costs of international transportation and insurance are added to the invoice value to determine the dutiable amount.

Question 39

If the invoice is for a DAP transaction,

Answer 39

, the costs of on carriage in the importing country should be deducted from the dutiable amount.

Question 40

4 Alternative Methods used by customs authorities to determine how goods must be valued

Answer 40

Comparative method Deductive method Computed ( reconstructed) value method Method of last resort

Question 41

Comparative method

Answer 41

The dutiable value of the goods is based upon the value of identical or similar goods imported in similar quantity to the same country.

Question 42

Deductive method

Answer 42

The value of the goods is determined from the price at which identical or similar goods are sold within 90 days of importation in the importing country

Question 43

Computed or reconstructed method

Answer 43

The value of the goods is determined by computing the manufacturing costs of the goods, adding customary expenses for overhead, as well as a reasonable profit.

Question 44

Method of Last Resort

Answer 44

Customs use well-trained and well-informed Customs officials to determine the value of the goods imported no specific guidelines are given, other than that the valuation cannot be “arbitrary.”

Question 45

Rules of Origin

Answer 45

Goods are given a country of origin based upon a set of rules

Question 46

Rules of Origin follows 2 methods

Answer 46

Substantial transformation Change in Harmonized System Classification

Question 47

Substantial Transformation

Answer 47

The country of origin of a computer has been based on the country of manufacture of the motherboard, that of the final assembly of the product, and that of the operating system.

Question 48

Change in Harmonized System Classification

Answer 48

This method can sometimes lead to a product's country of origin being a country in which a fairly inconsequential transformation took place, and where little value was added.

Question 49

The customs clearance process

Answer 49

Entry--> Clearance---> Liquidated Entry-----> Protest (if necessary)

Question 50

Entry

Answer 50

The process by which an importer notifies Customs it has imported a product.

Question 51

Clearance

Answer 51

The term used to signify that the goods have been imported into a country, duty has been paid, and they have been released by Customs.

Question 52

Liquidated Entry

Answer 52

An entry that has been successfully reviewed by Customs authorities and for which duty has been paid.

Question 53

Protest

Answer 53

The formal request by an importer to have Customs reconsider the classification of a good, its valuation, or the determination of its country of origin.

Question 54

3 required documents by every country for making an entry

Answer 54

A form designated for entry (specific to the importing country) A Certificate of Origin to ascertain the country of origin A Commercial Invoice with enough information to determine value and classification

Question 55

Required Markings

Answer 55

All products must have the marking “Made in [name of country]” or “Product of [name of country

Question 56

Merchandise Visas.

Answer 56

a bilateral monitoring system has been implemented by the importing and exporting countries