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International Supply chain > Quiz 4 > Flashcards

Quiz 4 Flashcards

1
Q

Pre carriage

A

the domestic transportation in the exporting country

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2
Q

Main carriage

A

the international transportation between the exporting country and the importing country

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3
Q

On Carriage

A

, the domestic transportation in the importing country

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4
Q

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

A

practices, conducted

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5
Q

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

A

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

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6
Q

The 4 important factors of choosing an incoterms rule

A

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

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7
Q

The 2 groups of Incoterms Rules

A

7 incoterms rules for any transportation method

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

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8
Q

The 7 incoterm Rules for Any mode of transport are

A

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)

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9
Q

The 4 Incoterms Rules for ocean transport only are

A

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

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10
Q

Scope

A

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

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11
Q

Modality

A

The mode of transport for an incoterm rule

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12
Q

syntax

A

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

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13
Q

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

A

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.

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14
Q

The responsibilities for the exporter are typically

A
  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.
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15
Q

Responsibilities for the importer are typically

A

Doing everything else after the exporter does their part

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16
Q

the responsibility for the good shifts from exporter to importer when

A

the exporter makes the goods available to the importer.

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17
Q

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

A

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 )

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18
Q

Carrier’s further responsibility from the FCA Premises

A

Unload the goods from the truck.

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19
Q

Under carriage paid to, delivery takes place when

A

goods are loaded in the first means of conveyance

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20
Q

Under the CIP rule, the exporter must provide

A

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

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21
Q

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

A

110

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22
Q

Duty

A

the amount of tax paid on an imported good

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23
Q

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

A

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

24
Q

The tariff rate is

A

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

25
Q

For almost all countries, the classification of goods follow the

A

Harmonized System (HS) of Classification

26
Q

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

A

6 digit code, 4

27
Q

Classification numbers for US golf shoes; Example:

6402.12.05 / Golf Shoes
30 / For men
60 / For Women
90 / For other people

A

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

28
Q

The correct classification of an imported good is generally

A

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

29
Q

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

A

finished product

30
Q

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.

A

final product

31
Q

When there is a doubt between 2 classifications,

A

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

32
Q

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

A

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

33
Q

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

A

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

34
Q

Most duty is collected based on the ___ of goods

A

value

35
Q

Ad valorem

A

customs terminology regarding duty that is collected

36
Q

For customs’ purposes, valuation is

A

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

37
Q

Dutiable amount

A

the amount on which duty is calculated; the landed value of goods

interpreted as the CIP or CIF value of goods.

38
Q

If the invoice is for an FAS transaction,

A

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

39
Q

If the invoice is for a DAP transaction,

A

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

40
Q

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

A

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

41
Q

Comparative method

A

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

42
Q

Deductive method

A

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

43
Q

Computed or reconstructed method

A

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.

44
Q

Method of Last Resort

A

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.”

45
Q

Rules of Origin

A

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

46
Q

Rules of Origin follows 2 methods

A

Substantial transformation
Change in Harmonized System Classification

47
Q

Substantial Transformation

A

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.

48
Q

Change in Harmonized System Classification

A

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.

49
Q

The customs clearance process

A

Entry–> Clearance—> Liquidated Entry—–> Protest (if necessary)

50
Q

Entry

A

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

51
Q

Clearance

A

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.

52
Q

Liquidated Entry

A

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

53
Q

Protest

A

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.

54
Q

3 required documents by every country for making an entry

A

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

55
Q

Required Markings

A

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

56
Q

Merchandise Visas.

A

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

International Supply chain (4 decks)

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