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Drawback Regulatory > Quiz Questions > Flashcards

Quiz Questions Flashcards

1
Q

Name the 3primary restrictions on a claimant’s ability to file drawback under 1313(j)(2).

A
  1. Insular Possessions
  2. Exports to USMCA
  3. Basket Provision
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2
Q

The lesser of two values rule would reduce drawback recovery in which of the following scenarios:

a. Goods shipped to Cananda or Mexico that have been advanced in value so they are no longer in the same condition.
b. Under 1313(j)(2) scenario where the value of import is less than the value of the export.
c. Under 1313(j)(2) where the value of the export is less than the value of the import.
d. A & C

A

c

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3
Q

A manufacturing drawback claimant, post TFTEA, that is assembling appliances from component parts would most likely request the following from Customs as part of the ruling application under 1313(b):
a. A specific ruling with appearing-in basis of claim.
b. A T.D. 81-234 with appearing-in basis of claim.
c. A T.D. 81-300 with used-in basis of claim.
d. A T.D. 20-07 with a used-in less valuable waste basis of claim.
e. None of the above

A

e

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4
Q

Which of the following basis of claim is most appropriate for a chemical manufacturing claimant with large amounts of measurable loss that results from a chemical reaction process:
a. Used-in
b. Used-in less valuable waste
c. Appearing-in
d. The abstract method

A

a

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5
Q

True / False
Exports to Puerto Rico from the US qualify for drawback but only if filed under 1313(j)(1).

A

False

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6
Q

True / False
Under 13139(j)(1) the destruction of domestic product (originating in the US) would be eligible for drawback but only if you use lot number or serial number tracing to link the destruction with an import.

A

False
Could also use accounting method. Also, if all domestic, then there are no imports. Therefore no drawback eligible.

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7
Q

If a claimant of fungible retail merchandise imports from China, then exports to Mexico in the same condition (assuming no comingled customer retail returns) which of the following drawback provisions is most appropriate:
a. 1313(a)
b. 1313(j)(1) utilizing serial number tracing
c. 1313(c)
d. 1313(j)(2)
e. 1313(j)(1) utilizing an acceptable drawback accounting method

A

E

B is not the most appropriate

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8
Q
  1. Which of the following individuals/entities are authorized to sign Customs documents on behalf of an importer/claimant (circle all authorized)?
    a. The owner of a sole proprietorship
    b. Any employee of the corporation
    c. The Corporate Secretary
    d. An employee of a corporation with duly authorized signatory authority for the corporation.
    e. The CEO of a Corporation
    f. Any licensed Customs Broker
A

All but B

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9
Q

True or False
Export shipments to US territories and insular possessions (exclusive of Puerto Rico) do qualify for drawback but must be filed under 1313(j)(1) or 1313(a).

A

False

Just 1313j1, not 1313a

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10
Q

Which of the following drawback provisions includes a substitution method with part number level matching in addition to HTS matching.
a. 1313(c)
b. The Wine drawback law
c. 1313(p)
d. 1313(j)(1)
e. A & D

A

a

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11
Q

A manufacturing drawback claimant with very small amounts of valuable but inconsistent waste would most likely employ which of the following basis of claim methods
a. Used-in
b. Appearing-in
c. Used-in less valuable waste
d. The schedule method
e. The abstract method

A

B

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12
Q

True or False
Manufacturing abstract records provide an alternative method of determining the claim quantity for more of a custom manufacturing process where the amount of material used to produce the finished article varies for each production run.

A

True

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13
Q

The following record identifies each of the component(s) incorporated in a manufactured finished product.
a. Quality records that indicate the specifications of the imported designated material.
b. Bill of Material
c. Inventory records
d. Work in process records

A

b

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14
Q

Name the three primary advantages that 1313(p) would provide a chemical claimant over 1313(j)(2)?

A
  1. No Basket Provision
  2. No Lesser of 2 Values
  3. No physical possession
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15
Q

Which of the following are industry specific drawback statues (circle any that are correct)
a. 1313(p)
b. 1313(c)
c. Wine Drawback Law
d. 1313(a)

A

a and c

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16
Q

Which of the following historical drawback terms is still applicable today on USMCA exports filed under 1313(j)(1)?
a. Same kind & quality
b. HTS level matching
c. Commercial interchangeability
d. Lesser of Two Values
e. Relative Value
f. Same Condition Drawback
g. A and F

A

f

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17
Q

A company imports a kit from China with electronic components parts identified by individual part numbers. The HTS classification (HTS begins with OTHER at the 8th and 10th) does not shift from import to export following a simple assembly process that changes the function/use of the kit. The finished assembly is assigned a distinct material code. The finished product is exported to South Korea. Circle any of the following statements that are true.
a. Because of the US/South Korea FTA, the claimant cannot file under the provisions of 1313(b).
b. The claimant could file under 1313(j)(1) at the part number level using an acceptable accounting method.
c. The claimant could file under either 1313(a) or 1313(b).
d. The claimant should ideally file under 1313(b) once it secures a T.D. 20-07.
e. The claimant could file under 1313(j)(2) because the HTS does not shift from import to export.

A

c and d

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18
Q

True or False
A relative value calculation is most appropriate in instances where the same production process results in a multiple products derived from the same raw material input.

A

True

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19
Q

Which of the following events potentially triggers a drawback claim assuming the previous import of duty paid merchandise (circle all that apply)
a. Destruction of the goods under Customs supervision that share the same HTS as the imported duty paid filed under a qualifying 1313(j)(2) HTS.
b. The export/return of goods previously used at retail filed under 1313(c)
c. The export of the same exact goods to Mexico that were previously imported duty paid from China.
d. The export of a qualifying manufactured product to destinations other than Canada and Mexico.
e. The movement of goods into a FTZ under zone restricted status.
f. Assembled product shipped to CA/MX where the amount of duty is greater on the finished product that on the imported duty paid components into the US.

A

All but e

20
Q

A company outsources part of its production process to an outside independent contractor that is only compensated for the value added and does not purchase the electronic components from the importer/claimant. The parts are identified by individual part numbers. The drawback claims will be filed under 1313(a). What is the number of the drawback ruling that each party would need to secure:
a. T.D. 20-07 for each, and additionally, the agent needs an 81-181
b. T.D. 20-07 for the claimant and a specific ruling for the agent.
c. T.D. 20-07 for the claimant and 81-181 for the agent.
d. 81-234 for the claimant and 81-181 for the agent.

A

D

21
Q

Which of the following corporate transition scenarios requires approval for the successor to acquire the drawback rights from the predecessor corporation (from Customs HQ under the provisions of 19 USC 1313(S)).
a. A company adding a factory that does not necessitate a change in the Federal Identification Number (EIN Number)
b. An “S” corporation establishes a new business division that operates under the primary EIN number but with a different suffix.
c. A “C” corporation purchases/acquires a competitor that ceases operations under its EIN number and begins operating under the successors EIN number (assumes the predecessor has unrealized drawback opportunities).
d. A company purchases all the assets and liabilities of a separate legal company that went out of business and seeks to file drawback against the import balances of the acquired company.
e. Both C and D

A

e

22
Q

True or False
The transfer of drawback rights from the importer of record to the export requires a formal written waiver of said rights and making such available to Customs.

A

False

23
Q

True or False
Under the TFTEA drawback regime a drawback claimant can file drawback against packing material regardless of the drawback eligibility of the material content contained in the package.

A

True

24
Q

Which of the following manufacturing “tests” found in various parts of the Customs regulations establishes whether a drawback claimant can file under the provisions of either 19 USC 1313(a) or (b) – Circle all correct answers
a. A tariff shift from import to export
b. A process that results in a new functionality of the finished product
c. An assembly process that changes the essential character of the raw material
d. A substantial transformation
e. An increase in value of at least 50% in the US
f. None of the above
g. The assignment of a new name to the finished product that results from the production process

A

b, c, & g

25
Q

Which of the following is true related to HTS basket provisions that begin with the word “Other” at the 8th, 10th or possibly both for a claimant seeking to file under 19 USC 1313(j)(2)
a. An annotation that skips the 8th digit but begins with “Other” at the 10th can qualify under J2 if you secure a binding ruling from HQ.
b. A claimant can file under J2 with a product description “breakout” at the 8th even if the 10th begins with “Other”.
c. A claimant can file but must do so at the part number level.
d. If the merchandise is fungible, the basket provision restriction does not apply.
e. None are true.

A

b

26
Q

True or False
A claimant imports duty paid material from China subject to Section 301 using an HTS that begins with other at the 8th and 10th. It also procures fungible US origin merchandise of the same part number from a US based supplier that it then exports to customers in Chile. The claimant could compliantly file under 19 USC (j)(1) either using lot number or serial number tracing.

A

False

27
Q

Which of the following documents could be used to substantiate the fact and date of exportation in the event of a Customs review
a. A dated certified inland bill of lading from the domestic warehouse that terminates at the Port of Export.
b. A house airway will of lading that establishes the date and fact of exportation.
c. An export ocean bill of lading with a laden on-board date.
d. A Canadian B3 entry document (Canadian Government Import Document) along with any other supporting commercial records.
e. All of the above.
f. All but A

A

F

28
Q

Which of the following are not drawback eligible
a. Section 232 duties
b. Over quota agricultural product filed under J2
c. Exports to Puerto Rico that originate in the continental United States
d. Anti-Dumbing duties
e. All of the above

A

e

29
Q

The lesser of two values concept applies to which of the following provisions 19 USC 1313
a. J1
b. A
c. B
d. B but only on exports to Canada, Mexico and Chile
e. P
f. C & D

A

c

30
Q

True or False
Goods that are fungible are identical in both appearance and perceived value by the marketplace…literally identical in all circumstances.

A

True

31
Q

Which basis of claim to use when you have multiple products involved and you don’t have significant recoverable, valuable, consistent waste?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Used-in

32
Q

Which basis of claim to use when you have multiple products involved, you do have significant recoverable, valuable, consistent waste, and there is a favorable ROI on admin, compliance or record keeping?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Used-in less valuable waste

33
Q

Which basis of claim to use when you have multiple products involved, you do have significant recoverable, valuable, consistent waste, and there is not a favorable ROI on admin, compliance or record keeping?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Used-in

34
Q

Which basis of claim to use when you don’t have multiple products involved, you do have significant recoverable, valuable, consistent waste, and there is not a favorable ROI on admin, compliance or record keeping?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Appearing-in

35
Q

Which basis of claim to use when you don’t have multiple products involved, you do have significant recoverable, valuable, consistent waste, and there is a favorable ROI on admin, compliance or record keeping?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Used-in less valuable waste

36
Q

Which basis of claim to use when you don’t have multiple products involved, you do not have significant recoverable, valuable, consistent waste?
a. Appearing-in
b. Used-in
c. Used-in less valuable waste

A

Appearing-in

37
Q

When would you use Used-in Basis of Claim?

A
  • if there is either no waste, or the waste is valueless or unrecovered
  • Irrecoverable or valueless waste does not reduce the amount of drawback
  • Used when you have multiple products
38
Q

When would you use Appearing-in Basis of Claim?

A
  • used regardless of whether there is waste
  • claimant does not need to keep records of waste and its value
  • may not be used if multiple products are involved
39
Q

When would you use Used-in less valuable waste Basis of Claim?

A
  • when the manufacturer recovers valuable waste, and keeps records of the quantity and value of waste from each lot of merchandise
  • the value of the waste reduces the amount of drawback
40
Q

Can you export to USMCA under 1313j1?

A

Yes, in same condition.

41
Q

Can you export to USMCA under 1313j2?

A

No, not at all.

42
Q

Can you export to USMCA under 1313a?

A

Yes

43
Q

Can you export to USMCA under 1313b?

A

Yes

44
Q

Which provision does physical possession apply to?

A

1313j2

45
Q

Is there a provision that you can export to insular possessions where drawback is eligible?

A

1313j1

46
Q

Same condition drawback is still applicable today on USMCA exports filed under which provision?

A

1313j1

Drawback Regulatory (2 decks)

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