customs duties

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Customs Duties

Tariffs or taxes payable on merchandise imported or exported from one country to another.

Customs laws seek to equalize the charges imposed by other countries, furnish income for the federal government, and preserve the financial stability of domestic industries.

Congress has the exclusive authority to determine the imposition and enforcement of such duties and federal courts have exclusive jurisdiction to resolve controversies involving customs duties.

Customs Service

The U.S. Customs Service has these responsibilities: the proper assessment and collection of customs duties, excise taxes, fees, and penalties owing on imported items; the prohibition and seizure of contraband, including narcotics and illegal drugs; the processing of people, carriers, cargo, and mail into and out of the country; the administration of certain navigation laws; the detection and apprehension of individuals engaged in fraudulent activities who intend to circumvent customs; the protection of U.S. business and labor through the enforcement of statutes, regulations, and countervailing duty; the enforcement of Copyright, patent, and trademark provisions and quotas; and the setting of requirements for imported merchandise.

Goods and Merchandise Subject to Duties

Federal tariff schedules set forth terms that prescribe those goods that are to be subject to duties. Such schedules specify the items upon which a duty is to be imposed when imported into the United States and the rates at which the items will be taxed based upon the monetary value of each item.

Exemptions Any U.S. resident, including an infant, who returns from a foreign trip is permitted an exemption from being charged duty on specific items that would otherwise be subject to duty, provided the individual was out of the United States for a minimum of 48 hours. The size of the exemption depends upon the reasonable retail value of each item, which is determined by the place of purchase, not by what it would sell for in the United States. Articles must be for personal or household purposes or for use as gifts. Included within the exemption are limited amounts of alcoholic beverages, cigars, and cigarettes.

Household goods—including rugs, draperies, and furniture—obtained abroad and used there for a period of one year can be imported without the imposition of a duty, provided these goods are not brought into the country for sale or for use by some other individual. Cameras, stereo equipment, and watches do not fall under the classification of household goods; therefore, a duty must be paid on such items. Household goods transported abroad from the United States are, upon their return, exempt from duty. In addition, personal articles, such as cameras and jewelry, that were originally manufactured in a foreign country can also be returned without the imposition of a duty, provided they were purchased in the United States and identified and registered with the Customs Service prior to being brought to a foreign country.

Vehicles, including automobiles, that are taken abroad for nonbusiness purposes can be sent back to the United States duty free upon proof that such vehicles were shipped from the United States. Such proof can be in the form of either a state motor vehicle certificate or customs registration certificate upon the registration of the automobile prior to shipment. If an automobile is repaired while abroad, the value of the repairs must be stated and a duty must be discharged on their value.

Gifts The established exemption applies to both gifts received abroad and those brought home for others. Gifts that do not exceed a value of $50 in the country of shipment can be accepted by the recipient in the United States free from any duty charges and, therefore, have no effect on the exemption. However, no one person can receive gifts exceeding $50 on any one day. If this occurs, a duty and, if applicable, a tax will be imposed on all articles. The $50 limit does not include gifts of liquor or tobacco, nor does it include gifts that an individual sends to himself or herself or to any person with whom he or she is traveling. The common practice is to have gifts wrapped and labeled separately so as to avoid having them included in the sum total of purchases by the customs officer.

Other Purchases In the event that the total dollar value of the imported items is greater than the set exemption amount, the purchaser must complete a written declaration itemizing all articles. A duty of 10 percent on the first $1,000 in the excess amount must be paid, but the duties on goods above that amount vary, based on their wholesale, rather than on their fair retail, value. Those articles assessed at the maximum duty rates are included within the exemption, whereas those assessed at lower rates are put in the excess category. Discharge of the duty on the excess items can be made with American money, a personal check, a government check, a traveler's check, or a money order. Personal checks cannot be drawn on foreign banks; rather, they must be drawn on a national or state bank or trust company of the United States. In the event that a government check, traveler's check, or money order is used, it must not be for an amount higher than $50 in excess of the duty charge.

Restricted Articles Various items such as plants that shelter harmful insects are subject to restrictions because they are hazardous to the General Welfare of the United States as a whole or to a particular segment of society. Restricted plants cannot be brought into the United States unless the Customs Service issues special permits. Livestock—including horses, goats, sheep, and zoo animals—are also restricted and require permits for their importation. Pets must pass inspection by veterinarians employed by the u.s. department of agriculture and are frequently subject to a quarantine period prior to entry into the United States.

Importation of firearms and ammunition requires a permit. Weapons taken abroad to be used on a hunting expedition can be brought back by the individual who removed them without a permit. The owners of firearms customarily register them with the Customs Service before their departure; however, no more than three firearms and one thousand cartridges can be registered.

Prohibited Articles A wide range of items cannot be brought back to the United States from a foreign country. Included in this category are plants in soil, citrus peels, fresh dairy products, and seeds from a number of plants. Narcotic drugs are strictly prohibited; however, medication containing narcotic substances can be brought in provided the substances are properly identified and the traveler has a doctor's prescription or a statement relating to the drug. The importation of various articles from certain countries, including Cuba and Vietnam, are prohibited without a license obtained from the Office of Foreign Assets Control of the department of the treasury.

Penalties Failure to declare articles that must be declared makes the items subject to seizure and Forfeiture. An individual who fails to declare an article is held liable for a penalty equivalent to its value, which is its worth in the place where it was acquired. An individual who fails to declare an item can also be subject to a criminal action.

Seizure and forfeiture provisions are also applicable in the event that the value of an item is understated or misrepresented and the individual who is guilty of such understatement or Misrepresentation must pay the duty on the forfeited item.

Further readings

Korb, Lawrence J. 2003. A New National Security Strategy in an Age of Terrorists, Tyrants, and Weapons of Mass Destruction. New York: Council on Foreign Relations.

Oldham, Charles, ed. 2002. United States Coast Guard: The Americas' Lifesaver and Guardian of the Seas. Tampa, Fla.: Government Services Group.


Contraband; Tariff.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

customs duties

the duties payable on the importation into a country of goods purchased abroad. In the UK, value-added tax on imported goods is payable on a sum comprising the price of the imported goods plus any customs duty payable thereon.
Collins Dictionary of Law © W.J. Stewart, 2006
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