CUSTOMS DUTIES

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 finan-
cial 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 respon-
sibilities: the proper assessment and collection
of customs duties, excise taxes, fees, and penal-
ties 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.

CROSS-REFERENCES
Contraband; Tariff.