Customs Legal Assist Workshop

Awareness Workshop for Chamber of Commerce Members

Introduction Presentation will include the following topics: Overview of Customs & Border Control Service (CBC) Import Figures 2019/20 New Business Processes IT Platforms Electronic Declaration (e-D) Benefits of using technology Customer Support Center (CSC)

Introduction (cont.'s) How to Use COLS Tariff Classification Warranty Goods Discounts Temporary Imports Methodology in Calculating Duty Do’s and Don'ts Conclusion

Customs & Border Control Services (CBC)

Who are we? About us What are our responsibilities?

Who are we?

February 1, 2019, two agencies merged together to form CBC. https://youtu.be/Ui2O4j_AuNA

About Us Our Vision To strengthen the security and stability of the Cayman Islands through an intelligence-led risk management approach.

About Us cont’d.

Our Mission To collect and protect revenue, facilitate legitimate travel and trade while providing effective border management for the safety of our environment, citizens, and visitors.

About Us cont’d.

Our Values  Accountability – we are individually and collectively accountable

for our actions.  Passion – we care immensely about the security and safety of the Cayman Islands, its people, and visitors. We value and encourage teamwork, personal development, innovation, and creativity.

 Integrity – we commit to act ethically and professionally while maintaining impartiality, fairness, and consistency.  Excellence – we commit to delivering world-class customer service to our local and international interests.

What are our responsibilities?

CBC is responsible for the following: Protection of our borders Collection of Import Duties, Package tax, Warehouse and other fees Management of travel and trade.

New Business Processes  Intelligence-led risk management, High, Medium, and Low Who, what, when, where, why and how  Compliance management Pre and post arrival checks, physical and nonintrusive inspections (k-9 and x-ray scanner), and post audit  Enhanced partnerships Established relationships with key stakeholders and traders  Using Technology to enhance efficiency and effectiveness (Go Paperless Initiative)

IT Platforms Customs Online System (COLS) Customs Information Management System (CIMS) Immigration Management System (IMMS) Advance Passenger Information System (APIS)

Customs Online System (COLS) What is Customs Online?  How do traders submit an entry ?  What documents are required? 

Submission Process

COLS cbc.gov.ky or eservices.gov.ky

Customs Online System (COLS) Customs Online System (or just “Customs Online” or “COLS”) is our Web Portal, which is your gateway to doing business with CBC electronically.

Electronic CBC Declarations (or just “e-D”) allows traders to now handle and track their e-CICD online.

Customs Online System (COLS) To submit your e-D, traders have to first get access to COLS. To complete your registered COLS account profile, the follow documents are required in PDF format for upload:  Computer, Internet access, and scanner Driver’s License or I.D. Passport,  Your valid email address,  If you are a business, a valid Business License Certificate (LLC or Ltd),  When clearing goods on behalf of third parties, a signed Appointment of Agent Form.

Customs Online System (COLS) Once traders have their COLS account authorized, they are able to submit their e-D using COLS. At any time, the importer can connect to their Customs Online Portal Dashboard and track their e-D’s processing progress with the CBC.

Electronic CBC Declaration (e-Declaration) To submit a e-D for processing, the following documents are required in PDF format and uploaded along with the e-D electronic form:  Suppliers or sales invoices for goods being shipped (Courier system generated invoice not accepted and commercial invoice restricted)  Bill of Lading or Airway Bill from shipper  It will be necessary to identify goods by Tariff Codes

Benefits to Traders Provides remote access Saves valuable time and money Allows the tracking of declarations Lessen impact on our environment Increase trade facilitation Provide online payment and release (pending implementation) Allows for Pre-Arrival Release (pending implementation)

Benefits to CBC  Allows for the sharing of information across CBC  Advance information (pre-arrival checks)  Enhance reporting capacity Trade statistics Revenue Post Auditing Management reporting FOI  Increase focus on high risk trade and cross-border transactions

Interagency Collaboration

COLS How to Use COLS (Demo)

HS Tariff Background • Before the introduction of the Harmonized System, goods had to be classified under the different tariff systems of various countries. This slowed down and complicated international trade, making it very difficult to do business in many countries. • In the interest of speeding up economies and simplifying the classification process, the Harmonized System was created and today is widely adopted throughout the world.

HS Tariff Background (cont.'s) • The Cayman Islands recognized the needed to use International best practices by modernizing the hybrid system, and adopting the full Harmonized System; • Took into consideration the increase in the volume of international trade, new technology and the rapid change in the world economies; • Also more than 98 % of the merchandise in international trade is classified using the HS.

HS Tariff Background(cont.’s) • NOVEMBER 2017 CUSTOMS WENT LIVE WITH THIS UPGRADED SYSTEM; • SERVICES SUCH AS ONLINE DATA ENTRY SUBMISSIONS AND PROCESSING WERE INTRODUCED WHICH ALLOWED CUSTOMERS TO SUBMIT THEIR DECLARATIONS ELECTRONICALLY THROUGH THE CUSTOMS ONLINE SYSTEM (COLS); • THE NEW HARMONIZED TARIFF PLAYED A BIG PART IN THE CTSS/CIMS (CUSTOMS INFORMATION MANAGEMENT SYSTEM) AND COLS.

Tariff Classification What is Tariff Classification?

• It is an essential activity and the process of determining the correct tariff code for imported and exported goods; • Importers and exporters have to declare a product classification number that identifies their product; • This number is called the tariff commodity code or HS code.

Tariff Classification • There is a legal obligation on all importers to declare their goods to Customs and Border Control upon arrival using the HS Codes.

Why? • • • •

determines the rate of import duty and fees to be paid; clearly identifies the goods for the compilation of trade stats; points to any import restrictions on the goods; indicates if any preferential treatment applies.

The Harmonized System • The Harmonized System is an internationally accepted standardized numerical method of classifying traded products; • At the international level, the Harmonized System (HS) for classifying goods is a six-digit code system; • system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics.

The Harmonized System • The Harmonized System is an internationally accepted standardized numerical method of classifying traded products. • System is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics.

The Harmonized System The HS comprises approximately: • Sections – (21); • Chapters - (99) 2-digit codes; • Headings - (1,229) 4-digit codes; • Subheadings - (5,394) 6-digit codes.

The Harmonized System What is the structure of the HS? • IT CONSISTS OF: • (a) General Rules for the interpretation of the System (GRI’s); • (b) Section and Chapter Notes, including Subheading Notes; and • (c) A list of headings and subheadings arranged in systematic order (i.e., degree of processing).

The Harmonized System What is the structure of the HS? • The HS contains a considerable amount of information; • Very systematically laid out; • Goods within the headings of a section follow the progression from live objects and raw materials to the finished product.

The Harmonized System Why did the Cayman Islands adopt the HS? • Commonly accepted practice internationally in goods classification; • Outdated hybrid system; and • Better management of trade statistics

The Significance of Tariff Classification • Tariff classification using the Harmonized System (HS) “allows a world of many languages to speak with one.”

Why Classify Goods and What Can Go Wrong?

• Failure to classify your goods correctly can lead to: • Non-compliance penalties; • Clearance delays; • Seizure of goods; and • Revocation of import privileges.

Benefits of Proper Classification Traders/Importers • More Efficient & Speedy processing of cargo; • Correct Classification of Products (save money); • Harmonized Commodity Inventory (inventory control); • Industry Market share statistics; • Identification of emerging markets; and • General economic research and analysis.

Benefits of Proper Classification CI Government • Better development of trade policies; • Uniform identification of imported and exported goods for purposes of duty collection, enforcement of national laws; • Promotes consistency and comparability of information; • More accurate trade statistics for Government; and • Monitoring controlled goods

Binding Tariff Information • It is highly recommended to ensure the correct classification of products by receiving a binding decision from Customs and Border Control. The main benefit to the company is legal certainty with regard to tariff classification.

Methodology Used in Duty Calculation Duty is collected on the Cost (value) Insurance (for shipping) and Freight charges.

Cost +Insurance+ Freight= CIF (CI$) x 22% (rate of duty)= duty to be paid

Warranty Goods The CBC Law does not make provision for goods that have been used and exported under a warranty contract. However, the Law allows a refund of duty for goods imported under a contract that: – Description – Quality – State or condition – Damage in transit

Warranty Goods ďƒ˜Return the goods unused to seller ďƒ˜Goods must be entered outward with CBC

Discounts ďƒ˜Only when shown to the satisfaction of CBC that the deductions area) Available to any buyer purchasing similar goods b) Do not result from a special relationship between buyer and seller c) Do not, in any case, exceed 20% of the invoiced value

Temporary Imports The Law allows for goods to be entered as a temporary import up six months without any duty. Such imports requires an application to the Director of CBC. Goods are normally inspected on import and export. A security deposit is sometimes required.

Temporary Imports Goods that qualify: Heavy equipment or machinery that can’t be sourced on island Goods for a trade show or conference. Film equipment Entertainment equipment Waiver of duty or concession can only be granted by Cabinet

Do’s  As soon as you know you are receiving goods, gather the necessary documents and share them with your agent.  The necessary documents should be your Supplier Invoice or Sale Invoice(s). Provide these documents in PDF format to your agent.  If additional documentation is required to collect your package, obtain this prior to the shipment arriving (e.g. approval needed from the Department of Agriculture).  If you are not sure if additional information is required, ask your agent or our Customer Support Centre.

Don'ts Omit or misrepresent the value of your goods (don’t assume “everyone” will know the value of a given item). Hand written invoices are not normally accepted. The customer is responsible for providing all necessary and proper documentation, do not rely only on the agent to do this.

Customer Support Center (CSC) Customer Support Center (CSC) Assistance with imports/exports, visitor/extension, travel/visa, and vessel info/extension queries Call 649-4579 press 0, and then 1 for import assistance. Or email CBCOnlineSupport@gov.ky for imports/exports or visa.queries@gov.ky extensions/visas.

Conclusion We are confident that by streamlining our business processes, having well-established partnerships, and efficient technology systems coupled with customer support, we will be able to accomplish our vision, meet our objectives and goals to help enhance customer experience.

Questions