Customs Regulations and Compliance
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Course Introduction
This course provides an in-depth exploration of the legal frameworks, procedures, and practical applications related to customs regulations and compliance in international trade. Students will gain a solid understanding of customs laws, documentation requirements, tariff classification, valuation, and rules of origin. The course also covers best practices for ensuring compliance, managing customs audits, and addressing common challenges such as import/export controls, duty regulations, and penalties for non-compliance. Real-world case studies and scenario analysis are used to illustrate how businesses can navigate evolving customs environments and maintain effective regulatory compliance across borders.
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International Logistics Management of International Trade Operations 3rd Edition by David
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Chapter 1: Introduction
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Q1) The Bretton Woods Conference triggered the creation of the World Trade Organization in 1944.
A)True
B)False
Answer: False
Q2) A firm can respond to one of its competitors' introduction of a lower-priced product by starting to produce its own lower-cost product abroad and importing it.Such a strategy is called
A) insourcing.
B) foreign investment.
C) just-in-time.
D) outsourcing.
E) None of the above
Answer: D
Q3) The "Wal-Mart effect" pushes manufacturers to sell products at ever-lower prices,often obtained by manufacturing abroad.
A)True
B)False
Answer: True
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Chapter 2: International Supply Chain Management
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Q1) Logistics costs have generally steadily declined over the past 50 years,when expressed as a percentage of the GDP of the United States.
A)True
B)False
Answer: True
Q2) The people whose responsibilities include loading and unloading ships are called ____________________.
Answer: longshoremen
Q3) Insurance issues in international logistics are thankfully similar in complexity to insurance issues in domestic logistics.
A)True
B)False
Answer: False
Q4) "Time-defined" deliveries refer to shipments of goods that cannot stay in transit too long because they are perishable.
A)True
B)False
Answer: False
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Chapter 3: International Logistics Infrastructure
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Q1) Among characteristics of the Saint Lawrence Seaway is/are
A) it is wide and most ships can pass through it.
B) it is growing in the amount of traffic it carries.
C) it provides good year-round transportation.
D) it links the Great Lakes to the Saint Lawrence River and the Atlantic Ocean.
E) None of the above
Answer: D
Q2) In many countries,access to high-speed highways is limited to those who can pay a
Answer: toll
Q3) Most of the easily accessible oil and gas fields are in the early part of their life expectancies.
A)True
B)False
Answer: False
Q4) The ____________________ of an airport determine(s)the type of aircraft which can serve that airport.
Answer: runways
Q5) The tunnel between France and Great Britain is called the ____________________.
Answer: Chunnel
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Chapter 4: Methods of Entry into Foreign Markets
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Q1) _____ is not truly a method of entry into a country for an exporter.
A) Active exporting
B) A marketing subsidiary
C) Contract manufacturing
D) A wholly-owned subsidiary
E) Franchising
Q2) ____________________ is a form of exporting by which a firm can benefit by not having to lay out any capital but is able to generate world-wide income from its intellectual property fairly rapidly.
Q3) Maquiladoras are located on the border between
A) France and Germany.
B) Spain and Portugal.
C) Quebec and Ontario.
D) the United States and Mexico.
E) None of the above
Q4) Joint ventures were developed as ways to partner with a politically well-connected company in a foreign country to help prevent things like nationalization of a foreign company by the host government.
A)True
B)False
Page 6
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Chapter 5: International Contracts
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Q1) Unless otherwise specified,contracts between an exporter and an agent and contracts between an exporter and a distributor are called
A) contract law.
B) labor law.
C) common law.
D) distribution contracts.
E) None of the above
Q2) Under the Uniform Commercial Code (UCC),when a buyer agrees to an offer made by a seller,but indicates a desire for a different schedule of delivery or term of payment,such a response is considered to be a rejection of the offer.
A)True
B)False
Q3) The contract clause that spells out if a representative will be an agent or distributor is usually the first clause of the contract and is called the _____________________ of appointment clause.
Q4) Accounts that the exporter will keep to itself and will not allow the agent/distributor or any other local representative to sell to are called ____________________accounts.
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Chapter 6: Terms of Trade or Incoterms
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Q1) Under the DES Incoterm,the exporter is responsible for the goods until they are placed at the disposal of the importer at the ____________________ of destination.
Q2) In a quote which includes multiple Incoterms,so that the customer can choose,the Incoterm that has the highest invoiced amount is
A) EXW.
B) FCA.
C) DDP.
D) CIP.
E) None of the above
Q3) The FOB term not only means "Free On Board," it is also sometimes referred to as A) Freight On Bow.
B) Free Over Bow.
C) Freight On Board.
D) Freight Over Ballast.
E) None of the above
Q4) Variants to the CFR Incoterm were created to reflect which of the trade partners was responsible for unloading costs.When the exporter bears the costs,the term "CFR ____________________" is used.
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Chapter 7: Terms of Payment
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Q1) In documentary collection activity,the exporter's bank is called the ____________________ bank.
Q2) A letter of credit is more secure than cash in advance.
A)True
B)False
Q3) A payment guarantee is the most commonly used type of guarantee and is used to ensure that the contractor finishes the project.
A)True
B)False
Q4) A problem with TradeCard is that it is an extremely expensive alternative.
A)True
B)False
Q5) Among country risks in international trade are labor issues.For instance,_____ has/have a strike almost every year at its/their ports.
A) Chad
B) Paraguay
C) Japan
D) All of the above
E) None of the above
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Chapter 8: Currency of Payment (Managing Transaction
Risks)
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Q1) The International Bank for Reconstruction
A) is called the Bretton Woods.
B) was developed to manage Germany's World War I reparations.
C) is also known as the World Bank.
D) All of the above
E) None of the above
Q2) The risk resulting from possible fluctuations in currency exchange rates is called
A) hedging.
B) transaction exposure.
C) the direct quote.
D) floating.
E) None of the above
Q3) Under the Interest Rate Parity theory of exchange rate determination,the forward exchange rate should be expressed as a ____________________ if the foreign country is experiencing higher nominal interest rates than the domestic country.
Q4) The Ex-Im Bank provides loans to small exporters.
A)True
B)False
Q5) The euro was first created as an artificial ____________________.
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Chapter 9: International Commercial Documents
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Q1) An air waybill
A) is always straight.
B) is also used in ocean transportation.
C) serves as an individual validated export license.
D) can serve as a shipper's export declaration.
E) None of the above
Q2) Export quotas can be used to control scarce resources or prices of products for which a country has a monopoly.
A)True
B)False
Q3) If the ____________________ is not filed in time with U.S.Bureau of Customs and Border Protection,the shipment will not be allowed to leave the port of departure.
Q4) A manifest is an internal document of the shipping company and is not examined by government entities.
A)True
B)False
Q5) Among other things,tariff rates are determined based on the shipment's weight.
A)True
B)False
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Chapter 10: International Insurance
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Q1) Lloyd's of London acts as a market through which unusual risks are insured.
A)True
B)False
Q2) An exporter in a developing country sells under CIF terms to an importer in a developed country.The exporter provides the minimum required insurance coverage.If there is a loss,the importer would
A) have to file a claim with an insurer in the developing country.
B) be subject to foreign exchange devaluation due to the length of time of claim processing.
C) be required under the CIF terms to pay the invoice despite the delay in receiving the claim.
D) All of the above
E) None of the above
Q3) Traditionally,shippers of higher-value cargo will ask that the cargo be carried "____________________ deck."
Q4) An insurance contract is legally binding only if the insured has a(n)____________________ in the subject matter of the insurance.
Q5) Most cargo sent by air has ____________________ value.
Q6) It is impossible to get insurance for ____________________ leakage.
Page 12
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Chapter 11: International Ocean Transportation
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Q1) What used to be exclusively bulk cargo,like forestry products and grain,is now being shipped in containers.
A)True
B)False
Q2) Ships too large to pass through the Panama Canal are called A) tramps.
B) Panamax ships.
C) post-Panamax ships.
D) capesize ships.
E) None of the above
Q3) The ____________________ tonnage is the total weight of the ship when fully loaded,measured by the weight of the volume of water it displaces.
Q4) RORO ships have the advantage of not needing specialized lifting equipment.
A)True
B)False
Q5) Displacement tonnage is the weight of the ship,when empty,measured by the weight of the volume of water it displaces.
A)True
B)False
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Chapter 12: International Air Transportation
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Q1) In calculating airfreight rates,airlines figure the volume-weight of the shipment based on the volume yielding a certain weight value.As a result,
A) the airline will charge the lesser of the volume-weight or the actual weight of the cargo.
B) the airline will be more concerned about volume than weight.
C) the airline will charge the higher of the volume-weight or the actual weight of the cargo.
D) the airline will be concerned about the rates it will charge at different altitudes it flies.
E) None of the above
Q2) Aircraft designed so that freight is carried on the main deck as well as in the belly hold are called ____________________.
Q3) An "onboard courier" is an individual who travels as a passenger,but relinquishes his or her baggage allocation in order to transport cargo.
A)True
B)False
Q4) The largest cargo airport in the world is at ____________________.
Q5) The largest airfreight company in the world is ____________________.
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Chapter 13: International Land and Multi-Modal Transportation
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Q1) A ____________________ is the idea that cargo traveling on ocean liners can cross a land obstacle by being unloaded in one port,transferred to a train,carried across the land area by rail,and reloaded onto another ship.
Q2) Aircraft containers are used to aggregate small individual packages rather than to form a whole shipment.
A)True
B)False
Q3) In Europe,some trucking companies register their vehicles in other countries in order to avoid ____________________.
Q4) Unlike the United States,European railroads focus more on ____________________ traffic than freight.
Q5) River barges mostly carry ____________________ cargo.
Q6) Trucks carrying international cargo tend to be
A) semi-trucks.
B) identical from country to country.
C) free of regulations in the foreign country they enter.
D) All of the above
E) None of the above
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Q7) Cargo of exceptional size and/or weight is called ____________________.
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Chapter 14: Packaging for Export
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Q1) The three functions of correct packaging are
A) to reduce costs, speed delivery, and to provide correct instructions.
B) to provide attractive packaging for consumers, to provide for recycling, and to publicize the product while in transit.
C) to protect goods in transit, to facilitate proper handling of goods in transit, and fulfill the shipper's customer service strategy.
D) to provide impenetrable protection for the goods, to make shipping costs as low as possible, and to maximize pallet utilization.
E) None of the above
Q2) Single shipments that are too small to be shipped as a full container are _____________________ by a freight forwarder or a NVOCC with other freight and then shipped in a full container.
Q3) Most in-transit thefts involve people who are ____________________.
Q4) Some shippers use old pallets as spacers (dunnage)to keep cargo from shifting. A)True B)False
Q5) Boxes and enclosed crates should be lined with a waterproof material such as ____________________.
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Chapter 15: International Logistics Security
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Q1) The primary goal of the International Chamber of Commerce is to facilitate international ____________________.
Q2) Which U.S.agency is NOT involved with security enforcement?
A) Customs and Border Protection
B) Secret Service
C) Coast Guard
D) Immigration and Customs Enforcement
E) None of the above
Q3) In order to be comprehensive in their security efforts,companies have to secure four areas in their supply chains; their fixed assets (plants,warehouses,distribution centers),their ____________________ while they are in transit,the information on which they rely to manage their operations,and their workforce,to ensure that it is reliable and trustworthy.
Q4) C-TPAT program offer companies the following advantages:
A) lower probability of Customs' inspections at the port of entry.
B) priority scheduling of inspections when they are deemed necessary.
C) assistance from Customs' Supply Chain Security Specialists.
D) All of the above
E) None of the above
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Chapter 16: Customs Clearance
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Q1) Because of the complexity and time-consuming nature of filling out Customs entries,many countries demand that importers delegate the task of interacting with Customs to a freight forwarder,a representative of the importer that has acquired the knowledge and experience required to deal effectively and efficiently with Customs.
A)True
B)False
Q2) Tariffs can be calculated
A) ad valorem.
B) as a fixed amount per unit imported.
C) in a mixed system of a fixed amount per unit imported plus a percentage of the value of the goods imported.
D) All of the above
E) None of the above
Q3) Non-tariff barriers may appear in the form of
A) requiring a special sticker to be applied to an imported product.
B) slowing down Customs clearance processes.
C) multiplying the number of documents required for importing products.
D) All of the above
E) None of the above
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Chapter 17: Using International Logistics for Strategic Advantage
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Q1) The exporter is responsible for providing good,clear documents in the correct number of originals and copies
A) in all cases.
B) only if the exporter is the exporter of record for Customs purposes.
C) only if the export is conducted in the exporter's currency.
D) only if the importer has requested a shipment under a C-type Incoterm (CIF, CIP, CFR, or CPT).
E) None of the above
Q2) One of the better sources for finding specific information about the cultural characteristics of a country is
A) Cultural Vignettes published by the British Broadcasting Corp.
B) Culturegrams published by Brigham Young University.
C) Cultural Background Notes published by the U.S. Department of State.
D) Environmental Summaries published by the Central Intelligence Agency.
E) None of the above
Q3) When providing a quote to a potential customer abroad,it is best to provide the importer with ____________________ Incoterm alternatives.
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