Customs Assists: importers get hurt by what they don’t know

CBP has for decades targeted importers looking for problems with assists.  And that trend has only escalated recently. Most importers do not even realize that they have assists that must be reported to CBP.  This happens because importers do not firmly grasp what an assist is.  All this comes to a head typically when CBP audits an importer or sends a request for information.  Then there is a mad rush to file prior disclosures and to fix the problem, while shelling out large settlement payments to CBP.

An “assist,” is defined by statute as “materials, components, parts, and similar items incorporated in the imported merchandise” that is provided “free of charge or at a reduced cost, by the buyer of imported merchandise for use in connection with the production or sale for export to the United States of the imported merchandise.” 19 USC Section 1401a(h)(1). An “assist” might consist of, for example, design or engineering work done overseas. The value of the assists is subject to import duties pursuant to 19 USC Section 1401a(b)(1)(C).  Pursuant to 19 CFR 152.102 an assist means any of the following if supplied directly or indirectly, and free of charge or at reduced cost, by the buyer of imported merchandise for use in connection with the production or the sale for export to the United States of the merchandise: (i) Materials, components, parts, and similar items incorporated in the imported merchandise. (ii) Tools, dies, molds, and similar items used in the production of the imported merchandise. (iii) Merchandise consumed in the production of the imported merchandise. (iv) Engineering, development, artwork, design work, and plans and sketches that are undertaken elsewhere than in the United States and are necessary for the production of the imported merchandise.

There are ways to avoid violations, including understanding the regulations governing assists, meticulous record keeping, careful coordination with suppliers, and sound communications within the company.

By the way, did you know that 19 CFR § 152.103 (d) (2) allows companies to depreciate the value of an assist? The regulation states: "If the assist has been used previously by the buyer, regardless of whether it had been acquired or produced by him, the original cost of acquisition or production would be adjusted downward to reflect its use before its value could be determined."