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Case Study: Wholesaler Recovers Thousands in Duties with MGTA Drawback

Financial graphs and charts overlay a containership on the water.

By using an outsourced duty drawback program, Specialty Sporting Goods is able to recover over $50,000 in duties per year with minimum outlays and nearly zero internal resources expended.

About Specialty Sporting Goods

Specialty Sporting Goods is a U.S. wholesaler of quality, athlete tested sporting equipment and gear. The company imports the majority of its products from several different vendors in China and then resells them to big box retailers in Spain, Germany, and Finland. On average, the company exports about 65 shipments per year.

The company is headquartered in the Southern United States, employs 178 people, and has annual revenues of $20 million.


Prior to working with Mohawk Global Trade Advisors (MGTA), Specialty Sporting Goods was unaware of the duty drawback program. Each year the company was unknowingly leaving money on the table by failing to recover duties paid on imported goods that were subsequently exported.

Action Taken

Through discussions with MGTA, it was found to be in the best interest of the company to file for drawback privileges. Besides recovering duties paid for merchandise that was exported in the last year, Specialty Sporting Goods was also able to recover additional funds through filing drawback retroactively on the previous three years of exports.

Using MGTA as their duty drawback provider also alleviated Specialty from the burden of using their own internal resources to execute the recovery of funds. Payroll was saved, and the company’s staff was able to maximize their time and energy on growing and maintaining the business.


The only initial investment outlaid was for duty drawback application fees, which totaled $1,500.

By setting up a quarterly drawback filing with MGTA, after deducting commission, Specialty Sporting Goods has been able to realize $50,992.50 in refunds per year. Another $153,000—after deducting commission—was recovered from a one-time retroactive filing for the previous three years.

Find out if your shipments qualify for duty drawback. Call Robyn Moore today at (630) 994-3032 and ask for your free duty drawback assessment.

By Robyn Moore, Duty Drawback Manager

©2017 Mohawk Global Trade Advisors

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Be Aware of Your Exports: BIS and DDTC Cracking Down on Export Violations to Russia

Saint Basil's Cathedral in Russia

Shipments to Russia and Ukraine are still being heavily scrutinized by the Bureau of Industry and Security (BIS) and the U.S. State Department of Defense Trade Controls (DDTC). The inspection has increased since new sanctions were issued to Russia and Ukraine in December 2016. Therefore, to avoid export violations it is crucial to ensure your organization practices due diligence in regards to U.S.-origin items being transshiped or reexported to these areas.

Here are a few preventative measures you can take to minimize the chances of unknowingly enabling illegal diversion of your exported goods to Russia. The full version can be found here.

  • Pay attention to any discrepancies between the destination country and country from which an order is placed or payment is made. If the countries do not match, it’s possible that someone is planning to illegally divert your exported goods to a different country, such as Russia.
  • Be wary if a freight forwarder’s office or address is listed as the item’s final destination. It is your duty, by law, to investigate further. Do not proceed with the transaction before asking the purchaser about the item’s end user, end use, and ultimate destination.
  • When looking into the end destination of the item, an exporter should take a close look at the e-mail address, telephone number country codes, and languages used in customer communications or websites. If any of these details suggest a destination country other than what you have been told by the customer, you should be cautious about going through with the transaction.
  • Exporters are advised to always screen their customers. The U.S. government has provided a user-friendly tool to help in the consolidated export screening process.

Do you need help with developing your export compliance manual? Reach out to Mohawk Global Trade Advisors.

By Danielle Passage


What Documents are Required to Qualify for Duty Free Return of Foreign Goods?

Cargo ship with money faded in background

Back on April 25, 2016, Customs announced changes to U.S. tariff number 9801.00.10 that allow for duty free return of foreign goods that are returned within three years of being exported. We previously wrote about this topic here. However, at the time, Customs was unclear as to what documents were mandatory to present at time of entry. They have since updated the requirements in a message sent January 31, 2017.

The following are the documents needed at time of entry for certain items.

  • A Foreign Shipper’s Declaration is required if the U.S. origin or foreign origin goods are valued $2,500 or greater.
  • A manufacturer’s affidavit is required to confirm that the articles were made in the United States. (Applicable to U.S. origin goods only.)
  • One of the following documents will be deemed sufficient proof of export from the United States for both U.S. origin or foreign origin goods:
    • Copy of the entry into the foreign country.
    • U.S. export invoice or bill of lading/airway bill.
    • Electronic Export Information (EEI) or the Automated Export System (AES) filing exemption.
  • A formal entry packet is required, regardless of value, along with the Directorate of Defense Trade Controls (DDTC) Partnership Government Agency (PGA) message set, for U.S. origin goods that were originally exported under a Department of State license that are now being re-imported.

The following are the documents needed at time of entry for aircraft returns.

  • A CBP Form 3311, or its electronic equivalent may be used, as stated in 19 CFR § 10.1, for aircraft and aircraft parts and equipment returned to the United States.
  • A formal entry packet is required if any maintenance is being performed on the aircraft while in the United States.
  • For U.S. manufactured aircraft returning to the United States that were sold to a foreign government under the Foreign Military Sales program, where modifications or enhancements will be made to the aircraft, then the following is required for the import and subsequent export of the aircraft:
    • A formal entry packet.
    • At the time of export, the EEI submission that cites the Directorate of Defense Trade Controls export license (DSP-5).

For assistance with developing processes and procedures for returning foreign goods, contact Mohawk Global Trade Advisors.

By Danielle Passage


Commercial Invoice Checklist: Avoid Miscommunicated Requirements

Customs officer with commercial invoice faded in the background

At last count, your company is sourcing from 35 foreign suppliers, located on five of the seven continents, and the number is growing quickly. With the amount of suppliers increasing, it’s a good idea to create a foreign supplier database that can be used by a number of departments. To gather information for this task, you head to the accounts payable department to pick up some invoices.

What you find stops you in your tracks. The commercial invoices do not have consistent formats. Some invoices indicate Incoterms, whereas others do not. There are even invoices that are completely in Spanish, handwritten, or incomplete.

How can these inconsistencies be corrected to ensure more uniformity? Fortunately, there is a solution—send your suppliers detailed instructions of what is mandatory on the commercial invoice [1]. This may sound simple, but getting the supplier to adhere to the requirements could prove challenging.

Communicating Requirements

Liquidated damages—monetary penalties—can be assessed against an importer for failing to provide a commercial invoice [2]. This can happen if Customs is at your facility performing a formal audit or if they request a hard copy of the commercial invoice for any entry, at any time. A shipment cannot be cleared by Customs without an invoice. Therefore, it is imperative to have a proper commercial invoice to avoid penalties and delays in clearance.

The requirement for an accurate commercial invoice should be incorporated into your import compliance manual and processes. Your procedure ought to include a way to communicate the requirements to the supplier, a process for monitoring the supplier’s paperwork, and a protocol to follow for when the requirements are not met.

While obtaining an invoice for every imported shipment may seem an obvious requirement [3], suppliers often create their own version of the document. This could be in the form of a packing list to which pricing information has been added, a pro-forma invoice [4], or their own invoice template. They may tell you they have “always done it this way;” however, none of the above supplier-created documents are acceptable replacements for a commercial invoice. This is why it is crucial to make the requirements clear to your supplier, which can be communicated in the purchase order, shipping instructions, or sales contract.


While there are few cases where a commercial invoice is not required, at minimum a U.S. importer must still present some sort of confirmation of the value of a shipment. There are also circumstances where invoice requirements may be waived by U.S. Customs, but the process to obtain a waiver is cumbersome and can cause clearance delays.

As a compliance best practice, it is recommended that you require suppliers to provide a commercial invoice for all U.S. import shipments, regardless of exceptions. Advising your suppliers that it might assist in expediting the payment process, could motivate them to comply with this request.

The Importance of Correct Value

The most important requirement to be aware of is reporting the correct value of a shipment at time of entry. It is the importer’s legal responsibility to declare the correct value, classification, and rate of duty [5]. An accurate commercial invoice will help to ensure the correct value is reported to U.S. Customs.

One way to ensure this is to compare the entered value shown on the U.S. Customs entry, against the amount your company paid to the supplier for that specific shipment. Any mistake, damage, overage, shortage, etc. that creates a discrepancy between the amount paid to the supplier—no matter when it’s paid and when it’s discovered—and the amount reported to U.S. Customs, requires that the entry be amended to show the actual value imported. If the two values do not match, corrective action—which may include advising U.S. Customs of the error—is required. Your company may want to contact a Customs attorney to discuss the best approach to this.

You may be wondering why this matters in today’s electronic environment, where hard copy documents are rarely, if ever, presented to U.S. Customs at time of entry. Even with electronic documents, discrepancies between the declared value and the payment amount often remain out of sight, until U.S. Customs arrives for an audit. Should that happen, it will do no good to explain why a system of checks and balances is not in place and why no corrective action has been taken.

The regulations are unmistakable; unless your situation qualifies for an exemption or you wish to pursue a waiver from U.S. Customs, a commercial invoice must be provided in order to be cleared by U.S. Customs. However, an inaccurate or incomplete commercial invoice is one of the most common errors found during a U.S. Customs audit. In order to avoid penalties and fines, importers need to ensure that their commercial invoices, or pro-forma invoices—in certain cases—meet all U.S. Customs requirements. By issuing instructions to suppliers, importers can help ensure the commercial invoice is accurate.

Click here to download our invoice checklist.

We can help you develop or improve your import compliance programs. For guidance on incorporating procedures about commercial invoices into your current compliance program, contact Mohawk Global Trade Advisors at 1-800-996-6429.


[1] See 19 CFR §141.81-141.90 (2017) for commercial invoice requirements.

[2] See 19 CFR § 171 App. B (D)(6) (2017)

[3] Per 19 CFR §141.81 (2017), “A commercial invoice shall be presented for each shipment of merchandise at the time the entry summary is filed.”

[4] A pro-forma invoice is acceptable only in certain circumstances as detailed in 19 CFR § 141.83(d) (2017). Many suppliers mistakenly provide a pro-forma invoice in place of a commercial invoice. Click here to see an example of a pro-forma invoice.

[5] See 19 USC § 1484(a) (2017)

By Adrienne Graddy, Senior Advisor

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©2016 Mohawk Global Trade Advisors


Prepare for New TSCA Reporting Requirements

Toxic sign

Effective March 21, there will be a revised import certification process for commodities subject to the Toxic Substance Control Act (TSCA). The Federal Register announced the upcoming changes on December 27, 2016, found here. The original effective date for these changes was January 26 but was postponed to March 21 per a message in the U. S. Customs Cargo Systems Messaging System (CSMS).

Removing Paper-Based Blanket Reporting

The paper-based blanket reporting requirements, described under 19CFR 12.121(a)(2)(ii), will no longer be effective as information will be submitted electronically with each entry. Previously, importers could provide an annual paper blanket certification to U.S. Customs to cover multiple shipments of the same chemical during a one-year period at one port of entry. Elimination of the paper document supports the continuing effort to reduce paperwork by collecting and processing information electronically.

Importers may wish to provide blanket information to their Customs broker for repeated use on their chemical imports. A TSCA positive or negative statement can be prepared and submitted to your Customs broker for use on each applicable customs entry as needed. At a minimum, this information should be reviewed and updated annually.

Additionally, importers will be required to include three new data elements on their TSCA certifications.

• Certifying individual’s name

• Certifying individual’s phone number

• Certifying individual’s email address

Mandatory Certification Statement

A positive or negative certification statement will be required at time of entry. These statements serve to verify either that the chemical is subject to TSCA and complies will all rules and orders or that it is not subject to TSCA. The language for these are shown below per 19CFR 12.121(a).

TSCA Positive Statement:

“I certify that all chemical substances in this shipment comply with all applicable rules or orders under TSCA and that I am not offering a chemical substance for entry in violation of TSCA or any applicable rule or order under TSCA.”

TSCA Negative Statement:

“I certify that all chemicals in this shipment are not subject to TSCA.”

Need Guidance?

The Environmental Protection Agency (EPA) has advised that it is the importer’s responsibility to determine whether an imported product is subject to TSCA and must be reported at time of entry. They suggest that importers call the TSCA Hotline at 202-554-1404 for assistance and that providing the CAS (Chemical Abstract Service) numbers for your products will expedite the Hotline review process.

If you need help updating your compliance processes or in understanding the TSCA import reporting process, reach out to Adrienne Graddy.


By Adrienne Graddy, Senior Advisor


Responsible Sourcing Tool Added to CBP’s Forced Labor Fact Sheet

Responsible sourcing tool screen

U.S. Customs and Border Protection has revised the Forced Labor Enforcement fact sheet. This fact sheet aims to inform and therefore combat the risks of forced labor within companies’ operations and global supply chains. The update adds a link to the Responsible Sourcing Tool, which can help supply chain owners visualize each country’s risk of child labor and forced labor.

If you need guidance on starting or enhancing a social compliance system for your company, contact Mohawk Global Trade Advisors.


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