Customs and International Trade: Savings opportunities

Continued downward economic pressures and general market uncertainty are reducing available working capital. Amounts spent on Customs duty are often "hidden" from management’s direct view and, therefore, perceived to be difficult to manage. These duty costs are generally captured in the "cost of goods sold" number — typically the second-largest number in the income statement — which means they are not visible as a unique cost element.

Our customs & international trade professionals stand ready to help your company with compliance, classification and potential free-trade-agreement benefits. Contact one of our professionals to find out more.

Valuation planning & first sale for export. The value of imported goods declared by an importer impacts the amount of duties paid. PwC can help your company explore strategies to reduce the customs value of your imported goods and analyze your ability to utilize first-sale valuation methods to lower your overall duties paid.

Foreign trade zone (FTZ). Companies importing goods into the US incur an immediate duty cost as goods cross the border. Duty deferral provides immediate cash-flow and time-value benefits for a company. In addition, companies manufacturing in a FTZ may be able to obtain reduced duty rates on imported goods. PwC can assess the cost/benefit of an FTZ for your company, and help in the implementation/maintenance of a FTZ to capture these benefits.

Duty drawback. Companies that export goods which are unused, further manufactured in the US, or destroyed under customs supervision, may obtain a refund of 99% of duties paid on the imported materials through Duty Drawback. PwC can help you develop an effective drawback program to take advantage of these refund opportunities.

Classification re-engineering. Our classification team can review your company’s existing classification database for compliance purposes, or for opportunities for retroactive and/or proactive duty savings.

Origin compliance manager (OCM). To take maximum advantage of the commercial benefits of free trade agreements, your company must provide support documentation to both customers and tax authorities. PwC's OCM tool is designed to help you provide accurate, efficient, and reliable application of origin rules, and to make collection and maintenance of supplier information manageable for verification purposes.

Free trade agreements — NAFTA, GSP, etc. When a company is making supply chain planning decisions, product/material sourcing may significantly impact the amount of duties paid in the US. PwC can help your company establish a proficient supply chain strategy that incorporates all available free trade agreement savings opportunities.