§ 221. Levy and rates.
§ 222. Exemptions.
§ 223. Basis of import duty.
§ 224. Lien on imported goods.
§ 225. Personal liability of importer.
§ 226. Lien on importer’s property.
§ 227. Civil penalties and interest.
The following import duties are hereby levied on all products specified herein which are imported into the FSM:
(1) cigarettes, at the rate of $0.025 per cigarette, provided that this rate shall increase by $0.005 per cigarette on January 1 of each of the years 2007, 2009, 2011, 2013 and 2015;
(2) tobacco, other than cigarettes, at the rate of 50 percent ad valorem;
(3) perfumery, cosmetics, and toiletries, including cologne and other toilet waters, articles of perfumery, whether in sachets or otherwise, and all preparations used as applications to the hair or skin, lipsticks, pomades, powders, and other toilet preparations not having medicinal properties, at the rate of 25 percent ad valorem;
(4) soft drinks, drink mixes, drink preparations, coffee, tea, and nonalcoholic beverages, at the rate of 25 percent ad valorem, provided, however, that any beverage having a fruit juice content of 25 percent or more by volume shall be at the rate of three percent ad valorem;
(5) beer and malt beverages, at the rate of $0.25 per 12 fluid ounces;
(6) distilled alcoholic beverages, at the rate of 12 dollars per gallon;
(7) wine at the rate of 30 percent ad valorem;
(8) foodstuffs for human consumption, at the rate of three percent ad valorem; provided, however, that fresh and frozen fish and seafood, shall be at the rate of 25 percent ad valorem;
(9) gasoline and diesel fuel, at the rate of five cents per gallon;
(10) laundry bar soap, at the rate of 25 percent ad valorem; and
(11) all other imported products, except those specified above, at the rate of four percent ad valorem.
(1) Damaged, pillaged or faulty goods. Upon receipt of a written request within 28 days of the goods' release from Customs control, the Secretary may authorize a refund of the whole or part of the duty paid, where any of the following conditions exist:
(a) goods have been damaged, pillaged, lost or destroyed during the voyage;
(b) goods have, while subject to the control of Customs, been damaged, pillaged, lost or destroyed; or
(c) the Commissioner is satisfied that, owing to a fault or defect in any goods, the importer has received a reduction or a refund, in whole or part, of the price paid for the goods.
(2) Goods imported for subsequent export.
(a) Upon application to and approval by the Secretary, import duty paid on the following goods shall be refunded: goods imported for processing in the FSM, not otherwise used in the FSM, and subsequently exported from the FSM. For purposes of this subsection, raw materials or ingredients which are worked into or otherwise become part of a different or more finished product are deemed exported when that product is exported.
(b) Goods imported for processing are eligible for the duty refund when the finished products which the imported goods were processed into have been loaded on an aircraft or vessel for direct removal from the FSM and that aircraft or vessel has departed from the port. After they have been so loaded, the goods shall again be subject to import duty if they are unloaded or used in the FSM. With respect to importers primarily engaged in importing for processing and subsequent export, the Secretary shall provide for waiving, by regulation rather than collecting and subsequently refunding, duties.
(c) Upon application to and approval by the Secretary, import duty shall be waived on the following goods: goods imported for transshipment through the FSM, not to be used in the FSM, which are securely stored while in the FSM and which are exported from the FSM within a reasonable time of import to the FSM, as defined by regulation. Should these goods not be exported within a reasonable time, the importer will be subject to a penalty equal to one-quarter of the import duty that would have been due if the goods were to be used in the FSM. Should these goods be removed from the secure storage facility or used in the FSM, they will be subject to the full import duty.
(d) The burden of proving that goods imported are for subsequent export shall be upon the importer/exporter as specified in regulations.
(3) Goods carried in per trip abroad. Each time an individual person enters or returns to the FSM from a foreign jurisdiction, he or she is entitled to bring into the FSM the following goods duty free, provided that such goods are for that person’s own personal use or consumption and not for resale or exchange, and provided further that such person is permitted by applicable State law to possess, use, and consume such goods:
(a) up to 200 cigarettes;
(b) up to one pound of tobacco or 20 cigars;
(c) up to 52 fluid ounces or 1500 milliliters of distilled alcoholic beverages; and
(d) up to two hundred dollars ($200) worth of goods other than tobacco products, beer and malt beverages, distilled alcoholic beverages, and wine.
(4) Visitors’ personal effects. A visitor to the FSM may import bona fide personal effects into the FSM duty free, provided the goods are for the visitor’s own personal use and will be taken with the visitor when he or she leaves the country.
(5) Returning goods. Goods produced or properly entered in the FSM which are subsequently removed from the FSM may be returned to the FSM duty free. The burden shall be on the owner of the goods to establish that the goods were either produced in the FSM or previously and properly entered.
(6) Goods used in foreign aid projects. An international organization, foreign contractor, or other foreign entity may import goods into the FSM duty free in connection with the performance of services or other conduct of business in furtherance of a foreign aid agreement entered into by the FSM, the terms of which require that such import shall not be subject to taxation by the FSM; provided that if and when such goods are subsequently sold in the FSM, import duty shall be due based on the sale amount. The duty, together with penalties and interest, shall be the joint and several personal liability of the importer and the purchaser and shall be secured by first liens on the goods and on the importer’s property as hereinafter provided.
(7) Certain fishing vessels and equipment. Fishing vessels basing in the Federated States of Micronesia under a valid permit or license issued pursuant to title 24 of this code shall not be subject to the import duty on either the vessel or equipment installed in the vessel. This exemption shall apply to replacement parts and equipment imported by these fishing vessels as well.
(8) Parcels which would generate a de minimis duty. Parcels mailed or otherwise sent into the FSM, which would otherwise generate a de minimis duty, shall be exempt from import duty, provided that such goods are for the recipient's own personal use or consumption and not for resale or exchange. Parcels with values up to the amount specified in subsection (3)(d) of this section, shall be exempt.
(9) Health, education and welfare related goods donated for humanitarian use. Upon application to and approval by the Secretary, the import duty on goods related to health, education or welfare donated without cost for humanitarian purposes, and not for resale, shall be waived or refunded; provided, however, that if and when any of such goods are subsequently sold in the FSM, import duty shall be due based on the sale amount. The duty, together with penalties and interest, shall be the joint and several personal liability of the importer and the purchaser and shall be secured by first liens on the goods and on the importer's property as hereinafter provided.
(1) For purposes of determining the basis of import duties levied by this subchapter, the term “ad valorem” shall mean the CIF price of the subject item.
(2) If the Customs officer can reasonably determine the CIF price of imported goods, the import duty shall be payable on the CIF price.
(3) If the Customs officer cannot reasonably determine the CIF price of imported goods, the value for payment of duty shall be determined by the first of the following methods which is reasonably available to the Customs officer:
(a) FOB price plus actual insurance, freight, and other charges from the FOB location to the CIF location;
(b) The value of identical goods at the CIF location; or
(c) The value of identical goods at an earlier point plus actual insurance, freight, and other charges from that point to the CIF location.
(4) If the Customs officer cannot determine the CIF price or its equivalent through one of the foregoing methods, the value for payment of duty shall be determined by the appraisement, the cost of which shall be borne by the owner.
(5) No deduction of any kind shall be allowed from the CIF amount because of any special or sample discount, or on account of any other consideration by which a special reduction in price has been or might be obtained.
(6) Where there is a relationship between the buyer and seller of imported goods the consignee may be required to provide reasonable proof that the relationship did not influence the price paid or payable for the goods.
(a) To demonstrate the acceptability of the price paid or payable for the goods, the consignee shall supply to Customs details of:
(i) The way in which the buyer and seller organize their commercial relationship;
(ii) The way in which the price in question was arrived at; and
(iii) The price of identical merchandise, or similar merchandise, in sales to unrelated buyers in the FSM.
(b) Where Customs officials determine that the relationship has influenced the price paid or payable the CIF shall be determined by appraisement, the cost of which shall be borne by the owner.
(7) If the value of imported goods is stated in a currency other than that of the FSM, then the basis of the import tax of such goods shall be calculated according to the ruling rate of exchange at the date of export of the goods.
All duties imposed on goods under this chapter, together with any penalties and interest thereon, shall constitute a lien on those goods having priority over all other claims and liens, except as provided in the Secured Transactions Act, and may be collected by levy upon those goods in the same manner as the levy of an execution.
If any imported goods are removed, whether legally or illegally, from the dock, airport, or post office before payment of the full and correct duties thereon, the importer of the goods shall be personally liable for the payment of any duties not so paid, together with any penalties and interest thereon. If there is more than one importer, all such importers shall be jointly and severally liable.
The personal liability of an importer provided for in this chapter shall be secured by a lien on any personal property of that importer, having priority over all other claims and liens, except as provided in the Secured Transactions Act, and with the exception of liens imposed pursuant to subsection (2) of section 135 of this title, and may be collected by levy upon such property in the same manner as the levy of an execution.
The following penalties and interest shall be separate from and in addition to the criminal penalties imposed elsewhere in this chapter. It is the duty of an importer to know and declare, fully and accurately, the types, quantities, and values of all dutiable goods which he or she imports, and civil penalties and interest may not be avoided through lack of knowledge, however innocent such lack of knowledge may be.
(1) Understatement. If the amount of duty due on goods is understated when reasonably calculated on the basis of the documentary and other information provided to Customs officers, there shall be added to the amount of the understatement a penalty equal to the following percentage of the amount of the understatement:
(a) 100% if the understatement is discovered by Customs officials before release of the goods;
(b) 100% if the understatement is discovered and reported to Customs by an importer or owner and the full and correct duty, including penalties and interest, is paid within ten days after release of the goods; or
(c) 200% otherwise.
(2) Late payment. Unless goods are entered and the duty thereon is paid within the time limit for entry established in section 238 of this chapter, there shall be added to the amount of duty due five percent of the duty if the failure is for not more than one month, with an additional five percent for each additional month or fraction thereof during which such failure continues, not to exceed 100% in the aggregate.
(3) Interest. Any duty which is not paid before the earlier of the time limit for entry or release of the goods shall thereafter bear interest at the rate of 18% per annum until paid.