April 2023 — Question 5
What would be the correct amount of duty for a warehouse withdrawal of 8,000 kilograms of cheddar cheese for which Headquarters Quota has notified the broker that only 5,000 kilograms remains eligible for entry under the quota?
- A$0.00
- B$4,089.60✓ CBP's answer
- C$6,816.00
- D$10,905.60
- E$27,837.96
Why this answer
Quota-class merchandise may be withdrawn from warehouse at the in-quota rate only up to the quantity Headquarters Quota reports as available, so just 5,000 of the 8,000 kilograms can come out under Additional U.S. Note 18, with the balance remaining in the warehouse. Under the edition tested, in-quota cheddar of subheading 0406.90.08 carries a 12 percent rate, and the keyed $4,089.60 is 12 percent of the entered value of the eligible 5,000 kilograms. Options C and D are built on a wrong 20 percent rate, and D also computes duty on the full 8,000 kilograms as though the quota balance imposed no limit. Watch for: Applying the duty rate to all 8,000 kilograms despite the 5,000-kilogram quota balance.
Original CBLE Simulator explanation — the question and key above are CBP's; this analysis is ours. Verify against the current edition before relying on it in practice.
CBP's cited authority
Answer and citations as published in CBP's official answer key for the April 2023 examination.
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