Duty

Summary of Duty

A tax imposed by governmental authority on goods imported. The amount of the duty imposed on any given article is prescribed in the nation’s ‘customs tariff. There are several types of duties, the most common of which is the ordinary duty. Ordinary duties may be imposed in any of three forms: (1) ad valorem duties, which are assessed as a percentage of the value of the goods, e.g., 5 percent ad valorem; (2) specific duties, which are imposed on a per unit basis, e.g., ten cents per pound, one dollar per barrel; and (3) compound duties, those that incorporate features of both ad valorem and specific duties, e.g., fifty cents per gallon and 3 percent ad valorem. Most duties, particularly those on manufactured goods, are assessed on the ad valorem basis.

Duties are imposed for a variety of reasons. In the case of industrial countries, duties serve as a source of government revenue, albeit a small percentage; as a practical matter, the purpose of customs duties is to control imports through the price mechanism. For example, industrialized nations frequently use compound duties on manufactured goods containing raw materials that would themselves be dutiable; in such cases, the ad valorem portion of the compound duty protects the domestic finished goods industry, while the specific duty portion protects the domestic raw materials industry.

Each nation, individually or in conjunction with other nations, publishes a tariff containing voluminous listings of products and prescribing a rate of duty for each product. Normally, the content of the tariff is prescribed by statute, and the duties so prescribed are said to be statutory duties. It should be recognized that nations will “retaliate”for the imposition of duties upon their products by imposing or increasing duties upon the products of the nation that seeks to protect itself behind a tariff wall. Over time, it becomes apparent to most nations that protectionism impedes their own export trade and breeds inefficiency into domestic industry not challenged by import competition. As a result, over the past fifty years, and particularly since the end of World War II, many nations have sought to remove barriers to trade, consistent with the protection of essential national industries and compelling internal political circumstances. Most nations have empowered their executive authority to engage in multinational trade agreements whereby tariff reductions are offered in return for reciprocal concessions from other trading nations. For this reason, most nations have at least two rates of duty: the statutory rate, and a lower concessional rate offered to those who have granted concessions in their own tariffs. In the case of the United States, the statutory rates are found in Column 1 of the tariff schedules. A uniform, lower rate is granted to nations with which the United States has negotiated reciprocal concessions; such nations are classed as most favored nations, and the duties applicable to imports from these countries are embraced in Column 2 of the tariff schedules. In addition to the most favored nation rates, most advanced countries have offered special, nonreciprocal concessions to developing nations as an impetus to their economic growth. The most comprehensive program of nonreciprocal concessions is duties are eliminated or reduced in accordance with the Generalized System Of Preferences (read this and related legal terms for further details), as advanced under the auspices of the General Agreement on Tariffs and Trade (read about the GATT for further details).

In addition to ordinary duties imposed on all merchandise of a particular type or class, special additional duties may be imposed upon certain imports under specified condition. The most common forms of such duties are antidumping duties, imposed to correct the distorting effects of Dumping (read this and related legal terms for further details), i.e., sales at less than fair market value; Countervailing Duties (read this legal term for further details), levied to compensate for subsidies provided to the foreign supplier by his government as an incentive to export; and marking duties, an additional duty at the rate of 10 percent ad valorem imposed on merchandise that is not properly marked as to country of origin.

In addition to customs duties, some products are subject to excise taxes, collected by the Customs Service on behalf of the Internal Revenue Service. The excise taxes so imposed are not unique to imports but are also collected on domestic products of the same type or class, such as liquor.

In some countries, duties are imposed upon some exports as well as imports. Export duties are employed only by developing countries on certain commodities in which they are a dominant supplier. The purpose of these duties is to raise revenue for the government. The U.S. Constitution prohibits the collection of export duties.

See Reciprocal Trade Agreements Program, Smoot-Hawley Act, Tariff (Customs). A table of U.S. excise taxes can be found here.

(Main Author: William J. Miller)

The Legal History of Doing What Ought Not to Be Done

This section provides an overview of Doing What Ought Not to Be Done

Duty in International Trade

Meaning of Duty, according to the Dictionary of International Trade (Global Negotiator): In customs, a tax levied by government on the import, export or consumption of goods. Usually a tax imposed on imports by the customs authority of a country. Duties are generally based on the value of the goods (ad valorem duties), some other factors such as weight or quantity (specific duties) or a combination of value and other factors (compound duties).

Resources

See Also

• Legal Biography
• Legal Traditions
• Historical Laws
• History of Law

Further Reading

• Doing What Ought Not to Be Done in the Oxford International Encyclopedia of Legal History (Oxford University Press)
• The Oxford Encyclopedia of American Political and Legal History (Oxford University Press)
• Doing What Ought Not to Be Done in the Dictionary of Concepts in History, by Harry Ritter
• A Short History of Western Legal Theory, by John Kelly

The Legal History of Duty (Far_)

This section provides an overview of Duty (Far_)

Resources

See Also

• Legal Biography
• Legal Traditions
• Historical Laws
• History of Law

Further Reading

• Duty (Far_) in the Oxford International Encyclopedia of Legal History (Oxford University Press)
• The Oxford Encyclopedia of American Political and Legal History (Oxford University Press)
• Duty (Far_) in the Dictionary of Concepts in History, by Harry Ritter
• A Short History of Western Legal Theory, by John Kelly

Duty in Constitutional Law

From the Comparative Constitutions Project: Duties refer to obligations or requirements of the state or citizens. For example, in most corporatist countries, citizens have a duty to join trade unions. However, in many countries, citizens have right to form and join trade unions. The duty in coporatist countries means that these citizens must join them, but the right in these other countries means that the state and/or other citizens may not encumber their ability to join these, not that citizens have to join.

Duty of Disclosure in E.U. Patent System

This is a requirement imposed on all persons involved with the patenting process to disclosure information (patents, articles, laboratory data etc.) to the patent examiner that may affect the granting of a patent.

Duty and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Duty: A tax imposed on imports or exports. Duties can be “ad valorem” (applied as a percentage of value), “specific” (applied on a quantitative basis, such as dollars per ton), or “compound” (a combination of both). See also tariff

Duty drawback

Duty Laws

Resources

See Also

Further Reading

• Information about Duty in the Encyclopedia of World Trade: from Ancient Times to the Present (Cynthia Clark Northrup)

Duty and the Laws of International Trade

Duty-saving options

Customs Trade Law