Maintaining your compliance with US Customs and Border Protection can seem daunting, especially if you are new to the international trade industry. But you are not alone, even seasoned professionals in the industry are constantly refining their knowledge and approach to Customs compliance.
To help you get started, you can use the following tips as a guide to ensure you are compliant with US Customs.
Know Your Product
This may seem like a no-brainer, but the best place to start when it comes to compliance is to have a thorough knowledge of the products you plan to import. For example, some questions to consider when choosing products to import are:
- Are the goods subject to any regulations of our partner government agencies?
- Are there any free trade agreements in place that these goods fall under?
- Are these goods likely to be subject to Abandonment/Rejection?
- Is forced labor used in the production of this product?
Make sure you are using the correct HTSUS
Misclassification is a very common issue for importers and can result in a company owing more money to US Customs if an additional duty bill is issued. While importers will often rely on their US Customs Broker to classify their goods with the correct HTSUS code, you should be sure to review the meaning of that code internally. Harmonized Tax Schedule.
Ultimately, the seller importing goods into the US is responsible for properly classifying their goods and is responsible for any penalties resulting from improper classification. You can ask for a binding decision from US Customs if you are not sure how an item should be classified.
Check Your Provider
Before choosing an overseas supplier, you should thoroughly analyze the supplier’s business. You should also request samples of your goods before importing them.
Anti-Dumping/Countervailing can also be manufacturer specific, so be sure to check ahead of time if this is the case with your chosen supplier. If that provider is charging less than their competition in their country, rejection and/or conflict may be the reason.
Label Correct Country of Origin
Be sure to use the correct label when declaring the country of origin of your goods. Remember, this is the country where the goods were built, raised, or produced and not necessarily the country you are importing directly from. If you are importing goods from a supplier in India, but the goods were manufactured in China, the country of origin is China.
Keep Records Proving You Used Reasonable Care
Keeping records of your entry into the US can be very helpful if and when US Customs requires additional documentation as part of your import procedures. The general recommendation is to keep documents on file for a minimum of 5 years, but, if possible, the company should establish a plan to keep at least a summary of each entry entered on file permanently.
Records kept on file must demonstrate that your company has exercised reasonable care in its dealings with US Customs. Reasonable care is not defined specifically by CBP because it is ultimately up to them what reasonable care looks like in a particular situation. This is why it is better for the consumer to keep their own records and not rely on an external service provider to maintain the records.
Have a Written Import Compliance Plan
Having a formal import compliance program in place for your company will help ensure that your internal team works as a unit and is aware of the risks associated with importing into the United States. Conducting a meaningful risk analysis should be part of this process, and the appropriate senior executives responsible for overseeing the import compliance program within your company should be involved.
Make sure your address is always up to date
Notices from US Customs are sent to your company via the US Postal Service. Therefore, having the correct address on file with Customs ensures that you will receive any and all correspondence that CBP sends regarding your entry. Also, if a piece of mail is returned to CBP because your address is incorrect, they will consider your bond insufficient, preventing you from making any entries until it is corrected.
Clearly Identify Internal Responsibility
At some point during your import journey, you will receive a letter from CBP regarding an entry you made or a claim issued. It is important to have a process in place for how to handle these and, perhaps most importantly, who is responsible for handling these notifications within your company.
Notices from CBP are usually addressed to the company as a whole and do not include a named person in the address. This can lead to important notices being lost in the mail room or on someone’s desk if it is not clear who should receive them inside.
Respond to Tax Correspondence Promptly
If you receive a CF-28, CF-29, or any claim on your US Customs Bond, you must act immediately. Regular communication with CBP can be time-consuming so starting the process as soon as possible will help ensure you stay in compliance and many times it can cost your company less money in the long run.
Have a U.S. Property Bond in Place with Adequate Bond Value
Having a Adequate US Customs Bond in the file is a necessary part of the import process. If your bond is deemed insufficient by CBP, they will give you a limited amount of time to post a bond with an adequate bond amount before completely barring you from importing unless this requirement is met.
The best way to ensure that you meet this requirement work with the bond provider which communicates clearly about the bond and tracks the adequacy of your bond over time. Monitoring your bond adequacy throughout the year can help you avoid the stress of receiving a deficiency letter.
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