Maintaining your compliance with US Customs and Border Protection can seem overwhelming, especially if you are new to international trade. But you are not alone, even seasoned industry professionals are constantly improving their knowledge and approach to customs compliance.
To help you get started, use the following tips as a guide to ensure you are in compliance 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 with 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 regulations from partner country authorities?
- Are there any free trade agreements in place that these goods fall under?
- Are the goods possibly subject to anti-dumping/countervailing duties?
- Is forced labor used in the production of this item?
Verify that you are using the correct HTSUS
Misclassification is a very common problem for importers and can result in a company owing additional money to US Customs if a supplemental customs bill is issued. While importers will typically rely on their US customs broker to classify their goods with the correct HTSUS code, you should be sure to review the description of this code in Harmonized tariff plan.
Ultimately, the importer bringing the goods into the United States is responsible for correctly classifying their goods and is liable for any penalties arising from misclassification. You can request one binding decision by US Customs if you are unsure how an item should be classified.
Kill your supplier
Before choosing an overseas supplier, you should conduct a thorough analysis of this supplier’s business. You should also request samples of your item before import.
Anti-dumping/countervailing may also be manufacturer specific, so be sure to check in advance if this is the case with your chosen supplier. If this supplier charges less than their competitors in their country, anti-dumping and/or countervailing may be the cause.
Marking of the correct country of origin
Make sure you use the correct labeling when indicating the country of origin of your goods. Remember that this is the country where the item was made, raised or produced, which is not always the country you are directly importing from. If you import the item from a supplier in India, but the item was originally produced in China, the country of origin is China.
Keep records that prove you exercised reasonable care
Keeping your own records of your entries into the US can be very helpful if and when US Customs requires additional documentation for any part of your importation practices. The general recommendation is that documents are kept for a minimum of 5 years, but if possible, a company should establish a system to keep at least the entry summary for each entry indefinitely.
The records kept on file must demonstrate that your company has exercised reasonable care in its dealings with US Customs. Reasonable care is not directly defined by CBP because it is ultimately up to them what reasonable care looks like in a given situation. This is why it is best for an importer to keep their own records and not rely on an external service provider for registration.
Have a written import compliance program
Having a formal written import compliance program outlined 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 relevant senior officials responsible for overseeing the import compliance program in your company should be involved.
Make sure your address is always up to date
Notices from US Customs are sent to your business via the US Postal Service. So having the correct address on file with Customs ensures that you will receive all correspondence that CBP sends regarding your entries. 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 this is corrected.
Clearly identify internal responsibilities
At some point in your import journey, you will receive correspondence from CBP regarding an entry you have made or a claim that has been 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 postings in your company.
Notices from CBP typically arrive addressed to the business as a whole and do not include a named individual in the address. This can lead to important messages getting lost in a mailroom or on someone else’s desk if it is not clear who should receive them internally.
Respond quickly to customs correspondence
If you receive a CF-28, CF-29, or any claim on your US Customs Bond, you must act immediately. Communicating back and forth with CBP can take time, so getting the process started as soon as possible will help ensure you maintain your compliance and can often result in your business costing less money over time.
Have a US Customs Bond in place with a sufficient bond amount
To have one sufficient US customs bond on file is a required part of the import process. If your bond is deemed insufficient by CBP, they will give you a limited time frame to post a bond with a sufficient bond amount before completely stopping you from importing if this requirement is not met.
The best way to ensure that you meet this requirement is to work with a bond provider that clearly communicates about the bond and tracks your bond adequacy over time. Monitoring your bond adequacy throughout the year can help you avoid the stress of receiving an insufficiency letter.
