In the post-9/11 environment in which we all now live and operate, the push from the U.S. government has been to obtain more details about shipments earlier in the process. The government in general and Customs and Border Protection in particular also have moved away from simply letting companies know that mistakes have been made toward imposing serious penalties of greater size and much more quickly. As a result, many more shipments are being inspected and detained than ever. With the current just-in-time delivery environment in which international traders now routinely operate, companies cannot afford to have shipments delayed, even if they are later released. Try explaining to a customer why Customs’ inquiry is not well-founded when it takes several weeks to resolve!
The suggestions below cannot guarantee your dealings with Customs will be problem-free, but if you follow them, you will at least be ready for those problems should they arise.
1. Know your product.
It is no longer enough to concentrate on only the financial aspects of your transaction. To make sure you do not run into delays, you need to make sure whether those goods have someone else’s trademark or copyright on them and, if so, that proper authorizations are in hand. You also need to know what it will cost you to get those goods imported and that you are dealing with reliable business partners. The remaining tips are intended to help you in these areas.
2. Know your business partners.
One of the best things you can do to minimize problems with CBP is to join the Customs-Trade Partnership Against Terrorism. It allows you a structure to work with your business partners to carefully manage your supply chain. For more details, see http://www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/ctpat/http://www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/ctpat/. C-TPAT is designed to enhance supply-chain security, but a closer working relationship with your business partners can only have positive effects.
3. Screen your business partners.
What do you know about your business partners? Meeting someone at a trade show who claims to be able to fill your order is not enough. How do you know the goods you order will be delivered on time, intact and at the agreed upon price? Unless you perform due diligence on your business partners, you cannot be sure they are reliable. The same is true for your service providers and transportation companies. Each segment of the supply chain has its indicia of reliability. Come to know them sooner rather than later.
4. Know the regulatory requirements.
How have you made sure that the value of your commercial deal meets Customs’ value requirements? How can you properly cost your resale deal if you have not figured out the duty rate that applies to your imported goods? Are you eligible to take advantage of a free-trade agreement? If so, do you know the basic requirements and how to document them? Do you know your record-keeping obligations?
5. Are your goods legally marked?
The law requires that each imported good have its country of origin legibly, indelibly and permanently affixed on the good and its outer packaging. Are your goods marked that way? Do they state a U.S. address and, if so, has that been factored into the marking? Does an exception apply? Do you have someone else’s trademark or copyright on your goods? If so, do you have proper written authorization to use that mark?
6. Does anti-dumping or countervailing duty apply to your goods?
Have you checked the CBP www.customs.ustreas.gov/xp/cgov/import/add_cvd/), International Trade Commission (www.usitc.gov/trade_remedy/731_ad_701_cvd/index.htm) and International Trade Administration (http://trade.gov/ia/index.asp) Web sites to ensure that antidumping and/or countervailing duties have not been imposed on the goods being exported to you? If not, you could be in for a major shock. These duties are imposed on top of what is provided for in the Harmonized Tariff Schedule (www.usitc.gov/tata/hts/) and can sometimes involve staggering numbers, often well in excess of 100 percent!
7. Can other agencies stop your imports?
Are there other federal and/or state agencies with jurisdiction over the importation or transportation of your goods? Have you identified them and complied with their requirements?
8. Do any terms and conditions apply?
In the air and ocean environment, there are internationally agreed upon limits of liability. Do you know them and the other usual terms and conditions that transport companies apply? Have you insured your shipment? Have you read your commercial and transportation documents and your insurance policy? Have you checked the terms and conditions that your broker, forwarder, NVOCC and trucker impose? Have you properly documented your loss and reported it timely?
9. Do you communicate regularly with your business partners?
Do you know why your suppliers have encountered problems shipping your goods on time, if that is the case? Are they having trouble with their subcontractors or suppliers? Have the materials or parts used to make your goods changed? Have you figured out the impact of the peak season on getting your goods to market timely? Do you know the changes your business partners are planning? Have you told them what you are planning to do in the future?
10. Keep up-to-date.
With the advent of the widespread use of the Internet and presentations in the form of webinars, it is just a matter of making the time to find out the latest information about those factors important to your business. If a new court case has decided an important fact, such as the classification and duty rate that applies to your goods, wouldn’t you want to know if your cost is rising or falling? Wouldn’t you want to know about regulatory changes with which you will need to comply? As things change so rapidly, now, more than ever, it is critical for international traders to stay up-to-date about the changes affecting their bottom lines and not just where and when you may order goods.
Every transaction has different factors or considerations to it. These tips are intended to mention some of the most important ones that are typical to a vast array of transactions. These are also the ones most likely to take money out of your pocket if you have not planned properly. There is no way to fully explain the ins and outs of importing in this short an article, so the best tip of all is make sure you have good advisers around you. Following a competent and energetic staff, they are your best resource for success!