The Dos and Don’ts of Import Compliance by Jim Trubits

Trubits is a licensed U.S. Customs Broker and Certified Customs Specialist

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Importing and exporting involves more than choosing what countries to trade with and finding trade partners.  In webinar below and hosted by the New York Small Business Development Center, Jim Trubits, a licensed U.S. Customs Broker, Certified Customs Specialist and Vice President at Mohawk Global Trade Advisors, presents the dos and don’ts of import compliance.  I captured highlights on Jim’s talk (consider it a working outline) so that you can print and take your own notes while you listen.

 The webinar covers the role of a broker, binding rules, documentation, recordkeeping, and further best practices. 

View the webinar, Dos and Don’ts of Import Compliance:
https://www.youtube.com/watch?v=E45HK4KP5Ds

Your Customs Broker

  • Advises on import regulations
  • Prepares docs for customs entry
  • Uses U.S. harmonized tariff system
  • Can accept service of process on your behalf

When is reasonable care required?

How have you marked your goods?

8 Steps to Compliance

  1. Tariff classification
  2. Valuation
  3. Free trade agreements
  4. Marking
  5. Other agencies
  6. Documentation
  7. Recordkeeping
  8. Procedures

U.S. Harmonized Tariff Schedule

  • Classify product -> HTSUS code
  • HTSUS code -> duty rate
  • Binding Rulings – Best Tool for Compliance

Method of Valuation

  • Transaction value
  • Deductive value
  • Computed value
  • Value if other values cannot be determined

Common Valuation Pitfalls

  • Related parties
  • Non-dutiable charges
  • Assists
  • Selling Commissions
  • Repairs
  • Royalties/licensing payments
  • Returns

Free Trade Agreements (FTAs)

Your goods must:

Qualify before making claim
Have FTA declaration/NAFTA certificate to qualify

Import Marking
(19 CFR 134.11)

  • Conspicuous place
  • Legible
  • Indelibly and permanent
  • Indicates origin to ultimate purchaser in the U.S.
  • Includes name of country of origin

Example of Bad Marking

“Product of U.S.A.

or Mexico or Brazil or Czech Republic or China or Indonesia.  Packaged in the U.S.A.”

Documentation

What you need to know.

Customs Invoice Errors

Make sure you are not missing these nine items:

  1. Country of origin
  2. Incoterm
  3. Tariff number
  4. Value
  5. CBP ruling number
  6. Piece count
  7. Ultimate consignee number
  8. Government agency docs
  9. Description of goods

You might also re-read:  A 10-Point Checklist to Expedite Clearance of Goods on Imports

Recordkeeping

Make sure your records are as clean as possible.  Meaning, make sure you are not missing any of the above items and keep a paper trail on everything you do.

What’s a Customs Bond?

A guarantee (like an insurance policy) to ensure all financial/regulatory obligations will be met.

An importer may buy a single transaction or an annual continuous bond.

Do I Need An Import Compliance Manual?

CBP Enforcer of 40+ Agencies!

Whether it is an agency such as Aphis, FDA or Environmental Protection Agency, all protect your best interests on an import.

How Far in Advance Does Customs Want My Cargo Manifest Data?

It depends on the commodity but here’s a typical example:

By ship:  24 hours before arrival.
By air:  4 hours
By train:  2 hours
By truck:  2 hours 

*Allow at least 2-5 hours extra for your broker.

How Soon Should I Send Prior Notice of Imported Foods to the FDA?

By ship:  8 hours before arrival
By air:  4 hours
By train:  4 hours
By truck:  2 hours

*Prior notice should not be sent to the FDA more than 30 days if submitted via ABI or 15 days via PNSI in advance of arrival.

If you don’t do what is required, customs will hold the shipment!

Best Practices

FDA – before importing:

  • Product labeling
  • Registration of Food Facilities
  • Appointing a US Agent
  • Determine FDA Product Code, Affirmations of Compliance
  • Transmit the Prior Notice

FDA – post importing:

  • If subject to FDA review, hold intact
  • May proceed – obtain proof from customs broker
  • Retain records

USDA – before importing

  • Determine if the product is admissible
  • Do I need an import permit?
  • Do I meet the labeling requirements?
  • Do I have the proper docs for inspection?

    USDA – post importing

    • Obtain proof from customs broker that goods are cleared
    • Retain records

    Final slide

    Jim explains what this means.

    CONDUCT
    Post-entry audits
    DISCLOSE
    Post-entry

    Remember, each company is individually responsible for ensuring its import/export activities are in compliance with all U.S. Government and foreign nations' laws and procedures.  Questions?  Email Jim at jtrubits@mohawkglobal.com.

    Photo Credit: Cineastes 1:1