DHL GLOBAL FORWARDING

HOW TO SUCCESSFULLY IMPORT GOODS INTO THE USA guide to avoiding common entry errors and ensuring compliance with US Customs Border Protection

WHY SHOULD I IMPORT INTO THE US?There is huge demand for importing goods into the US. In 2013, $2.273 trillion worth of goods were imported.

Key imports included agricultural products, industrial supplies, capital goods (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery) and consumer goods (automobiles, clothing, medicines, furniture, toys).

However, every year thousands of importers unnecessarily delay their entries into the US. This is because they make mistakes and are not compliant to US Customs Border Protection (CBP) and Other Government Agencies (OGA).

WHAT ARE THE CONSEQUENCES OF NONCOMPLIANCE WHEN IMPORTING?

If you do not adhere to US CBP regulations when importing freight into the US, you risk incurring:

Delays in clearance and delivery

(resulting in customer dissatisfaction)

1

Increased scrutiny

by US CBP and OGA

2

Storage / detention

fees

3

Additional administrative

costs, duties, and interest charges

4Penalties and

liquidated damages: Negligence

Gross negligence Fraud Other

5

To avoid common entry errors as an importer, you will need to:

Understand the responsibilities of

being an Importer of Record (IOR)

1

Declare correct values on

Customs entry

2

Declare the correct country of origin

and ensure marking requirements are

followed

3

Use the correct HTS

classifications for imported

products

4Understand

how Free Trade Agreement

regulations relate to your import

5

Correctly follow the post-entry

procedures

6

LET’S TAKE THESE ONE STEP AT A TIME…

Post-Entry ProceduresFTA RegulationsHTS ClassificationCountry of OriginRequirements

Declaring Correct ValuesIOR Responsibilities

An Importer of Record (IOR) must:

• Work with a compliant Customs broker

• Ensure the imported goods comply with all laws and regulations

• File completed entries and related documents for each import

• Pay assessed import duties and other taxes

As an importer, you must also fulfill Importer Bond Responsibilities and use Reasonable Care as required by the MOD Act.

TOP TIP: Develop an internal compliance program

to manage your import process!

WHAT ARE MY RESPONSIBILITIES AS AN IMPORTER?

Post-Entry ProceduresFTA RegulationsHTS ClassificationCountry of OriginRequirements

Declaring Correct ValuesIOR Responsibilities

WHAT ARE IMPORTER BOND RESPONSIBILITIES?

To fulfill the Importer Bond Responsibilities, the Importer must agree to:

• Pay duties, taxes, and charges

• Make or complete entry

• Produce all required documents

• Redeliver merchandise where applicable

• Rectify any non-compliance with provisions of admission

Post-Entry ProceduresFTA RegulationsHTS ClassificationCountry of OriginRequirements

Declaring Correct ValuesIOR Responsibilities

Under the Customs Modernization (MOD) Act, the importer must demonstrate that they have undertaken Reasonable Care to guarantee accurate and complete entry summaries and all other declarations to CBP.

Reasonable Care is met if the importer sought and received advice from a Customs expert before import and relied on this in good faith – meaning that the advice was not clearly wrong or obtained fraudulently.

HOW DO I ENSURE I COMPLY TO THE MOD ACT?

Post-Entry ProceduresFTA RegulationsHTS ClassificationCountry of OriginRequirements

IOR ResponsibilitiesDeclaring Correct Values

As the importer, you must ensure that the correct value for your goods is declared on Customs entry.

• Make sure you understand the rules for valuation

• Ensure the values listed on the commercial invoice and import documents match the Purchase Order (PO) and are in the correct currency

• Declare any assists (when the importer has provided something of tangible value to the manufacturer of the imported good)

• Ensure you are accurate when deducting freight charges from the declared Customs value

TOP TIP: Establish processes and

procedures to identify values not listed on the commercial invoice which still need to be

declared, including assists, indirect payments, and

royalties

HOW DO I ENSURE CORRECT VALUES ARE DECLARED ON CUSTOMS ENTRY?

Post-Entry ProceduresFTA RegulationsHTS ClassificationIOR ResponsibilitiesDeclaring Correct ValuesCountry of OriginRequirements

When importing into the US, clearly declare the country of origin on Customs entry.

The country of origin is the country where the good was produced or manufactured (further processing in another country MAY or MAY NOT affect country of origin ) – this is NOT the same as the country of purchase.

Ensure that the vendor understands what country of origin to list on their commercial invoice. TOP TIP:

Perform random audits of POs as well as import and entry documentation to

ensure the country of origin is declared correctly for

your imports

WHAT ARE THE COUNTRY OF ORIGIN REQUIREMENTS FOR IMPORTING FREIGHT INTO THE US?

Post-Entry ProceduresFTA RegulationsIOR ResponsibilitiesDeclaring Correct ValuesCountry of OriginRequirements

HTS Classification

HTS is the Harmonized Tariff Schedule of the US, used to classify imports and exports.

A good’s HTS classification determines

• Rate of duties

• Quotas

• Restraints on entry

• Embargoes

• Anti-dumping and Countervailing Duties (ADD / CVD)

• Other US government agency requirements

TOP TIP: In order to be compliant,

importers should establish a database of HTS codes for their own

commodities

WHAT IS HTS CLASSIFICATION?

Post-Entry ProceduresFTA RegulationsIOR ResponsibilitiesDeclaring Correct ValuesCountry of OriginRequirements

HTS Classification

One of the most common entry errors is listing the incorrect HTS classification on import.

To prevent this, you can:

• Ensure you have access to expert HTS knowledge

– Internal HTS-trained staff

– Customs consultants

– Customs brokers

• Make HTS classification part of your PO process by reviewing products and assigning HTS prior to import

TOP TIP: Maintain a database

of your top / frequent imports to the US with the correct HTS classifications and share this with your

Customs broker

HOW DO I ENSURE I USE THE CORRECT HTS?

Post-Entry ProceduresIOR ResponsibilitiesDeclaring Correct ValuesCountry of OriginRequirements

HTS Classification FTA Regulations

You may qualify for duty savings if your imports to the US fall under Free Trade Agreements (FTAs)

• Educate yourself on which FTA could apply to your imports

• Determine what supporting documentation you need to make the claim

• Ensure your vendor understands all requirements when supplying documents

• Audit entries with free trade claims to ensure proper complianceTOP TIP:

Ensure you don’t claim special FTA duty preferences without thorough research!

HOW CAN FREE TRADE AGREEMENT (FTA) REGULATIONS AFFECT MY IMPORT?

IOR ResponsibilitiesDeclaring Correct ValuesCountry of OriginRequirements

HTS Classification FTA Regulations Post-Entry Procedures

Even once your goods have been imported into the US, the import process isn’t over – as the importer, you must further undertake due diligence to:

• Maintain entry records for up to five years past the import

• Identify and take action on post-entry communications from the CBP and other parties, such as

– Requests for Information

– Notices of Action

– Pre-penalty and penalty notices

• Set up an audit procedure to verify the accuracy of filed Customs entries

WHAT POST-ENTRY ACTIONS ARE REQUIRED FOR IMPORTING TO THE US?

TOP TIP: Set up a record

keeping system for your post-entry documentation!

HOW CAN DHL GLOBAL FORWARDING HELP YOU IMPORT INTO THE US?

We offer a range of services to help importers with their import compliance responsibilities, including

• HTS classification database development

• Compliance Training

• Development of SOPs

• Regulatory interpretation and consultation

• Assistance with compliance issue resolution

• Post entry modifications

• Compliance Auditing

• Seminars and webinars

For further information, contact our Customs Experts:

dgfcustoms@dhl.com

ADD / CVD

Anti-dumping (AD) and Countervailing (CV) duties. ADD is a protectionist tariff that the US government imposes on foreign imports that are sold at less than fair market value. CVD is an import tax imposed on certain goods in order to prevent dumping or counter export subsidies.

Assists

Goods which the buyer of imported merchandise provides directly or indirectly, free of charge, or at a reduced cost, for use in the production or sale of merchandise for export to the US.

Customs

Duties and taxes imposed on imported and exported goods, and the government department responsible for the collection of these.

Customs Border Protection (CBP)

The US government’s law enforcement organization that facilitates lawful international travel and trade.

Free Trade Agreement (FTA)

Agreements that are put in place to reduce the barriers to trade between two or more countries and help protect local markets and industries.

HTS classification

The primary resource for determining tariff classifications for goods imported into the US.

Other Government Agencies (OGA)

Some imported products face additional regulations from various other government agencies. US Customs will enforce these regulations at the port of entry. Examples include: Food and Drug Administration (FDA), Bureau of Industry and Security (BIS), Environmental Protection Agency (EPA), Departmen of Transportation (DOT) and Office of Political Military Defence Trade Controls (PMDTC).

Requests for Information (RFI)

A standard business process used to collect written information regarding the capabilities of various suppliers, usually to better inform buying decisions.

Notices of Action

The United States Citizenship and Immigration Services (USCIS) will send a Notice of Action to a customer in order to communicate information related to notices of receipt, rejection, transfer, re-open, or appointment.

Pre-penalty / penalty notices

A pre-penalty notice refers to a notice issued to a company by a governmental agency that is suspected of committing some serious violation. The notice demands a written response within specified time or the company will be subject to a penalty or fine. After the issuance of the pre-penalty notice and consideration of any representations made by the importer, the US Bureau of Customs and Border Protection must issue a written penalty notice, specifying any changes in the information provided in the pre-penalty notice.

Purchase Order (PO)

A commercial document and first official offer issued by a buyer to a seller, which indicates types, quantities, and agreed prices for products or services.

US Trade Representative

A Cabinet member who serves as the president’s principal trade advisor, negotiator, and spokesperson on trade issues.

GLOSSARY