Importing can be difficult and confusing. Airport Brokers Corporation can assist you. We work with our clients in many areas. We can:
Assist You In Determining The Classification & Rate
Of Duty For Your Products, Research Prior Customs' Rulings On Your
Product(s)If A Ruling Does Not Exist & There Is A Question
As To The Classification & Duty Rate For Your Products, We Can Write To
Customs & Obtain Customs Rulings On Your BehalfExplain
U.S. Customs & Border Protection (CBP) Laws and Regulations That Affect
Your Product(s)Explain The Laws & Regulations Of Other Federal
Agencies That Affect Your Products, Such As Those Of The Food & Drug
Administration, Fish & Wildlife, Department Of Agriculture, Department
Of Transportation, Etc.Quote Ocean & Air Freight Rates For
YouArrange To Have Your Shipment Picked Up Overseas
& Forwarded To YouTracing & Tracking Of Your ShipmentAssist You In Obtaining A Customs BondSurrender The Ocean Bill Of Lading To The Ocean Carrier
For YouPrepare & File The
U.S. Customs & Border Protection Entry On Your
BehalfIf Customs Wants To Examine Your Shipment, We Will Open
The Packages For Customs' Examination Or Arrange To Have It Done On Your
Behalf.Assist You In Obtaining Cargo InsuranceIn The Event Of Loss Or Damage To Your Shipment, Assist
You With Cargo ClaimsWhat are a few of the things you should know about importing?
Do You Need A License Or Permit To Import? -
As a general rule you do not need any type of a license to import or to
be an importer. There are some exclusions to this if you intend to import arms,
ammunition, strategic materials, some animals or products made from animals,
etc.
Who Can Make Customs Entry - Customs
entry can be made by the importer or a licensed Customs Broker. Customs brokers
are licensed by U.S. Customs & Border Protection, Department of Homeland
Security. In order
to be licensed, an individual must pass a test on U.S. Customs & Border
Protection laws and
regulations, pass a thorough background investigation, be a U.S. citizen and
over 21 years of age.
Customs Power of Attorney - In order to make Customs entry on behalf of the
importer,
the importer needs to appoint the Customs Broker as their agent on a limited
Customs Power of Attorney. The Customs Power of Attorney allows the customs
broker to sign customs documents on behalf of the importer. The Customs Power of
Attorney must be signed by an officer of the corporation, if the importer is a
corporation, or by the owner of the merchandise. Click here for a Customs Power
of Attorney for Airport Brokers Corporation.
U.S.Customs & Border Protection Entry -
U.S.
Customs & Border Protection entry is required on all goods entering the
commerce of the United States. The importer, or their customs broker, usually
files a form 3461, Entry, for release of the goods and then, shortly thereafter,
files a form 7501, Entry Summary, and makes the payment of the customs duties,
taxes and fees.
When a shipment arrives by air freight the documents normally arrive with the shipment. On ocean freight shipments the documents are sent separately from the shipment and normally arrive at our office from the importer, the shipper, the overseas forwarder or the international department of the bank, if a letter of credit is involved. On all shipments the importer should list Airport Brokers Corporation as the notify party on the bill of lading and, on ocean freight shipments, have one set of original documents sent directly to us.
The documents we need to prepare the Customs entry are: a.) the bill of lading; b.) the commercial invoice; c.) the packing list (if there is one); and d.) other documents as may be required for Customs entry. Other documents may include a NAFTA Certificate of Origin for shipments that qualify for reduced duty or duty free entry originating in Canada or Mexico. Footwear requires a Footwear Invoice. Textiles and wearing apparel often require visa and quota documentation and a Textile Declaration. When we know exactly the items you will be importing we can go over the required documents with you.
Once we receive the documents we take the commercial invoice and classify each item on the invoice in terms of the Harmonized Tariff Schedule of the United States (HTSUS). Every item that might be imported is provided for somewhere in the tariff schedule. Drinking cups, for example, are classified by what they are made of (china, porcelain, course-grained earthenware, brass, copper, pewter, glass, plastic, etc.), whether the cups are available in sets, the cost of the sets per dozen, etc. Classification is a learned skill and, at times, even Customs debates what the correct classification might be. You can view the tariff schedule at Customs' web site and look up rulings that Customs have made on the classification of products if you like; or, we can sit down with you and go over the classification of your products with you. The classification and the country of origin will determine both the rate of Customs duty and the reporting quantity that must be shown on the Customs entry.
Once we know the classification and rate of duty we take a look at the value shown on the commercial invoice. If the goods are sold on a C.I.F. Seattle basis we will try to determine the international freight and insurance charged and deduct those from the invoice value to come up with the "entered value", the value shown for Customs entry purposes.
When we have all of the details we prepare the Customs entry by putting the information into an electronic data base in our computer and file the Customs entry with U.S. Customs & Border Protection. The computer program we use is specifically designed to Customs' specifications for filing the Customs entry with them.
What happens next is based upon the type of goods being imported, the country of origin of the goods, the country from which the goods are shipped, who the importer is and random factors in Customs computer. Customs may a.) release the merchandise without Customs' examination; or b.) Customs may want to examine the documents for the shipment; or c.) Customs may want to examine the goods themselves. If Customs wants to examine the documents we must physically provide Customs with the Customs entry and the documents. Some goods, such as those subject to visas and quotas and goods entered on Single Entry Customs Bonds, require that documents be furnished to Customs with each entry. As far as Customs examination goes, Customs examine about 2%-3% of shipments arriving in the United States. Customs examines shipments to locate drugs, illegal goods, contraband and undeclared articles that might be in a shipment; goods that are not legally marked with the country of origin; and, to verify the goods entered match up with the quantity, description and value of those shown on the commercial invoice and Customs entry. If Customs want to examine the goods it is up to the importer to have the goods opened for Customs' examination. We will arrange for this on behalf of clients. While Customs does not normally charge for examining the goods, there can be additional costs for moving the goods to a Customs examination facility and/or opening the goods for Customs' examination. Customs may want to examine just part of the goods, the entire shipment or even have the goods x-rayed as part of their examination. This is a random cost that must be built into the final cost of the goods imported. Imported goods must remain with the importing carrier or in a bonded warehouse until they are released by U.S. Customs & Border Protection. After Customs' release the goods may be delivered to the importer or elsewhere as the importer wishes.
Customs duty and taxes may have to be paid to Customs at the time of entry (as is the case with merchandise like wearing apparel) or within 10 days from the date of Customs release. The Customs' duties and taxes may be paid directly to U.S. Customs & Border Protection by the importer, by the importer to the customs broker or to Customs through an ACH account. Customs requires that we remind importers that, if they pay the Customs duties and taxes through a customs broker, payment of the duties and taxes to the customs broker does not constitute payment of the duties and taxes to U.S. Customs & Border Protection. In the event that the customs broker does not make payment to Customs in a timely manner the importer can be subject to Customs fines and penalties. If the importer has established an ACH (Automated Clearing House) account with U.S. Customs & Border Protection established to pay the Customs duties electronically to Customs, the importer has 12 days in which to pay the duties due. Airport Brokers Corporation assists its importers in establishing ACH accounts with Customs if the importer wishes to pay Customs in this manner.
After the Customs entry is made the entry goes through a "liquidation" process which is Customs' final determination of the duties and taxes due. Customs may choose to liquidate the Customs entry "as entered" with no change in duty or taxes; with a duty refund, if Customs determines the duties and taxes were over deposited; or, with an increase in duty and/or taxes, if Customs determines the value and/or classification was incorrect at the time of entry. As a general rule, if the importer disagrees with the liquidation of the Customs entry, the importer has 90 days in which to "Protest" the liquidation of the entry before it becomes final. The "Protest" is a formal document filed with Customs detailing why the importer disagrees with the liquidation of the entry. Except in unusual circumstances, such as fraud, if the entry is not protested within 90 days from the date of liquidation the liquidation becomes final.
Importer
Security Filing (ISF) - Customs now requires an Importer Security Filing
be filed on all cargo entering the United States by vessel. The ISF must be
filed with Customs at least 24 hours prior to the cargo being loaded on board
the exporting vessel overseas. This is a new requirement that came into effect
in 2009. Much of the filing information appears on the commercial invoice the
importer usually receives from the shipper; however, "Consolidator", "Container
Stuffing Location" and "Ship To" are new data elements. We have an electronic
ISF form for importers to give their suppliers to use that allows us to prepare
and file the ISF for the importer. There are no penalties for late filing or
non-filing for the first year. Once enforcement is started, the maximum penalty
will be $5,000 per bill of lading. Customs wants importers to try to start
filing as soon as possible. If an importer shows they have tried to have the ISF
filed on time, if there is a penalty, Customs will use the importer's prior
history as a mitigating factor in reducing a future penalty or possible penalty.
Customs Bond -
Customs requires the filing of a Customs bond with merchandise entered on a
formal entry. The Customs bond guarantees to Customs that, in the event the
importer does not pay the Customs duties, increased Customs duties, fines or
penalties, etc., the bonding company will pay Customs any funds due Customs that
the importer fails to pay. Having a Customs bond does not alleviate the
importer's debt to Customs. If the bonding company does have to make a payment
on behalf of the importer, the bonding company will proceed against the importer
for damages. There are two types of Customs bonds: a.) Single Transaction Bonds; and
b.) Continuous Bonds.
A Single Transaction Bond (STB) is good for only one transaction. The amount of the bond is based on the type of merchandise being entered and the value of the shipment. Customs requires larger bonds for importations of merchandise subject to visa and quota restrictions (such as textiles and wearing apparel) and merchandise subject to release by other federal agencies (such as the Food & Drug Administration).
The Continuous Bond is good for one year and must be filed in an amount large enough to cover 10% of the estimated duties and taxes to be paid. The minimum Continuous Bond that can be filed is $50,000. With the filing of each Continuous Bond Customs requires a bond application detailing the amount of merchandise the importer has entered in the previous year and the amount the importer plans to import within the next year. Since a customs bond will also be required for the Importer Security Filing, we are advising importers to obtain Continuous Bonds rather than use Single Transaction Bonds. The ISF may be considered a separate transaction from the customs entry.
Customs Duties & Taxes - The U.S. Customs & Border Protection duty due depends on the type of merchandise
being imported and the country of origin, where the merchandise was grown,
produced or manufactured. The average rate of duty from most countries is about
1.6% - 6%; although, some merchandise, like textiles and wearing apparel, have
higher duty rates.
In addition to the Customs duty Customs charge a Merchandise Processing Fee (MPF) for their processing shipments. On formal entries the MPF is .21% (.0021) with a $25.00 minimum and a $485.00 maximum.
For shipments arriving by vessel there is a Harbor Maintenance Fee (HMF) of .125% (.00125) with no minimum or maximum..
The Customs duties, MPF and HMF are all based on the F.O.B. value of the shipment. Importers do not have to pay duty on the cost of international freight or cargo insurance. If goods are purchased on a C.I.F. basis, the importer can deduct the actual amount of the international freight and cargo insurance from the C.I.F. value.
The value Customs requires the importer to use is the "Transaction Value", what the importer is actually paying for the goods. In the event of a Customs audit the importer is required to be able to produce copies of purchase orders, commercial invoices, packing lists, catalog pricing, checks, money orders, wire transfers, and other documents to substantiate the price actually paid for the goods.
Terms of Sale & Costs - The basic costs that an import incurs in importing goods are
dependent upon the terms of sale of the goods. If the goods are purchased
"Ex-Factory", at the supplier's door, then the importer must pay the cost of
moving the goods from the manufacturer's door to the exporting carrier. Once the
goods are placed on the exporting carrier the terms of sale are said to be
"F.O.B.", or "Freight On Board" the exporting carrier. Although the term F.O.B.
indicates the seller is responsible for all costs and charges including the
placing of the shipment on board the exporting carrier, on air freight shipments
sold F.O.B., the seller usually charges the buyer for the cartage from their
warehouse to the exporting carrier, airport transfer fees and export
documentation fees by placing them as collections (or collect amounts) on the
exporting air waybill. On ocean freight shipments the seller normally pays all
of the costs to F.O.B. the exporting carrier. An F.O.B. quote should have a
named location, such as F.O.B. Keelung or F.O.B. London-Heathrow Airport.
C.I.F. stands for Cost, Insurance & Freight. The "C" in C.I.F. is the same as F.O.B. A C.I.F. quote should be C.I.F. a named location, such as C.I.F. Seattle or C.I.F. Tacoma. This shows that all costs are paid by the shipper and included in the price to Seattle or Tacoma.
Requirements of Other Federal Agencies
- About 25% of all goods imported come under the laws and regulations of other
U.S. government agencies, in addition to U.S. Customs & Border Protection. Other federal agencies
include the U.S. Food & Drug Administration (which regulates foods,
drugs, cosmetics, medical devices and products related to them), the U.S. Fish
& Wildlife Service (which regulates importation of animals and products
made from animals), the U.S. Department of Agriculture (which regulates
importations of fruits and vegetables), the U.S. Department of Transportation
(which regulates importations of automobiles, motorcycles and parts), the U.S.
Environmental Protection Agency (which regulates importations of pesticides,
automobiles and motorcycles), the Internal Revenue Service (which regulates
importations of liquor and cigarettes) and the Federal Communications Commission
(which regulates importations of electronic appliances, computers, etc.) to name
a few. Airport Brokers Corporation can assist you by going over the products you
plan to import and advise you of which other federal agencies are involved with
the importation. We can help you get the information you need and copies of
their laws and regulations. Also, please check out our links list to these other
federal agencies.
Marking on Products - Almost all
imported products are required to be marked in English with their country of
origin in a permanent manner and in a conspicuous place. If goods are sold in a
box, then the outside of the box must also be marked with the country of origin.
If the name of a city, country or location, other than that of the country of
origin, appears on the product or carton then the country of origin of the
product must be marked next to it in equal or larger sized letters. Ordinarily,
the country of origin marking must show "Made In ----" or "Product of ---".
In that cartons can be stacked, Customs will no longer allow country of origin marking on the bottom of the cartons.
Some products, like textiles, textile products, wearing apparel, watches and metal products require special marking and labeling. Airport Brokers Corporation would be glad to go over the marking requirements with you before you import. It is cheaper to have the goods marked correctly at the time they are manufactured than to have the goods marked in the United States. If Customs finds goods are not legally marked at the time of importation they will hold up release of the shipment and can issue fines and penalties. Mark correctly before you import.
Recordkeeping - Importers are required
to keep all records relating to a Customs entry for 5 years from the date of
entry. The records kept include bill of lading, commercial invoices, packing
lists, price quotes, inventory receipts, financial statements, copies of the
Customs entry and all other documents relating to the importation of the
goods.
Other Sources of Information On Customs Requirements
- Customs publishes a book available on their web site entitled "Importing Into the United States". This is another
good source of information. Their web site is at
www.cbp.gov. Look under Trade and then under
Basic Importing and Exporting. All of the other federal agencies also have web
sites with information. Their web site address is usually their agency initials
(like FDA for Food & Drug Administration) followed by .gov.
How Can Airport Brokers Corporation Assist
You? - These are just some of the things an importer should know
before importing. We want to handle your business and assist you with your
Customs entry. We would be glad to sit down with you and go over your products,
your needs and all of the requirements for Customs entry. We will get you ocean
and air freight rates, costs for warehousing and distribution, Customs bonds,
cargo insurance and more. We want to make sure that you succeed so that we can
grow with you. Your business is important to us.
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