Recently, a customer told us that his goods were held by US customs for days, and he ultimately had to pay $15,000. This included fees for storage in a bonded warehouse until the necessary documentation was processed. This can be avoided by following these key tips before exporting from China.
Importing into the USA – What documents do you need?
Exporters from China must expect thorough inspections of their goods. They must bear in mind that many goods are subject to specific import regulations and even prohibitions. A similar problem to that in China is that service providers often lack the specific knowledge and information required for correct customs clearance.
It is essential to ensure that all information required for customs clearance is included on the commercial invoice to avoid potential delays and additional costs during import into the USA. Difficulties are not uncommon, especially with the Incoterm DAP (delivery at place). If the importer of the goods and the shipping address are not the same, the freight forwarder will contact the recipient instead of the actual importer, which can delay the shipment. Therefore, the identification and contact details of the IOR (Importer of Record) on the invoice are crucial. Correct invoicing is one of many requirements for importing goods.
The requirements for invoicing by exporters from the EU include the following important information:
- The invoice must be written in English.
- Port of entry or airport in the USA
- Name and address of the seller from the China
- Name and address of the buyer in the USA
- Invoice number and invoice date
- Detailed and accurate product description
- Prices and currency information
- Country of origin
- Note down possible Incoterms in advance.
- Contact person responsible for exports
When creating a pro forma invoice, the exporter may sometimes need to confirm the shipment’s value to customs before clearance can proceed. However, not only a correct invoice but also other documents are required for import processing. These include shipping documents, a customs bond, and customs forms for import duties and shipment release.
Who can handle the import into the USA?
Given the overwhelming number of regulations and documents, it is advisable to book a specialized customs broker locally. Their expertise and professional experience will save you a great deal of time and hassle. Unlike in China, customs brokers in the USA must hold a license, for which they must pass a professional examination administered by US Customs. Exporters can find authorized brokers for each port on the website of the US Department of Homeland Security(CBP = US Customs and Border Protection).
However, the agents do not assume the functions of the advisor when it comes to determining the correct customs tariff number.
If the customs tariff number is available, the agent can check the regulations and conditions as needed, but must be explicitly commissioned to do so. The first step here is clear communication. Does the agent have the necessary experience in my case? Do they have sufficient capacity for my shipments?
The cost of an agent typically ranges from $60 to $250, depending on the size of the customs agency. After receiving a Customs Power of Attorney, the agent can handle the import processing. For this purpose, Customs assigns a specific number to importers. American companies already have their tax identification number, which is used for this. Nevertheless, the represented companies remain responsible to Customs for the correct classification of the goods, the determination of their value, and the processing of their entry into US customs territory. Only in the second step is the agent consulted with the freight forwarder to minimize errors. The next step for customs clearance in the US is to obtain a customs bond, which the agent secures from a bond company. This bond serves as insurance against the applicable import duties. The processes of customs clearance and payment of import duties can then be completed more quickly thanks to the close cooperation between CBP and customs brokers. U.S. Customs reviews all customs documentation and either releases the goods or orders a customs inspection. If import duties are not paid, the importing company loses its privileges. This means that the customs guarantee is revoked, and all associated privileges are lost. Document inspection is then required for each shipment, customs duties and taxes are due immediately, and the shipment takes considerably longer.
Special import regulations in the USA – rules and documents
Many companies wonder whether they can handle customs clearance and registration for imports into the USA themselves. Given the overwhelming number of regulations and documents, authorities and even the agents themselves recommend relying on the expertise of local agencies. For example, a trade fair booth builder might register their container with US customs but forget that the included box of candy for customers requires FDA (Food and Drug Administration ) registration. Additionally, food shipments must be pre-registered with a “Prior Notice” informing customs about the individual shipment. Strict requirements apply here as well, such as a description of the item, the name of the manufacturer and shipping company, the country of origin, and the intended port of entry into the USA. Failure to comply with these requirements will result in the container being held up, incurring further unnecessary costs and time.
But it’s not just food or medical devices that are subject to numerous regulations. Goods such as textiles, wood products, consumer goods, and children’s products are also subject to various requirements that must be declared and documented. The challenge lies in finding the correct documents, completing them accurately, and submitting them. Other important authorities involved in import declarations to the USA include the EPA (Environmental Protection Agency) and the National Highway Traffic Safety Administration (NHTSA) , as motor vehicles must comply with US emissions regulations and safety standards.
An important tool for imports is the ACE (Automated Commercial Environment) system . Agents must register and then receive access approval from customs. Using this system, agents report imports, and importers can generate reports detailing what the agent reported, when, and how. However, the reporting function is limited to the respective customs tariff number and does not display item numbers or similar information. This overview provides both the importer with some control and security against misuse of their registration number, and allows customs to review the information if necessary. Reports can be filtered not only by customs tariff number but also by shipment type, such as the ISF report (for ocean freight). The ISF (Importer Security Filing), also commonly referred to as 10+2, must be submitted to U.S. Customs and Border Protection (CBP) no later than 24 hours before the shipment is loaded onto the vessel bound for the United States. Otherwise, a penalty of $5,000 per violation may be imposed for submitting an inaccurate, incomplete, or late ISF.
Digital options and small shipments
Considering the current state of digital capabilities in the US, it is certainly advantageous that importers can access their reports. In contrast, this monitoring capability is virtually nonexistent for China customs clearance. Importers in China cannot verify the risk of EORI number misuse.
We are currently dealing with the issue of small shipments from third countries, where e-commerce customers cannot see where their goods are coming from or what the associated costs are. This is also not possible in the USA.
However, unlike in China, the limit for small shipments is $800. Customs is authorized to process small shipments valued at up to $800, which are often sent to the US via mail or courier services, duty-free and tax-free through a simplified procedure (informal entry). According to US Customs and Border Protection, shipments whose value does not exceed the $800 de minimis value limit for small commercial shipments are exempt from the currently applicable 25 percent additional tariffs. However, imports of goods subject to anti-dumping or countervailing duties are generally not eligible for duty-free and tax exemption under the de minimis rule and must be processed through the formal entry procedure. US Customs also conducts random inspections in these cases.
Conclusion
Considering all the regulations and requirements, it is therefore crucial to submit all necessary documents correctly and in detail, and to comply with all specifications. To ensure a smooth and time-saving process, it is advisable to engage a reputable and experienced customs broker. Particular care must be taken in selecting the right representative. With the right broker, nothing stands in the way of importing goods into the complex world of US customs.
