What you need to know if you plan to import.

No.1 – Know who is responsible for payments

The Importer of Record (IOR) is the party responsible to U.S. Customs for the payment of all duties, taxes, fees owed to the U.S. government as well as ensuring all requirements to make the entry have been met.  The IOR may be a resident or a non-resident of the United States.  They must have detailed knowledge of the goods.  Most importantly, they must be a “Party to the Transaction”, meaning they must be either the buyer or the seller.

Non-Resident Importers (NRI) do not need a U.S. issued Employer Identification Number (EIN) number in order to be the importer of record on U.S. import transactions. For these parties U.S. Customs and Border Protection assigns a Customs Assigned Number (CAN) in order to identify the importer. The Customs Assigned Number (CAN) is applied for during the account setup process.  Assign your custom broker a power of attorney and have your broker apply for a CAN.   It is important to note that this only applies to a Non-Resident Importer.

A Non-Resident Importer will still need to declare the Employer Identification Number (EIN) of the importer which is also referred to as an Internal Revenue Service (IRS) number or the Social Security Number (SSN) for the U.S. consignee on each import transaction.  If the goods arrive unsold, for example they are going to a warehouse or fulfillment center, then the EIN or SSN will need to be supplied at the time of entry for the physical location of the goods.

No. 2 – Do the proper research before importing

The first and foremost is failing to properly research product admissibility and import requirements. Often importers ship goods before they fully understand what is required for the particular import, and this mistake can lead to shipment delays, intensive examinations, refusal of goods, seizure of goods, an increase in landed costs, and monetary penalties. In addition to standard documentation and bond requirements, there are various requirements that are commodity specific so importers should fully understand the requirements for each government agency should their goods fall under the scope of one or more of the Partner Government Agencies (PGAs). To quote U.S. Customs and Border Protection “know before you go.”

No. 3 – Logistics Team Selection

The second biggest mistake is failing to develop a professional and knowledgeable logistics team. This includes freight forwarders, carriers and a custom broker. Often importers will pick the cheapest option available and end up paying for it in time and frustration down the road.  The importer carries the largest role and holds the greatest responsibility.  No matter who is doing the work by filing the entry or declaration with U.S. Customs and applicable Partner Government Agencies (PGAs), be it the importer or the customs broker, the importer of record is ultimately responsible for the payment of all duties, taxes, fees and penalties to US Customs. For this reason, choose your logistics service providers carefully, and make every effort to communicate the details of your shipment in order to ensure the accuracy of your declarations.

No. 4 – Provide the Right Documents

Standard documentation for clearance varies depending on the mode of transportation, however there are some commonalities. Regardless of commodity, standard documentation includes:

• Commercial invoice
• Copy of the bill of lading, or airway bill
• Arrival notice for air and ocean shipments

If the goods fall under the scope of one or more of the many Partner Government Agencies (i.e. the Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), U.S. Fish and Wildlife Service, Federal Communications Commission (FCC), U.S. Environmental Protection Agency (EPA), etc.) additional forms and information will be required in order to make entry.

No. 5 – Choosing the right Bond

In order to ensure the revenue due to the US government, US Customs requires that every entry be secured by a bond. This can be met in two ways:

A single entry bond – is just that a bond that covers a single shipment.  These can be purchased through a surety company.   If you choose this option, it is best to have a customs broker apply for the single entry bond in conjunction with the entry filing in order to ensure that everything matches and that you are properly covered.   If you plan on having more than one entry this option can get quite expensive.

Continuous bond – if you plan on shipping multiple shipments per year.  Also the most cost-effective way for multiple shipments.   This bond type covers all import transactions for a full year from the date of issue.   It is important to note, if you are shipping via ocean you will be required to have a bond in place for both the U.S. Customs entry and the Importer Security Filing (ISF). This is where single entry bonds can get quite expensive because the bond cost nearly doubles for each shipment. A continuous bond will cover both the entry bond requirement and the ISF bond requirement. On ISF transactions, an importer is only allotted five single entry ISF bonds in a lifetime by the surety. Once the five ISF bonds are used, the importer will be required to purchase a continuous bond should they endeavor to continue shipping via this mode of transportation. Simply put, to save time and money the best option is the continuous bond.

Interested in learning more? Please contact us today at 305-328-9447 or 844-328-9958 or by email at info@blancoconsultingllc.com  to learn more about our local marketing solutions and services.