Processing Shipments through Customs - Part 5 of 7

welcome to the fifth part of this 7-part e-course on importing goods into the USA. Step 6 and 7 involve facilitating your goods through customs and paying any required duties.

Imported goods cannot legally enter the United States until the shipment has arrived at a U.S. Port of Entry and Customs has authorized delivery of the goods. Customs will not notify you of the arrival of a shipment. You must make an arrangement with the carrier of your goods or with your customs broker to be notified of shipment arrival.

Customs Broker

You do not need to be physically present to accept your shipment. You may delegate that responsibility to an agent or broker. Customs brokers are private individuals, partnerships, associations or corporations that are licensed by the Customs Service to submit necessary information and appropriate payments to Customs and Border Protection (CBP) on your behalf. Brokers can be very useful because they have expertise in the entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise.

Formal vs. Informal Entry

The Customs Services defines "entry" not as the arrival of goods in a port but instead, as the process of presenting documentation for processing goods through customs.

Informal Entry

If you are importing for your personal use or if the merchandise total is less than $2,000, informal entry can be used. Under this approach, you are not required to post a bond (see below), the customs inspector assigns a classification number and once payment of duties and charges is made, goods are released.

Formal Entry - Consumption

Goods can be entered in to the U.S. for consumption (directly into commerce), for storage in a bonded warehouse or for transportation to another port of entry.

Goods must be "entered" into Customs within 15 days of arrival or they will be transported to a general warehouse and could be lost to auction if not claimed.

The following documents are required to "enter" customs:

Entry manifest (CBP Form 7533)
Evidence of right to make entry
Invoice
Packing lists
Any other required documents (permits, certifications and so on)
Evidence of right to make entry

Goods can only be entered by the owner, purchaser or employee or a customs broker. A customs broker must have a valid power of attorney executed by the owner or purchaser in order to act on their behalf to process the shipment.

Surety Bond

Goods entered for consumption must be accompanied by a U.S. Customs and Border Protection (CBP) surety bond. This bond is essentially an insurance policy that guarantees payment to CBP. Use of a bond allows you to take possession of goods before all customs procedures are completed or to move goods under bond from one place to another before those goods are actually entered for consumption with duties paid. To learn more about how to bond amounts required and how to obtain a surety bond, go to http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/3510-004.ct...

Examination

Imported goods may be examined to assure that:

Container contents match packing lists and invoices
No illicit goods are being smuggled
Products carry appropriate labeling
In some cases, sample packages of the products may be retained by Customs for testing, classification or appraisal purposes.

Appraisement

The process of appraisement determines the customs value of the shipment, i.e., the value that will be used as the basis for calculating duties. Usually, the customs value will be the same as the transaction value. The transaction value includes:

Product price excluding freight and insurance (should be itemized on invoice)
Packing costs
Commission incurred by the buyer
Cost of any assist
Royalty or licensing fees
The transaction value will not be used if there are extenuating circumstances that make it difficult to ascertain the true transaction value. In that case, the value may be established by using the value of identical merchandise that has been shipped to the U.S., the deducted value (resale value) or the computed value (value of materials, processing, general expenses and packing costs).

Since the issue of appraisement is critically important to calculating fees, you should read the Customs information on appraisement carefully to be sure that you know how your goods will be handled. (www.cbp.gov/linkhandler/cgov/toolbox/publications/trade/usimportrequirem...)

Liquidation

Once customs officials have reviewed the entry documents, possibly examined the shipment, confirmed the classification and calculated the duties, the shipment will be "liquidated". Liquidation is notification of the amount of duty required to secure release of the goods. Liquidation notices are published on a bulletin board at the customs house and may also be forwarded to the importer as a "courtesy notice".

As a practical matter, liquidation can occur three to six months after you have received your goods. For example, you may be able to obtain immediate delivery of merchandise by classifying your product and paying customs duties. However, your classification and value is not binding on the U.S. Customs Service. Through the liquidation process, the Service will make its own analysis of the goods and determine whether or not they agree with the classification, value, and duties paid.

In some cases, the liquidation notice may indicate a reclassification or other adjustment which lowers the duty. In other cases, the duty is higher than anticipated and you will be charged extra duty. If you do not agree with the liquidation conclusion, you may protest by filing a claim within customs. All shipments must be liquidated within a year of liquidation notice.

Electronic Processing

To speed customs clearance, Customs Service has developed the Customs Automated Commercial System (ACS), which electronically receives and processes entry documentation and provides cargo disposition information. Cargo carriers, customs brokers, and importers can use the system, which reduces clearance time from days to hours or even minutes. If you work through a customs broker, be sure that your broker utilizes the Automated Broker Interface (ABI), a system that works in combination with ACS.

You have now studied all of the steps involved to import goods into the United States. Section VI takes a brief look at the postal alternative to importation to the U.S.