Be Prepared and Skip the Fines: A Guide to What Should be in Your Compliance Toolbox
If U.S. Customs decides to pay you a visit, will you be prepared? If you’re not complying with applicable laws and regulations, you could be facing some hefty monetary fines, seized shipments and maybe even jail time.
No one wants to be in that situation, and now more than ever it’s imperative that importers and exporters maintain a high level of reasonable care and due diligence. This means ensuring that you understand your responsibilities as well as the consequences of non-compliance. Don’t be caught empty-handed!
So, what should you have in your compliance toolbox? Here’s a list to get you started.
- An organized record-keeping program: Customs requires that shipment documentation is kept on-hand for five years. If Customs requests a copy of this documentation, you must be able to produce it quickly. While the term “documentation” refers to paper records, CBP will allow for electronic storage of documents as long as they are indexed appropriately and can be quickly accessed for presentation.
- A Master of Classification: Proper classification of imported material prior to making entry is essential! It is recommended that you establish a procedure or program to review and update your parts table with the correct HTSUS number and applicable duty rate. While your reputable broker can assist in proper classification, the onus is on the importer to ensure accuracy.
- Manual on Valuation Methods: Is the material properly valued prior to entry? Are you using the correct terms of sale? Understanding the terms of sale along with any additions and subtractions is vital for customs valuation. A best practice manual can be an asset when it comes time for Customs to evaluate your entry.
- Government Agency Map: Do you have procedures to ensure that your imports comply with partner government agencies (PGAs)? USDA, FDA, EPA, DOT, and Fish and Wildlife are some of the agencies that have control over your imports in addition to CBP. Knowing and complying with their requirements can help keep you out of trouble!
- Handy-dandy Free Trade Agreements: Do your imports qualify for any reduced-duty program? NAFTA, Free Trade Agreement, and U.S. Goods Returned are some of the programs, which can result in savings.
- Your very own country of origin marking requirements for your commodities: Are your products legibly marked with the country of origin? If your product is lacking a country of origin marking, Customs will ensure that unmarked imported products are denied. If already released by Customs, you will be required to return the goods via redelivery notice. To avoid unwanted costs, delays, and problems, you should ensure that your imports are properly marked.
- A shiny new best practices program: A procedure to respond to any Customs requests for information and/or any other official correspondence from Customs can help you save time and money.
- Last, but not least, your very own compliant Customs Broker: Your Customs Broker should be on top of changing regulations and should help you stay compliant in this evolving industry. Finding a broker to guide you through the regulatory weeds will help your operations remain smooth and compliant.
As you can tell, navigating through the hectic workshop of U.S. Customs can be a challenge for the most experienced handy-man so make sure you have your toolbox ready!