In our previous posts, we have talked about an importer’s responsibility, and the importance of having a clear understanding of the terms and parts involved in the importing process.
In this post, we want to highlight the importance of compliance in the importing process. Importing into the U.S. is a tricky endeavor and requires firm adherence to CBP requirements and law regulations.
Yes, the importing process tends to lean on the intricate side, but it can be equally exciting and rewarding once you step into the journey. And as always, we are excited to prep you up for it!
What is Customs Compliance?
Well, it is exactly like the name suggests. Customs Compliance involves acknowledging and following the rules and regulations during the importing process. The CBP has strict outlines, regardless of the type of import. Essentially, it is the importer’s responsibility, that is, yours, to make sure that you cover each aspect to be fully compliant according to the CBP.
What Does it Include?
Customs Compliance essentially covers 3 aspects:
- Identification and classification of the imported goods
- Tariff and duties calculations that the imports entail
- License application and registration, if required. For instance, food and medicine need to be registered with the FDA (Food and Drug Administration).
- Based on the given requirements, an importer needs to have an extensive knowledge regarding all the information that is stated above. This includes being aware of:
Country of origin of the imported goods
The suppliers the importer wants to import from
Duties and taxes associated with the imported goods, as well as ensuring that they are duly paid
All required documents, which must be presented to the customs authorities at the port of entry
Compliance Assessment
The compliance assessment is the systematic evaluation of an importer’s systems linked to all the CBP-related operations. It includes testing of financial transactions, assessing the efficiency of the importer’s internal controls, and evaluating the level of compliance being shown by the importer.
Some key areas that are covered in the compliance assessment are:
- Record keeping
- Merchandise classification/trade statistics
- Merchandise quantities
- Antidumping/countervailing duty operations
- Quota conformity
- Merchandise value
- Warehouse or foreign trade zone operations
- Merchandise transshipment
- Special trade programs (GSP, CBI, others).
Once the assessment is conducted, you either get a report stating that your standards are according to the CBP law and regulations, or you get a report that states you are non-compliant.
It is always best to get the former, not only because of the obvious need to be approved, but because the latter requires so much work – you need to coordinate with the CBP advisors and formulate a compliance improvement plan, mentioning the corrective actions you will take to ensure compliance (it is like being rejected in a job interview, and then asking them to list the reasons that will make you a better fit for them).
If the assessment sounds overwhelming, it will be comforting to know that by law, the CBP is required to inform the importer of the intended assessment schedule. As an importer, you can also ask for an entry conference, where the assessment’s purpose will be explained.
At IZZI Logistics, we are your partners throughout, from the onboarding to the final stages of importing. This also includes thoroughly preparing you to meet all the CBP requirements and law regulations.
All in all, If you play by the rules, importing can actually be a rewarding and worthwhile experience. And with IZZI Logistics as your partner, you can seamlessly navigate through all the challenges (thanks to our exclusive network and insider knowledge.)
Part 4 (which will be coming soon) is all about choosing your supplier well – so make sure you keep an eye out for that!
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