Navigate Global Trade With Confidence
Stay informed with our insights on market entry strategies and international trade laws. Our expertise helps businesses navigate the complexities of global trade, ensuring compliance and successful entry into new markets for sustainable growth and competitiveness.
Agencies importers and exporters deal with:
Compliance with following agencies to regulate Imports/Exports in the USA make it challenging:
- Customs and Border Protection (CBP)
- Homeland Security Investigations (HSI)
- The Food and Drug Administration (FDA)
- The Environmental Protection Agency (EPA)
- Centers for Disease Control and Prevention (CDC)
- Animal and Plant Health Inspection Service (APHIS)
- The International Trade Administration (ITA)
To remain competitive, the importers/exporters need efficient processes and full compliance with all regulatory requirements.
Customs and Border Protection (CBP)
There are numerous U.S. agencies involved in international trade, but almost none are more concerned with the import/export process than the CBP. CBP oversees all aspects of the import/export process, like ensuring that the goods you enter into the country are legal and compliant for Customs clearance, collecting import duties and tariffs, and managing much of the documentation that allows goods in or out of the country. In total, CBP enforces rules and regulations for 47 other government agencies.
The CBP will also help you during the import process. You can contact a CBP specialist before your import arrives at its port of entry and they will help you by providing import classification, applicable duty rates, and answers to any other questions you might have.
Homeland Security Investigations (HSI)
HSI is the agency that enforces the import and export laws.
The Food and Drug Administration (FDA)
The FDA is another government agency commonly involved with the importing process. The goal of the FDA is to check the safety of products intended for animal and human use. The products they regulate include:
- Food
- Medical products (drugs, devices, and biological)
- Radiation-emitting electronic products
- Animal feed
- Tobacco
- Cosmetics
The FDA has different rules regarding different products. Because of this, you need to check if your product falls under one of these categories. From there you can consult the FDA’s website for further importing requirements for that product. The FDA regulates exports that fall under their jurisdiction as well. They do this because countries who are trading partners with the U.S. have their own guidelines for imports. The FDA ensures that our exports meet the standards of other countries.
The Environmental Protection Agency (EPA)
The EPA monitors the foreign trade of products that may cause harm to the environment. The categories of products they regulate are:
- Pesticides and Devices
- Substances that Cause Ozone Depletion
- Chemical Substances
- Vehicles, Engines, and Fuels
- Wastes
The EPA regulates other products that would be considered “other requirements.” These include coatings used in architecture, products used for personal care/cleaning, and plumbing products. Just like with the FDA, the EPA’s regulations differ depending on the product being imported.
Another regulation of the EPA that importers and exporters must follow is the Greenhouse Gas Reporting Program (GHGRP). This regulation applies to exporters and importers of the following products:
- Coal-based liquid fuels
- Petroleum products
- Industrial gasses
- Carbon dioxide
- Fluorinated GHGs contained in pre-charged equipment or closed-cell foams
There are specific requirements for each of these products that would necessitate reporting to the EPA. The specific requirements state that if someone exports or imports an equivalent of 25,000 metric tons
The items that you are importing will determine if you need to get a license or permit. According to CBP standards, an importer doesn’t need to have a license. However, other government agencies might require one depending on what you import. The CBP only acts as an administrator for these government agencies. The CBP also plays a part in the export process. Some of the laws they follow are the same as other agencies. Exports don’t usually require permits or licenses and the process is typically much shorter. If you do not need a license or permit for an import, you will still have to complete CBP document forms. Likewise, you should research your export to make sure that it doesn’t require a permit or license as well.
What About a Customs Bond?
You will need a customs bond under two circumstances.
1st. if you are importing commercial goods that have a value of over $2,500. Commercial goods are goods and services that are made available for purchase.
2nd. circumstance is if the goods you are importing are regulated by another federal agency.
If you need a customs bond, there are two different types that you can obtain. The first is a continuous bond. This bond will cover you for any number of imports for the entirety of a year. When you only import items on a less random basis you should use a single transaction bond. This bond is good for one time use only.
Documents Needed
There are many different documents that are needed for importing and exporting. However, there are two documents that you can count on needing for both.
- bill of lading
- commercial invoice/packing list.
The bill of lading is an extremely important document that both importers and exporters need. This document is signed by both the exporter and the importer. The document also contains important information regarding the import.
- Description of Goods
- Quantity of Goods
- Weight of Goods
- Name of Recipient
- Address of Recipient
- Terms of Sale
The second document that both importers and exporters will need is the commercial invoice and packing list. While these documents might seem different since they each have different names, the two are grouped together because they contain roughly the same information. The only real difference between the two is that the packing list requires a more detailed summary of the goods. When you fill out these documents, you need to make sure that the information on each document matches one another.
The following information that will need to be included on the commercial invoice is the:
- Name and address of both the seller (exporter) and the buyer (importer)
- Value of goods
- Quantity of goods
- Description of goods
- Tariffs on imports and exports
When you import items into the U.S., you will likely have to pay a tariff on them. The CBP collects tariffs on behalf of the Department of Commerce or DOC. The rates of tariffs can vary depending on what item you are importing and from what country it is coming from. Tariff rates are determined by an item’s HTSUS code — a 10-digit code used for tariff and product classification. Every internationally traded product falls under a specific HTS code which you can find by using an HTS code lookup tool. This code will let you know the duty owed on a product depending on which country it’s being imported from and whether or not the U.S. has a free trade agreement (FTA) with said country. If there is an FTA in place, tariff rates will either be reduced or free. Otherwise, you’ll likely owe some form of duty on your import.
Under Title 19, section 1467, of the United States Code (19 U.S.C. 1467), CBP has a right to examine any shipment imported into the United States and it is important to know that you, the importer, must bear the cost of such cargo exams. Per the CBP regulations, it is the responsibility of the importer to make the goods available for examination-- "The importer shall bear any expense involved in preparing the merchandise for CBP examination and in the closing of packages" (19 C.F.R. 151.6). Household effects are not exempt. No distinction is made between commercial and personal shipments.
CBP created 10 industry-specific Centers to increase uniformity at the ports, facilitate the timely resolution of trade compliance issues nationwide, and further strengthen the agency's knowledge about industry practices.
Centers Webpage - Information on how the Centers transform the way CBP approaches trade operations and works with the international trade community; the Centers are aligning with modern business practices, focusing on industry-specific issues, and providing tailored support to unique trading environments.
Federal Register - Regulatory authorities and codification of centers under TFTEA.
Centers Directory - A directory that provides all contact information for each of the Centers.
Centers of Excellence and Expertise (Centers) are industry-focused and account-based operational organizations processing post-release trade activities on behalf of US Customs and Border Protection (CBP).
Centers are aligned by 10 key industry sectors in strategic locations at Ports of Entry across the U.S. and are the strategic point of connectivity between the trade community and CBP operations. The Centers increase uniformity of practices across the Ports of Entry, facilitate the timely resolution of trade compliance issues nationwide and strengthen CBP’s ability to protect the U.S. economy.
The Centers are comprised of organization units that focus on one of the following strategic areas:
Partnership Division: Streamline trade facilitation efforts through partnership programs and increase industry-based knowledge through bi-direction education efforts.
Validation and Compliance Division (V&C): Validate risk factors within an industry sector and develop approaches to improve compliance.
Enforcement Division: Develop and address risks through impactful national enforcement plans and strategies.
Related Centers of Excellence and Expertise Information
Regulatory Implementation of the Centers of Excellence and Expertise
Centers Trade Process Document
Centers Contact Directory
CBP has provided new tools to better enforce IPR, enhance collaboration with IPR holders, and strengthen international partnerships to stop counterfeiting at the source.
IPR Webpage - Information on how CBP engages in the interdiction of products that infringe on the U.S. trademarks, copyrights, or exclusion orders issued by the U.S. International Trade Commission
IPR Brochure – Overview of IPR, one of CBP’s Priority Trade Issues (PTIs)
Failure to comply with the new rule could ultimately result in monetary penalties, increased inspections and delay of cargo.
Types & Amounts of Import Non-Compliance
Customs has outlined penalties and fines for failing to meet customs compliance requirements in 19 U.S.C. § 1592. Under this statute, Customs can apply monetary and fines based on:
- the severity
- type
- history of the importing company.
Government agencies render different fines and penalties based on:
- merchandise of duties
- taxes
- fees.
Customs also has three levels they use when determining the severity of non-compliance:
- Negligence: Customs will find you negligent if your company fails to exercise reasonable care and competence required from a compliance procedure. Clerical errors do not constitute negligence, and unintentional electronic errors may not result in negligence.
- Gross Negligence: This level of culpability means that importing goods was done with adding false information or omitting relevant facts from CBP while importing goods.
- Fraud: This is the most severe culpability level because it means that an importer knowingly provided false statements or omitted information from regulatory agencies.
Common Trade Compliance Program Mistakes
Your business needs a comprehensive import compliance program if your supply chain relies on international trade and imported goods. Import regulations are continually changing, and the U.S. government requires importers to meet strict guidelines at each import process stage.
An import compliance program needs to adapt to changes among different government agencies each year, and all imported goods must be classified and reported accurately to ensure tariffs, duties, and other regulatory requirements are met. Some importers choose to handle their import compliance program in-house.
Cargo Control
CBP uses risk-based analysis and intelligence to pre-screen, assess and examine 100 percent of suspicious containers. Remaining cargo is cleared for entry into the U.S. using advanced inspection technology.
Standard Guidelines for CBP/Trade Outages
Bonded Warehouse Manual for CBP Officers and Bonded Warehouse Proprietors
How Cargo Flows Securely to the U.S.
Foreign-Trade Zones
Automated In-Bond Processing Business Process Document
In-Bond Regulatory Changes Frequently Asked Questions
Computation Formula of Mod-7 Check Digit
Examination and Detainment
Historically, cargo entering the United States from any foreign territory has been subject to physical examination by the U.S. Government to verify that it complies with U.S. laws and regulations. After September 11, 2001, a new combined organization of Border Patrol, the Immigration and Naturalization Service, Agriculture Inspection, and the U.S. Customs Service became Customs and Border Protection (CBP) in the Department of Homeland Security. CBP now assumes a leading position in the defense of Homeland Security to protect the country against terrorists and weapons of mass destruction.
The CBP antiterrorism mission is not limited to the physical examination of cargo when it arrives in U.S. ports. CBP is also using intelligence from a number of sources to identify high-risk shipments in order to concentrate its inspectional resources on them. Domestically, CBP is working with the thousands of companies who are members of the Customs Trade Partnership Against Terrorism to emphasize security in the supply chain, so that CBP cargo examinations can be given even more selectively.
An important part of the CBP mission remains the facilitation of legitimate trade. In addition to its own regulations, CBP enforces over 400 laws on behalf of over 40 other U.S. Government agencies. A large number of these import restrictions and requirements are designed to protect the American people from dangerous and illegal goods. CBP has undertaken a number of initiatives, such as the use of non-intrusive inspection technology, to increase its ability to examine cargo effectively without slowing the flow of trade, which plays a significant part in the U.S. economy. Customs detainment can be a major hassle. Once it is detained you have to try to get it released by completing the necessary paperwork or paying the necessary fees. Understand why the shipment was held in the first place. Understanding the Customs process times. Not all Customs holds are because there is an issue with the shipment. Customs processes tend to take time in most countries.
Maintain a business office staffed in the U.S.
Other partners (such as carriers, customs brokers, and manufacturers):
Demonstrate excellence in supply chain security practices.
Have no significant security-related events.
Meet industry-specific security requirements 3.
Remember, each application is considered individually, and CBP assesses eligibility based on trust and security practices. If your company qualifies, you can actively participate in the CTPAT program! 🌟312
Process
The certification process for CTPAT varies based on several factors, but here’s a general overview:
- Application Submission: After submitting your application, CBP reviews it for completeness and eligibility. This initial step typically takes a few weeks.
- Validation Process: If your application is accepted, CBP schedules an on-site validation visit. The duration depends on your company’s size, complexity, and location. It can range from a few days to several weeks.
- Corrective Actions: If any security gaps are identified during the validation, you’ll need to address them. The time required depends on the specific issues found.
- Final Approval: Once all requirements are met, CBP grants certification. This step usually takes a few weeks.
Overall, the process can take several months from application to certification. Remember that maintaining consistent security practices is essential to remain certified.
During the validation visit, CBP representatives visit your company’s facilities to assess your supply chain security practices. Here’s what typically occurs:
Interviews: CBP interviews key personnel, including security coordinators, managers, and employees. They discuss security procedures, documentation, and compliance.
Physical Inspection: Inspectors examine your facilities, cargo handling areas, storage spaces, and security measures. They verify compliance with CTPAT security criteria.
- Document Review: CBP reviews your security-related documents, such as security plans, training records, and incident reports.
- Security Assessment: Inspectors evaluate your security practices against CTPAT’s minimum security criteria. They may ask for evidence of specific security measures.
- Corrective Actions: If any deficiencies are found, you’ll receive recommendations for corrective actions. Address these promptly to maintain certification.
Remember, the validation visit is an opportunity to demonstrate your commitment to supply chain security.
Procedure:
CTPAT Trade Compliance Handbook:
Refer to the CTPAT Trade Compliance Handbook provided by the U.S. Customs and Border Protection (CBP).
1. It offers detailed guidance on modernized trade compliance within the program.
- Understand the requirements and best practices outlined in the handbook.
Written Cybersecurity Policies:
- Develop comprehensive written cybersecurity policies and procedures based on industry standards
2. Ensure they cover data protection, access controls, incident response, and risk management.
Regular Training:
- Train employees on C-TPAT security protocols.
- Reinforce the importance of compliance and vigilance.
Risk Assessments:
- Conduct regular risk assessments of your supply chain.
- Address vulnerabilities promptly and adjust procedures as needed.
Internal Audits:
- Regularly audit your security practices.
- Identify gaps and implement corrective actions.
Remember, consistent compliance strengthens your supply chain security and facilitates smoother processing by CBP
Validation
During the CTPAT validation process, there are several common reasons why companies may fail:
- Inadequate Documentation: If your security-related documents (such as security plans, training records, or incident reports) are incomplete, outdated, or don’t align with CTPAT requirements, it can lead to a failed validation.
- Lack of Employee Training: Insufficient training for employees regarding security protocols and procedures can be a red flag. Regular training ensures everyone understands their roles in maintaining security.
- Physical Security Gaps: Any physical vulnerabilities, such as unsecured access points, inadequate fencing, or poorly monitored areas, can result in a failed validation.
- Non-Compliance with Security Measures: If your company doesn’t consistently implement the security measures outlined in your security plan, it can jeopardize certification.
- Insufficient Supply Chain Partners’ Cooperation: CTPAT encourages collaboration across the supply chain. If your partners (e.g., carriers, suppliers) don’t meet security expectations, it can impact your validation.
If a company fails CTPAT validation, CBP provides guidance on addressing the identified deficiencies. The company must promptly implement corrective actions to meet security requirements. Failing validation doesn’t automatically result in removal from the program, but consistent non-compliance may lead to suspension or removal. It’s crucial to maintain robust security practices and address any gaps promptly.
The timeframe for addressing deficiencies identified during CTPAT validation varies. CBP typically provides a reasonable period for corrective actions, considering the specific issues found. It’s essential to promptly address any gaps and demonstrate commitment to supply chain security.
If you find it challenging to address the deficiencies within the specified timeframe, communication is key. Reach out to CBP promptly and explain the situation. They understand that unexpected obstacles can arise. By maintaining open communication and demonstrating your commitment to resolving the issues, you can work collaboratively toward a solution.
CBP conducts revalidations for CTPAT partners on a three-year cycle. During the revalidation process, CBP reviews your security practices, documentation, and compliance to ensure ongoing adherence to CTPAT requirements. It’s essential to maintain consistent security measures throughout the certification period.
Preparing for a successful CTPAT revalidation involves several key steps:
- Review Your Security Measures: Assess your existing security practices against CTPAT criteria. Ensure that all required measures are consistently implemented.
- Update Documentation: Review and update security-related documents, including security plans, training records, and incident reports. Make sure they reflect any changes or improvements since the last validation.
- Employee Training: Conduct refresher training for employees on security protocols. Reinforce their understanding of their roles in maintaining supply chain security.
- Incident Reporting: Ensure that your incident reporting procedures are effective. Promptly document and address any security incidents.
- Collaborate with Partners: Engage with supply chain partners (carriers, suppliers, etc.) to verify their compliance with security requirements. Collaboration is essential.
- Physical Security: Inspect your facilities for any physical vulnerabilities. Address gaps related to access points, fencing, and monitoring.