U.S. customs compliance: A refresher
If you’ve been reading our blogs you might have caught our previous posts on this topic – for example, this one on customs negligence, and this more recent one on the “Mod Act” and non-compliance penalties.
But if you’re importing into the U.S., this is important stuff – and it can be a bit confusing – even for a seasoned importer!
In this blog, we’ll aim to clarify what you need to know and provide some advice for keeping on top of your company’s importation requirements.
Under U.S. law, importers of goods into the U.S. are legally responsible for declaring all relevant information pertaining to those goods. This includes information such as the goods’ value, classification and rate of duty, among others.
What happens if you don't comply?
Not complying with U.S. import requirements, whether it’s intentional or not, can result in penalties for the importer. The penalties vary depending on the level of culpability, which falls into three classifications:
- Negligence: a failure to comply due to not exercising reasonable care*;
- Gross Negligence: a failure to comply, with “actual knowledge or wanton disregard” for the requirements; and
- Fraud: a failure to comply due to “voluntarily and intentionally making a false statement or committing another non-compliant act.”
*Reasonable care is a bit of a mushy term. It’s not defined in the Mod Act (U.S. Customs Modernization Act) and the concept has been evolving ever since the act came into force in 1993. But don’t be left scratching your head. Two important actions you can take to ensure you’re exercising reasonable care are:
- Developing and following a customs compliance plan for your company, and
- Teaming up with a licensed customs broker.
Create an in-house customs compliance plan
Companies doing regular cross-border business with the U.S. are well-advised to create and implement a customs compliance plan. Such a plan should include programs and procedures to:
- Document and store records of import activities (keeping in mind that records must be kept for five years);
- Ensure goods are properly classified and valued, and the country of origin correctly declared;
- Confirm that what was entered before receiving goods was actually received (with respect to both type and quantity of items);
- Respond to any customs requests for information, in consultation with your customs broker;
- Verify qualification for any special tariff or duty rates; and,
- Update and amend the plan as needed.
Once you’ve created a plan that suits your business, be sure to follow it and update it as needed to keep it relevant. Once the system and procedures are in place and working, there’s a very good chance you will have exercised the reasonable care required by Customs.
Pair up with an experienced customs broker
Businesses wishing to understand U.S. Customs regulations would do well to partner with an expert in the field. We have the knowledge and experience you need. Our customs professionals on both sides of the border are ready to work with you to help you understand your responsibilities and make your importing hassle-free.
Information provided by: U.S. Customs Consulting Dept. - Cole International
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