USA Customs Import and Export Laws

A leading player in the world economy, the United States enjoys an abundance of natural resources, a highly educated work force and a strong consumer base. These assets, coupled with a tradition and respect for the rule of law and strong protection of business and private property rights, has attracted businesses to the United States from throughout the world.  These businesses find trading partners within the United States and often find it advantageous to establish their own business units in the United States to leverage business opportunities available to domestic companies and their owners.

U.S. Customs and Border Protection, (commonly known as “CBP”) has primary responsibility for enforcing the trade laws at the border and for ensuring that the trade community complies with the import and export laws of the United States.  CBP is also responsible for supply chain and border security matters involving the international flow of cargo to or from the United States. Importers and exporters are, under penalty of law, required to use reasonable care to insure the correctness of the documents and declarations filed at time of import or export of cargo.  The failure to do so may result in enforcement action by CBP or other federal agencies, including assessment of monetary penalties and/or seizure of the goods. CBP’s responsibilities also include education and working with the trade community to assist and help motivate importers and exporters to comply with the law.

Because of the large number of special trade programs which the United States offers, the effective average tariff rate (Customs duties) on imports of goods is well under 10%.  However, specific duty rates can vary significantly depending upon the product, whether it is entitled to a duty preference, or, if the product is subject to a trade enforcement action, such as an antidumping or countervailing duty investigation or order.  The duty is paid by the importer of record; estimated duties are deposited at time of entry and final duty determinations are made at time of liquidation of the consumption entry, with additional duties assessed or refunds issued in those cases where CBP determines that the amount deposited at time of entry is incorrect.  CBP decisions are subject to administrative appeal and judicial review. Similar to many of its trading partners, U.S. law permits the temporary importation of products for various purposes without the payment of duty and permits returning travelers to bring in limited quantity of merchandise purchased aboard for personal use without payment of duty.  The trade laws of the United States also permit the establishment and use of various devices, such a bonded warehouses and foreign trade zones to defer duty payment until product is needed for distribution or eliminate duty payment for products intended for export.  Other duty preference of programs of general interest include drawback (refund) of duties which may be available upon exportation of merchandise.

In most cases a license is not required in order to import merchandise into the United States.  However, certain classes and types of goods may require a permit or license from various government agencies in order to be imported or, in certain cases, exported. Unlike some other countries, the U.S. permits non-resident companies to act as importers of record.  A formal entry is usually required for commercial shipments valued over $2,500.  Formal entry requirements include the posting of a bond to secure release of the goods, submission of the entry and entry summary with related paperwork, including commercial invoice, bills of lading, packing lists and other required documentation necessary to establish entitlement of the goods for release from CBP custody and admission into the United States.  If a formal entry is required, CBP regulations require the customs broker filing entry on behalf of the importer to put the ultimate importer’s identification number on the Entry Summary CBP Form 7501.

Basic information required at time of import includes a full and complete description of the product as well as its quantity, country of origin and value.  Although CBP is charged with ultimate responsibility for fixing the appraised value (value for duty) and classification of the imported goods, the importer is required to provide the correct tariff classification and value on the import documents submitted to Customs upon arrival of the goods.  The importer is also required to insure that all documents provided to CBP are complete and correct and that the goods are entitled to any duty preference programs claimed at time of entry.

Under U.S. tariff law, all imported merchandise, unless otherwise excepted, is required to be marked with its country of origin.  In certain cases, for example, watches, apparel and textiles, electronics and wireless communication devices, food products, etc., additional special marking requirements apply.  Products which do not meet the marking requirements are subject to exclusion or seizure; in some circumstances, the importer may be subject to a monetary fine or assessment of liquidated damages for a non-compliant import or export.

The United States has entered into over a dozen special trade preference programs with various trading partner countries and is currently in the process of negotiating a major regional trade agreement with nations in the so called Pacific Rim.  Each trade agreement and preference program has its unique rules of origin and documentary requirements necessary for entitlement.  The failure to comply can result in disallowance of the claimed duty preference, resulting in unanticipated duty liability and reduced margins, and in the worst case, such failures can lead to administrative sanctions or other enforcement actions.

We represent and advise clients in a broad range of export and import matters, including duty preference claims and origin verification claims under the North American Free Trade Agreement (NAFTA) as well as matters arising under other trade preference programs, e.g., the United States-Israel Free Trade Act (including Qualified Industrial Zone issues for Jordan and Egypt), the Dominican Republic-Central America Free Trade program (DR-CAFTA), the Caribbean Basin Initiative programs, and the Korea, Australia and Singapore FTA’s.  We routinely assist clients in preparing for and dealing with Focused Assessment and targeted compliance audits conducted by the Regulatory Audit Division of CBP.

Our firm also provides tailored services to importers in various areas of Customs law, such as Customs Valuation for Duty, including transfer pricing issues arising out of related party transactions, Duty Preference Programs, Tariff Classification, Foreign Trade Zone and Bonded Warehouse Operations, Country of Origin and related Marking Laws, Recordkeeping Requirements, Drawback Documentation, Intellectual Property Protection, Entry Requirements and Border Security.  We assist clients in minimizing Customs duty obligations while attaining a high level of compliance with United States Customs laws and regulations.  We also help firms with various Customs related issues affecting cross border operations within the NAFTA Territory and in achieving compliance with regard to their export transactions on shipments from the United States.

Success in achieving business goals requires advance planning and giving careful thought to identifying and solving issues before they become costly problems.  Our experience, knowledge and expertise gained in over a hundred years of combined practice provide the key to help unlock the opportunities of doing business as a trading partner in or with the United States.