Importing goods from other countries is a common practice for businesses and comes with regulatory challenges.Failing to comply with import regulations can result in delays, penalties, and even the seizure of goods. Having correct processes can have a significant benefit on your business. This includes lower overall costs . In this blog post, we will explore common issues ot be aware of when importing goods.
Ensuring Compliance When Importing: A Guide to Smooth International Trade
Understand Import Regulations:
Ensuring compliance when importing involves comprehending tariff classification, rates, customs documentation requirements, import restrictions, and product-specific regulations.
Commercial Invoice for Imports
The commercial invoice is one of the most fundamental documents for international shipping. It is also the most basic once you understand what is required on a commercial invoice you can request the necessary information from your supplier or overseas.
Do not over-rely on a customs broker:
Customs brokers are knowledgeable in customs regulations and can assist you in navigating the import process. However, as the importer, you are ultimately responsible for compliance. Saying "my broker handled it for me" is not a valid excuse for non-compliance.
Classify Your Goods Correctly:
Accurately classifying your imported goods is crucial for compliance with import regulations. Each type of good is assigned a specific classification code, known as a Harmonized System (HS) code. Most countries offer assistance through what is often called an "advanced ruling" or "binding ruling."
Maintain Accurate Records:
Keeping accurate and comprehensive records of your import transactions is essential. This includes maintaining records of invoices, shipping documents, customs declarations, and any other relevant documentation.
Stay Informed on Regulatory Changes:
Import regulations are subject to change, so it is vital to stay updated on any regulatory changes. For instance, the tariff schedule for the US (USHTS) is updated several times per year.
Three Import Fundamentals: Tariff classification, declared value & country of origin
- Classification of goods. Everything begins with a detailed description of goods. The descriptions should be broad enough for a layperson to understand their intended use. And also include specific details regarding material components and other data points. From the description, the tariff classification can then be determined.
- Compliance with free trade agreements enables importers to benefit from 0% duty. Remember, the country you ship from is not necessarily the country of origin.
- Declaring a value for customs. In most cases, the price paid for the goods is the correct value to declare. However, valuation can be complex if it is between related parties. Also, "assists" such as a seller's commission, royalties, and packaging are often considered part of the transaction. Some countries also consider the cost of shipping as part of the value for duty.
Video: Understanding declared value to the USA.
Other Compliance Issues beyond the 3 fundamentals
4. Having adequate internal compliance procedures. Establishing a compliance manual and standard operating procedures with your suppliers and customs broker is an important consideration. Such processes should be supported with internal audits.
5. Over-reliance on third parties. Often, information from suppliers is subpar. Supplier information is more about the sale than about import compliance. Over-reliance on your customs broker or freight forwarder can lead to complacency and overconfidence. Their work is only as good as the information they receive. Ultimately, the Importer of Record (IOR) is responsible for compliance.
6. Stay updated on ever-changing regulations. Trade regulations change regularly.
7. Compliance extends beyond import customs and can include other government agencies.
8. Ensure that the goods you import do not infringe on intellectual property rights.
Import regulations can be incredibly complex, and keeping track of them all can seem overwhelming. As a first step, it is best to first understand import fundamentals. From there, you can become familiar with import regulations that apply to your specific products or industry. The most important aspect is having trusted partners, whether they be a customs broker, freight forwarder, or consultant. The key term we use often among our team is being totally transparent.
Transparency and trust are actually the biggest keys, especially when it comes to importing, exporting, and dealing in a complicated regulatory environment. Contact our team to develop systematic automated compliance processes.
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