Import FAQs

An Import Compliance Manual is a set of documented processes and procedures for handling import shipments so that the various government laws and regulations are followed. An Import Compliance Manual also helps to ensure that everyone in the company knows how import shipments are to be handled compliantly.

There are numerous policies and procedures that the import manual should include. These sections should include the program organization, personnel and responsibilities, import documentation, broker instructions, entry process procedures, Other Government Agency (OGA) requirements, import review, post entry review and corrections, training, guidance on tariff classification, and Free Trade Agreements.

A good import compliance manual will reflect the businesses policies and procedures as they are, not what the company wants them to be. It will be specific and will have achievable goals. The compliance manual should have meaningful objectives and procedures. It should address regulatory requirements and best practices. A good import compliance manual should also be reviewed on an annual basis to make sure policies and procedures stay relevant to the ever-changing regulations.

A Customs violation is breaking the laws or regulations established by any of the government agencies that can impose restrictions on what is imported into the United States. These agencies include Customs and Border Protection (CBP), Food and Drug Administration (FDA), and the US Department of Agriculture (USDA).

Typical Customs violations include not claiming additional antidumping duties, valuation errors, using an incorrect HTS classification, and claiming a Free Trade agreement or US goods returned that haven’t been verified. Violations can be prevented by using reasonable care, knowing the regulations and reviewing the Informed Compliance Publications from Customs that relate to your business. Other ways to prevent violations include hiring an experienced consultant that can assist you in interpreting the regulations, performing regular audits, and ensuring adequate training to ensure that you are in compliance with the regulations.

Implemented in 1993, the Customs Modernization Act established the requirement that all importers must exercise reasonable care when importing goods into the U.S. No matter the size of your business, it is your responsibility to be compliant with all trade regulations. Not declaring items with Customs can result in negative consequences such as fines, penalties, and detention of your product. If your business imports anything, then you are solely responsible for ensuring that you comply with the regulations.

Customs has a penalty assessment they follow depending on the type of violation, the level of culpability and if there was a duty loss. There could be civil or criminal penalties associated with the violation. These may include monetary penalties or even jail time. There are 3 levels that Customs assesses for culpability: Fraud, Negligence and Gross Negligence.

You should report any Customs violations. Once you find a violation, you should examine other entries to determine if there is a pattern of similar violations. Sometimes, these can be corrected as Post Summary Corrections or Protests if they fall within the applicable timeframe to have the entry corrected. If you find a systemic issue, you should submit a prior disclosure to Customs. It is always better to notify Customs of the error, rather than have Customs notify you.

Duty recovery is receiving back duty or fees from CBP that were overpaid. Common ways for duty to be overpaid is by not claiming a Free Trade Agreement at the time of entry, using an incorrect classification or value, or re-exporting imported goods after processing.

A Corporate Auditor may not have the appropriate knowledge needed to file the duty recovery with CBP. The Customs laws and regulations can be tricky to navigate for someone that is inexperienced. Duty recovery should always be performed by an experienced person that is knowledgeable of the import regulations.

The duty recovery process can vary in the time it takes. One entry might only take a few hours, whereas multiple entries can take longer. Once an issue is discovered that is protestable, it is good to look back at all of the shipments that have been imported over the past four years to see if there are more entries that can be incorporated into the duty recovery. Once the Protest is submitted to CBP for review, it can take anywhere from one month to two years to receive the money-back.

Yes, there is a time limit to recover duty. There are 2 ways to recover duty: A Post Summary Correction (PSC) and a Protest. A PSC can be filed once the entry has been filed up until 300 days from the date of the entry or 15 days prior to the liquidation date. The Protest can be filed after an entry has been liquidated and up to 180 days after the entry has liquidated.

A Customs Protest is a way to correct information previously entered on entry documents. The most common way protests are filed are either electronically or on CBP Form 19. A Protest can be accompanied by additional duties owed to Customs or a duty refund depending on what information is being corrected.

A protest filer is the person who files the protest. This can be the importer of record, their agent, or an attorney. 

A Customs Protest has to be filed within 180 days of the liquidation date.

A Customs protest can be filed electronically through ACE, but you must have a Protest filer account in ACE. Hard copies are also accepted at the Port of Entry and processed by the Centers of Excellence and Expertise. CBP will then enter the information into ACE.

The United States-Mexico-Canada Agreement, or USMCA, is a trade agreement between the United States, Mexico and Canada. It is similar to the North American Free Trade Agreement (NAFTA), but some specific areas have been updated from the previous agreement. Those areas include updates to the automotive industry, energy, and digital trade or e-commerce.

No, NAFTA Certificates of Origin will not be valid under USMCA. The USMCA does not require a specific Certificate of Origin, but the goods still need to be verified to ensure they qualify for USMCA. A Certificate of Origin will need to be completed, however, it can be in any format.

While most of the USMCA is the same as NAFTA, there were some improvements. One is for the automotive industry. The rules of origin were upgraded to help support an increase in US production and employment. Another area is energy.

The update for this area helps to fix an issue with hydrocarbons transported through pipelines and new flexibilities in the rules of origin for oil and gas moving through the three countries.

The final improvement is for digital trade. NAFTA did not include e-commerce or digital trade as it was developed prior to these kinds of trade.

To qualify for preferential treatment under the USMCA, goods must comply with the USMCA Rules of Origin.

The four origin criteria classifications define how a good qualifies:

Origin Criteria A: Wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 4.3 (Wholly Obtained or Produced Goods).

Origin Criteria B: Produced entirely in the territory of one or more of the Parties using non‐originating materials provided the good satisfies all applicable requirements of Annex 4‐B (Product‐Specific Rules of Origin).

Origin Criteria C: Produced entirely in the territory of one or more of the Parties exclusively from originating materials.

Origin Criteria D: “Except for a good provided for in Chapter 61 to 63 of the Harmonized System: (i) produced entirely in the territory of one or more of the Parties; (ii) one or more of the non‐originating materials provided for as parts under the Harmonized System used in the production of the good cannot satisfy the requirements set out in Annex 4‐B (Product‐Specific Rules of Origin) because both the good and its materials are classified in the same subheading or same heading that is not further subdivided into subheadings or, the good was imported into the territory of a Party in an unassembled or a disassembled form but was classified as an assembled good pursuant to rule 2(a) of the General Rules of Interpretation of the Harmonized System; and (iii) the regional value content of the good, determined in accordance with Article 4.5 (Regional Value Content), is not less than 60 percent if the transaction value method is used, or not less than 50 percent if the net cost method is used”.”