Cross-Border Guide: Understanding The United States Import Process

The United States is the largest market for imported goods. No matter what your business may be, importing and exporting to the U.S. will help expand your customer base and profit. However, the process is not always cut and dry. If you're going to do business in the U.S., you need to know your import and export obligations. Over the years, we've heard many myths and misconceptions about importing and exporting products through cross-border trade. We've broken down the basics of what’s happening so you can make smart decisions when engaging with U.S. customs.The first thing you should know about shipping goods internationally, is that it is all about preparing. While Canada's import process is centered on CBSA regulations, the primary difference here is the government agencies involved and some of the requirements. Canada and the U.S. do share a border and do have a similar process for importing/exporting, but they have different customs regulations, so knowing what those are beforehand can be helpful.

Understanding the Government Agencies

When importing or exporting into the United States, the primary agency you will be dealing with is the CBP (Customs and Border Protection). Any shipments and entry need to be in accordance with regulations and involve all the relevant agencies. Carriers and shippers must identify themselves to CBP properly, otherwise they will not be cleared to cross. 

For the U.S., regulations are not just set in place by the CBP, but also other government agencies overseeing specific types of product. If you are shipping clothing for example, then the Federal Trade Commission also has regulations you must follow, while the FDA (Food and Drug Administration) is responsible for regulations regarding food or beverages. These agencies may review your goods/import declaration in order to decide if you are allowed to import into the U.S.. If your shipment requires additional documents, it would be as a result of some of these agencies regulations, which is why known what you are shipping is important. Some shipments may require, for example, a Certificate of Hygiene, so communicating with the relevant agencies or your broker is going to help ensure you have all the required documents. 

Understanding the Different Types of Entry

In the United States, your goods can enter via formal (commercial) or informal entry and the primary difference is in the value of your goods. Most goods would enter via formal entry, because often shippers do ship large quantities or value of goods. As of now, according to the U.S. government, most goods valued over $2500 USD require formal entry. This also means that most exports/imports would require a customs broker, due to the complexity of the process. If you are shipping informally, then the shipment needs to be accompanied by the exporter, or the consignee collects it at the port of entry, without a need for a customs broker.

However, keep in mind that U.S. customs can at times require formal entry and a broker even if the goods you are shipping are not a specific value or controlled goods, as they do have discretion on these matters. 

In the U.S., a broker is required to clear shipments of controlled goods, meaning goods which require licenses (either U.S. or Canadian), in order to cross. Some of these would be categories such as:

• Alcohol
• Tobacco
• Animals/Animal products
• Biological items (medicine, narcotics, dairy etc.)
• Petroleum

Understanding the Required Documents 

In order to enter the U.S. with commercial goods, certain documents need to be in place and correctly filled out. Some of the required documents for entry are:

• Bill of Lading
• Commercial or Customs Invoice
• Certificate of Origin
• Importer ID number

Similar to Canada's system, but you would file an ACE eManifest, and you will need your U.S. Customs Invoice, which contains the shipper and consignee information, description of goods, IRS number, value and country of origin.

All of your goods also require HS Codes, or tariff classification and this is going to be part of the forms you are submitting as well. The carriers will require a SCAC code and their PAPS or PARS as well; and though this is part of the carrier requirements, the shipper should still be aware of them. For informal entries, there are less documents required, but the shipment should still have a commercial or Customs Invoice and Certificate of Origin.

The Importer of Record is the party or individual responsible for filing entry documents with customs at the port of entry. The Importer of Record can be the exporter, consignee, or a customs broker.

Understanding How to Deal With Customs

If you plan on deferring payment of duties or taxes/fees on the shipment, then you have the option to have your goods sent to a bonded warehouse. Otherwise, duties, fees and taxes need to be paid before the goods can clear, and a customs broker would usually be able to calculate and handle this aspect of the shipment. The broker files documents and information with U.S. customs, after appraisal of the duties/fees is done on the shipment. Keep in mind, duties/fees must be paid before the item clears customs. Duties are determined using the tariff, origin and value of goods.

You can expect your shipment to be examined by customs for value, validity of the documents, and whether you are shipping any prohibited items. U.S. customs primary concern is safety, which is why the regulations in place are strict.

Customs will examine the invoice, Bill of Lading, and any other documentation as well as the cargo itself, in order to grant entry. You also can be audited after the fact, so keep your import records for up to five or six years after importing.

Understanding the Mistakes to Avoid

Incomplete or improperly filled out documents are the primary reason that shipments do not get cleared at the border, which is why going over the documents is important. A customs broker can file the documents correctly usually, as they specialize in the area. Errors can be subject to fees and penalties, including having to pay fees of up to nearly half of the goods value, as well as having your privileges revoked.

Using a broker who is familiar with the regulations can help avoid some of these errors. You also want to ensure you communicate with broker and carrier regularly, which is why using a platform like Zipments.io, which allows you to streamline communication, makes the process easier and less prone to any errors, since there is visibility every step of the way.

Resources You Can Use

If you are new to importing or wanting to make the most of the process, currently you are allowed to contact CBP import or entry specialists at the port of entry of your choice and ask questions. They can provide advice on classification, specific requirements and any entry questions. You need to provide enough detail to describe your shipment in order to receive the clearest answer, including the intended use, country of origin and description of goods.

You can also use the Zipments.io platform to generate Customs Invoices for free. The great thing about technology, is that through the Zipments form generator, the tariff code is automatically generated and the invoice is completed with little room for error. 

Border crossings and international shipping are usually not that difficult, if you prepare ahead of time. There is a lot of paperwork and detail involved in exporting and importing products to or from U.S. and Canada. You can't take the U.S. Customs and Border Protection lightly. However, you can make the whole process smooth and stress-free by knowing some of the steps ahead of time. The technology and resources will help you get through it, stress-free and hassle-free.