Posts Tagged ‘importing’


 

4 Keys to Importing into the USA

USA Flag MapIf you are new to importing goods into the United States there are many requirements, restrictions, and regulations involved. From quota restrictions, other government agency permits/inspections to Customs forms. Some information, such as an item being eligible for reduced rates of duty or eligible for one of the many Free Trade Agreements, or products that are not permitted to enter the commerce of the United States because they are manufactured from a facility located in an embargoed country, can only be determined if you know the products Harmonized Tariff Schedule classification number. Determining your product’s tariff number can be extremely complex.

Starting out with a good understanding of Customs regulations and requirements are key to importing success.

Requirements for shipping to the United States:

1. Customs Clearance:

Customs clearance is probably the first thing to consider. Depending on the value of your shipment you need to determine if a customs broker is required.  Typically,  Customs will allow you to enter shipments valued under $2500.00 into the U.S. without a formal entry. Goods that do not qualify for this entry exemption include U.S. Food and Drug Administration (FDA) regulated and other restricted goods, Anti-Dumping Duty/ Countervailing Duty (ADD/CVD) and quota goods.

If formal entry is required you need to have an account set up with a customs broker and documentation prepared prior to shipping.  Documentation is usually completed by the exporter or supplier prior to the goods being delivered to the carrier.  The importer of record is ultimately responsible to ensure that the documentation provided is accurate and complete.  It is critical that you have all the proper documentation and information. Once paperwork is submitted to your customs broker, they will review the information for accuracy prior to the information being submitted to Customs.

2. Documents:

Documents that are typically required with each shipment are listed below:

  • Customs or Commercial Invoice
  • Bill of Lading
  • Other government agency documents
  • Commodity specific requirements or documents

3. Commodity Specific and Other Government Agencies (OGA):

Commodity specific and other government agency (OGA) requirements depend on other government agencies’ safety, energy efficiency, health, etc. standards. Many of the items cannot be imported without a permit, license or additional documentation to satisfy the agencies’ requirements.

Everything imported into the U.S. must be properly marked with the country of origin.

There are some exceptions to the marking requirements which are listed in the federal code of regulations 19CFR134.33 the J List exceptions.  Some products are very hard, or impossible, to mark, such as bolts, nuts, washers, cut flowers, or firewood. However, some articles described in this list which are imported in a container, the container in which the product will reach the ultimate purchaser is required to be marked with the country of origin.

4. Duty Rates:

Duty rates are fees that are paid to U.S. Customs and Border Protection and are based on the classification of the products that are entering the U.S.  The importer of record is responsible for paying these fees.  Your customs broker has the authority to pay the duty fees on your behalf and invoice you for them or set up an ACH account and you would have the ability to pay the duty direct to Customs.

Products that enter the U.S. are classified according to the Harmonized Tariff Schedule of the United States.  Goods are placed in a product category called classification, the number used to classify the product is more commonly referred to as a Harmonized Tariff schedule or HTS number.  The classification number is 10 digits and that number determines the rate of duty that will be applied to your product.  U.S. Customs has an online version of the most current HTS codes available.

Classification can be a very difficult process that generally requires a lot of research and product information.  As the importer of record (IOR), you are ultimately responsible for providing the correct product classification to U.S. Customs.  Entering goods into the United States with an incorrect classification or duty rate could result in penalties or increased duty bills.   Many importers choose to hire a customs broker to assist them with the classification of their goods. Do not be surprised if your customs broker asks for ingredient lists or written literature on your product when assisting you with your product classification.

In conclusion, it is the Importer of Record’s (IOR) responsibility to make sure that their goods meet all the requirements for entry into the U.S.  A customs broker can lend a hand and assist you with the various requirements and regulations.  Always plan ahead and be sure to know before you go to ensure a hassle free importation into the U.S.

 

Want to learn more about the fundamentals of cross-border shipping? Attend a Customs Compliance Seminar hosted by Pacific Customs Brokers and learn from the experts.

Have questions or comments regarding importing to the USA? Leave them in our comments section below or email Ask Your Broker.

 

4 Ways to Benefit from Free Trade Agreements

Are you familiar with the North America Free Trade Agreement (NAFTA) and the responsibilities you assume when receiving the benefits of duty free status on imported goods?

With the relative ease in enjoying the benefits of NAFTA, you can also take advantage of free trade on importations from other participating countries.

Free Trade Agreements (FTAs)

Free Trade Agreements (FTAs) are agreements made between countries who desire to reduce trade barriers on goods manufactured in their respective countries. Canada has entered into Free Trade Agreements (FTAs) with several countries including Colombia, Peru, Panama, and Chile to name a few.

Things to consider when evaluating your costs and responsibilities:

1. Determine if the goods are coming direct from a foreign country

In order to receive the benefits of a FTA, the goods must be manufactured in the respective country, qualify under the rules of origin and be shipped directly from the foreign country to Canada.  In some instances, it is necessary to transfer the goods through a third country.  A transportation scenario like this can still meet the FTA rules, but there are some conditions that must be met.  In this instance, if the importer wishes to claim duty free benefits under a FTA, they will need to have proof that the goods were moved “in bond” through another foreign country and have never entered the commerce of that country.

 

2. Make sure the exporter has sufficient knowledge to complete FTA documents

It is imperative that your foreign supplier has sufficient knowledge of the Free Trade Agreement.  The person completing and signing the FTA Certificate of Origin is declaring that all statements are true and accurate; in other words, that due process has been observed and the goods listed actually qualify.  While the foreign supplier is responsible to supply the respective FTA Certificate of Origin, the Canadian importer is ultimately responsible for duties, fines and penalties if at a later date and it is discovered that the goods do not qualify.  If you have reservations regarding the validity of the supplier’s claim, you may wish to pay the regular rate of duty.

 

3. Verify the tariff classification

Our previous blog  ‘4 Reasons for Determining the Correct Harmonized Tariff Classification’ covers the reasons of this important step.  In reference to FTAs, the obvious assumption is that goods imported under free trade should be duty free.  This is incorrect.

Establishing the rate of duty for an imported good depends, in part, on determining the proper H.S Tariff Classification. Tariff classification can be very complex and speaks to the essential character of the article being imported:

  • What article is being imported?
  • What is the article made of?
  • What is the item used for?

It is very important that the H.S. Tariff Classification is correctly assigned to each product, as the H.S. Tariff Classification determines the rate of duty.  If you are unsure regarding the H.S. Tariff Classification, please contact Pacific Customs Brokers for assistance.

To learn more about The Harmonized System Code (HS) Code:

  1. Read another one of our blog articles: How Much Do You Know About H.S. Tariff Codes?
  2. Attend a Harmonized System Tariff & Classification Workshop.

 

4. Be aware of the rules of origin

Not all FTAs are the same. Trade agreements were endorsed to provide advantages for importers and exporters; you must understand the responsibilities in order to utilize the savings.

 

Additional Resources:

For more information on the respective Canadian Free Trade Agreements, visit the  Trade Negotiations and Agreements section of the Department of Foreign Affairs and International Trade Canada.

 

Has your business benefited from Free Trade Agreements? Do  you have questions about Free Trade Agreements? We welcome your comments below.

 

The Importance of a Bill of Lading

What is a Bill of Lading (BOL):

A bill of lading is a legal document between the shipper of particular goods and the carrier detailing the type, quantity, date of direct shipment and destination of the goods being carried. The bill of lading also serves as a receipt of shipment when the goods are delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver. The carrier or the shipper can complete it, but the driver of the transport company is to sign and date it once the goods are on-board.

What does Customs look for on a Bill of Lading?

The Canada Border Services Agency (CBSA) requires to know:

  • the number of pieces
  • total weight and
  • date of direct shipment for each shipment on board

The number of pieces, total weight and date of direct shipment is a requirement for the declaration made by the importer of record/customs broker. It is highly recommended that you provide a copy of the bill of lading to the importer of record/customs broker so that the information can be confirmed against the corresponding invoice(s) being declared. If a bill of lading is not provided to the customs broker, the carrier must still advise by other means, the number of pieces, total weight and date if direct shipment.

A carrier must always make the bill of lading available to a CBSA officer in the event it is requested.

 

Do you have questions on a Bill of Lading? Please share yours in the comments section below or contact Pacific Customs Brokers.

 

 

 

 

 

 

Bill of Lading: Top 4 Reasons You Need One

The Canada Border Services Agency (CBSA) needs and wants to know exactly what”s on your truck. To help make sure all goods on your truck are accounted for and declared, you must supply a bill of lading or pick up receipt when faxing your Pre-Arrival Review System (PARS) entry to your customs broker.

Why is a Bill of Lading used?

1. The main purpose of the standard straight bill of lading is that it is a contract of carriage.

Other useful purposes include:

2. It may incorporate the full terms of the contract between the consignor and the carrier by reference.
3. It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition.
4. When completed in full, it helps the customs broker match up commercial clearance paperwork to ensure they are able to make a complete declaration for all goods aboard that truck.

The carrier or the shipper can complete it, but the driver of the transport company is to sign and date it once the goods are onboard his/her truck.

Important information on a bill of lading:

For Customs purposes, some of the most important details on the bill of lading are:

  1. Piece count (total skids, boxes, pallets)
  2. Weight (total weight of the goods listed)
  3. Description of goods
  4. Date (the date of pick up/export is used to establish the date for exchange rate)

If there is only one (1) location you have picked up goods from, then only one (1) bill of lading or pick up receipt is required. If you are picking up from multiple locations, then you need to have a bill of lading or pick up receipt for each location you’ve picked up from.

Commercial Documents

When picking up freight from the shipper, they may give commercial documents to you. If they do, please send them to the customs broker with the bill of lading or pick up receipt. It is important that you send the customs broker all documents you have. It helps ensure that all required documents are in place to declare those goods to Customs.

If the shipper does not supply you with commercial documents, please let the customs broker know as soon as you know, so that they can work on getting the documents in order.

Other Documents

Often, a commercial invoice and bill of lading are sufficient for the customs broker and CBSA to process your load. There are many instances where special documentation will be required. Some examples of goods that need additional documents are:

  • CFIA regulated goods (fresh fruits & vegetables, fresh cut flowers)
  • Transport Canada regulated goods (vehicles) – which require another government agency (in addition to CBSA) to review the import

When faxing your PARS to the customs broker (at least five hours in advance), simply affix your barcode label to the bill of lading, making sure you are not covering up any important information. Be sure to clearly indicate which port you’re crossing at and on what date and time. Please also include your phone number so that you can be contacted in the case there are any documentation issues.

Remember to ALWAYS confirm that your load has been set up before you get to the border.

Be accountable for the goods you are transporting and your cross border experience. Providing all the appropriate paperwork and allowing the customs broker time to do their part, will truly ease your journey.

 

Do you have questions on a Bill of Lading? Share them in our comments section below.

 

 

14 Must-Know Tips For Importing

Here are some quick tips to help with a smooth import into Canada:

  1. Get detailed, factual information about the commodity you are importing.
  2. Customs clearance is not instantaneous. A customs broker has to recreate your Canada Customs Invoice(CCI) line by line electronically for the Canada Border Services Agency (CBSA) and other government departments. Once transmitted, the entry has to be reviewed by employees of the above mentioned departments.
  3. Determine if you are importing a regulated commodity.
  4. You should use one customs broker for all modes of transportation and all ports of entry.
  5. Examinations can be performed by any of the departments involved in importation.
  6. Some items are prohibited from entry into Canada — always do research on your commodity before you import.
  7. A shipment can be examined, even if previously accepted by Customs.
  8. Administrative Monetary Penalty System (AMPS) can be issued if any information provided is not in compliance with Customs regulations or found to be untrue.
  9. A customs broker requires certain information such as country of origin, currency and a complete description for every shipment, even in instances of repeat imports.
  10. Duty rates are in place to protect Canadian industry; not to inconvenience you. If a product has an extremely high duty rate, it is most likely for this reason.
  11. There is no such thing as “free”. No charge, free samples and giveaways still require all of the same information for Customs clearance as if they were purchased, including an accurate commercial value. Duties and taxes are still applicable.
  12. Hiring a customs broker enables you to access years of knowledge, experience and expertise in declaring your goods to Customs.
  13. Government forms can be confusing to complete. Save yourself time and read the instruction sheet before filling the form to ensure that it is completed correctly.
  14. Some commodities require additional documentation and certification in order to clear through CBSA and other government departments. Without the required documents, commodities can be refused entry into Canada.

 

Do you have any pointers that would be helpful for an importer? Share them in our comments section below.
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