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How to Import for a Trade Show in the U.S. or Canada

Trade Show Imports Stand

Are you attending a trade show across the border? This post will teach you what you need to know about Trade Show Imports into the U.S. or Canada.

Trade Show Imports: Saul Better Call Us

Saul was going to display his super duper machine at a trade show in Houston, Texas. His machine was bound to be a disruptor in the market and he was excited to show it off. Saul booked his booth, made his travel plans and hooked his machine to the back of his pick up, threw his promotional material in his suitcase and headed for the border.

What Saul did not know was he had to take certain steps before he made his way out of Canada and into the U.S.

  1. He did not realize that the window cleaner and paper towel he would use to clean his display booth each night is considered a consumable item and would need a declaration for the portion used while he was in the U.S.
  2. Saul did not know that the promotional material he would distribute at the event would need a consumption entry
  3. He did not understand that the super duper machine would need a bond to avoid paying the entire amount of duties and taxes.

 

Needless to say, Saul was late to his trade show and he had a few more expenses (in the form of penalties) that he did not account for in his budget.

With 2018 freshly upon us you might have the same opportunity ahead. A trade show could likely be on your horizon. If you are asking the question “how can I get my trade show goods across the border?” first off, kudos to you for researching. Secondly, hooray, you have come to the right place.

In this blog you will find a practical checklist to help you prepare for an international trade show. As well as, what you will need to know to import your trade goods into the U.S. or Canada.


Trade Show Imports Checklist (7)

(1) Take Inventory

Make a list of what you want to bring to the show and split the list into two sections.

Section One

Section one will include everything you want to leave behind. Anything you would use, consume, giveaway or sell while in the country.

Section Two

The second section will include everything you will bring home.

(2) Remove Purchasable Products

If you have an item that will be used or consumed in the visiting country, a simple option is to buy the product once you arrive rather than import them. A good example would be cleaning supplies. Even something as simple as glass cleaner could provide a hold-up at customs. Purchasing supplies in the country you are visiting will eliminate risks when clearing customs.

(3) Are the Goods Eligible?

Check with Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), the Participating Government Agency, or your Customs Broker to see if there are any restrictions on the goods you are wanting to take to the show.

(4) Marking, Quantity & Packaging

All samples must meet marking regulations, and they must be within the country’s quantity and packaging requirements. Otherwise your goods could experience delays or be seized at customs.

(5) Entry Type

Find out from your customs broker what is the best type of entry to use for your goods. A Customs Broker will be able to help with your timeline requirements and potentially reduce your costs at customs.

(6) Letter of Recognition

The International Events and Convention Services Program (IECSP) was developed to encourage businesses and organizations to hold trade shows, conventions, events and exhibitions in Canada. They provide guidance and information to facilitate event participants, foreign exhibitors, and temporary imported goods and materials, into and out of Canada.

CBSA offers the IECSP in order for you to have one primary contact to provide you with federal government services and requirements associated with international events and conventions taking place in Canada.

The event organizer will often work alongside the IECSP’s Regional Coordinator to ensure all parties are prepared for customs entry. Once CBSA recognizes the event, they will provide a letter of recognition to the event organizers, the customs broker or designated event representatives.

The letter will contain:

  • The name and type of event
  • The date and location of the event
  • The expected number of participants
  • Who is responsible for processing any CBSA documents
    • Event Organizer
    • Customs Broker
    • Delegated Representative
  • Goods brought into Canada, their origin and intended use
  • Controlled goods being imported
  • Goods that will be sold or given away
  • If applicable, a note requesting the event be considered for Border to Show Service
  • What goods can possibly enter duty free and/or receive partial relief from GST/HST

It is important for you to get a copy of the letter of recognition to ensure your entry process at the border is smooth.

(7) Time Limits

Some imports must be exported within a certain time frame. Take note of the entry date to make sure you do not go past expiry. For instance, the IECSP requires 15-30 business days notice in order to help you prepare for the customs clearance. If the request is made with less than 15 business days it is up to the IECSP’s Regional Coordinator to decide whether or not to provide a letter of recognition.

 


Trade Show Importing into the U.S.

Is Your Import Duty Free?

Souvenirs, branded paraphernalia and advertising materials are eligible to be duty free if they can be applied to a Free Trade Agreement. Office machines and equipment can be duty free if they enter under a Temporary Import Bond (TIB). For commercial samples and apparel samples, they can enter the country duty free if their value is less than $1.00 USD. For anything over $1.00 USD, to be considered duty free, customs must modify the goods to the point where they are unsuitable for resale. This is done by marking, tearing, perforating, gluing, or otherwise altering the goods.

Is a Merchandise Processing Fee Applied?

All of your imports require a merchandise processing fee unless they are under a Free Trade Agreement. Unsure of what a Merchandise process Fee is? Check out our Blog Merchandise Processing Fee (MPF) Explained.

Your Recommended Entry

Consumption entries are recommended for souvenirs, branded paraphernalia, advertising material, and commercial/apparel samples. For office machines and equipment where the duty is above $100.00 USD you would be best suited to import under a Temporary Import Bond. Keep in mind Temporary Import Bond items must be exported within 12 months of entry.

Errors You Will Most Often See

In speaking with our U.S. release Operations Manager, Breanna Leininger, she described the most common errors you will see when you try to import items for a trade show into the U.S.:

“The most common errors we see are in packaging and invoicing.  When looking to import goods into the U.S. for a tradeshow it is vitally important to package and invoice consumables such as giveaways separate from the trade show booth. This will prove to be helpful if you are flagged for inspection, as well as open you up to entry filing options that will save you time, money, and a headache.”

Note: We recommend getting items you could buy from a store, such as cleaning supplies, in the country your trade show is in. Items purchased in a store can require additional statements and manufacturing information you may not have access to when purchasing from a store.

Trade Show Imports U.S.

 

 

 


Trade Show Importing into Canada

Is Your Import Duty Free?

Souvenirs are duty free if a Free Trade Agreement can be applied. Branded paraphernalia is duty free as long as it is exported back with you. Office machines and equipment, as well as, display goods are duty free if they are exported within 18 months. For advertising materials, most paper goods are conditionally duty free, any other materials must be applicable to a Free Trade Agreement. Finally, commercial samples and apparel samples are duty free.

Is Your Import GST Exempt?

Souvenirs and advertising materials are not exempt. Branded paraphernalia is exempt if it is exported. Office machines and equipment are GST exempt. Commercial samples and apparel samples are GST exempt if only one of each is displayed or if the samples are clearly not for resale. Finally, display goods are exempt as long as they are exported within 6 months.

Your Recommended Entry

Souvenirs and advertising materials intended for sale or consumption in Canada must be accounted for on a B3. Any branded paraphernalia left in Canada must also be accounted for on a B3. E29Bs are required for returning branded paraphernalia, office machines and equipment, as well as, display goods.

Errors You Will Most Often See

In speaking with our Canadian release Operations Manager, Cherie Storms, she described the most common errors you will see when you try to import items for a trade show into Canada:

“Forgetting to ask the event organizer if the event has been approved by CBSA, and if so, travelling with the approval letter which supports the purpose of entry. Also, bringing in consumables that will not be returned, forgetting that there may be duties and taxes on those”.

Trade Show Imports Canada

 

 

 


Why You Should Declare Your Trade Show Imports

Not declaring items intended for business purposes is illegal. Customs can make samples useless for resale and your goods could even be seized or destroyed. Keep in mind not being prepared at customs can delay your journey. Being forced to complete all of the paperwork at the port of entry can be a huge headache and time consuming. Knowing before you go will make your trade show experience pain-free.

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What You Need to Know About the Section 321 De Minimis Value Entry

 

Section 321 De Minimis Value Entry

 

A de minimis shipment commonly referred to as Section 321, allows for goods valued at $800 USD or less, to enter duty-free into the U.S. Under this legislation they are also permitted to enter without formal entry. Therefore, this regulation is a great option for importers to save money and time.

Law previous to February 24, 2016, only allowed for a de minimis value of $200 or less.

Some goods may not qualify under Section 321 under the following circumstances.

Section 321 Restrictions

  • Goods needing inspection as a condition of release, regardless of value
  • Merchandise subject to Anti-Dumping / Countervailing duty (ADD/CVD)
  • Products regulated by the following Partner Government Agencies (PGAs),:
    • *Food and Drug Administration (FDA)
    • Food Safety Inspection Service (FSIS)
    • National Highway Transport and Safety Administration (NHTSA)
    • Consumer Product Safety Commission (CPSA)
    • United States Department of Agriculture (USDA)

*As of July 2017, the FDA has provided exemptions for this restriction for the following goods:

  • Cosmetics
  • Dinnerware
  • Radiation-emitting non-medical devices
  • Biological samples for laboratory testing
  • Food (excluding ackees, puffer fish, raw clams, raw oysters, raw mussels, and foods packed in airtight containers stored at room temperature)

 

Although the Section 321 option reduces the amount of paperwork required for low-value shipments, it creates a potential compliance pitfall.

Section 321 Daily Restriction

Especially relevant to importers is the daily restriction. As mentioned by authors Teresa M. Polino, Orisia K. Gammell and Julia L. Diaz in the Arent Fox LLP article Did You Know: The 2015 Trade Enforcement Act Can Save Importers Money?, “this increase applies to shipments of articles imported by one person (e.g., a company) on one day, other than in the case of articles sent as gifts from a person in foreign countries or in the case of articles accompanying and for the personal or household use of a person arriving in the U.S.”

 

As a result of this daily restriction, importers can only take advantage of the Section 321 benefit on one single transaction per day.

How to Declare Section 321

Goods valued at $800 USD or less can enter duty-free, without formal entry or eManifest into the U.S. Keep in mind that if entering with a shipment that does require an eManifest, the following steps will indicate to U.S. Customs and Border Protection (CBP) that a Section 321 is on board.

  1. Within the ACE eManifest select the shipment type ‘section 321.’
  2. Enter a shipment control number for the goods
  3. Include goods details including shipper, consignee, value, commodity, and country of origin.
  4. Submit the eManifest to U.S.CBP

 

In addition, the carrier will need to provide the section 321 goods details and paperwork to the border officer upon request.

Since it is not a formal entry, there will be no entry number provided by U.S. CBP for section 321 shipments.

Best Practices

In conclusion, ensure that your carrier is not making multiple Section 321 claims. Carriers may elect to make the Section 321 claim to expedite the clearance process. However, they may be unaware of whether the importer reached their daily allowance or not. To avoid  penalties as a result of multiple transactions per day, we recommended that importers regulate shipment filings in the following ways:

  • Identify the particular shipment the Section 321 claim will be used each day
  • Request creation of formal entries on all other entries
  • Use the services of one customs broker to ensure filing of import/export transactions are consistent
  • Build strong communication lines with the logistics team including carriers, freight forwarders, and customs brokers

 

Have questions or comments regarding this provision and how you can ensure that you are taking advantage of Section 321 within the compliance guidelines? Ask us comments section below.

 

5 Most Common Mistakes to Avoid When Importing into the U.S.

Image: 5 Most Common Mistakes to Avoid When Importing into the U.S.

In 2010, during one of our first U.S. Customs Compliance seminars, U.S. Customs and Border Protection (CBP) identified the 5 most common mistakes to avoid when importing into the U.S., and interestingly enough, these are STILL the most common mistakes today.

Whether you are a U.S. manufacturer sourcing from China, purchasing completed goods for immediate sale, or acting as the non-resident importer (NRI) into the U.S., understanding these common mistakes and how to avoid them could save you a lot of time and money.

Mistake #1: Not Determining Your Customs Tariff Codes Correctly

The Harmonized Tariff Schedule determines the correct duty rate for your imported products. It is the foundation for your import compliance. Using the wrong code can mean you are underpaying or overpaying customs duties and taxes.

There are many ways to determine your customs tariff codes, some more reliable than others:

Regardless of your method of determination, treat tariff classification like you would a medical condition. Rather than relying on a self-diagnosis obtained from the internet, some things are best left to the trained professionals!

Mistake #2: Misunderstanding Rules of Origin

There are standard rules of origin for all goods. When importing goods into a nation with which the U.S. has a trade agreement, such as the North American Free Trade Agreement (NAFTA), they may be eligible for reduced or eliminated duty. Something to note, however, the use of an FTA may result in additional rules of origin to qualify for preferential treatment.

NAFTA certificates list the originating nation of the goods and act as proof of the claim. You, as the importer of record (IOR), are responsible for the completeness and accuracy of the NAFTA certificate.

Ensure you are filling out NAFTA certificates correctly by taking our Free Trade Agreements and Rules of Origin seminar or NAFTA for Beginners webinar series.

Mistake #3: Incorrect and Incomplete Country of Origin Marking

Legibly and permanently mark you imported goods with their country of origin. The country of origin may not be the same as country of purchase. Reference the U.S. Customs Regulation (19 CFR 134) to ensure compliance regarding markings and “J” list exemptions.

Pay close attention when reusing boxes. All previous markings must be eliminated to ensure that the correct country of origin markings are the only ones visible.

Mistake #4: Misunderstanding U.S. Customs Valuation

Delare the proper value of the imported goods to customs. Ensure you also calculate any deductions or additions. Support these adjustments with proper documentation at the time of entry.

Determine your goods value by attending our Customs Valuation seminar or commissioning our Trade Advisors.

Mistake #5: Using a U.S. Goods Returned Declaration for Non-American Goods

If you are importing goods back into the U.S., you can declare them as U.S. Goods Returned (USGR) to eliminate the duty… unless it turns out that they are not U.S. goods!

Declaration of Free Entry of Returned American Products requires you to provide appropriate documentation that goods were manufactured in the U.S. Maintaining a close relationship with your U.S. vendors may be helpful when it comes time to request an affidavit of manufacture to avoid paying duties on U.S.-made goods.

Final Suggestions by CBP

  1. If you are in doubt of whether or not your good is NAFTA eligible, do not claim it as such, and ensure that your customs broker does the same.
  2. If, after the fact, you find that you have made a mistake or a ‘false statement,’ notify CBP as soon as possible to ensure that you do not get penalized.
  3. Talk to your customs broker about the steps needed to disclose the scope of a discovered discrepancy. Some discrepancies can be corrected very quickly while others require more effort.

CBP does not want to be an impediment to doing business with the U.S. Avoid these 5 most common mistakes when importing into the U.S. and enjoy import success.

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The Cost of Customs Compliance Part 3 | The Benefits of Being Proactive

You have read about the perceived cost of compliance and the ramifications of not being compliant for the last two weeks in our Your Broker Knows blog. This week it is time for some happy news! What are the returns of investing in compliant trading activities?

To answer this questions, we are interviewing some of our team members who have many stories to tell!

Q: Do you have an example of a company who endured a Customs audit without receiving penalties as a result of their trading activities?

A: A few years back we worked on behalf of a client who was importing a large capital project into Canada. We cleared the project as one unit under a provisional entry. This is permitted when each part of the import would not work without the other.

The components were arriving from multiple suppliers located in various countries, at multiple ports of entry by boat, airplane, and truck, over the course of three years.

For theses types of entries, Customs requires the importer, to keep exceptionally detailed and accurate entry records for each shipment in the entry. As we were the customs broker, we kept these records for the client. Once entirely imported, the shipment records were submitted to Customs for audit. This value of this project was over $265,000,000.00 CDN. You can imagine how many pieces this import was made up of! The client passed the audit with flying colors! There were no delays, penalty payments, or entry corrections necessary. It was a complete success.

Q: What compliant activities did this company conduct which resulted in such a successful result?

A: Accurate and detailed records and procedures! It’s surprising how many importers can overlook this aspect of compliance, yet it’s one of the biggest problem areas. In this example, it was the entry records. But non-existent operating procedure can lead to compliance issues.

One of our clients received a sizable penalty when the person normally in charge of filling out the customs documentation for each shipment went on vacation. The vacation relief was not trained in this area and had no procedure to follow. The only guide they had to follow was past entry documentation. They copied the information for a past entries invoice, replacing the piece count and value, for the shipment they were scheduled to import. It later turned out that the shipment they copied was for a different commodity. They had inadvertently used the wrong commodity description and tariff classification. This resulted in an inaccurate duty payment. The fine assessed to them was steep. So…records are super important! And pro tip….file them by transaction number as that is how Customs will ask for them.

Q: Customs motto of ‘know before you go’ are words we repeat to our clients often. What does it mean to you?

 A: Oh sheesh, yes we do say that a lot! Know before you go is the equivalent of looking before you leap (in my college’s words). Who takes the jump before looking at where they will land?!?

 We give a lot of credit to new importers who check import eligibility through preliminary research before they make a purchase. Their research is not just online; they reach out to other importers to understand the reality of importing. They call a customs broker or freight forwarder to get a checklist of what they should do before attempting to import. They try to understand all parts of their supply chain – who is responsible for what. There is also value in working with vendors who have experience. Far too many times we clear urgent shipments from new importers who are denied entry for not having done this research.  

 A client of my colleagues was importing produce from overseas and did not do this research. It turned out that the shipment required a phytosanitary certificate, which they did not have and could not get. Customs destroyed the 6 palettes of produce. It’s costly! That client lost money on the purchase and shipping of that produce. A little research and a lot of conversation can avoid this.

Q: In all your years in this industry, what is the best story you’ve heard with regards to a client being compliant? 

A: There is one back when I first started in this industry that I will always remember. I was getting trained in a seminar when this example came up. I had just learned that Canada Border Services Agency would accept voluntary disclosure of an incorrect entry, provided that they do not find the inaccuracy first.

If a new client had provided us a product database which had even one incorrect tariff, it could result in years of incorrect imports. Customs can look back 7 years, which could result in a lot of incorrect entries.

Now, there is not too much an importer can do as far as lost revenues because, in this example, they would have sold the imported product under the assumption that the import costs were far lower than what they should have been if the correct tariff was assigned and used for declaration. However, there would be an opportunity to disclose this error and make the corrections to Customs.

Clients who find errors should always report and correct them to avoid a penalty that could be a detriment to their business.

Q: If you could give an importer one compliance tip, what would it be any why?

A: Oh my…seriously…just one?! I’m going to give a few.

Do your research, educate your staff, choose vendors wisely, complete paperwork accurately, audit your broker, and maintain your records.

 

Did you like this Q & A format? Let us know if we should do more of these interviews in the comment section below!

 

The Cost of Customs Compliance Part 2 | Not as Expensive as One Might Think

Image: The Cost of Customs Compliance Part 2 | Not as Expensive as One Might Think

Carrying on from last week’s Part 1 article, a customs compliance penalty often brings into question whether the customs broker can be held accountable if the importer is found to have errors in their import declarations. Since customs holds the importer of record (IOR) ultimately responsible for customs compliance, it is rare that an importer can shift the blame to their service providers or vendors who offered incorrect advice, submitted the declaration with erroneous information or lacked the expertise to catch potential problems with an imported item. Therefore, it is important to ensure your service provider evaluation includes the following:

  1. Does the customs broker have a process in place to review customs declarations for incomplete or inaccurate documentation prior to submission to customs?
  2. Does the customs broker offer Trade Advisory Services which can help with binding ruling applications on unclear product classifications or on new product purchases to determine any additional duties required and/or reporting requirements to other government departments?
  3. Does the customs broker clear all modes of transportation including courier shipments therefore ensuring consistency in both process and tariff classification?
  4. What is the level of certification, education and experience of the entry staff who are reviewing and submitting declarations on your behalf?
  5. Is your customs broker open during your hours of operation? If so, will they have an experienced representative available to answer questions about your specific account?

If your company’s supply chain requires the use of multiple customs brokers, we advise you to look into the following possible areas of inconsistencies.

Multiple Customs Brokers = Multiple Inconsistencies

We previously published an article on the Downside of Using Multiple Customs Brokers in which we highlighted two things to look out for when using multiple customs brokers.

Inconsistency between your chosen customs brokers:
Customs Broker ‘A’, who clears your incoming air shipments, may use a slightly different tariff classification code for your imported item than Customs Broker ‘B’ who clears the same item via highway transport. During our trade compliance seminars we often tell the tale of the outcome of three customs brokers classifying the same item and each coming up with their own justifiable explanation for their classification. This is a result of a highly complex harmonized system tariff schedule, the different experiences each of those brokers have had in their classification practice, as well as their understanding and application of the General Rules of Interpretation (GRI) as they relate to the item.

Difference in business process:
Not all customs brokers are created equal. Each has its own area of expertise and therefore business process. A courier company who offers customs brokerage as an added service has a priority to ensure speed and accuracy with the parcel delivery. A compliance broker, like us, Pacific Customs Brokers, specializes in ensuring their clients trading practices fall within Customs law. Our process differs in the the attention given to detail.

Review Your Entries to Mitigate Risk

As you can see from the areas of concern we have addressed in this article, and despite best efforts, an importer may be completely unaware of their shortfall in customs compliance. One way to review your customs broker’s accuracy is to review the declaration summary provided with the invoice against the following checklist:

  1. Has your vendor provided a full and accurate description of goods for classification purposes?
  2. Is the value declared on your vendor’s invoice correct and will it match your reconciliation to the vendor?
  3. Will you be receiving any additional invoices for value added costs such as royalties or commissions?
  4. Have all applicable discounts been declared and taken where applicable?
  5. Has the country of manufacture been declared correctly for all items on the invoice?
  6. Were all the items listed on the invoice received? Were there shortages or overages?
  7. Do you have properly completed certificates on hand for all items declared under a preferential tariff treatment, including North American Free Trade Agreement (NAFTA) Certificates of Origin?
  8. Has the Goods and Services Tax (GST) been correctly accounted for on all items?

 

We encourage you to reach out to our Trade Advisory team with any questions you may have regarding your customs compliance practices at [email protected]. We are here to help!