Guide to U.S. Customs Brokerage and Compliance Processes
Customs compliance is the process of submitting and receiving authorization through US Customs and Border Protection (CBP) officials at US ports and airports to introduce commercial freight into the United States. This entity inspects cargo and ensures compliance with customs law, rules, and regulations applicable to the type, volume, and other specifications of your freight. Moreover, customs agents confirm which import duties are to be applied and collected.
The Importer of Record (IOR)
The importer of record has complete and sole responsibility for compliance with all U.S. Customs requirements. These responsibilities include:
- Documentation
- Record Keeping
- Duty Classification
- Value
- Payment of Duties
- All other Homeland Security requirements
- Using Reasonable Care
A Power of Attorney is required from the Importer of Record. For a U.S. Company, the Power of Attorney must be signed by an officer of the company with IRS #. For a Mexican Company acting as an importer of record, a Mexican Power of Attorney is required, signed by an officer of the company along with a copy of the Acta Constitutiva. Additionally, a U.S. Consignee IRS # is needed. We can start the process and clear Customs with fax or scanned copies but will need the originals forwarded to us eventually.
CBP Form 7501: Entry Summary
The CBP Form 7501, also known as “Entry Summary” is a mandatory document submitted to CBP, U.S. Customs and Border Protection, for customs clearance according to the accuracy of information regarding the imported commodity. The form provides details of appraisement, origin, and classification, among other key bits of information. Entry 7501 or the entry summary is presented upon the arrival of goods into the United States, in addition to other necessary documents according to the nature of the merchandise.
At a glance, authorities can assess applicable duties, collate statistics, and the origin and classification of the goods, all in one place. As soon as the import shipment arrives at the US port of entry, the importer or the customs broker representing the company is required to file a set of documents with CBP or other OGA at the port of entry of goods. The IOR has 10 days from the date of release of the shipment by customs to pay duties and taxes and other fees filed by the 7501.
Types of Entries
To make their operations more efficient, CBP has created various forms and entry types:
- Consumption Entries: Free and Dutiable, Quota/Visa, AD/CVD, Appraisement, Vessel Repair, FTZ Consumption and combination.
- Informal Entries: Free and Dutiable, Quota Other than Textiles.
- Warehouse Entries: Warehouse, Re-Warehouse, TIB, Trade Fair, Permanent Exhibition, Foreign Trade Zone Admission.
- Warehouse Withdrawal: For Consumption, Quota/Visa, AD/CVD and combination.
- Government Entries: Military Only.
Other Government Agencies (OGA)
We are responsible for making sure that all commodities besides, complying with US Customs Regulations also comply with all Other Government Agencies. Depending on the commodity, additional information may be needed, such as OGA, Reconciliation, Certificates, HAZMAT 24hrs in advance, ADD, CVD, Assists, PPQ, Quota, Visa, TSCA, MSDS, or Marking Waivers.
The following table lists common agencies and regulated examples:
| Agency Name | Example Commodities |
|---|---|
| FDA - Food & Drug Administration | Food items, plates |
| FCC - Federal Communications Commission | Radios, computers |
| DOT – Department of Transportation | Vehicles, Tires |
| EPA - Environmental Protection Agency | Water Filters |
| FISH & WILDLIFE | Birds |
| SIMA – Steel Import Monitoring and Analysis System | Steel products |
Post Entry Processes
Once a shipment clears Customs, the Entry Summary needs to be generated (equivalent of a Pedimento) and accepted by Customs. Entry Summary along with any monies due for duty must be paid by 10th business day after the shipment crosses. Other post-entry processes include:
- NAFTA Refunds - Protests
- Prior Disclosures - Fines & Penalties
- PEA (Post Entry Amendments) - Reconciliations
- SIL (Supplemental Information Letter)
Electronic Single Window and Technology
An Electronic Single Window should improve border collaboration and decision making between Customs and all Other Government Agencies (OGAs) at the border, who have a mandate over the cross-border movement of controlled and regulated goods. The outcome should be reduced trade release times, simplification of procedures, and improved controls resulting in enhanced security and trade facilitation. A well designed Single Window should reduce trade release times from days to hours.
To get there, you need 3 things:
- Natural Language Processing (NLP) and Machine Learning (ML) to automate determining the Harmonized Tariff System (HTS) Number for Commodity Classification.
- A sub system (trade data management system) that allows for the determination, application, approval and management of digitized licenses, permits, certificates, and other control documents (LPCOs).
- Case and Workflow management systems to automate decision making between Traders, Customs, and the OGAs.
