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Goods imported for commercial purposes must comply with a variety of special requirements, such as marking of country of origin, which vary depending upon the particular commodity. Please see our publication, “Importing Into the United States,” for more detailed information. Be particularly aware that an invoice should always accompany commercial shipments.
If you are sending goods to someone outside the United States, you should be aware that most countries have similar regulations governing the importation of goods into their territory. If you are selling goods on a “Payment on Delivery” basis, you might want to contact the Customs authority of the country where the goods are being shipped to make sure they can legally be imported into that country. In addition, some commodities sold for export are subject to enforcement requirements of the Customs Service and other U.S. government agencies. In particular, cars and goods with potential military applications, including some electronics and software, must be cleared through Customs before they are exported. And if you export goods worth more than $2,500, you will have to follow formal export procedures.
All paperwork for sending packages internationally has a section for providing Customs information. A Customs Declaration is a form obtainable at most foreign post offices. This declaration form should include a full and accurate description of the merchandise, and should be securely attached to the outside of your shipment. Declaration forms vary from country to country, and they don’t all ask for the information required by the U.S. Customs Service. You should ask the seller to provide the following information, whether or not it is asked for on the paperwork. Seller’s name and address. Description of the item(s) in English (a legal requirement). For example, antique silver teapot, silk kimono, 18-karat gold rope necklace. It is very important that this information be detailed and accurate. What is described here will determine the classification number and duty rate that Customs assigns the item when it arrives in the United States. If this information is inaccurate, you could end up paying the wrong duty rate for what you purchased. If it is inaccurate enough to seem deliberately misleading — keep in mind that Customs does randomly inspect packages — your goods could be seized and you may be assessed a fine.
Quantity of each type of item being shipped. For example, two watches (14-karat gold, 17 jewel), one leather purse.
Purchase price in U.S. dollars. Provide both the unit price, and if more than one unit was purchased, the total value for all like items. Fudging or miscalculating the price paid for goods is a bad idea. Many sellers offer to misrepresent costs in an effort to save the purchaser from having to pay duty, but this is illegal. Others sellers are wary of package handlers and do not want them to know how valuable something may be, which could result in its theft. The most common legal precaution against theft is to insure the package when sending it. You should discuss insurance options with your seller, keeping in mind that misrepresenting the value of an item on the Customs declaration is illegal.
Weight of the item(s).
Country of origin of the product itself. Be aware that this is not necessarily the country where the item was purchased.
Note: It is important to know that foreign shipments that are not accompanied by a Customs declaration form and an invoice may be subject to seizure, forfeiture or return to sender.
Keep the following questions in mind before you buy something from a foreign source. The answers will have far-reaching Customs implications (explained below) that could influence your decision to buy.
The Internet has made it easy to find and purchase items from almost anywhere in the world. However, many people are discovering that getting a foreign-bought item successfully delivered to the United States is much more complicated. When goods move from any foreign country to the United States, they are being IMPORTED. There are specific rules and regulations that govern the act of importing – and they can be extremely complex and confusing – and costly.
That artisan cheese from Italy may be a snap to find and buy on the Internet, but the U.S. Customs Service could seize your purchase because certain regulations prohibit the importation of dairy products from particular countries without a permit.
Your great auction purchase of gorgeous linen products? Depending upon the country of origin, quota restrictions could hold them up in Customs for a long time. And storage charges in such cases can be expensive.
In other words, “Buyer, Beware.” When you buy goods from foreign sources, you become the importer. And it is the importer – in this case, YOU – who is responsible for assuring that the goods comply with a variety of both state and federal government import regulations. Importing goods that are unsafe, that fail to meet health code requirements, or that violate quota restrictions could end up costing you quite a bit of money in fines and penalties. At the very least, such goods would be detained, and possibly destroyed, by Customs.
Knowing what is admissible is just part of the story. The other part is knowing how to import. Depending upon what you are importing and its value, the procedures can be very complicated.
It does not matter whether you bought the item from an established business or from an individual selling items in an on-line auction. If merchandise, used or new, is imported into the United States, it must clear Customs and may be subject to the payment of duty as well as to whatever rules and regulations govern the importation of that particular product into the United States.
China is one of the most rapidly developing global players in the international economy. With a population in excess of 1.3 billion, approximately four times the size of the United States and geographically similar in size, China has been described as a sleeping giant of international trade. In 2005 China claimed and estimated 752 trillion dollars in exported goods, just shy of 927 trillion exported by the United States. In 2006, this number is expected to increase dramatically.
Because of the reduced production costs associated with Chinese origin commodities and the infrastructure to effectively produce many of the most sought after goods in the US, the United States remains the largest importer of Chinese goods. The US alone imports 21.4% of Chinese exports compared to their next largest trading partner Hong Kong which imports 16.3%.
China’s primary export commodities include machinery and equipment, iron and steel, medical and optical equipment, and plastics. The Chinese have significant natural resources at their disposal as well as the manpower to manufacture large quantities of refined and unrefined goods.
To avoid market disruptions from the over-importation of Chinese origin goods, China and the United States have entered into a voluntary agreement to limit the amount of goods (primarily textiles from chapters 50 to 63 of the US Harmonized Tariff Schedule) that may be imported into the US from China. Textiles leaving China must have an endorsement in the form of a visa from the Chinese government in order to obtain import clearance by US Customs and Border Protection. Information regarding the status of textile safeguards from China may be obtained from the Office of Textiles and Apparel.
Yes. China is involved in the largest number or anti-dumping cases over the past few years. Anti-dumping is the practice of importing goods at below fair market value in order to drive competitors out of the marketplace.
Fortunately for US importers, Chinese exporters make an effort to seek out international business partners and are active users of the internet. Prospective importers can make industry contacts on message boards like the Informed Trade International community forum, or on other websites designed to help importers and exporters meet. Some resources we found included:
http://www.chinese-suppliers.com/
http://www.alibaba.com/
http://www.chinabusinessworld.com/
A common mistake made by new importers is the assumption that they’ll need a special license to import goods into the United States. There is a great deal of confusion over this issue for several reasons:
In some cases and with certain types of goods, an import license is required. Examples include alcohol, tobacco, firearms, animals, copyrighted materials, food and more. These items are regulated by the individual agencies governing that type of good. US Customs does not create the regulations, they simply enforce them for other agencies. In addition to the licensing of certain types of goods, the US Department of Homeland Security also regulates the licensing of Customs Brokers. A Customs Broker is an individual authorized by US Customs and the Dept. of Homeland security to transact Customs business on someone else’s behalf. Customs Brokers are extremely useful for first-time and experienced importers because they often have access to systems and knowledge to file Customs entries in an efficient manner and utilize importer best-practices to speed import clearances and reduce import duties.
The General Rules of Interpretation can be found online here.
The General Rules of Interpretation (GRIs) outline the method used to determine a products classification. They also address special scenarios wherein a final classification may be difficult to determine. The General Rules of Interpretation below have been taken verbatim from the HTS (current as of 11/1/04).
Classification of goods in the tariff schedule shall be governed by the following principles:
1. The table of contents, alphabetical index, and titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions:
2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.
3. When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin.
5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character; (b) Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
This article is intended to provide a general understanding of the structure of the Harmonized Tariff Schedule and the method used to determine a products classification. By nature of an introductory article, it does not cover special and extenuating circumstances that often arise when determining a products final classification. The authors of this article recommend that you consult with a licensed Customs broker or member of the US Customs Service should there be any question as to the classification of your product. As the importer of record for your product, it is your responsibility to ensure that the classification presented to Customs for the import of your shipment is the most accurate and legitimate classification. It is important to understand the process of classifying your product because as the importer of record you can be held ultimately responsible for mistakes made in classification.
Choosing an attorney to represent you on matters of international trade can be a difficult decision. When choosing a lawyer to represent you, it can be difficult to subjectively rank them according to specific criteria. The following questions are designed to assist you in choosing an International Trade Attorney.
“How many years of experience do you have? Experience helps, but is not always crucial. An aggressive young lawyer may be more suited than an older lawyer exhausted by years of courtroom battle. On the other hand, you probably don’t want to hire somebody fresh out of law school on a complex matter. Be sure to look for an attorney that has some experience working with the specific government agency that is most applicable to your bussiness.
How many cases or transactions like this have you handled? Again, experience counts. You don’t want to be paying a young lawyer to learn at your expense. If the lawyer is unfamiliar with your type of problem, get a commitment for how long it will take for the lawyer to become conversant with the legal issues involved?
How much legal research do you expect to do on this case, and why? Doing legal research is a good thing, but not to learn the subject matter. A well-qualified lawyer can give you an estimate in your first conversation about what he or she thinks the legal issues are, and any lawyer who’s worth hiring will tell you what he or she doesn’t know. But if the issues aren’t that complex but the lawyer is expecting to do a lot of research, that may be an indication that this lawyer hasn’t handled enough of this kind of cases.
Would you be comfortable handling my case? Most lawyers want to handle whatever they can bring in if it interests them. Yet the lawyer may not have the right skills to handle this case. Don’t be afraid to ask this question.
Can you give me the names of a couple of clients who have had cases similar to mine? Most lawyers will want to check with prior clients to see if they would mind speaking with you (lawyers are, after all supposed to be discrete and expert at maintaining confidences, and you probably wouldn’t want to have your name given out without your permission). But a former client may give you lots more information about the lawyer than you can get yourself.
Can you give me the names of a couple of lawyers who represented other parties in cases like mine? Same as above, except the lawyers probably can evaluate the lawyer better than the client can. Neither is fool-proof, since the lawyer will be selecting what names he or she give you. But you may get some valuable information.
Have you written anything about any case similar to mine? Lawyers interviewing for law jobs are invariably asked for writing samples. Clients should as well. Good writing is often important, and the client should see early on whether the lawyer can write simply, directly, and persuasively.
What law school did you go to? Harvard may be the best school in the country, or it may not. It’s subjective. Someone from a “good” school who hasn’t been practicing for years probably is not as good as somebody who has practiced regularly and well since graduation from a “lesser” school. The ranking of schools is subjective, and anyway, you want a lawyer, not a pedigree. Graduation from a given law school simply does not insure that this lawyer can handle your legal matter.
How many cases have you won? Any lawyer who claims never to have lost a case simply hasn’t tried enough of them. This kind of statistic is meaningless unless you get deeply into the facts of each case. As a client, you don’t have time to do this.
What organizations do you belong to? Most lawyers belong to many organizations with highfalutin names. Why join an organization that sounds cheesy? But nearly all the organizations that a lawyer belongs do will accept as members anyone who can pay the membership fee, so membership doesn’t guarantee anything. A few organizations do, such as the American Board of Trial Advocates (ABOTA) or the California Academy of Appellate Lawyers. Yet requiring a lawyer to be members of these invitational bodies doesn’t solve the problem, either, because they usually require a greater amount of trial or appellate experience than most lawyers can get these days, and you may be shortchanging yourself.
What awards have you won? Many fine lawyers have never won an award because they’ve been too busy representing their clients and raising their families to devote the kind of networking necessary to win such awards. Many–not all, to be sure–are popularity contests. As a client, you don’t have the time to investigate the backgrounds of the awards to determine if they really mean anything.
An international freight forwarder is an agent for the exporter in moving cargo to an overseas destination. These agents are familiar with the import rules and regulations of foreign countries, the export regulations of the U.S. government, the methods of shipping, and the documents related to foreign trade. Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle air freight and the Federal Maritime Commission to handle ocean freight.
Freight forwarders assist exporters in preparing price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and their handling fees. They recommend the packing methods that will protect the merchandise during transit or can arrange to have the merchandise packed at the port or containerized. If the exporter prefers, freight forwarders can reserve the necessay space on a vessel, aircraft, train, or truck. The cost for their services is a legitimate export cost that should be included in the price charged to the customer (see Chapter 11 of the Basic Guide to Exporting for pricing information.).
Once the order is ready for shipment, freight forwarders should be review all documents to ensure that everything is in order. This is of particular importance with letter of credit payment terms. They may also prepare the bill of lading and any special required documentation. After shipment, they can route the documents to the seller, the buyer, or to a paying bank. Freight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs export documentation regulations. A customs broker is an individual or company that is licensed to transact customs business on behalf of others. Customs business is limited to those activities involving transactions related to the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed or collected; or the refund, rebate, or drawback thereof.
Finding a Local Freight Forwarder Freight forwarders are located in most metropolitan areas. Yellow pages often have a freight forwarder, or transportation, heading. Additionally, the National Customs Brokers and Forwarders Association of America will provide exporters with information on their members. They can be reached at 1200 18th Street, NW, Suite 901,Washington, DC 20036, (202) 466-0222, or http://www.ncbfaa.org/.
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