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In the year 2010 alone, U.S. Customs and Border Protection (CBP) has increased its staff and technology in order to secure U.S. borders more rigorously. In 2004, there were 10,000 CPB agents, but in 2010 there were 20,500. If you import goods, you have to be concerned not only with correct import classification, but also with: Duty and tariff rates Quotas Anti-dumping duties Other rulings and regulations If you ignore import compliance the legal consequences can be severe, plus you risk lost sales, supply chain disruption, brand damage, loss of trading privileges, restricted market access, and higher inventory costs. Import Commodity Classification Import classification is only the first step in import compliance, but it is a very important step. Import codes are used for many tariff and tracking purposes. There are about twice as many import codes as export codes, and it is vital that your company classify imports correctly. This can be tricky. Although theoretically, commodities can only be classified one correct way, classification often requires a certain amount of judgment. The CBP has the authority to make classification decisions and may disagree with your classifications. If you're unsure as to how to classify an import, you may want to consider looking over CBP's published rulings to get a better idea of how CBP interprets import classifications. Importer Responsibilities Many parties may have involvement in the import process, but if you're the importer, you are the party responsible for ensuring that your import commodities are in compliance with import regulations. Customs brokers are not held responsible when imports are not in compliance with import regulations. If you're the importer, you're the responsible party. You are also responsible for the accuracy of submissions to CBP. If you are targeted for a CBP audit, Customs will look at your accounting records to determine which payments were made to overseas suppliers, and will then reconcile these payments with the amounts reported on the entries. Accuracy of your records is of the highest importance. Customs and Border Protection Audit Triggers There are a number of factors that can trigger a CBP audit, and you may end up the subject of an audit purely by chance. Here are some of the common triggers for CBP audits: History of noncompliance with regulations Compliance records of related companies A CBP focus on a specific industry or product The importer's trading partners Size of the importer Penalties usually occur because the country of origin, valuation, or classification of the imported commodities was determined improperly. Importation of goods that are not invoiced or declared can also lead to penalties. If CBP determines that duties were underpaid or not paid at all due to a violation, they will require the payment of those duties. How Can a Preemptive Import Compliance Audit Help? Working with an import compliance consultant to conduct an import compliance audit of your company's import classifications and practices can show you where your company risks violations and can help you correct those problems before they result in trade violations and CBP penalties. If you trade internationally, you’ll not only have to stay on top of import commodity classification but other complex laws as well. An import compliance audit by the experts at wearecompliant.com can ensure that you are in compliance with the government.
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