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U.S. Customs and Border Protection Regulations require actions to be taken when allowing products to enter the country.
Any mistake made in this process can lead to costly fines and even penalties for the importing company.
First, it is important to know that the Importer of Record (IOR) is the entity or individual responsible for providing all customs documents required by Customs Border Protection (CBP). This includes the product´s tariff classification, the payment of duties, and any other government requirements at the time of import. The Importer of Record is the entity responsible in the eyes of U.S. Customs. If they do not comply with the U.S. Customs Regulations, they will be held financially liable for any fees from CBP.
Below are 3 common mistakes in the Customs Brokerage process that can be costly to Importers.
1. Late Transmission, Inaccurate or Incomplete Information in Import Security Filing (also known as ISF 10+2).
Regulations approved in 2008 by CBP oblige the Importer of Record to provide certain information about the goods to be imported 24 hours before loading onto the ship, which is typically 48 hours before the ship leaves. If the information is not transmitted on time, is inaccurate, or incomplete, CBP could sanction the IOR with fines of $ 5,000 per violation and up to a maximum of $ 10,000.00 per HBL.
2. Late Payment of CBP Duties and Fees.
It is the responsibility of the Importer of Record to pay the duty and fees from U.S. Customs. Customs brokers can pay the duty on the importer’s behalf and bill it as part of their services in clearing the goods at the port of entry. If payment is not made to U.S. Customs timely, a Notice of Penalty and a Late Payment fine will be issued to the Importer of Record. There is also the risk of being placed on the U.S. Customs Sanctions List and not being able to import in the future.
If payment of duties is made after CBP notification, an administrative fee of $100 plus an interest rate of 0.1% (.001) per calendar day that the duties were delayed will be applied.
3. Entry Summary Errors and Corrections.
Updates to import declarations can be made within ten calendar days of their initial release without submitting a Post Summary Correction (PSC) to CBP.
If an update or correction of a declaration is required, the ten days have elapsed, and the duties and fees have been paid to CBP, submitting a PSC electronically is the only way to update the entry summary. There is no tracking or timeline provided with approval or denial on PSCs from CBP.
Once the PSC is transmitted, CBP will review the information and the documentation to approve or reject the update and determine if there is any sanction.
Sanctions can range anywhere from a fine to the withdrawal of the Registered Importer’s permit by CBP.
As you can see, if the customs brokerage process is not carried out correctly, it can generate additional expenses or severe penalties for the importer of record.
Knowing all the CPB requirements can be complex. That’s why we suggest you consult a Licensed Customs Broker to discuss the complexities of your U.S. imports, ensuring your goods are safe and compliant at each step of the import process.
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