IMPORTERS - Checklist
Considerations for first time importers. This is not a contract nor a condition of same; this document is merely to assist first time importers in completing the process of importing into the United States. Under United States Customs Regulations (19 USC) the importer of record is responsible to exercise reasonable care in the preparation and content of declarations to U.S. Customs and other government agencies. Importers are specifically encouraged to ensure that the reasonable care standard is met by seeking guidance from Customs brokers, Customs attorneys, accountants, in-house experts and other consultants. Once a contract or agreement has been established, or a mutually profitable relationship with overseas partners has begun to unfold, the next step is to consider transportation: how will you get the product from overseas to the U.S.? There are two basic choices; air freight, generally the more expensive of the two but much quicker in terms of door to door transit time, and ocean freight, the generally less expensive but far slower alternative. In order to determine which is the better alternative, use of the > two V = s principle = may help. These are > volume = (ie. size of the shipment) and > value = . Both play an important role in the determination of landed cost. Generally speaking, the goal would be to keep transportation costs as the lowest percentage of total landed costs. A large shipment of relatively low total value would thus be better suited to movement by ocean freight. On the other hand, a smaller shipment of relatively high value might be well suited to air freight, even though the freight charge might be more expensive than ocean, if, indeed, the transportation as a percentage of total landed costs was still a fairly low number. Other issues to consider include delivery schedules and other time constraints; risk of loss or damage; whether or not the products can withstand the normal rigors of ocean transportation; whether or not the products have perishable or hazardous properties. Once the method of transportation has been determined, specific instructions need to be given to your vendor, preferably via your forwarder. Proper use of INCOTERMS will not only determine who pays what charges to whom but will also clarify communications with the vendor. If you purchase using either A E @ or A F @ terms (for example EXW Taipei or FOB Singapore) you will have the responsibility of arranging transportation. If, however, the sale is made under a A C @ or A D @ term (for example CIF Long Beach or DDU Chanute), that responsibility lies with the shipper. In the latter, requests for specific routings or carriers may still be made, but perhaps not honored. The next consideration is in the choice of a forwarder, particularly if purchasing under A E @ or A F @ terms. Look for a company which has offices overseas and also close to your own location. Look for one that can handle both air freight and ocean freight traffic; is well established; can offer Customs Brokerage services; and has knowledgeable and experienced personnel. Choice of a reliable and trustworthy forwarding partner will enable an importer to concentrate on core business concerns, such as selling more products! Finally, new importers must be aware of the fact that importing is very much a > cash = business. Import Duty, if applicable, must be paid to U.S. Customs within 10 days of release of the shipment. It may be necessary to pay collect ocean freight charges to a steamship company, amounting to many thousands of dollars, in order just to obtain release of an original Bill of Lading. Credit, even when available, is invariably for a very short term only. Failure to make timely duty or transportation payments can delay shipments, put them at risk of seizure and possibly add considerable extra costs. Documentation: In order for a broker to clear U.S. Customs, you must issue a Power of Attorney which enables your broker to sign customs documents on your behalf. This document must be signed by an officer of your company. There must also be a customs bond in effect. This is a requirement to protect your company and U.S. Customs from duty variances that may occur. The bond is used to pay such variances, violations, and non payment of duties. There are two different types of bonds, a single entry bond and a continuous bond. A single entry bond is typically used by infrequent importers where there are low value products coming in a couple of times each year. Single Entry Bonds are billed by your broker on a per entry basis and usually carry a minimum charge, or a per thousand dollar charge. Continuous bonds are issued annually, and are typically used by regular importers, or perhaps by infrequent importers dealing in high value product lines. A continuous bond is valid for 12 months from date of issue and is valid at any port in the United States where goods may be entering and clearing customs . Explanation of terms: MPF - Manufacturers Processing Fee HMF - Harbor Maintenance Fee FDA - Food and Drug Administration USDA - United States Department of Agriculture ATF - Alcohol, Tobacco and Firearm CPSC - Consumer Product Safety Commission |
|
