1. Include all information required on your customs invoices.
2. Prepare your invoices carefully. Type them clearly. Allow sufficient space between lines. Keep the data within each column.
3. Make sure that your invoices contain the information that would be shown on a well prepared packing list.
4. Mark and number each package so it can be identified with the corresponding marks and numbers appearing on your invoice.
5. Show a detailed description on your invoice of each item of merchandise contained in each individual package.
6. Mark your goods legibly and conspicuously with the country of origin unless they are specifically exempted from country of origin marking requirements, and with such other marking as is required by the marking laws of the United States.
7. Comply with the provisions of any special laws of the United States that may apply to your goods, such as laws relating to food, drugs, cosmetics, alcoholic beverages, radioactive materials, and others.
8. Observe the instructions closely with respect to invoicing, packaging, marking, and labeling.
9. Work with CBP to develop packing standards for your commodities.
10. Establish sound security procedures at your facility. While transporting your goods for shipment, do not give narcotics smugglers the opportunity to introduce narcotics into your shipment.

When a shipment reaches the United States, the importer of record (i.e., the owner, purchaser, or licensed customs broker designated by the owner, purchaser, or consignee) will file entry documents for the goods with the port director at the goods' port of entry. Goods may be entered for consumption, entered for warehouse at the port of arrival, or they may be transported in bond to another port of entry and entered there under the same conditions as at the port of arrival. Arrangements for transporting the merchandise in bond to an in-land port may be made by the consignee or by a customs broker or by any other person with an interest in the goods for that purpose.

Goods may only be entered by their owner, purchaser, or a licensed customs broker. When the goods are consigned “to order,” the bill of lading, properly endorsed by the consignor, may serve as evidence of the right to make entry. An air waybill may be used for merchandise arriving by air. In most instances, entry is made by a person or firm certified by the carrier bringing the goods to the port of entry. This entity is considered the “owner” of the goods for customs purposes. In certain circumstances, entry may be made by means of a duplicate bill of lading or a shipping receipt. When the goods are not imported by a common carrier, possession of the goods by the importer at the time of arrival shall be deemed sufficient evidence of the right to make entry.

Entering merchandise is a two part process consisting of: (1) filing the documents necessary to determine whether merchandise may be released from CBP custody, and (2) filing the documents that contain information for duty assessment and statistical purposes.

Following presentation of the entry, the shipment may be examined, or examination may be waived. The shipment is then released if no legal or regulatory violations have occurred. Entry summary documentation is filed and estimated duties are deposited within 10 working days of the entry of the merchandise at a designated customhouse. Entry summary documentation consists of:

• Return of the entry package to the importer, broker, or his authorized agent after merchandise is permitted release
• Entry summary (CBP Form 7501)

Within 15 calendar days of the date that a shipment arrives at a U.S. port of entry, entry documents must be filed at a location specified by the port director. These documents are:

• Entry Manifest (CBP Form 7533) or Application and Special Permit for Immediate Delivery (CBP Form 3461) or other form of merchandise release required by the port director,
• Evidence of right to make entry,
• Commercial invoice or a pro forma invoice when the commercial invoice cannot be produced,
• Packing lists, if appropriate,
• Other documents necessary to determine merchandise admissibility,
• Other invoices and documents necessary to assess duties, collect statistics, or determine that all import requirements have been satisfied.

If the goods are to be released from CBP custody at the time of entry, an entry summary for consumption must be filed and estimated duties deposited at the port of entry within 10 working days of the goods' entry.

The entry must be accompanied by evidence that a bond has been posted with CBP to cover any potential duties, taxes, and charges that may accrue. Bonds may be secured through a resident U.S. surety company, but may be posted in the form of United States currency or certain United States government obligations. In the event that a customs broker is employed for the purpose of making entry, the broker may permit the use of his bond to provide the required coverage.

An alternate procedure that provides for immediate release of a shipment may be used in some cases by applying for a special permit for immediate delivery on CBP Form 3461 prior to arrival of the merchandise. Carriers participating in the Automated Manifest System can receive conditional release authorizations after leaving the foreign country and up to five days before landing in the United States. If the application is approved, the shipment will be released expeditiously after it arrives. An entry summary must then be filed in proper form, either on paper or electronically, and estimated duties deposited within 10 working days of release. Immediate delivery release using Form 3461 is limited to the following types of merchandise:

• Merchandise arriving from Canada or Mexico, if the port director approves it and an appropriate bond is on file,
• Fresh fruits and vegetables for human consumption arriving from Canada or Mexico and removed from the area immediately contiguous to the border and placed within the importer’s premises within the port of importation,
• Shipments consigned to or for the account of any agency or officer of the U.S. government,
• Articles for a trade fair,
• Tariff rate quota merchandise and, under certain circumstances, merchandise subject to an absolute quota. Absolute-quota items require a formal entry at all times,
• In very limited circumstances, merchandise released from warehouse followed within 10 working days by a warehouse withdrawal for consumption,
• Merchandise specifically authorized by CBP Headquarters to be entitled to release for immediate delivery.

If one wishes to postpone release of the goods, they may be placed in a CBP bonded warehouse under a warehouse entry. The goods may remain in the bonded warehouse up to five years from the date of importation. At any time during that period, warehoused goods may be re-exported without paying duty, or they may be withdrawn for consumption upon paying duty at the duty rate in effect on the date of withdrawal. If the goods are destroyed under CBP supervision, no duty is payable.

While the goods are in the bonded warehouse, they may, under CBP supervision, be manipulated by cleaning, sorting, repacking, or otherwise changing their condition by processes that do not amount to manufacturing. After manipulation, and within the warehousing period, the goods may be exported without the payment of duty, or they may be withdrawn for consumption upon payment of duty at the rate applicable to the goods in their manipulated condition at the time of withdrawal. Perishable goods, explosive substances, or prohibited importations may not be placed in a bonded warehouse. Certain restricted articles, though not allowed release from custody, may be warehoused.

If no entry has been filed for the goods at the port of entry, or at the port of destination for in bond shipments, within 15 calendar days after their arrival, the goods may be placed in a general order warehouse at the importer’s risk and expense. If the goods are not entered within six months from the date of importation, they can be sold at public auction or destroyed. Perishable goods, however, and goods subject to depreciation and explosive substances may be sold sooner.

Storage charges, expenses of sales, internal revenue or other taxes, duties, fees, and amounts for the satisfaction of liens must be taken out of the money obtained from the sale of the unentered goods. Claims for the surplus proceeds of sale may be filed with the port director at whose instruction the merchandise was sent to sale. Any claim for such proceeds must be filed within 10 days of sale and supported with an original bill of lading. A photostatic copy or certified copy of the bill of lading may be used if only part of a shipment is involved in the sale.

Not all merchandise imported into the United States and intended for domestic commerce is entered at the port where it arrives. The importer may prefer to enter the goods at a different location in the United States, in which case the merchandise will have to be further transported to that location. In order to protect United States revenue in these cases, the merchandise must travel in a bonded status from the port of arrival to the intended port of entry. This process is referred to as traveling under Immediate Transportation procedures and is accomplished by the execution of CBP Form 7512. The merchandise is then placed with a carrier who accepts it under its bond for transportation to the intended destination, where the normal merchandise entry process will occur.

Examination of goods and documents is necessary to determine, among other things:

• The value of the goods for customs purposes and their dutiable status,
• Whether the goods must be marked with their country of origin or require special marking or labeling. If so, whether they are marked in the manner required,
• Whether the shipment contains prohibited articles,
• Whether the goods are correctly invoiced,
• Whether the goods are in excess of the invoiced quantities or a shortage exists,
• Whether the shipment contains illegal narcotics.

Prior to the goods’ release, the port director will designate representative quantities for examination by CBP officers under conditions that will safeguard the goods. Some kinds of goods must be examined to determine whether they meet special requirements of the law. For example, food and beverages unfit for human consumption would not meet the requirements of the Food and Drug Administration.

One of the primary methods of smuggling narcotics into the United States is in cargo shipments. Drug smugglers will place narcotics inside a legitimate cargo shipment or container to be retrieved upon arrival in the United States. Because smugglers use any means possible to hide narcotics, all aspects of the shipment are examined, including container, pallets, boxes, and product. Only through intensive inspection can narcotics be discovered.

Textiles and textile products are considered trade sensitive and as such may be subject to a higher percentage of examinations than other commodities.

CBP officers will ascertain the quantity of goods imported, making allowances for shortages under specified conditions and assessing duty on any excess. The invoice may state the quantities in the weights and measures of the country from which the goods are shipped or in the weights and measures of the United States, but the entry must state the quantities in metric terms.

If the CBP officer finds any package that contains an article not specified on the invoice, and there is reason to believe the article was omitted from the invoice by fraud, gross negligence, negligence on the part of the seller, shipper, owner, or agent, a monetary penalty may be imposed, or in some cases, the merchandise may be seized or forfeited.

If, during the examination of any package that has been designated for examination, the CBP officer finds a deficiency in quantity, weight or measure, he or she will make a duty allowance for the deficiency. An allowance in duty may be made for those packages not designated as long as the importer notifies the port director of the shortage before liquidation of the entry becomes final and establishes to the port director's satisfaction that the missing goods were not delivered.

• The port of entry to which the merchandise is destined,
• If merchandise is sold or agreed to be sold, the time, place, and names of buyer and seller; if consigned, the time and origin of shipment, and names of shipper and receiver,
• A detailed description of the merchandise, including the name by which each item is known, the grade or quality, and the marks, numbers, and symbols under which it is sold by the seller or manufacturer to the trade in the country of exportation, together with the marks and numbers of the packages in which the merchandise is packed,
• The quantities in weights and measures,
• If sold or agreed to be sold, the purchase price of each item in the currency of the sale,
• If the merchandise is shipped for consignment, the value of each item in the currency in which the transactions are usually made, or, in the absence of such value, the price in such currency that the manufacturer, seller, shipper, or owner would have received, or was willing to receive, for such merchandise if sold in the ordinary course of trade and in the usual wholesale quantities in the country of exportation,
• The kind of currency,
• All charges upon the merchandise, itemized by name and amount including freight, insurance, commission, cases, containers, coverings, and cost of packing; and, if not included above, all charges, costs, and expenses incurred in bringing the merchandise from alongside the carrier at the port of exportation in the country of exportation and placing it alongside the carrier at the first U.S. port of entry. The cost of packing, cases, containers, and inland freight to the port of exportation need not be itemized by amount if included in the invoice price and so identified. Where the required information does not appear on the invoice as originally prepared, it shall be shown on an attachment to the invoice,
• All rebates, drawbacks, and bounties, separately itemized, allowed upon the exportation of the merchandise,
• The country of origin,
• All goods or services furnished for the production of the merchandise not included in the invoice price.

• The shipper assumes that a commission, royalty, or other charge against the goods is a so called “nondutiable” item and omits it from the invoice.
• A foreign shipper who purchases goods and sells them to a United States importer at a delivered price shows on the invoice the cost of the goods to him instead of the delivered price.
• A foreign shipper manufactures goods partly with the use of materials supplied by the United States importer, but invoices the goods at the actual cost to the manufacturer without including the value of the materials supplied by the importer.
• The foreign manufacturer ships replacement goods to his customer in the United States and invoices the goods at the net price without showing the full price less the allowance for defective goods previously shipped and returned.
• A foreign shipper who sells goods at list price, less a discount, invoices them at the net price, and fails to show the discount.
• A foreign shipper sells goods at a delivered price but invoices them at a price f.o.b. the place of shipment and omits the subsequent charges.
• A foreign shipper indicates in the invoice that the importer is the purchaser, whereas he is in fact either an agent who is receiving a commission for selling the goods or a party who will receive part of the proceeds of the sale of the goods sold for the joint account of the shipper and consignee.
• Invoice descriptions are vague, listing only parts of numbers, truncated or coded descriptions, or lumping various articles together as one when several distinct items are included.

Goods that the CBP officer finds to be entirely without commercial value at the time of arrival in the United States because of damage or deterioration are treated as a “nonimportation.” No duties are assessed on these goods. When damage or deterioration is present with respect to part of the shipment only, allowance in duties is not made unless the importer segregates, under CBP supervision, the damaged or deteriorated part from the remainder of the shipment. When the shipment consists of fruits, vegetables, or other perishable merchandise, allowance in duties cannot be made unless the importer, within 96 hours of unloading the merchandise and before it has been removed from the pier, files an application for an allowance with the port director. Allowance or reduction of duty for partial damage or loss as a result of rust or discoloration is precluded by law on shipments consisting of any article partially or wholly manufactured of iron or steel, or any manufacture of iron or steel.

• Knowledge of and compliance with CBP law and regulations
• Full, complete and accurate documentation, including:
  • A complete, accurate description of your merchandise
  • The correct tariff classification of your merchandise
  • A proper declared value for your merchandise
  • Reporting all legally required costs or payments associated with the imported merchandise (assists, commissions, indirect payments or rebates, royalties, etc.)
  • The correct country of origin
• Following Customs and Border Patrol rulings
• Ensuring that the merchandise is properly marked upon entry with the correct country of origin (if required) and any other applicable special marking requirements (watches, gold, textile labeling, etc)
• Knowing how your goods are made, from raw materials to finished goods, by whom and where
• Complying with quota categories and visa categories
• Establishing that you have a legal right to import and/or use items that use any trademarks or copyrighted material or are patented and that copyrighted material is authorized and genuine
• Assuring that your merchandise complies with other agencies’ requirements (e.g., FDA, EPA, DOT, CPSC, FTC, Agriculture, etc.) and obtaining licenses or permits, if required, from them
• Reporting whether your goods are subject to a Commerce Department dumping or countervailing duty investigation or determination

Compliance assessment is the systematic evaluation of an importer’s systems supporting his or her CBP related operations. The assessment includes testing import and financial transactions, reviewing the adequacy of the importer’s internal controls, and determining the importer’s compliance levels in key areas.

The assessment is conducted by an interdisciplinary team composed of a CBP auditor, import specialist, account manager, industry expert (highly knowledgeable in an industry, such as electronics, auto parts or surgical equipment), and possibly other CBP specialists (attorneys, inspectors, scientists, etc). The compliance assessment utilizes professionally accepted statistical sampling and auditing techniques to review selected import transactions from the company’s previous fiscal year.

Compliance assessments will evaluate the company’s applicable customs operations such as:

• Record keeping,
• Merchandise classification/trade statistics,
• Merchandise quantities,
• Antidumping/countervailing duty operations,
• Quota conformity,
• Merchandise value,
• Warehouse or foreign trade zone operations,
• Merchandise transshipment,
• Special trade programs (GSP, CBI, others).

Companies found in compliance with CBP laws and regulations will get a report stating that fact. Companies whose systems are determined to be noncompliant will also get a report and will be asked to formulate, in cooperation with CBP advisors, a compliance improvement plan specifying corrective actions the company will take to increase compliance levels. Serious violations of law or regulation may result in CBP referring the company for a formal investigation or other enforcement actions.

By law, CBP is required to provide the importer with advance notice of an intended assessment and an estimate of its duration. Importers are entitled to an entry conference, during which the assessment’s purpose will be explained and its duration provided. Using information from CBP databases about the company or the importer’s industry, the compliance assessment team may have prepared questionnaires seeking specific information about the importer’s internal procedures. These questionnaires will be distributed at the entry conference.

Upon completion of the assessment, CBP will schedule a closing conference, at which its preliminary findings will be explained. A closing conference may not be scheduled for companies found to have serious enforcement issues. If no enforcement action is taken, CBP will provide the company with a written report of the assessment’s results.

The trademark owner may want to record the trademark registration with the US Customs to protect against the unauthorized importation of merchandise bearing those trademarks or trade names. During the recordation process, the trademark owner shall complete the applications, such as the places goods bearing the recorded intellectual property right (IPR) will be manufactured, the names and addresses of each foreign person or business entity authorized to use the IPR, and identity of parent or subsidiary companies which use the IPR. As soon as the application is received and approved by Customs, the information is distributed nationwide to over 20,000 Customs officers located at the ports of entry in the United States. This is an effective way to have the Customs enforce and protect your IPR against “counterfeit” merchandise which bears a false trademark that is identical or substantially indistinguishable from a registered trademark.

The above is intended as a general introduction and should not be construed as legal advice or legal opinion for your particular case. Please contact the Law Offices of Yu & Associates with any specific questions. Tel: (301) 838-8986, Email: syu@yulegal.com, Address: 110 N Washington Street, Suite 328E, Rockville, MD 20850.