Classifying Correctly for Customs Clearance: Part I - The Global Agreement between Importers and Agents

In the realm of global trade, the temptation to misclassify goods to save costs is an ever-present lure. However, the repercussions of getting caught are steep. Importers must be transparent with Customs and the brokers who act on their behalf regarding the nature and value of the goods entering the country. Any hint of deceit can result in violations, making future imports more challenging and causing significant shipment delays.

The Customs Modernization Act

Who is responsible for what under Customs clearance? It involves these key principles:

Shared Responsibility: Both Customs and Border Protection (CBP) and importers share the responsibility of ensuring that goods are accurately labeled.

Informed Compliance: Customs has the duty to keep importers updated on laws, regulations, and licensing requirements. An importer cannot be expected to follow rules if the governing Customs body does not communicate them. Sounds fair!

Reasonable Care: Importers must demonstrate due diligence in tariff classification, ensuring they have the necessary documentation from Participating Government Agencies (PGA). If there are any lapses, showing good faith efforts to comply supports their case.

Enforced Compliance: Once informed compliance and reasonable care are addressed, Customs becomes more stringent. Any errors at this stage must be corrected promptly to avoid penalties and further shipment delays.

What Constitutes a Violation in the Eyes of US Customs?

Under 19 USC §1592, civil penalties may be imposed for:

• False Statement, Act, or Omission

• Materiality

• Culpability (Fraud, Gross Negligence, or Negligence)

Follow us at All Borders Inc on our website blog or LinkedIn to learn about common pitfalls and how to avoid them. Or start using a Licensed Customs Broker with us today, and we'll handle the hassle for you, from clearance to consultation!