Frequently Asked Questions

Customs brokers are private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports.

Some areas of the Brokers services are:

• Prepare the import “entry” for an importer
• Ensure compliance with CBP and other government agency regulations
• Provide the required surety bond
• Pay duty and fees to CBP
• Deliver cargo to the importer or their customer.

The Harmonized Tariff Schedule of the United States Annotated (HTSA), is the primary resource for determining tariff (customs duties) classifications for goods imported into the United States.
It classifies a good based on its name, use, and/or the material used in its construction and assigns it a ten-digit classification code number. There are over 17,000 unique classification code numbers.

The Schedule is based on the international Harmonized System, the global system of nomenclature that is used to describe most world trade in goods, maintained by the World Customs Organization (WCO).

What is a Customs Bond, and why do I need to pay for one?

A customs bond is like an insurance policy for the duties and taxes on an imported good. Customs bonds are also known as imports bonds or surety bonds. You may ask who is protected by this insurance policy.

Customs bonds are financial guarantees between 3 parties: The Importer (the principal) the Surety company issuing the bond, and Customs & Border Protection (CBP).

The United States Government guarantees that customs duties and taxes will be paid on anything that is brought into the U.S. The customs bond protects the U.S. government from getting “stuck” with the bill for any shipper’s duties and taxes. In the unlikely event that a shipper cannot pay them, such as in the case of a bankruptcy or the closure of a business, the bondholder will make sure that the duties and taxes are paid.

The importer agrees to meet the following 8 conditions when posting a customs bond:

• Agrees to pay taxes, duties, and other charges in an efficient manner.
• Agrees to complete entry into the U.S.
• Agrees to produce evidence and required documents for a shipment.
• Agrees to re-deliver merchandise if mandated.
• Agrees to resolve non-compliance issues with provision for admission
• Agrees to allow examination and inspection of imported merchandise.
• Agrees to reimburse and exonerate of the U.S. for inspection, handling and storage costs, if necessary.
• Agrees to comply with the special requirements of duty-free shipments.
• A customs bond must be in place even on “duty-free” shipments.

Many Government agencies are interested in your import activities. Some of these agencies and a brief description of their areas of responsibilities are:

Department of Agriculture (APHIS) – Tasked with enforcing plant, animal, and ‘pest’ control. The DA is the primary enforcement agency for Wood Packaging regulations.

Department of Commerce – Collects statistical information about import shipments.

Food and Drug Administration – Ensures that food and drugs conform to certain standards.

Consumer Products Safety Commission – Regulates consumer products that the FDA doesn’t handle directly; (Toys, Clothing, etc.)

Fish and Wildlife Service – Oversees the handling of non-domesticated animals and goods made from parts of these animals and that are subject to the CITES treaty.

State Department – Monitors artifacts and cultural property imported from various countries and may be involved with licensing of certain imports.

Department of Transportation, Environmental Protection Agency, and the Federal Aviation Administration – Regulate the import of automobiles and Aircraft.

Bureau of Alcohol, Tobacco and Firearms – Issues license and/or permits to import alcoholic beverages of all kinds, firearms, and other weaponry, and tobacco products. Note that some of these goods are subject to State regulations and taxes.

Foreign Assets Control – Issues licenses to import products that would otherwise be prohibited (Cuban cigars, Iranian carpets)

The United States International Trade Commission – An independent federal agency determining import injury to U.S. industries in antidumping, countervailing duty, and global and China safeguard investigations; directing actions against unfair trade practices involving patent, trademark, and copyright infringement; supporting policymakers through economic analysis and research on the global competitiveness of U.S. industries.

The value most commonly used in appraising imported goods is “Transaction Value,” which is the price paid or payable for the merchandise. Add to that is the cost of packing; commissions or cost of any assist; royalty or license fees; and the proceeds of any subsequent resale; disposal, or use of the good – all to the extent that they are costs to the buyer and not already included in the original price.
You do NOT have to pay duty on the costs for international freight or insurance for your shipment.

U.S. Customs is very specific about who can sign the Power of Attorney. In most cases, the only corporate officers that can sign this document without supporting “Articles of Incorporation” are President, Vice-President, Secretary, and/or Treasurer. For some smaller incorporated companies, other titles may sign the power of attorney, but only if they are the sole signing officer and this is stated right on the Power of Attorney. 

A Foreign Trade Zone (FTZ) is an area in the United States that is not considered to be “in the U.S. Customs Territory” for specific legal purposes. Duty is not paid on goods placed into a Foreign Trade Zone, but rather when they are taken out and “entered for consumption” in the United States. For importers, that means that goods in an FTZ do not clear customs until they leave the zone.