Customs compliance should be a key element of every importer’s operational structure. For many legacy companies, their sourcing may have begun with domestic companies. The need to ensure compliance with import regulations from multiple government agencies may not have been necessary for what they were buying. However, as companies took steps to remove cost and layers from their supply chains, they became importers of record and subject to regulations from multiple government agencies. Here are three reasons that importers should have a Customs compliance program.
A proactive compliance program saves money and reduces risk.
Importers are businesses. As such, there are already investments made for accounting, insurance, human resources and other proactive steps which protect the health of the business and ensures continuity and protection. A Customs compliance program is no different.
- Are classifications reviewed before entry for duty rate and trade program eligibility?
- Are the goods or their packaging marked correctly with the country of origin?
- If an agricultural commodity, is it permitted entry into the United States?
- If potentially subject to antidumping, has a scope determination been obtained to avoid unnecessary risk?
These are reasonable questions that if an importer has a process in place can ensure that goods are brought in at the lowest possible duty rate with the fewest possible delays because of the due diligence done prior to entry to ensure complete admissibility.
It is never too late to undertake a review and implement corrective actions and take proactive steps.
Importers who have not had a compliance program may ask themselves, “Our company has been importing for years. It’s too late to try to institute these processes today.” At Zarach, we emphatically deny this and caution importers that it is never too late to implement a compliance program. A proactive analysis of an importer’s records could yield examples where there are issues of non-compliance which could be declared to Customs using a prior disclosure, limiting financial exposure to penalty multipliers within the regulations.
Non-compliance is expensive. Just ask this Texas importer ordered to pay more than a quarter million dollars.
An importer in Texas made a business decision to bring in furniture for use in university dormitories. They told Customs that it was not wooden bedroom furniture which was subject to antidumping duties of well over 200%. Customs disagreed, and the Justice Department levied a civil fine of $275,000 against the company for evading the regulations.
Trust Edward J. Zarach & Associates to craft your Customs compliance program.
As Customs brokers, we understand the regulations that govern the activities of importers. For decades we have helped importers operate their businesses profitably and within the scope of U.S. law. For more information how we can do it for your company, contact us today.