American Business


U.S. Customs Clearance

All goods coming into the United States must “clear customs.” Many disputes in the customs area arise over the classification of imported goods—basically, what is it? While this may seem a simple question, sometimes it is not; the TARIFF-duty rate depends on classification, and a substantial amount of tariff may depend on the outcome. Customs classifications are often overlapping, and where overlaps exist, logically the importer wants to choose the category with the least duty. Other customs-clearance disputes concern the place of origin: Where did it come from? Many imported PRODUCTs contain components or materials from many countries, complicating the question of the place of origin. The country of origin may determine whether the goods enter subject to tariff or duty-free. Lastly, customs disputes over the value of the imported goods can occur: What is its value? Customs duties are calculated as percentages of these values, which are principally derived from the transaction or invoice price. But often imported goods are intra-company transfers, from one division of a company to another. The companies use transfer pricing rather than invoicing, resulting in potentially different prices on which to base duties. The formalities for imported goods entering the United States are usually handled by a customs broker. Customs brokers are licensed and regulated under federal law as administered by the U.S. CUSTOMS SERVICE. The customs broker, or agent, files an “entry” form with the U.S. Customs Service, supplying documentation which the customs officer uses do determine whether to release the goods or not. At the same time, or within 10 days the agent must submit an “entry summary,” which is used by the official to determine duties, collect statistics, and determine conformity of the merchandise with U.S. health and safety requirements. Estimated customs duties are deposited at the time of filing customs documentation. The U.S. Customs clearance procedure was streamlined in 1978 to allow immediate release of imported goods after only entry documentation has been filed, without posting of bond to cover customs duties. Using a national, electronic automation program implemented in 1993, the Customs Service sends importers consolidated statements for all goods imported during a billing period.