Frequently Asked Questions about Importing into the U.S.


GENERAL IMPORTING

What is the definition of an Importer?

The U.S. Customs Service defines "importer" as a person primarily liable for the payment of duties on the merchandise, or an authorized agent acting on the importer's behalf.  The importer may be:  (a) a consignee, (b) the importer of record, or (c) the actual owner of the merchandise if the actual owner has filed with Customs a declaration acknowledging ownership along with a superseding bond.  (See 119 CFR 141.20 – For more information on Code of Federal Regulations (CFR) visit:   www.gpo.gov/nara/cfr/index.html

What is an Importer of Record?

The U.S. Customs Service defines the importer of record as the owner or purchaser of the goods; or, when designated by the owner, purchaser, consignee or a licensed Customs Broker.

What do I have to do to import a product into the U.S.?

Prior to importing and entering merchandise into the commerce of the United States, it is highly recommended to make an appointment with a U.S. Customs Trade Specialist at the local U.S. Customs' office.  In general, the most important information you need to acquire from U.S. Customs regarding the importation of a product are the following questions:

  • What is the HS tariff number of the product?
  • What is the rate of duty?
  • How should the product be marked?
  • Are there any other Federal Agency requirements  (FDA, DOT, EPA, ATF, etc.) that control the product?
  • Does the product require import licenses or quotas?

For additional information visit the Resources tab in our site and view the Guide to Importing

Once I have the information regarding my product, what is the next step?

Once you assess the requirements for your product to be imported into the U.S., you will need to develop an import price.  To do so, you will need to take into consideration all the costs associated with producing the product, plus all the costs of marking, packaging, and producing the product at the country of origin.  In addition, you will need to decide whether you or your company will be the importer of record, or whether you will allow another entity to import your product, such as a distributor.  (See PRICING section below)

Where can I get information on importing products into the United States?

The U.S. Government does not maintain import promotion programs such as those available to U.S. exporters. However, many countries maintain foreign trade commission offices in the United States, which, assist with the importation of foreign products into the U.S.  You may want to contact the importing country's commercial office for further assistance. (Example: Colombia: www.ProExport.com.co , Chile: www.ProChile.cl )

Do I need to have a Customs Broker to import a product into the U.S.?

Not necessarily, but it is highly recommended.  To speed customs clearance, the import community and the Customs Service have created the Customs Automated Commercial System (ACS), http://www.customs.gov/imp-exp2/auto-sys/acs.htm which, electronically receives and processes entry documentation and provides cargo disposition information. Cargo carriers, customs brokers, and importers may use the system, which reduces clearance time from days to hours or even minutes. Persons entering into the importing trade who intend to file their own entry documentation with U.S. Customs are encouraged to explore this method of transacting business. Also, those importing merchandise either for their own use or for commercial transactions may use a customs broker who transacts customs business using the Automated Broker Interface (ABI) http://www.customs.gov/imp-exp2/auto-sys/abi.htm in combination with ACS.

What is an Import Certificate?

The import certificate is a means by which the government of the country of ultimate destination exercises legal control over the internal channeling of the commodities covered by the import certificate.

What is an Import License?

A document required and issued by some national governments authorizing the importation of goods.  Import licenses may also specify the country from which the importer must purchase the goods.

What is an International Commodity Agreement?

An ICA is an international understanding, usually reflected in a legal instrument, relating to trade in a particular basic commodity, and based on terms negotiated and accepted by most of the countries that export and import commercially significant quantities of the commodity.  Some commodity agreements (such as exists for coffee, cocoa, natural rubber, sugar, and tin) center on economic provisions intended to defend a price range for the commodity through the use of buffer stocks or export quotas or both.  Other commodity agreements (such as existing agreements for jute and jute products, olive oil, and wheat) promote cooperation among producers and consumers through improved consultation, exchange of information, research and development, and export promotion.

What is considered Imports of Merchandise?

Imports of merchandise include commodities of foreign origin as well as goods of domestic origin returned to the United States with no change in condition or after having been processed and/or assembled in other countries.  For statistical purposes, imports are classified by type of transaction:  a) Merchandise entered for immediate consumption.  ("duty free"); b) Merchandise and merchandise on which duty is paid on arrival); c) Merchandise withdrawn for consumption from Customs bonded warehouses, and U.S. Foreign Trade Zones; d) Merchandise entered into Customs bonded warehouses and U.S. Foreign Trade Zones from foreign countries.

What are Instruments of International Traffic?

Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are designated as "instruments of international traffic" (IIT) within the meaning of section 322(a0, Tariff Act of 1930, as amended. Upon Customs acceptance of a type 3 bond, covering these IIT types, such instruments may be released without entry or the payment of duty, subject to the provisions of 19 Code of Federal Regulations (CFR) 10.41a.

What are Imports for Consumption?

"Imports for Consumption" measure the total of merchandise that has physically cleared through U.S. Customs either entering consumption channels immediately or entering after withdrawal for consumption from bonded warehouses under Customs custody or from Foreign Trade Zones.  Many countries use the term "special imports" to designate statistics compiled on this basis.

What is an Import Substitution?

A strategy which emphasizes the replacement of imports with domestically produced goods, rather than the production of goods for export, to encourage the development of domestic industry.

What is the In-Bond System?

The In-Bond System, a part of Customs' Automated Commercial System, controls merchandise from the point of unloading at the port of entry or exportation.  The system works with the input of departures (from the port of unlading), arrivals, and closures (accountability of arrivals).

What is an informal entry?

Informal entries cover personal shipments, commercial shipments and mail shipments that are being entered for consumption, i.e. for use or sale. In most cases informal entry can be used if the merchandise is valued at $2000 or less. There are some exceptions such as textiles, certain types of footwear and other goods subject to quota/visa restrictions. Personal shipments valued over $2000 will also require a formal entry. The difference between an informal entry and a formal entry is the bond requirement and the liquidation process. Liquidation is the final computation of duties or drawback accruing to an entry and is the final step in the entry process.

What is a Tariff?

A tax assessed by a government in accordance with its tariff schedule on goods as they enter (or leave) a country.  May be imposed to protect domestic industries from imported goods and/or to generate revenue.  Types include ad valorem, specific, variable, or some combination.

What are Non-Tariff Barriers?

Non-Tariff Barriers are market access barriers that result from prohibitions, restrictions, conditions or specific requirements and make exporting products difficult and/or costly.  The term covers any restriction or quota, charge, or policy, other than traditional customs duties, domestic support programs, discriminatory labeling and health standards, and exclusive business practices which limit the access of imported goods. NTBs may result from government or private sector actions.  For more information visit:  www.worldbank.org/research/trade/conference/neven.pdf

What is a Tariff Anomaly?

A tariff anomaly exists when the tariff on raw materials or semi-manufactured goods is higher than the tariff on the finished product.

What is Tariff Escalation?

A situation in which tariffs on manufactured goods are relatively high, tariffs on semi-processed goods are moderate, and tariffs on raw materials are nonexistent or very low.

What is a Phytosanitary Inspection Certificate?

It is a certificate, issued by the U.S. Department of Agriculture to satisfy import regulations of foreign countries, indicating that a U.S. shipment has been inspected and is free from harmful pests and plant diseases. For more information visit: http://www.ustr.gov/sectors/agri-sanitary.shtml

What is a Protest?

A protest is the legal means by which an importer, consignee, or other designated part may challenge decisions made by a District Director of Customs. It is a part of Customs' Automated Commercial System, which tracks protests from the date they are received through final action. For more information visit: www.customs.gov/impoexpo/pdf/pro0100.pdf

  

How is Profit Determined in an Antidumping Investigation?

For the purposes of constructed value in an antidumping duty investigation or review, the profit used is the profit normally earned by a producer, from the country of export, of the same or similar product as that under investigation. By statute, the amount of profit shall not be less than 8 percent of the sum of general expenses and cost.

What is Reciprocity?

The reduction of a country's import duties or other trade restraints in return for comparable trade concessions from another country. Reciprocity includes the lowering of customs duties on imports in return for tariff concessions from other countries; the negotiated reduction of a country's import duties or other trade restraints in return for similar concessions from another country.

What is a Temporary Importation under Bond (TIB)?

When an importer makes entry of articles brought into the U.S. temporarily and claimed to be exempt from duty under Chapter 98, Subchapter XIII, Harmonized Tariff Schedule of the United States, a bond is posted with Customs which guarantees that these items will be exported within a specified time frame (usually within one year from the date of importation).  Failure to export these items makes the importer liable for the payment of liquidated damages for breach of the bond conditions.  (See 19 CFR 10.31.).  The Temporary Importation under Bond (TIB) is usually twice the amount of duties and other payments the importer would otherwise

be required to pay.  Merchandise imported under TIB is usually for sales demonstration, testing, or repair.

I am interested in importing a car, what do I need to know?

There are specific requirements for importing automobiles into the U.S.  You may need to comply with what is known as Homologation of an Automobile.  It is the certification by a country that a vehicle conforms to its safety and emission standards -- primarily that a vehicle has been manufactured or modified to meet a country's standards.

PRICING and DUTIES

Who ensures a level playing field for America's industries in the competitive global market?

The Import Administration (IA) enforces laws and agreements to prevent unfairly traded imports and to safeguard jobs and the competitive strength of American industry. It also administers the U.S. antidumping and countervailing duty laws to provide a remedy to domestic industries injured by unfairly traded imports. For more information visit:  http://ia.ita.doc.gov

What is "J" Curve and Real Exchange Rates?

The current account may initially worsen before improving in response to real depreciation in exchange rates, because it takes time for the growth of import volumes to decline in response to higher import prices.  This phenomenon is known as the "J-curve effect," because the downward movement followed by an upward movement in the current account resembles the letter "J."

How is the Purchase Price used for an import?

It is used in dumping investigations that refer to the U.S. sales price of merchandise, which is sold or likely to be sold prior to the date of importation, by the producer or reseller of the merchandise for exportation to the United States.  Certain statutory adjustments (e.g., import duties, commissions, freight) are made, if appropriate, to permit a meaningful comparison with the foreign market value of such or similar merchandise.  The United States antidumping laws are set forth in Title VII of the Tariff Act of 1930, as amended ("the Act") (19 U.S.C. 1673 et seq.). For more information on anti-dumping visit: www.customs.gov/impoexpo/tools/archives/vol1n04/avcvd.htm

What is United States Price?

In the context of dumping investigations, this term refers to the price at which goods are sold in the U.S. compared to their foreign market value. The comparisons are used in the process of determining whether imported merchandise is sold at less than fair value.

What is Constructed Value?

For market economy cases, when there are no sales of the foreign like product in the comparison market suitable for matching to the subject merchandise (including, for example, when the Import Administration Department disregards sales because they are below the cost of production), the Department uses constructed value as the basis for normal value. The constructed value is the sum of (1) the cost of materials and fabrication of the subject merchandise, (2) selling, general, and administrative expenses and profit of the foreign like product in the comparison market, and (3) the cost of packing for exportation to the United States. (Section 773(e) of the Act.)

What is considered Dumping?

Dumping occurs when imported merchandise is sold in, or for export to, the United States at less than the normal value of the merchandise. The dumping margin is the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise. The weighted-average dumping margin is the sum of the dumping margins divided by the sum of the export prices and constructed export prices.

What is Trigger Price Mechanism?

The TPM is an antidumping mechanism designed to protect U.S. industries from under priced imports.  First used in 1978 to protect the steel industry, the TPM is the price of the lowest cost foreign producer. Imports priced below the trigger price are assessed a duty equal to the difference between their price and the trigger price.

What does Ad Valorem mean?

Literally:  according to value.  It is any charge, tax, or duty that is applied as a percentage of value.

What is Ad Valorem Equivalent?

It is the rate of duty, which would have been required on dutiable imports under that item, if the United States customs value of such imports were based on the United States port of entry value.

How are import duties allocated?

The Harmonized Tariff System (HTS) provides duty rates for virtually every item that exists. The HTS is a reference manual that is the size of an unabridged dictionary.  Experts spend years learning how to properly classify an item in order to determine its correct duty rate. For instance, you might want to know the rate of duty of a wool suit. A classification specialist will need to know, does it have darts? Did the wool come from Israel or another country that qualifies for duty-free treatment for certain of its products, where was the suit assembled, does it have any synthetic fibers in the lining, etc.   Please be aware that the duty rate you request is only as good as the information you provide. The actual duty rate of the item you import may not be what you think it should be as a result of your research. Customs makes the final determination of what the correct rate of duty is, not the importer.  For more information on the HTS visit: http://dataweb.usitc.gov/SCRIPTS/tariff/toc.html

How is a product determined to be free of duty or dutiable?

Rates of duty for imported merchandise vary depending upon the country of origin. Most merchandise is dutiable under the most-favored-nation--now referred to as normal trade relations--rates in the General column under column 1 of the tariff schedule. Merchandise from countries to which these rates have not been extended is dutiable at the full or "statutory" rates in column 2 of the tariff schedule.  Free rates are provided for many subheadings in columns 1 and 2 of the tariff schedule. Duty-free status is also available under various conditional exemptions which are reflected in the Special column under column 1 of the tariff schedule. It is the importer's burden to show eligibility for a conditional exemption from duty.  One of the more frequently applied exemptions from duty occurs under the Generalized System of Preferences (GSP). GSP-eligible merchandise qualifies for duty-free entry when it is from a beneficiary developing country and meets other requirements.  Other exemptions are found under the subheadings in Chapter 98 of the tariff schedule. These subheadings include, among other provisions, certain personal exemptions, exemptions for articles for scientific or other institutional purposes, and exemptions for returned American goods.  For more information on the HTS visit: http://dataweb.usitc.gov/SCRIPTS/tariff/toc.html

What is the Tariff Schedules of the United States and what does it do?

Effective 1979 to January 1989, the U.S. import statistics were initially collected and compiled in terms of the commodity classifications in the Tariff Schedules of the United States Annotated (TSUSA), an official publication of the U.S. International Trade Commission embracing the legal text of the Tariff Schedules of the United States (TSUS) together with statistical annotations.  This publication was superseded by the Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes (HTSUSA) in January 1989. The HTSUSA is commonly known today as the HS Code and it provides the number classification for each product that enters the U.S.  .  For more information on the HTS visit: http://dataweb.usitc.gov/SCRIPTS/tariff/toc.html

QUOTAS and RESTRICTIONS

What is the Quota System?

The Quota System, a part of Customs' Automated Commercial System, controls quota levels (quantities authorized) and quantities entered against those levels.  Visas control exports from the country of origin.  Visa authorizations are received from other countries and quantities entered against those visas are transmitted back to them.  Control of visas and quotas simplify reconciliation of other countries' exports and U.S. imports.  For more information visit:  http://www.customs.ustreas.gov/quotas/reports.htm

What is an Import Quota?

A means of restricting imports by the issuance of licenses to importers and assigning each a quota, after determination of the total amount of any commodity; which, is to be imported during a given period. For more information visit:  www.customs.gov/impoexpo/foryour_info.htm

 

What is an Absolute Quota?

Absolute quotas permit a limited number of units of specified merchandise to be entered or withdrawn for consumption during specified periods. Tariff-rate quotas permit a specified quantity of merchandise to be entered or withdrawn at a reduced rate during a specified period. Quotas are established by Presidential Proclamations, Executive Orders, or other legislation.

What are Tariff Quotas?

Application of a higher tariff rate to imported goods after a specified quantity of the item has entered the country at a lower prevailing rate.

What is Import Quota Auctioning?

The process of auctioning the right to import specified quantities of quota-restricted goods.

What is an Import Restriction?

Import restriction, applied by a country with an adverse trade balance (or for other reasons), reflect a desire to control the volume of goods coming into the country from other countries may include the imposition of tariffs or import quotas, restrictions on the amount of foreign currency available to cover imports, a requirement for import deposits, the imposition of import surcharges, or the prohibition of various categories of imports.

What are Quantitative Restrictions?

Known as QR's, they are explicit limits, usually by volume, on the amount of a specified commodity that may be imported into a country, sometimes also indicating the amounts that may be imported from each supplying country.  Compared to tariffs, the protection afforded by QR's tends to be more predictable, being less affected by changes in competitive factors.  Quotas have been used at times to favor preferred sources of supply.

What is Purchasing Power Parity?

Purchasing power parity is a theory, which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

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