The paperwork and entry process needed to clear imports into the United States are unique to the import function. It is also true that the U.S. Customs Service, a division of the U.S. Treasury Department, frequently reveals an underlying philosophy of  "presumed guilty until proven innocent." Performing what is essentially a policing function, U.S. Customs officials are always actively looking for unlawful conduct, and the importer must keep this in mind at all times. If the Customs Service believes that an importer has been less than candid, it has been known to assess unrealistically large fines or levies and leave it to the importer to prove them unjustified. This might be easy enough to prove, but while the allegation of wrongdoing is pending, the small business facing such a penalty and/or levy may find a powerful rationale to agree on a settlement that will conclude the issue. Aside from needing the importation released, the accounting reserve provision required for the large threatened Customs obligation can have a chilling effect on a company's credit standing.

Many people believe that you must obtain some sort of general license to be an importer. On the contrary. Except for applying to the Customs Service for an importer's identification number -- which will normally be your Social Security number if you are an individual or the Federal Employer's Identification number if you are a firm -- there are no specific import licenses necessary. There are, however, many questions that must be resolved, and for some products, licenses or advance permits that must be obtained before you can clear Customs. You should know these special circumstances before making a firm commitment to buy.

Besides routine procedures of entry, you should study in some detail areas of the U.S. Customs Regulations and discuss them with your custom house broker. A license must be obtained in advance to import certain controlled substances. For example, in the case of distilled spirits, wines, or malt beverages, a permit must be obtained from the Department of the Treasury's Bureau of Alcohol, Tobacco and Firearms, which is involved in other import licensing activities as well. Products coming under the surveillance of the Food and Drug Administration or the Department of Agriculture are among those that have controls and limitations for import placed on them. This is also true of certain chemicals, textiles, and consumer goods. The general practice, often stated in the purchase agreement, is that the seller will be responsible for all necessary export licenses and government filings. Even so, you will be well-advised to do some research of your own to be sure the exporter can, in fact, complete and ship the proposed transaction.

Now that you are in the buyer's role, don't forget all the clever techniques your export customers practiced on you, the seller, to obtain the best import terms. Also be sure to factor into your anticipated selling price -- in addition to customs duties, import clearance costs and fees -- other costs that did not concern you as an exporter, such as distribution, transportation, warehousing, handling and domestic marketing.

Assume that the overseas seller has performed as agreed in shipping the goods and that you have been notified of the arrival date and flight or voyage number of the shipment. You have accordingly advised the professional who is going to help you with the import process. This is your customs broker (or custom house broker). He or she must be notified of [any] imminent arrival and given full details about the nature of the merchandise, including its country of origin and any [import] quota information that may apply. Remember, the customs broker is only there to help you. It is rarely the broker who is penalized for incorrect or fraudulent customs entries: It is you. You yourself should learn about any special quotas, restrictions, or conditions that might be attached to your import. It will be impossible for the customs broker to give you the best assistance possible if he or she is not fully informed about the nature of your transaction.

We strongly recommend that you start by obtaining the U.S. Custom Service's inexpensive, easy-to-read, and very useful booklet, Importing Into the United States. It not only contains further details on material covered here, but describes the exceptions to general rules and specifies the import products that might present special challenges or require advance arrangements.

A phone call to you local U.S. Customs office can help you understand in a preliminary way what problems and duty costs might hinder your import efforts. A binding tariff classification can be obtained by writing any U.S. Customs district director. You should also locate for ready availability the harmonized Tariff Schedule of the United States of America (HTSUS), which contains the duty rates, and the Customs Regulations of the United States of America, which provides the procedural requirements. They can be found in many libraries and are available from the Government Printing Office.

L. Fargo Wells has been a leader in the international trading community for more than 20 years. He is currently a sought-after consultant on exporting and travels the world on assignments. He is also a director of several corporations to which he lends his international trading expertise. Wells is the founder and former director of the California Export Finance Office, and, with Karin Dulat, is the co-author of Exporting: From Start to Finance.

Reprinted from Selling to the World: Your Fast and Easy Guide to Exporting and Importing
by L. Fargo Wells.
Copyright 1996 by L. Fargo Wells. All Rights Reserved.
Published by McGraw-Hill.
Reprinted with permission of McGraw-Hill. May not be modified, reproduced, republished, uploaded, posted, transmitted, or distributed in any manner.