Many small business owners import goods to use in their manufacturing processes or to sell directly to consumers. If you are considering importing goods to use or to sell, you should know about import laws and procedures.

Organization

Imported goods-whether duty-free or dutiable-are subject to U.S. customs laws upon entering the customs territory of the United States. Most U.S. customs laws are administered by the U.S. Customs Service.

Under the Customs Modernization Act ("Mod Act"), importers are legally responsible for determining the correct classification and value of the imported merchandise, and the corresponding duty, and they are subject to strict record keeping requirements. The policy is called "informed compliance," and importers are held to a standard of reasonable care in carrying out their obligations.

Under the Mod Act, persons seeking to import goods into the United States must assume five basic responsibilities:

  • "Admissibility" of the Merchandise. An importer must ensure that any goods it seeks to enter are not within a prohibited or restricted category and may be admitted into the United States. The Customs Service administers the requirements of many federal agencies, and any limits, licensing, testing, or other regulations of those agencies must be observed before entry.
  • Proper Entry Procedures. Importers intending to enter goods into the United States "for consumption" must provide the required entry documentation, deposit all estimated regular customs and special duties, and observe all other entry procedures and deadlines. In addition to entering "for consumption," importers may "enter for transportation," enter "temporarily in bond," enter "for warehouse" or seek admission into a foreign trade zone.
  • Payment of all required duties, fees, and taxes. Importers entering goods for consumption are legally responsible for determining applicable duties in the first instance. This determination involves a finding on the classification, valuation and country of origin of the imported goods. Importers entering goods under a preferential trade or duty program must comply with the specific requirements of that program.
  • Marking. Importers are responsible for properly marking the country of origin of the imported goods and for complying with any other marking requirements.
  • Recordkeeping. Importers must keep all records of information required for the entry of merchandise (the Customs Service's (a)(1)(A) list). In certain circumstances, additional records must be kept.

U.S. Customs and Border Protection ("CBP"), which replaced the Custom Service, has the right to enforce violations of the United States customs law. Enforcement includes the imposition of civil or criminal penalties, the assessment of liquidated damages, or the seizure and forfeiture of merchandise. Importers have a right to "protest" a particular decision of the CBP at the administrative level and to appeal an adverse Customs Service decision to the United States Court of International Trade. In addition, under the General Agreement on Tariffs and Trade Uruguay Round agreements, certain customs issues may be appealed to the World Trade Organization.

Admissibility

Most goods may be entered into the United States subject only to customs entry procedures and payment of duties and fees. Certain goods, however, are prohibited from entry, and other goods are subject to certain import restrictions, such as quotas, import licenses, or special product regulations.

Entry

With limited exceptions, all goods imported into the United States are initially within the custody and control of the Customs Service. Goods only may be released to the importer through the process of "entry." The most common type of entry is entry for consumption.

Entry for consumption involves four events:

  1. Filing of entry documents, whereby the importer files documents necessary to determine whether the goods may be released from Customs' custody to the particular person
  2. Inspection and release of the goods, whereby the Customs Service confirms that the goods may properly be entered and released to the importer
  3. Filing of entry summary documents, whereby importers file documents required for duty assessment and statistical purposes, deposit the estimated duties, and pay the required fees and taxes, and
  4. Liquidation, whereby the Customs Service assesses the final duty due on the entry, thereby "liquidating" the entry

For more information about imports and trade, contact U.S. Customs and Border Protection.

If you have legal questions about importing goods into the United States, contact a small business attorney who is familiar with international trade issues.

Questions for Your Attorney

  • How do I classify and value machinery parts that I want to import?
  • What happens if my valuation of imported goods is incorrect?
  • How do I get the Customs Service to release my imported goods to me?