Importing Products into the US
For detailed information on importing products into the United States, the US Department of Homeland Security’s Custom and Border Protection agency has pertinent information on import regulations and requirements.
- Tips for New Importers and Exporters
- Introduction to the Importing Process (video)
- “Importing into the United States” a 200 page booklet
- List of prohibited/restricted items
For industry specific regulatory requirements:
Import Security Filing
U.S. Customs and Border Protection (CBP) will be requiring an Importer Security Filing (ISF) (formerly known as the 10+2) prior to vessel loading at foreign ports. The ISF generally will consist of 10 additional data elements from U.S. importers. In addition, 2 data set items will be required from carriers. The Importer Security Filing and additional data from carriers will enhance CBP’s ability to identify high-risk cargo shipments.
Customs and Border Protection has recently released an informational brochure on Importer Security Filing or “10+2” designed specifically for SMEs. This brochure has been developed with the intentions of being provided to walk-ins at every port of entry to help ensure all SMEs are aware of the implications of “10+2.”
There is additional information on the Customs site regarding this topic.
What is a Foreign-Trade Zone?
In the United States, the federal government has the authority to approve the creation of a foreign- trade zone (FTZ). The creation and development of individual zone projects, such as FTZ Zone 147, are usually the result of combined efforts from private and public sector entities.
Foreign-Trade Zones are treated as being outside the Customs Territory of the United States for the purposes of tariff laws and Customs entry procedures. Therefore foreign and domestic merchandise may be admitted into zones for storage, exhibition, assembly, manufacture and processing, without being subject to formal Customs entry procedures, the payment of Customs duties or the payment of federal excise taxes. When merchandise is removed from a foreign-trade zone, Customs duties may be eliminated if the goods are then exported from the United States.
If the merchandise is formally entered into U.S. commerce, Customs duties and excise taxes are due at the time of transfer from the foreign-trade zone. For a company, zone status provides an opportunity to reduce certain operating costs associated with a U.S. location that are avoided when operating from a foreign site.
What are benefits of Foreign Trade Zone?
Deferral of Duties:
Customs duties are paid only when and if merchandise is transferred into U.S. Customs Territory. The benefit equates to a cash flow savings that allows companies to keep funds available for operations while the merchandise remains in the zone. There is no limit on the length of time that merchandise can remain stored in a zone.
Reduction of Duties:
In a Foreign-Trade Zone, users may elect a zone status on merchandise admitted to the zone. The zone status determines the duty rate that will be applied to foreign merchandise if it is ultimately entered into U.S. Commerce. This permits FTZ Users to elect the lower duty rate applicable to either the imported parts or the finished product manufactured in the zone.
Elimination of Duties:
Customs duties are not paid on merchandise exported from a FTZ. Duty is eliminated on foreign merchandise admitted to a zone but subsequently exported from the FTZ. Generally, Customs duties are also eliminated from merchandise that is scrapped, wasted, destroyed or consumed in a zone.
Is there a way to get US import duties waived or refunded based on the parts being incorporated into finished equipment (Duty Drawbacks)?
There is a procedure called “duty drawback” which allows you to recover up to 99% of all customs duties paid on any imported materials contained in the exported product. The program is administered by Customs and Border Protection, which is part of Homeland Security.
There are many freight forwarders who will handle the drawback paperwork (for a fee) and there are consultants who specialize in this.