What is Customs Compliance?

Customs compliance are a set of standards outlined by the President of the United States, U.S. Congress, U.S. Customs Boarder Protection and other Government Agencies to protect the revenue of the United States and public safety. These standards protect the interest for those who conduct international trade, within the Trade Community and the general public from fraud, smuggling, force labor, counterfeits, pirated goods, and dishonest practices. Failure to adhere to trade compliance and its rules and regulations, CBP has the authority to issue liquidated damages, fines, penalties, confiscation of merchandise to export back to the country of origin at the expense of the importer or to destroy all merchandise at the expense of the importer.

To expedite your merchandise quickly through U.S. CBP, the importer of record who is responsible for being compliant as follows:

• Applying rules and regulations towards Free Trade (Tariff Programs) Programs
• Applying rules and regulations that relates to your merchandise and Items.
• Proper Classification that determines duty rate.
• Detail description on a commercial invoice to determine duty rate.
• Proper labels and labeling on merchandise.
• A surety bond if merchandise is over $2500.00 (Single or Continuous)
• Proper duties and all paperwork needed that accompanies all Merchandise and Items imported.
• Detail listings and a true full description of all items including weights and measures, quantity in each box and proper marks on your packing slips, commercial invoices and boxes.
• Properly declare the actual transaction value for each item boxed (do not include the cost of direct and indirect cost of manufacture, insurance, assists, shipping fees etc.)
• If paid in foreign currency, currency must be converted to dollars at the time and day a vessel, aircraft or cartage leaves a foreign port. Only the day of export.
• Proper timing for filing ISF.
• Import permits if applies to your merchandise.
• Provide the true full name of the shipper and the receiver, correct address, and complete contact information like an email address or phone number. (nick names, alias, or shortening of a name is not permitted.)

As a note: Any deceit, misinformation, improper names or missing documents upon arrival for inspection by CBP, your merchandise will be detained

Customs Bonds are legal instruments to protect the revenue of the United States which both parties, the surety and the principal must agree upon the terms of a bond. Even though all customs bonds have different guidelines and agreements (see chart below) which the surety and Principal must follow to protect the Importers merchandise and the U.S. government interest, its revenue. All Sureties must be approved by the Treasury Department which sureties must be listed and named in the current circular 570 to act as sureties on bonds, with the amount in which each may be accepted.

To ensure compliance in the case where merchandise subject to PGA requirements where failure to redeliver could pose a threat to the public health and safety. Therefore a bond will be executed in an amount which is not less than three times the total entered value of the merchandise that are required by the following agencies.  

1. Food and Drug Administration (FDA) – All
2. Environmental Protection Agency (EPA) – All 
3. Bureau of Alcohol, Tobacco and Firearms (BATF) – Alcoholic Beverages and Distilled Spirits 
4. Only Consumer Products Safety Commission (CPSC) – Toys and Fireworks only if sampled by Customs for CPSC testing 
5. Department of Agriculture, Agricultural Marketing Service (AMS) – Subject to marketing orders 
6. Federal Communications Commission (FCC) – All 
7. Toxic Substances Control Act (TOSCA) – All 

U.S. Customs Bonds serve with multiple purposes based on the activities that an importer or broker will conduct .

1. ISF bond:
   1. Single or Continuous bond
   2. Used only once.
   3. For shipment of goods that are laden and set to sail by vessel. 
   4. Must be filed prior to laden of goods.

Duties, Taxes & Fees	Bond Amount
$000,000 to $500,000	$50,000
$500,000 to $600,000	$60,000
$600,000 to $700,000	$70,000
$700,000 to $800,000	$80,000
$800,000 to $900,000	$90,000
$900,000 to $1,000,000	$100,000
$1,000,000 to $2,000,000	$200,000
$2,000,000 to $3,000,000	$300,00

ACTIVITY	SINGLE TRANSACTION BOND	CONTINUOUS BOND	Purpose of Bond and Bond Setting
Ia	Accelerated drawback Payment Refunds The bond limit of liability amount for accelerated payment of drawback shall be equal to the amount of accelerated payment to be received on the entry covered.	Accelerated drawback Payment Refunds 1. When the bond is for drawback claims using the exporter’s summary procedure the bond limit of liability amount shall be fixed in an amount equal to 25 percent of the drawback claimed on entries filed by the principal (exporter-claimant) during an annual period. 2. When the bond is for both accelerated payment of drawback and claims using the exporter’s summary procedure the bond limit of liability amount shall be fixed at an amount sufficient to cover the maximum amount of accelerated payment to be outstanding at any time during an annual period, or much larger amount the district director may deem necessary to afford ample protection of the revenue.
2		Custodian of Bonded Merchandise	SEE Types of bonds needed below chart.
3	International Carrier If the bond is to secure the landing in foreign ports, by a vessel of less than 500 net tons, of spirits, wines, or other alcoholic beverages not covered by a certificate of shipment, the bond limit of liability amount shall be fixed in an amount equal to double the estimated duty and taxes.	International Carrier In addition, the district director has full responsibility for setting bond limits at higher amounts, up to $250,000 as deemed necessary, for carriers with past narcotics violations and/or those originating from high-risk drug areas.	When the bond is to secure activities, including requested overtime services, related to the entry or clearance of vessels, vehicles, or aircraft which arrive directly or indirectly from any place outside the customs territory of the United States, the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000.
3a		Instruments of International Traffic	When the bond is for the control of instruments of international traffic required by Section 10.41a CR and/or clearance of serially numbered substantial holders or outer containers required in Section 10.41b CR, the bond limit of liability shall be fixed at $20,000, or such larger amount the district director deems necessary to accomplish the purpose for which the bond is given.
4		Foreign Trade Zone Operator (FTZ)	When the bond is for a Foreign Trade Zone operator, the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $50,000.
5		Public Gauger	The bond limit of liability amount shall be fixed in an amount the district director may deem necessary.. Under normal circumstances, the bond limit of liability for Public Gauger and Commercial Laboratory companies who have not been the subject of adverse Customs actions will be based on the number of approved or accredited sites operated by that gauger or laboratory company. Laboratories or gaugers operating one site are considered small and the bond limit of liability should be not less than $20,000. Companies operating two to ten sites are considered medium in size and the bond limit of liability should be from $30,000 to $50,000. Those companies operating more than ten sites are considered large in size and the bond limit of liability should be from $100,000 to $120,000.
6	Wool & Fur Products Labeling Acts and Fiber Products Identification Act Importations		The bond limit of liability amount shall be fixed in an amount equal to two times the value of the merchandise involved and duty thereon.
7	Bill of Lading		The bond limit of liability amount shall be fixed in an amount equal to one and one-half times the invoice value.
8	Detention of Copyrighted Material		fixed in an amount appropriate to hold material depreciation of articles detained as alleged to be infringing and from any loss caused by the detention of articles found not to be infringing. Generally, 120 percent of the value of the articles, as set forth in the entry, plus the estimated duties, taxes and fees will be appropriate, but the district director may raise or lower the amount as necessary.
9	Neutrality		The bond limit of liability amount shall be fixed in an amount equal to double the value of the vessel and cargo on board.
10	Court Costs for Condemned Goods		Fixed in an amount of $5,000 or 10% of the value of the claimed property, which ever is lower, but not less than $250.

ACTiVITY 2 – Custodian of Bonded Merchandise – Continuous Bond

1. Bonded warehouse operator
   • fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000 on each building or area covered by the bond. Note: In determining the bond amount for a warehouse which will be used to store distilled spirits, consideration must be given to the fact that the warehouse proprietor is liable for both the duty and tax on distilled spirits missing from the warehouse. When the bond is for the carriage of merchandise by common carriers, contract carriers, and freight forwarders, the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000 in the case of motor and air carriers and in an amount not less than $50,000 in the case of other carriers
2. Container station operator, independent of either the importing carrier or bonded
   • bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000.
3. A Centralized Examination Station (CES),
   • bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000.
4. customhouse cartage or lighterage operation
   • the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given, but not less than $25,000.
5. private carrier operator
   • the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to accomplish the purpose for which the bond is given.
6. to secure the payment of overtime services requested by or on behalf of parties in interest
   • the bond limit of liability amount shall be fixed in an amount the district director may deem necessary to secure the payment of the amount due.
7. more than one kind of custodial operation,
   • the bond limit of liability shall be fixed in an amount large enough to cover the combined operations. For instance, if a bonded warehouse and container station are covered under the same bond, the bond limit of liability shall be fixed in an amount the district director may deem necessary to accomplish the purposes for which the bond is given, but not less than $25,000, plus $25,000 per warehouse building.

There are 2 types of POA when conducting business with U.S. Customs.

1. An employee who works for a U.S. Customs broker who is acting solely for his employer to conduct customs business on their behalf.
2. Customs Broker to act on the behalf of the Importer to conduct customs business.

To conduct customs business, a U.S. Customs Broker must have a permit to conduct customs business at the port that a U.S. Customs Broker applied to. A Customs broker has the option to apply to multiple ports if a Customs Broker needs to conduct business at those ports. Transacting Customs Business means under CFR 19 Title: § 111.1 Definitions.:

1. Entry and admissibility of merchandise,
2. Classification and valuation,
3. The payment of duties, taxes, or other charges assessed or collected by CBP on merchandise by reason of its importation,
4. Refund, rebate, or drawback of those duties, taxes, or other charges.
5. Preparation, and activities relating to the preparation, of documents in any format and the electronic transmission of documents,
6. Parts of documents intended to be filed with CBP in furtherance of any other customs business activity, whether or not signed or filed by the preparer.
7. Transacting customs business does not include the mere electronic transmission of data received for transmission to CBP and does not include a corporate compliance activity.

Yet, a U.S. Customs Brokers license is not required to import on behalf of an importer.

1. An importer or exporter can transact customs business solely on his own account and in no sense on behalf of another is not required to be licensed, nor are his authorized regular employees or officers who act only for him in the transaction of such business.
2. Marine Transactions
3. Transportation in-bond
4. noncommercial shipments
5. Foreign Trade Zone (FTZ) activities

An Employee of a broker who is acting solely for his employer to conduct customs business must have a power of attorney stating that the employee will act on behalf of the customs broker and the power of attorney must be filed with the port director. Yet the customs broker is responsible and must exercise sufficient supervision of the employee to ensure proper conduct on the part of the employee in the transaction of customs business. Also a customs broker must exercise of reasonable care and diligence for those who are not licensed based on the acts and omissions which the employee may not beware of therefore the customs broker should have foreseen.

A power of attorney for an employee allows the employee to:

1. The broker has authorized the employee to sign documents pertaining to customs business on his behalf, yet a power of attorney does not have a to be filed with the port director.
2. A customs broker has filed with the port director a statement identifying the employee as authorized to transact customs business on his behalf.

For a Customs Broker to act on the behalf of the Importer to conduct customs business.

A power of attorney must be granted by the importer of record. A power of attorney can be on Customs Form 5291 yet a POA may not have to be on 5291 but shall be a General POA as explicit in its terms and executed in the same manner as a Customs Form 5291 as follows.

General power of attorney with unlimited authority example:

KNOW ALL MEN BY THESE PRESENTS, THAT

---

         (Name of principal)
________ ,

(State legal designation, such as corporation, individual, etc.) residing at ___ and doing business under the laws of the State of , hereby appoints   (Name, legal designation, and address) as a true and lawful agent and attorney of the principal named above with full power and authority to do and perform every lawful act and thing the said agent and attorney may deem requisite and necessary to be done for and on behalf of the said principal without limitation of any kind as fully as said principal could do if present and acting, and hereby ratify and confirm all that said agent and attorney shall lawfully do or cause to be done by virtue of these presents until and including , (date) or until notice of revocation in writing is duly given before that date.

Date __, 19;.

(Principal’s signature)

The Duration of power of attorney can be either unlimited or limited. Under an unlimited POA, an unlimited POA grants a POA for an unlimited period of time unless
a written notice of revocation is received by CBP either at the port of entry or electronically. Notice will be given to the Customs Broker that the importer ceases to be an active client therefore the POA is revoked. After revocation, Customs Broker must keep record for 5 years. A Limited POA Issued by a partnership that shall be limited to a period not to exceed 2 years from the date of execution.

As a rule, when conducting business with CBP or PGA’s, a power of attorney must granted to the individual or customs brokers to conduct business on behalf of the importer of record. Simple as writing to CBP / PGA’s for inquiries to filing.

CBP form 5106 is a basic form to establish your identity to conduct business of importing at any port of entry in the United States and its territories. Each person, business firm, government agency or other organization that intends to file an import entry must file a 5106. This form has multiple purposes, one is to establish or update an Importer account with CBP which CBP will enter a new importer/ principal into CBP’s ACE data base, this will provide for subsequent customs transactions. Second, an assigned filer code will be issued that will be used for the importers first formal entry or request for services, this will result in the issuance of a bill or a refund check upon adjustment of a cash collection.

The use of your filer code will be tract on every entry transaction that the importer will make. On each entry, CBP will collect and maintain records on all commercial goods imported into the United States, this will not relive you from maintaining your own records which must be maintained at your place of business (see CFR 19 Part 163 Record Keeping, how many years to maintain records). CBP will also collect and maintain records along with carrier, broker, importer, and other ACE-ITDS Portal user account and manifest information. CBP will use this information to track, control, and process all commercial goods imported into the United States. This facilitates the flow of legitimate shipments, and assists the Department of Homeland (DHS)/CBP in targeting illicit goods. With all entries that are made, CBP will continue to use what is called “Routine Uses” which the information requested on this form may be shared externally, as a “routine use” with appropriate federal, state, local, tribal, or foreign governmental agencies, or multilateral governmental organizations.

To import any type of goods into the United States, the practice of due diligence is the acceptable practice on your part as the importer. Meaning that all imports do not apply the same way for all goods are imported, whether you are importing live stock, perishables, wine, apparel to woods because each type of goods are determined by PGA (Partner Government Agencies) according to their rules and regulations and CBP look for the basic paper work for entry as well as other paper work required by PGA. PGA determine whether a good is prohibited or allow entry into the United States. As the Importer of Record you are responsible to research and gather information on the type of documents you will need to import your goods.

Documents Required by CBP upon entry of goods.

1. A bill of lading or air waybill
2. Commercial Invoice
3. Packing Slip
4. Surety Bond

As an Example from each PGA

Partner Government Agencies
TTB Importing Wine, Liquor and Beer	Must have a EIN from IRS	Federal Basic Importer’s Permit issued by TTB  TTB F 5100.24	Alcohol Dealer Registration, TTB F 5630.5(d)	Application for and Certification / Exemption of Label/Bottle Approval (COLA)  TTB F 5100.31 A certificate of age or origin is required for certain wines and distilled spirits imported into the United States	1. Importer must have authorization letter to sell by manufacture 2. Natural wine certification for   enological practices agreement, no certification is required. Please refer to our list 3. A certificate of age or origin is required for certain wines and distilled spirits imported into the United States.   4. FDA Prior Notice, 5.Bioterrorism Act of 2002 6. State Level, Import permit and other
USDA/APHIS On Oct 1, 2022, FAVIR will be replaced by ACIR (https://acir.aphis.usda.gov/s/) Importing from Chile Grape Cluster of fruit,	. 1. An Import Permit is required. CBP form 3461 for immediate transportation and to file 7501 with estimated duties attached	1. Admissible Plant Parts: Cluster of fruit, Fruit 2. Admissible Ports: All Ports	3. This commodity is subject to inspection at the port of entry and all general requirements of 7 CFR 319.56-3. 4. Voluntary Pre-clearance: Consignments may or may not be pre-cleared, signed PPQ Form 203 or a vessel report from APHIS. 5. Condition of Entry Treatment: T101-h-2 (Methyl Bromide Fumigation) REQUIRE T101-h-2 in addition to any required Medfly treatments.	6. Condition of Entry Treatment: T101-h-2-1 (Methyl Bromide Fumigation) , or  T107-a (Cold Treatment) , or  T108-a (Methyl Bromide Fumigation and Cold Treatment) If treatment has not been completed or  fails, the fruits or vegetables may arrive in the United States at either of the following locations: At ports located north of 39° latitude and east of 104° longitude At ports with  approved cold-treatment	Production Location: Not from any quarantine area. Phytosanitary Certificate: Must be accompanied by a phytosanitary certificate issued by the National Plant Protection Organization (NPPO) of Chile with an additional declaration stating the consignment was produced in an area free of  Ceratitis capitata.  Reference Information: To be treated in accordance with the Plant Protection and Quarantine Treatment Manual (https://www.aphis.usda.gov/import_export/plants/manuals/ports/downloads/treatment.pdf).
Importing Carbon and Alloy Line Pipe <= 16 inches in Diameter HTS – 7304191060 LINE PIPE (OIL/GAS PIPELINES) IRON/ NONALLOY STL, SEAMLESS, OUTSIDE DIAM 215.9-406.4MM, WALL THK >/= 12.7MM	1. import license issued by the SIMA office for entry summary.	1. All licenses will require importers to specify the country of ‘melt and pour’ for the crude steel 2. Low Value’ licenses remain  valid for shipments  up to $5,000;