Access to information about shipments, orders, customs entries and document images is critical to a thorough auditing strategy. An in house automated system offers several benefits to importers: visibility into the import process; the ability to proactively manage the import process; reduce inbound cycle times and decrease supply chain costs; improve regulatory data accuracy and errors; automate time consuming entry processes; intelligently screen suppliers, countries and other entities; improve landed cost accuracy; and ensure adherence to import compliance regulations.
Smaller companies – those with fewer shipments and new to the importing space, should also take advantage of automated solutions via a cloud based solution, which saves both time and money. A cloud based solution enables smaller companies to take advantage of automation technology without the need to invest in hardware, software or IT personnel. It is also easily accessible 24/7 via a web browser. A subscription-based payment module means a company only pays for what it needs, and can expand its usage as the company grows.
3. Not creating your own commercial invoice
Companies that don’t create their own invoices are increasing their risk of exposure to fines, penalties and delays as the information compiled by a third party and placed on a commercial invoice may be incorrect. The commercial invoice is the primary document Customs uses to ascertain classification, valuation and duty payments on each shipment, and Customs may demand to review the invoice prior to clearing cargo for entry into the United States. Best-in-class importers take steps to ensure their vendors’ commercial invoices comply with Customs’ invoice requirements. Delivery documents, shipping invoices and proforma invoices cannot be substituted for a commercial invoice.
The following information must be noted on the invoice: total value of goods; currency of purchase; country of origin (of manufacture); shipper and consignee full name and address as well as a piece count; detailed description of the product(s) and the Federal ID for the Consignee of the product in the United States. A free trade certificate is required to take advantage of preferential duty rates when applicable.
Submission of a commercial invoice is a condition of importation, and that the failure to provide a commercial invoice is a breach of condition of their import bond, for which liquidated damages can be assessed. Importers or their brokers are also required to sign a declaration that the invoice is true and correct, and if the company later learns that this is not true, that it will notify Customs of the inaccuracy.
A GTM system can provide complete, accurate and automated generation of the commercial invoice and other shipping documents by leveraging the clean and accurate data stored within the importer’s centralized repository. This includes business transactions with a related party or external supplier.
4. Not retaining appropriate trade-related documentation
Under Customs’ “reasonable care” standard, importers are expected to have documented and demonstrable internal controls that are routinely audited. Note that Customs’ idea of reasonable care may not be your idea of reasonable care. The best way to protect yourself from fines and penalties is to not only have documented proof to support your claims, but also internal controls that reflect your business practice and operations. These internal controls should be specific to your business – one size does not fit all. Secondly, you should test your internal controls on a regular basis, and document and maintain those results so that if CBP does audit you, your company can demonstrate the steps involved in making compliance decisions.
In addition to appropriate controls and procedures, A CBP best practice is to use automated systems to demonstrate reasonable care. Using an automated system enables you to quickly and accurately manage documentation related to imports and provide a comprehensive view of your company’s import management system. |
