Definition of Import

The term "import" is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus an import is any good (e.g. a commodity) or service brought in from one country to another country in a legitimate fashion, typically for use in trade.

Import License

An import license is a document issued by a national government authorizing the importation of certain goods into its territory. An import license is just a formal document allowing a person or group to bring in goods from outside their own borders. According to the United States Department of Commerce, a person does not always need to get an import license. They may still need governmental authorization, however. U.S Customs and Border Protection (CBP), is the primary agency that deals with licensing and governmental import authorizations. There are offices located throughout the U.S.

This article is intended as a general explanation of import requirements for a person interested in establishing an importing business in the USA or a person who may be importing something for personal use only (not for resale) into the USA.

Import Requirements

An individual may make his/her own Customs clearance of goods imported for personal use or business. All merchandise coming into the United States must clear Customs and is subject to a Customs duty unless specifically exempted by law. Clearance involves a number of steps: entry, inspection, appraisement, classification and liquidation.

The U.S. Customs Service does not require an importer to have a license or permit. Other agencies may require a permit, license, or other certification, depending on what is being imported. Customs entry forms do ask for your importer number. This is either your IRS business registration number, or if your business is not registered with the IRS or you do not have a business, your social security number.

The importer must declare the dutiable value of merchandise. The final appraisement is fixed by Customs. Several appraisement methods are used to arrive at this value.

If formal entry is required - the importer may have to post a surety bond.

It is the importers responsibility to ensure that his or her goods being imported meet admissibility requirements - such as proper marking, safety standards, etc. - and that the proper permits, if required, have been obtained in advance of the goods arriving in the United States.

Arrival of Goods

Imported goods may not legally enter U.S. commerce until the shipment has arrived within the port of entry and Customs has authorized delivery of the merchandise. This is normally accomplished by filing the appropriate documents, either by the importer or by the importer's agent.

The Customs Service does not notify the importer of the arrival of the shipment. The carrier of the goods usually makes notification of arrival.

In the case of a single noncommercial shipment, a relative or other individual may act as the importer's agent for customs purposes. This person must know the facts pertaining to the shipment and must be authorized in writing to act for the importer.

Formal vs. Informal Entry

Informal entries cover personal shipments, commercial shipments and mail shipments that are being entered for consumption, i.e. for use or sale. In most cases informal entry can be used if the merchandise is valued at $2000 or less. There are some exceptions such as textiles, certain types of footwear and other goods subject to quota/visa restrictions. Personal shipments valued over $2000 will also require a formal entry. The difference between an informal entry and a formal entry is the bond requirement and the liquidation process. Liquidation is the final computation of duties or drawback accruing to an entry and is the final step in the entry process.

Formal entries are generally commercial shipments supported by a surety bond to ensure payment of duties and compliance with Customs requirements. A bond is like an insurance policy that is payable to Customs in the event that the importer does not comply with import requirements.

Goods admitted as informal entries do not require the posting of a bond and goods are liquidated on the spot. After the importer receives notification of the arrival of merchandise from the carrier and it is determined that all shipping charges are satisfied an invoice is presented to Customs. When an informal entry is being made, the inspector, not the importer, is responsible for determining the classification number of the goods being imported. The inspector also completes the Customs forms used for informal entry.

Classification

All goods that enter the United States are categorized according to the Harmonized Tariff Schedule. The act of placing goods into the correct category is called classification.

Classification determines how much duty will be collected. Classification is more than simply looking up an item in an index. It is a very complicated process requiring the application of the General Rules of Interpretation; the section, chapter and subheading notes; and the Explanatory Notes. The importer is responsible for properly classifying his merchandise before entry. If he is not sure how to properly classify an item, he can submit a request, in writing, for a binding classification ruling to the National Commodity Specialist Division, U.S.

Examination of goods is necessary to determine:

1. The value of the goods for Customs purposes and their dutiable status.

2. Whether the goods are properly marked with the country of their origin. Special marking or labeling may apply. Generally, imported merchandise must be legibly marked in a conspicuous place and with the English name of the country of origin.

3. Whether the goods have been correctly invoiced.

4. Whether the shipment contains prohibited articles.

5. Whether the requirements of other federal agencies have been met.

6. Whether the amount of goods listed on the invoice is correct, and no shortage or overage exists.

If necessary, goods may be analyzed by a Customs laboratory to determine proper classification and appraisal, to determine that the goods meet safety requirements, or to ensure that they are not counterfeit or otherwise in violation of U.S. laws.

Restricted Merchandise

A license or permit from the responsible agency may be necessary to import:

• alcoholic beverages

• animal and animal products

• certain drugs

• firearms and ammunition

• fruits, nuts

• meat and meat products

• milk, dairy, and cheese products

• plants and plant products

• poultry and poultry products

• petroleum and petroleum products

• vegetables

There are also restrictions on the importation of certain trademarked and copyrighted articles. Certain items in these categories may also be prohibited.

The following items must comply with applicable regulations of other agencies:

• art materials

• cultural property

• hazardous/toxic/flammable materials

• household appliances

• some electronics products

• toys and children’s articles

Most of the above items are regulated, variously, by:

• Bureau of Alcohol, Tobacco, and Firearms

• Animal and Plant Inspection Service

• Animal and Plant Inspection Service

• U.S. Fish and Wildlife Service

• Food and Drug Administration

• Consumer Product Safety Commission

Today, an increasing number of goods and products such as textiles, clothing, automobiles, boats, radios, CD players, television sets, and medical devices, are subject to special standards, declarations, certification, marking or labeling requirements.

Other merchandise must be examined for fitness of use, freedom from contamination, or may be subject to quotas on the quantity imported.

All these requirements must be met before the merchandise may be released by Customs. Finally, many categories of goods are subject to quota or visa restrictions.