Import Shipments Entry Process through US Customs

Understanding US Customs Entry Process is absolutely essential to clearing US Customs without delays and unnecessarily increasing the landed costs of  your goods. I cover this information in depth in my classes and courses at my Import Export Business Educational website and have a page on the Entry Process there.  I present the info in this post so I can build upon it in my future posts.

ShipmentWhen your shipment arrives to your destination, your city where you reside or your business is located, or simply where you wanted the shipment to be shipped to, in this case assuming you are the consignee on the shipping documents, you will receive an Arrival Notice from the US Customs.

It is best to have your shipments addressed to you or your company name in care of your customhouse broker. This way your broker gets the notification first and can immediately begin the entry process to clear your goods through the US Customs, notifying you of the same.

When your shipment leaves the country of origin by sea (ocean freight) it arrives to a US seaport ( Long Beach, California, Seattle, Washington etc.) from where it then may continue to the final destination (your hometown) by air, rail or truck. Whichever carrier brings the shipment to its final destination last, it will end up in their US Customs bonded warehouse where you will go to pick it up after it has cleared the US Customs.

It is the responsibility of the importer to arrange for the examination and release of the goods thus hiring a customs broker he/she can start the process for you. In other words, Entry of Goods can be undertaken only by the owner of goods, or by a licensed Customs Broker.

To start the entry process, you or your broker must have the evidence of the right to make an Entry. This requirement is satisfied with having an airway bill or bill of lading in your or your broker’s name, meaning you or your broker is the Consignee on the Shipping Documents.

Your goods can clear the US Customs under a Formal or an Informal Entry process.

If the invoice value of your goods is less than $2,000, then you can clear it as an Informal Entry. If your goods are over $2,000 invoiced value, then you’ll have to file a Formal Entry.

Even though in theory you are allowed to fill out all of the pertinent documentation for Formal Entry yourself, it’s best to hire a customs broker to do it for you.

Customs Brokers are licensed by the US Customs and trained to prepare the entries the way US Customs wants them to be prepared. In other words, US Customs will not likely assist you much in the process of the preparation of the entry documents and make sure you have them filled out correctly. Having mistakes in your paperwork will only delay your customs clearance and possibly target all of your future shipments for extra scrutiny if not delays. The extra expense that hiring a customs broker will entail is well worth the peace of mind and speedy and professional entry process. Best you, the importer, allow your Customs Broker to handle all dealings with US Customs, after all that’s what you will be paying them for.

To start the entry process, you or your broker must have all the shipping documents necessary to clear the US Customs. If, for example, you are bringing in ‘pillow cases,’ your shipment must be accompanied by a textile visa. As discussed in my other posts, if this document is missing, you won’t be able to clear US Customs until you or your broker will have to procure this document from your shipper or directly from the trade authority in the country of origin. The waiting process will result in your shipment being assessed storage charges and thus inherently increase the landed cost of your goods and diminish your profit. Do understand clearly what shipping documents you will need to clear customs smoothly. Learn the import export business the right way – see the Insider’s Guide to Successful Importing.

If all the documents are present, then the only other thing you’ll need to be able to start an entry process is an evidence of a bond being posted.

Typically, you must buy a bond or your broker will automatically post the bond for you and bill you for the use of it. The minimum bond that must be posted is 2% of the invoice value of your goods or $50,000 bond minimum. The bond is required to assure that damages, if any, duties, taxes, or penalties can be covered in the event that the importer wouldn’t have the funds.

As part of the entry process, your broker will fill out many documents, from an Entry Manifest, Form 7533, to an Entry Summary, Form 7501. All pertinent US Customs forms are available at the Forms page of the CBP website. If customs agree to the classifications used in the entry process, they’ll stamp the documents Passed Customs and you can go ahead and pick up your goods.

If customs, however, doesn’t agree with the classifications used by your broker, they’ll send the paperwork back to your broker for reclassification. This can constitute further delay in the clearing process which can be made even more time consuming if customs once again won’t agree to the classification used based on the invoice description of the goods. Often in such a case US Customs orders a physical inspection of your shipment. Another reason, as already noted above, that may trigger an inspection is when your invoice and packing list show discrepancies – your invoice is not corresponding with the packing list.

US Customs inspection is performed in a bonded warehouse or requires a move to a special inspection site. In essence, the inspection results in a proper classification of goods. In any case, the inspection constitutes delays in the clearing process as well as results in inspection charges being assessed to be paid by you, the importer; typically those charges are billed as Move to an Inspection Site and you’ll see it on your broker’s bill. Often, the inspection process can also entail damages incurred in the process of the inspection. Customs stipulates that you should pack in such a way so as to facilitate an inspection. Beware, if damages to your goods occur during the inspection, you won’t be reimbursed as Customs is not liable for damages sustained during inspection.

Once the inspection is completed and/or the customs is satisfied with the Entry Summary as presented by your broker, a Release Form, stamped Passed Customs, is issued by the Customs; at this point you can pick up your imported goods.