Today’s guest post is from Jim Dickeson, a specialist in import/export compliance and a licensed customs broker from Import Export Geeks. The post is based on an article that originally ran in the Supply Chain Management Review (EH Publishing) on March 1, 2002.
The five myths harbored by US importers of record that the article highlighted were as follows:
- Our risk exposure is limited to the Customs duties.
An importer’s financial exposure is equal to the value of the imported goods, plus duty! U.S. Customs includes the value of the imported merchandise when determining liability and can assess penalties based on the liability.
- Customs released our shipment, so we’re out of the woods.
The statute of limitations is five years after the material misstatement or omission was made to Customs and the liability on an import continues for five years beyond actual release of the shipment.
- The seller prepared the invoice, so mistakes are not our fault.
The importer is responsible for what is reported on the Customs entry regardless of who prepared the invoice.
- Our customs broker does all the work, so if there’s a problem, he will fix it.
Even if you use a broker, you’re still fully accountable.
- Our customs broker keeps all entry records, so we don’t need to.
Importers are required to keep a copy of all correspondence related to import transactions for at least five years.
When you consider that average error rates in global trade processes approach 10% to 20%, that the effective control of global trade processes is often 100 to 200 times worse than accounts payable in an average company, and that Customs tends to reclaim $7 for every $1 that they spend on an audit, it’s critical that you banish the import (and corresponding export) myths today.