Realign Your Trade Compliance Program with a Midyear Review
The complexities of importing and exporting goods in the United States means it’s easy to overlook process changes and forget to make updates in a timely manner. However, if not caught quickly, outdated information or imprecise processes can add unnecessary fees and penalties. If left to accrue over the course of a full year, these costs can be staggering.
That’s why I recommend a midyear customs review. If something is off base with your customs compliance program you can rapidly realign as needed. Use C.H. Robinson’s comprehensive checklist to guide your own midyear customs process review.
Midyear customs clearance checklist
1. Review customs broker powers of attorney
Revisit powers of attorney (POAs) and revoke any from U.S. customs brokers with whom you no longer wish to work. Remember, any POA you extend should have an expiration period, providing a natural time to review. If you aren’t sure of existing POAs, you can see all U.S. customs brokers transacting business on your behalf by requesting your Importer Trade Activity (ITRAC) data (see #11)
2. Update names and addresses on file with U.S. Customs
U.S. Customs and Border Protection (CBP) uses contact information from CBP Form 5106 to communicate with Importers of Record. If you have recently moved, or have not reviewed the information listed on CBP Form 5106 in a while, re-validate the information you have on file so you will receive all pertinent and time-sensitive correspondences the CBP sends.
3. Ensure bond amount is sufficient
If your import activity has changed, or you anticipate a large increase in activity during the remaining half of the year, your bond may need updating. CBP can determine your bond is insufficient and may require you to increase your bond amount. A midyear review and update is a proactive move.
4. Consider changing listing multiple principals on the same bond
Having multiple entities on one bond can bring cost savings. But be sure to decide if the risks are worth the reward. When sharing a bond, each entity shares liability if CBP issues a demand against the bond. In addition, if any entities terminate the bond, this can disrupt the other entities within the bond.
5. Check customs broker instructions
Review and document any customs broker instructions you send to U.S. customs brokers regularly—from Harmonized Tariff Schedule (HTS) classification rules and related party verification instructions to anti-dumping/countervailing duty instructions—to ensure your customs broker declares entities to the CBP according to your wishes.
6. Request updated certificates of origin
Be proactive with foreign suppliers and obtain updated annual blanket certificates of origin (COO) for any program in which you’d like to claim preference. And provide any updated COOs to your U.S. customs broker. Not obtaining COOs in a timely fashion may lead to unnecessary annual duty costs.
7. Update free trade agreement instructions
Revise any instructions pertaining to free trade agreements (FTAs) so your U.S. customs broker has proper direction about how you would like to file entries that may be eligible for FTAs.
8. Obtain your manufacturer’s affidavits
If you utilize a U.S. goods return program, found under Heading 9801, be sure you have obtained your manufacturer’s affidavits for the rest of the year. Share these affidavits with your U.S. customs broker and record them within any customs broker instructions.
9. Review anti-dumping/countervailing duties products
The CBP can investigate any potential anti-dumping/countervailing duties (AD/CVD) evasion allegations. Accurate case numbers, rates, etc. are critical for reporting upon entry. Even if you are disclaiming AD/CVD, document your product details internally, explaining why your product does not fall within the scope of the order.
10. Provide reconciliation flagging instructions to U.S. customs broker
If you are a reconciliation participant, approved by CBP, flagging of entries is the responsibility of the importer. Now is the time to send your U.S. customs broker written direction with any flagging instructions you would like established or changed.
11. Request import activity records from CBP
ITRAC provides a wealth of information you can use to create or improve your import compliance program. Likely, you’ll need tools, like C.H. Robinson’s Global Trade Reports®, to transform the raw ITRAC data into user-friendly dashboards and reports.
12. Sign up for the ACE Portal
The ACE Secure Data Portal is a powerful way to manage trade compliance programs. This powerful tool enables you to receive paperless notifications from CBP, monitor your brokers, audit entries in real time, and much more.
13. Request export activity data
Similar to ITRAC data for import activity, request your Electronic Export Information (EEI) from the Census Bureau, Foreign Trade Division. If you are the filer in the Automated Export System (AES) using the ACE Export Portal, you can review your EEI on a regular basis.
14. Check U.S. Import HTS Classification and Export Classification
Review and communicate any updates to your HTS Classification Database and your Export Schedule B Number to proper stakeholders—both internally and externally.
15. Reduce liability with marine cargo insurance
Steamship lines and air cargo providers have limited legal and financial responsibility for international cargo. Marine cargo insurance plans can reduce your company’s financial exposure and bring new efficiencies.
16. Protect trademark and trade names
Make sure the CBP has any and all of your trademarks and trade names protected and recorded. This allows CBP to help you combat potential counterfeit products or infringement.
17. Request manifest confidential treatment
You can request confidential treatment of inward and outward manifest information. However, note that there are mandatory biannual renewal requirements. In addition, account for all possible variations of names within your request.
18. Review your denied party screening program
Look at which parties you are screening, and how often. This can ensure your program is appropriate for your current business model and bring potential risks to your attention.
19. Perform internal and external training
Regularly schedule time to ensure adequate training is happening with appropriate stakeholders. This keeps all parties, especially new employees, up to date with changes.
20. Address priority trade issues
Be sure that your compliance program addresses each one of the CBP’s initiatives to mitigate the risks of priority trade issues.
Smooth customs clearance doesn’t just happen
Careful planning and regular reviews of your customs processes are critical components to a strong trade compliance program.
If a midyear review seems unfeasible or this list seems daunting to conduct all at once, consider bringing in an outside expert like C.H. Robinson to guide you through the process. The most important part is to ensure you review, update, and communicate any changes to these areas of your compliance program on a consistent basis.