Customs brokers have a wealth of knowledge and on a daily basis they deal with terminology that might be foreign to the average importer, especially to those just getting started. The more familiar an importer is with the terminology, the better they will understand the customs clearance process. Here are a few customs brokerage terms to help you understand the importing process.
Classifying your goods correctly is critical to the customs clearance process. The Harmonized Tariff Code (HTS) is an internationally recognized system of names and numbers to classify goods.The classification is used for tariff duty assessment and import restrictions. Each good being imported into the U.S. must be classified by basic information describing the good; such as name, use, and materials used. There are roughly 17,000 unique classification codes which can make it a daunting task for importers to classify their good(s) correctly. Fortunately, given the correct product description, customs brokers are equipped to properly classify the good if an HTS number is not given.
Customs Border Protection offers Remote Location Filing (RLF) as an electronic entry program. RLF allows customs brokers to electronically transmit import data to any port remotely. The customs broker must be approved and have a valid national permit to transmit the data. The data is transmitted through the Automated Broker Interface, or ABI. This system tracks and controls the process of all commercial goods imported into the U.S. Importers can also transmit data at any port based on ABI requirements.
For financial responsibility, a customs surety bond is required on merchandise being imported into the U.S. This bond goes to the U.S. Customs and Border Protection in order to protect the U.S. government in the event the importer does not fulfill their obligation to pay duties, monetary penalties, etc., while the goods are in customs custody and/or following the release of the goods. There are two types of customs bonds. One being Single Entry Bonds (SEB) which cover a single import transaction at port of entry. The other is Continuous Bonds, which cover all of an importer’s shipments at all U.S. ports of entry for a complete year. Importers with less than four imports per year will use the SEB, while importers with high volume coming into the U.S. will use a Continuous Bond.
Customs brokerage terminology is challenging but with a little understanding it can help you with the customs clearance process. It’s important to remember customs brokers are here to guide you through every step of the importing process. At AFC International, we track and coordinate all aspects of customs clearance, making it easy to understand the process.