Examination of Merchandise in International Shipping

In international shipping, to protect the revenue of the United States (and for other reasons listed below), CUSTOMS HAVE THE RIGHTS TO EXAMINE ALL MERCHANDISE. No matter if it is formal or informal, transportation in bond, etc., international shipping.
When shipping internationally, even the luggage of the president of the United States may be checked by U.S. Customs.

Only TWO EXCEPTIONS in international shipping: Diplomatic language (1) can be inspected, especially by the State Department, and Defense armaments (2) are under the control of the Defense Department.

Other reasons besides protecting the revenue of the United States:

• Protection against terrorism during international shipping (especially since 9/11)
• Contraband in international shipping
• Quantity and quality verification of global shipping goods 
• False trademarks in international shipping
• Marking requirements for international shipping (goods which are made in China labeled as made in the USA)
• Value of international shipping goods (wrong value declared), etc.

Examination in international shipping can be done at:

1. International carrier's facilities
2. Special CESs (Centralized Examination Centers authorized by customs for the purpose)
3. Importer facilities
4. Public storage or warehouses, etc.

CUSTOMS ALMOST ALWAYS INSPECTS MERCHANDISE SHIPPED INTERNATIONALLY AFTER THE ENTRY FORM IS FILED AND SUBMITTED. No matter if it is a formal entry or a passenger's language declaration.
The reason is: CUSTOMS NEEDS SOMETHING SIGNED BY IMPORTER OF RECORDS. I.E., A PROF THAT SOMEONE IS LEGALLY RESPONSIBLE FOR THE ENTRY.

CHARGES FOR THE INSPECTION IN INTERNATIONAL SHIPPING:

• In international shipping, Inspection at the carrier's warehouse is usually done for NO CHARGE. However, carriers may charge importers for that.
• If customs comes to an importer of record's facility, then IT IS BILLABLE EXPANSES.
• OVERTIME INSPECTION
  Means from 5:00 PM to 8:00 AM. If services for which overtime was requested are not performed through no fault of U.S. Customs, the extra compensation shall be paid for at least one period (2 hours). In addition, as described in 24.17(a), Examples are assignment on board to protect the revenue, Supervise unloading of vessel or aircraft, Supervise exportation of international shipping merchandise, Supervision manipulation outside a bonded area, etc.

Usually, customs inspect one box out of 10 or 1% of the invoice.

If customs discover a shortage, they MUST make an official demand for the re-delivery of international shipping goods back to a customs facility WITHIN 30 DAYS from the date of discovery of the shortage. If the demand has not been made within 30 days, then the importer of records is not obligated for the re-delivery. Bonded carriers are required to move shipping cargo internationally under bond.

Permit to manipulate(CF 3499)

It allows you to open and see it BEFORE customs will inspect it.
It allows VISUALLY look only. You may not take anything. There will be a customs or carrier's representative next to you.
Permit to manipulate is issued by customs and signed by customs and the international carrier (since goods are still in the carrier's possession).

Discrepancy Report in international shipping (CF 5931. part 158)

If the manifest quantity does not match the actual amount (over or short), CF 5931 must be filed with the entry to explain the discrepancy. Examples: Shortage in international shipping - boxes are coming in different aircraft of the same airline. Overage - The pallet had been split apart).

CF 5931 must be filed at the time of entry. Here are the choices to file:

1. To file actual OR manifestual quantity and CF 5931.
2. File NET

If an entry is filed, then 5931 and fund that something is missing (or over) CF 5931 SUPPLEMENTAL has to be filed. Later on, the balance. However:
1. For entry by air, a supplemental must be filed within 30 days from the date of entry of international shipment.
2. By ocean or surface - within 60 days.

PENALTY: if you fail to file a supplemental in international shipping on time and you are short, it is a fine of $500 + FULL DOMESTIC VALUE OF ALL MERCHANDISE (which is the value + duty).

GOW (General Order Warehouse) 19 CFR Part 127 - "nightmare" for importers of records. It is a bonded public warehouse. The purpose is:

15 calendar days after entry, goods are held in the international carrier's facility.

If you fail to file an entry within 15 calendar days at 5 PM on the 15th calendar day, internationally shipping goods will be moved into GOW.
The lien will be put on the merchandise (CF 3485 - notice of lien).

CHARGES IN GOW ARE EXORBITANT! Brokers lost many customers because internationally shipping goods went to GOW.
The charges are so high because GOW must cover its expenses for abandoned cargo since auction sales usually do not cover all GOW costs.

Merchandise that U.S. Customs seize is also placed in GOW.

International shipping merchandise in GOW can be exported within 6 MONTHS from importation. After 6 months, IT CAN BE ENTERED FOR CONSUMPTION ONLY. It is impossible to withdraw anything less than an entire lot from GOW.

IF MERCHANDISE IS NOT WITHDRAWN FROM GOW WITHIN 6 MONTHS, IT WILL BE SOLD AT A PUBLIC AUCTION. If the sale does not generate enough funds to pay GOW storage costs, U.S. Customs can claim the owner for the price not covered by the deal. This, however, is rarely done.

Customs Automated Systems in international shipping (141.31):

The purposes of automated systems in international shipping are as follows: 1. Clear ports faster; 2. Clear customs paperwork faster; and 3. Apparent goods are quicker to sell in the USA.

ACS - Automated Commercial System, which includes the following parts:

• ABI - Automated Broker Interface. Entries processing.
• AMS - Automated Manifest System.
  Before goods arrive in the USA, carriers file manifests to U.S. Customs. (Examples: Vessels - what is on the ship; Aircraft - when wheels go up at origin, manifest is submitted electronically).
• ESS - Electronic Selectivity System. Target sensitive goods coming into the U.S.; identify customers on certain goods from certain countries. It puts a "flag" on sensitive imports for examination.
  ESS has 3 levels of security based on commodity, carriers, and importer of records history:
  1. High risk - frequent exam. Almost every shipment will be examined extensively.
  2. Unfamiliar - one of three-four shipments (containers).
  3. Regular - Random. Once in one to two months.
• ACH - Automated Clearing House.
  Customs deduct duties and taxes directly from the importer's bank accounts—no check writing.
• BARCODING - For Mexico and Canada.

INFORMAL ENTRIES CFR 19.143

Informal entries in international shipping require NO BOND. However, the Port Director CAN demand a bond on an informal entry. If informal entry is dutiable, it is liquidated on the spot upon the payment of duty.

CF 368 is an INFORMAL ENTRY FORM

Types of informal entries (Informal entry applies to) :

1. INTERNATIONALLY SHIPPED PERSONAL GOODS REGARDLESS OF VALUE

Exceptions:

• Cars;
• Dangerous goods
• Suppose it contains over $250 of particular merchandise. The amount has been frozen since 1930 by the U.S. Union for U.S. Union protection. (Examples: gloves, shoes, textiles, matrices, etc. These items are covered in Sections 7,8,11,12 of Harmonize tariffs. Many of those items are subject to visa or quota).

2. American Goods Return (AGR). CF 3311 - Declaration of American Goods Return.

Limits:

• AGR Under $2,000 (except 250 group)
• AGR under $10,000 was returned for repair and exported from the USA.
• AGR under $10,000 rejected by foreign buyers. Require CF 3311 AND CF 7501. However, it is still an informal entry. No bond is required, and there is no duty on it.

All entries over $10,000 must be done as FORMAL entries.

APPRAISEMENT ENTRIES IN INTERNATIONAL SHIPPING

In international shipping, entries can be informal and formal. However, 99% of appraisement entries are formal.

Appraisement entry means that the value is unknown. In CF 7501, leave the value blank. Customs will determine the value of international shipping goods. (Examples: Goods damaged on the route; gift items; used and second-hand goods; dock overage; household goods used abroad and returning to the USA; personal goods of citizens of the USA who died abroad, etc.)

U.S. Customs gives rights to discuss appraisement value if importers think that goods are overvalued.

NO ENTRY IS REQUIRED FOR INTERNATIONAL SHIPMENTS. 3.21 of Tariff Act 1930

1. Everything under $25;
2. Intangibles - corps with casket and flowers;
3. Currency worth under $10,000 U.S. Dollars (must be reported to IRS, but not to U.S. Customs);
4. Telecommunication transitions;
5. Articles from space;
6. Business records, diagrams, blueprints, etc.;
7. Articles returned in 45 days that had not been delivered by carriers (for undelivered articles by USPS, FedEx, etc.);
8. U.S. aircraft parts removed for return in 45 days.

IMMEDIATE DELIVERY:

1. Perishable. NO MATTER WHERE IT COMES FROM;
2. U.S. Government;
3. Coming from contiguous countries (Canada and Mexico)

Application for Immediate Delivery is CF 3461 (142.21). It is entry itself. The difference at 7501 is Customs release it immediately (still in 15 calendar days. However, it needs to be much faster for perishables.). IT STILL REQUIRES A BOND.

C-TPAT. Newly Introduced Customs Program in international shipping 

Customs & Trade Partnership Against Terrorism

This is a US border security program to help protect the USA from terrorism in international shipping. C- TPAT combines the efforts of Customs and other government agencies and importers to develop, strengthen, and maintain security controls for the entire global supply chain of goods entering the United States.

This partnership with C- TPAT is voluntary, but non-participants have been experiencing numerous CF28 Requests for Information regarding their shipment, causing a delay in their international shipping import process.

C- TPAT consists of various measures depending on the activity of the partnered trade member, such as C- TPAT for international shippers, importers, licensed brokers, air carriers, sea carriers, rail carriers, air freight consolidators, NVOCCs, marine port authorities, and terminal operators. Customs provides warehouse and manufacturer security recommendations in this partnership program. By combining the efforts of all of the trade parties noted above, cargo security from the point of origin (the manufacturer) to the ultimate purchaser and consumer would be safeguarded from terrorism.