Increased enforcement of trade laws: Authorities like U.S. Customs and Border Protection (CBP) have ramped up enforcement of existing laws, including those focused on anti-dumping and anti-forced labor. This means that even compliant importers must be more diligent to avoid unintentional violations.
Increased complexity of global trade
Today’s trade environment is far more complicated than in the past, and navigating it requires specialized expertise:
- Numerous trade agreements: Many trade agreements have complex rules of origin that require thorough documentation to qualify for reduced or eliminated duties. Incorrectly claiming preferential status can result in severe penalties.
- Product-specific regulations: Many products are regulated by multiple government agencies in addition to customs. For example, the FDA, EPA, and CPSC all have their own specific requirements for imports. Importers need expert knowledge to satisfy the rules of each “Partner Government Agency” (PGA).
- Complex Valuation and Classification Challenges: Accurate classification of goods under the Harmonized Tariff Schedule (HTS) remains a highly intricate process and is a frequent source of costly errors. The evolving global trade landscape has complicated classification procedures, with many products now subject to multiple tariffs under a single line item (IEEPA Fentanyl, IEEPA Reciprocal, Section 301, Section 232 steel/aluminum/copper, Section 232 vehicles and new country specific trade agreements as they emerge). In addition to proper classification, valuation must incorporate various elements such as assists, royalties, and other non-obvious additions to the transaction value.  Compliance services and fees are mandatory for commercial importers
The need for specialized knowledge and technology means compliance is a paid service, not an optional one:
- Professional services are required: Licensed customs brokers provide professional services to prepare and file customs declarations, manage required documents, and interact with government agencies. The cost of these services depends on the shipment’s complexity and value.
- Technology and automation: To handle the increased volume and complexity, modern customs compliance often involves specialized software and automated processing. This technology allows professionals to avoid manual errors, manage a high volume of entries, and track shipments more effectively, all of which come at a cost.
- Various customs fees and bonds: Importers must now pay various official fees to government agencies, such as Merchandise Processing Fees (MPF) and Harbor Maintenance Fees (HMF). Most commercial imports also require a customs bond, which is a financial guarantee that duties and fees will be paid.
Risks and costs of non-compliance
The financial risks of making a mistake outweigh the costs of paying for expert compliance services:
- Severe penalties for errors: CBP can issue large fines for mistakes, including those related to valuation, classification, origin marking, and late filings.
- Costly delays and inspections: Mistakes or heightened scrutiny can lead to inspections and holds at the border, incurring costly storage fees and delaying the supply chain.
- Reputational damage: The risk of a supply chain disruption or seizure can damage a business’s reputation, especially for direct-to-consumer e-commerce brands.
