The Bureau of Customs and Border Protection, or CBP, which is part of the Department of Homeland Security, enforces all laws relating to goods crossing the US border.

When goods are imported into the United States, there must be a formal “importer of record” who is responsible for complying with applicable laws and paying all customs duties and fees. US law allows a nonresident company to be the importer of record. However, it is typically in a foreign seller’s interest for the US distributor or customer to be the importer of record, because the foreign seller then avoids the burdens of complying with applicable laws and paying customs duties and fees. Which party is the importer of record is a matter of party agreement, and this is
usually covered by the delivery term specified in the governing sale-of-goods contract.

While any importer has the right to prepare and file a customs entry for goods that it imports, a commercial importer typically hires a customs broker to file customs entries on behalf of the importer. Only a customs broker, fully licensed by CBP, may act as an importer’s agent in this capacity. US law requires an importer to execute a power of attorney appointing a customs broker as attorney-in-fact. However, an importer remains liable vis-à-vis CBP for any errors committed by a customs broker when it prepares import paperwork on behalf of the importer. Also, a commercial importer will need to obtain a customs bond from a surety company. This bond is a third-party guarantee for payment of duties and certain penalties associated with any violations of US import laws.

While there are hundreds of US laws that may apply to any given importation of goods, there are three main areas of substantive customs law with which an importer must comply: classification, valuation, and marking. All imported goods must be classified in the Harmonized Tariff Schedule of the United States, and classification is the chief determinant of the applicable duty rate. All imported goods must be valued in accordance with applicable law, which in many cases will be based on the price paid or payable for the goods. Because most duty rates are expressed as a percentage of the import value, applicable customs duties are typically determined by the combination of duty rate, as provided by a product’s classification, and import value. Finally, almost all imported goods must bear a country-of-origin marking, in English, so that the ultimate US purchaser of a product is made aware of the product’s origin.

An importer must take seriously its compliance with the import-related laws of the United States. Before 1994, an importer only needed to provide the US government with the correct facts concerning the products being imported. Since 1994, however, an importer has also been required to understand and apply certain law to the facts in order to, for example, determine the correct classification and value of imported goods. The role of the CBP is to confirm the correctness of such determinations made by the importer. In this regulatory structure, compliance with law is essentially shifted, at least in the first instance, to the importer itself; and an importer may be assessed penalties if it does not use reasonable care to understand the facts or law or when it applies the law to the facts.