The Importance of Good Data for Cross-Border Customs Compliance

Date: September 28, 2017

Topics: Legal / Regulatory, Logistics, Technology

A contribution from Luisella Basso, Vice President, Compliance, Pitney Bowes – part 2 of 3. Read part 1 here!

Data is definitely having more than a moment.  Obviously information is valuable, but it’s what you do with it that counts. Good data helps just about any aspect of your business become more successful. Cross-border customs compliance is no exception.

When retailers think about managing compliance and logistics, they tend to focus on the latter. Very often the first question I get from a new cross-border retailer is centered on how to ship a product to another country.  In reality, the first question a retailer should be asking is what do they need to know about a product before it leaves the business?

Every product in your inventory has attributes.  The first step is being able to convey crucial information about these attributes in the most efficient ways possible.

What actions will you need to take for exporting?

  • Find the export control justifications number
  • Understand any potential restrictions on imports that you could run into based on this number.
  • Know country of origin, based on where the product was manufactured—not the country from which it was shipped
  • Determine each product’s Harmonized Tariff System (HS) code.
  • Get the essential character of your product which will be clearly described on your shipping and commercial invoices for import and export purposes.

These documents need to be accurate in order to determine eligibility for export and import into your destination country.

How does keeping in close contact with suppliers help bolster my data?

Getting the paper trail from your distributors and manufacturers should be a top priority. If you are removed from importation—bringing products from abroad and assembling in the US—making sure this data is readily available is critical because it will increase the accuracy of the data around your product. The key is staying close to the distributer and manufacturer to make sure you have the correct information for the forms in case something changes.

How can data help me take advantage of free trade agreements?

Anything that has to do with any free trade agreement needs to be entirely accurate. There is an immense amount of scrutiny in relation to these agreements. They may look at the Certificate of Origin and start asking more questions or asking for supplemental information.

By far, NAFTA is the most heavily enforced of all free trade agreements. To claim NAFTA, you need a manufacturer’s Certificate of Origin and be able to prove that all your information is correct. In general, the recommendation is that if you’re not the supplier, don’t claim NAFTA unless you have a Certificate of Origin in your hands.

If you meet the requirements, know your product. If you’re selling a sweater, you need to know material and country of origin. This information helps you to get the proper HS code for customs paperwork and even helps you take advantage of free trade agreements. You’ll also need to declare the transactional value of your product. It’s vital that your values are accurate, traceable and auditable as the receiving countries may want confirmation of values.

Data is valuable, but only if you know how to best apply it to your situation. By keeping good data, you ensure that you’re equipped to craft the best compliance and logistics plan to suit your needs.

Header image: Robert Raines

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