Export and Import Laws
Export and import laws are important when engaging in global trade. Supply chain managers and companies have a fundamental duty to ensure all importing and exporting activities are held in compliance in local, federal, state, and international laws. For the purposes of importers in the US, the list of regulations can be quite extensive. Failure to follow these laws and regulations may result in fines, penalties, and incarceration, which depend on the severity of the offense. Since each country may have specific laws to govern exports and imports, this post will focus on importing and exporting from a US-based entity.
Importing to the US and Duties
Imports to the US are subject to the Harmonized Tariff Schedule (HTS), which helps shippers assess the appropriate duties on imports. These duties are comparable to the taxes on an item for entry into the US; however, these fees are not optional. Incorrectly determining the appropriate duties for imports can result in a punishment equal to, if not greater than, failure to report imports in the first place.
Exports and Imports From Restricted Countries
When an embargo against a given political or government exists, the import of such goods may be restricted. Similarly, the export of goods from these areas may be restricted as well. Depending on the type of existing embargo or restriction, the imports may be subject to restrictions with respect to quantity, value, and type. For example, textiles, minerals, prescription medications, and other items may be restricted from entry to the US.
As the US has grown more aware of foreign threats to Americans, the potential restriction to exports has become evident. Some purchasers may be forbidden to purchase items from the US. As a result, a shipper is not allowed to export goods to this specific country. However, this should be taken as an implication to circumnavigate the restriction through a third-party country, which could result in punishment under US and international trade law. In other words, exports must ensure all purchases fully disclose who the product will be ultimately sent to. By disclosing this information, shippers can avoid becoming entangled in an illicit trade-triangle between restricted countries, a third-party destination, and the US.
Additionally, the import or export of military equipment falls into a regulation outside of the purchaser restriction. In the US, all purchasers of firearms or military equipment are only acceptable with a special export license and authorization from the appropriate governing bodies, such as the Department of Customs and Border Protection. As with other parts of international trade laws, failure to disclose this information equates to a violation and may incur all appropriate penalties.
Imports by Means of Ocean Vessel Shipments
In 2009, the US enacted a law to requires importers or their appropriately licensed party, such as a licensed customs broker, to contact the CBP about an incoming shipment and provide detailed information about the import through an Importer Security Filing. Importers must understand that appointing another individual to be responsible for the import does not alleviate responsibility of accurate filing with the CBP for assessment of duties within the HTS or review potential threats to Homeland Security. However, this advanced security measure does not apply to any other modes of transport.
International trade is filled with intrinsic processes and shared responsibility, An exporter or importer must be vigilant in ensuring all shipments are not violating restrictions, and all appropriate fees, duties, and taxes must be paid to the respective parties. If a shipper violates any of these commonplace laws in international trade, the punishments may include fines, incarceration, restriction of shipping authorization, and further punishment by the Customs and Border Protection. Fortunately, supply chain managers have extensive experience in this area and can help your organization identify what threats and violations may exist. As a result, your risk for engaging in international trade is greatly lessened.