With details and scrutiny of US customs rules making compliance increasingly tricky, clients turn to freight forwarders for expert help.
What could be worse for an international exporter than facing the cost of rejected shipments, market absence and a potential fine for failing to comply with US customs requirements? Perhaps the horrid PR of its refused goods being publicly barred by American authorities, too. That nightmare is precisely what myriad global companies continue suffering for breaching increasingly complex US customs regulations. So to avoid that expensive and embarrassing fate, many US-bound exporters are asking their freight forwarding partners for expert assistance.
"More and more companies are recognizing the importance of seeking help to make sure they get American compliance right," says Greg Koneski, US Customs Compliance Specialist for Bolloré Logistics in Paris, who provides consulting services to the company's European exporters for their American-bound shipments. "There's also a growing desire among companies to be good corporate citizens – whether that's through enhanced sustainability, social responsibility or conscientious regulatory compliance, including customs."
Appealing for expert assistance is more compelling now than ever. Since the adoption of the Customs Modernization Act in 1993, with its theme of "informed compliance" and obligation to exercise reasonable care, US law has placed all responsibility of incorrect customs declarations on importers – no matter who makes mistake; accidental or intentional. American regulatory agencies have made all details of customs compliance public and easily accessible to allow importers and foreign shippers to avoid mistakes, and are therefore disinclined to clemency when they do.
Meanwhile, increasing US concerns over security; stricter application of product approval criteria and import rules; and recently rising protectionist sentiment have heightened scrutiny of import irregularities. Deployment of the highly efficient ACE digital customs network -- shared by the Food and Drug Administration (FDA), Environmental Protection Agency and other federal regulators – has further reduced the potential of non-compliant customs entry documentation and products creeping through unnoticed.
Consequences of running afoul explain why many Bolloré Logistics clients welcome that aid. Barred cargo can be shipped back or seized, fines may be levied and rejected goods may be placed on public US lists of banned products. That's costly, spoils planning and is harmful to a company's public image.
"US customs rules are available and transparent, but they're a bit like tax codes in being long, detailed and boring," Mr. Koneski says. "You may dutifully read them and still make a mistake. That's why we're offering customers the added value of helping them insure compliance -- from factory floor to the final importer."
That service counsels and trains customers' administrative units to be more effective when addressing any issue that could affect their exports to the US market. Bolloré Logistics provides those operations documentation, procedural and vetting structures for clients' US customs declarations, and routinely checks and updates them.
Thoroughness and keeping clients up-to-date are vital. US compliance involves not just declaration and periodic inspection of imported goods, but of production sites. Meanwhile, the exacting nature of some FDA and other US agency regulations leave even diligent foreign businesses confused.
"A nice smelling shampoo is a cosmetic under FDA criteria, but if an anti-dandruff characteristic is added, it's classified as an over-the-counter drug," Mr. Koneski notes. "In the US, they're of different product categories, have different approval procedures, different labeling and different entry requirements."
Complexities of US customs can make it just as easy for companies to slip up shipping to American affiliates as to third party importers. But in the former cases, avoiding error provides extra benefits: the forwarder's consulting service will have facilitated US importation and helped increase sales by affiliates. That in turn enhances the value of the mother company's investment in the US – and contributes to its expansion objectives.