In this guide, you’re going to learn everything about customs assigned importer number (CAIN).
From basic definition, why you need it, uses to validity period, among other vital aspects about CAIN.
So, before you acquire customs assigned importer number, read this guide.
- What is a Customs Assigned Importer Number?
- Do you Need CAIN to Import?
- What is the Customs Assigned Importer Number format?
- Why is a CAIN (Customs Assigned Importer Number) Important?
- Who Should Apply for CAIN?
- Which Entities Require a Customs Assigned Importer Number?
- What is the Difference Between CAIN and E.I.N.?
- How do You get CAIN?
- What is the Cost of Acquiring CAIN?
- How Long Does it take to Get CAIN?
- Can Foreign Importers with CAIN Import Freely to the U.S.?
- What is the Importer of Record in Shipping?
- Can a Foreign Company be an Importer of Record?
- What is the Difference Between SSN and CAIN?
- Can a Customs Broker Apply for CAIN on Your Behalf?
- Does CAIN Expire?
- Can you Have More than one CAIN?
- When can You File for a New Importer Number?
- When Does a Custom Deactivate CAIN?
- Can you Reactivate a Voided Customs Assigned Importer Number?
- How can a Voided CAIN Affect your Shipments?
- How do You avoid Shipment Delays to CAIN Problems?
- With CAIN, do you still Need a License to Import into the U.S.?
- How can You Update your CAIN Information?
What is a Customs Assigned Importer Number?
Custom Assigned Importer Number (CAIN) is a type of identification used by foreign importers in the United States.
It is an essential requirement for foreign importers importing into the United States without an Employer Identification Number (E.I.N.).
Importing to USA
Do you Need CAIN to Import?
Yes, you need a Custom Assigned Importer Number (CAIN) to import to be established as a foreign importer possessing a record.
To achieve this, you will need a Custom Assigned Importer Number and a Customs bond.
What is the Customs Assigned Importer Number format?
Custom Assigned Importer Number format has fifteen digits: nine numbers are used to identify the business; two letters and four numbers define the program and each account.
CAIN system includes various types of Revenue agencies and border services agency programs which many businesses maybe register for the following:
- Corporate income tax.
- Import or export as identified by R.M.
An example of Customs Importer Number may be:
This number is mostly found in tax documents, and it is in the form of letters and numbers.
Why is a CAIN (Customs Assigned Importer Number) Important?
Custom Assigned Importer Number is essential due to the following reasons:
- CAIN protects your business from costly violations, which results from the negative consequences of not complying.
- It protects national security due to countries’ need to protect information about critical products and technology from the wrong hands.
- It helps foreigners in safeguarding competitive advantage in a very competitive marketplace.
- Ensures that the records of goods are well maintained for all import transactions.
Who Should Apply for CAIN?
Foreign-based businesses should apply a custom Assigned Import Number (CAIN).
This documentation is designed explicitly for importers that lack the United States Social Security Number (SSN) or Employer Identification Number (E.I.N.).
Which Entities Require a Customs Assigned Importer Number?
Entities that require a Custom Assigned Importer Number should have the following features:
i. Foreign importers who would like to import to the United States.
ii. Entities that lack I.R.S. business tax Numbers.
iii. Those that do not have a social security number.
iv. Corporations that do not have an Employer Identification Number.
What is the Difference Between CAIN and E.I.N.?
Employer Identification Number (E.I.N.) is a type of documentation given by the United States Internal Revenue Service to assist in tax administration.
On the other hand, Custom Assigned Importer Number (CAIN) is a document that is issued to foreign importers who do not have an Employer Identification Number.
It is a requirement for any United States-based Corporation or partnership to have an Employer Identification Number.
On the other hand, the Custom Assigned Identification Number is assigned to foreign importers in the United States when the Customs bond is put in place.
How do You get CAIN?
The Custom Assigned Importer Number, which is requested by Customs and Border Protection’s paperwork of entry, is got in the form of a tax number for the business.
This number is issued to businesses.
In case you do not have this tax number, you may be required to use the number of your social security in the paperwork that requires CAIN.
If you lack either a business tax number or a security number, you will be required to get your Custom Assigned Importer Number by filling a form.
This form is known as Customs Border and Protection form 5106, and it must be available at the port of entry where you are required to fill customs entries.
It is essential to know that there are regulations to govern and control issuing of Custom Assigned Importer Number.
What is the Cost of Acquiring CAIN?
The cost of acquiring a Custom Assigned Importer Number varies among various licensed brokers available in the market.
However, this price is mostly controlled by the department of homeland security.
How Long Does it take to Get CAIN?
Custom Assigned Identification Number submissions can be processed and approved in about two business days.
CAIN remains on file for one year from the date of the last usage on its equivalent, the Customs Form 7501, a request for services.
If it is not used for one year, CAIN will not be associated with any outstanding transactions.
At this point, the Custom Assigned Identification Number is removed from the files of Customs.
Can Foreign Importers with CAIN Import Freely to the U.S.?
No, foreigners cannot import freely in the U.S. as the final recipient of a shipment must have a U.S. address and tax identification number.
The U.S.-based business will need to act as your consignee if you have an E.I.N. and your business is registered in another country that is not the U.S.
The final consignee will be the individual or entity which is receiving the cargo at the destination.
If you are a foreign importer who lacks a presence in the United States entity, you will need to have a Custom Assigned Identification Number.
In this case, you must name a business that is U.S. based to act as your shipment’s consignee, and they will receive the goods at the destination.
What is the Importer of Record in Shipping?
An importer of record refers to a non-resident corporation that acts as an importer for merchandise or shipments from a given company to the United States.
All importers of records have the same duties and responsibilities regardless of the type of company or individual.
Importer of record
The primary purpose of the importer of record is to make sure that their shipments meet the government’s custom requirements and any required regulations.
They should also finance all the necessary import fees and duties.
Few entities can fill the role of importer of record, and these include:
- A company that is based in the U.S. and has a Tax Identification Number.
- United States Citizen with Social Security Number.
- Licensed Custom Broker of United States.
- A foreign company that possesses a Customs Assigned Importer Number.
- Freight forwarder.
Can a Foreign Company be an Importer of Record?
Yes, a foreign company can be an importer of record.
Requirements that grant permission to a non-resident company to serve as an importer of record are straightforward and like residential companies in the U.S.
Most importers use services provided by custom brokers licensed in preparation and filing forms of entry.
Similarly, non-resident companies may also hire a licensed customs broker to help in filling the entry forms.
The non-resident company is also required to obtain an import bond, as all importers do.
This bond’s primary function is to repay the Government of the U.S. in case the importer fails to pay due to increased duties or obligations specified under the bond’s terms.
Apart from the entry bond, a foreign company must have an agent that resides in the state where the port is situated or where the entry is filed in case of remote filing.
This agent will not take care of any liability but will just overseas and accept service of process on the foreign company’s behalf.
This function is met effectively by engaging a licensed customs broker to conduct all the required procedures on behalf of the foreign company.
To become a foreign importer of record, you should provide the following:
- Copy of Certificate of Incorporation.
- Identification of the company’s two authorized officers.
- Completion and submission of C.B.P. form 5106.
For Custom brokers, they will need to submit the following to complete the process:
- Filled and completed Customs Power of Attorney (P.O.A.)
- A document certifying the authority of representatives authorized by your company.
Importer of Record submissions can be processed and approved in about two business days.
It is essential to know that there are given incoterms of shipments that establish the party as an importer of record.
Some of the advantages of becoming a foreign importer of record include:
- Improved relationships between supplier and buyer.
- Negotiation tool: when you are an importer of record, you are better positioned to give buyers valuable options.
- Reduced custom issues: taking full charge of importing goods will prevent the scenario of processes halting or slowing down.
What is the Difference Between SSN and CAIN?
Social Security Number (SSN) refers to a number used for customs and tax for sole proprietors and Unites States individuals.
On the other hand, Custom Assigned Import Number refers to a number issued to Foreign importers who do not have SSN or E.I.N.
Social Security Number is only used in imports made to the United States and does not serve exports from the United States.
On the other hand, the Custom Assigned Identification Number is issued only to foreign importers who would like to import to the United States.
Can a Customs Broker Apply for CAIN on Your Behalf?
Yes, your Customs broker is the one who should help in obtaining Custom Assigned Number.
Before obtaining a Custom Assigned Importer Number, you will need to provide:
- Customs Power of Attorney should be signed by two officers belonging to the company.
- This document will be given to you by your broker.
- Copy of Articles of Incorporation.
- If the document that empowers officers with authority to sign a power of attorney is not provided in the Articles of Incorporation, it must be provided.
- Pictures or scans of the identification of two officials.
Once all this information is provided and any other additional details, then the Customs broker will be able to apply for CAIN on your behalf.
Under the Customs Identification Number, you will also get a Customs bond alongside the required documents required for importing your goods.
Does CAIN Expire?
Yes, Custom Assigned Importer Number expires after a specific time as it is not issued for a lifetime. Each country has a given period of expiration established for CAIN.
For example, in the United States, the customs authorities can keep the Custom Assigned Importer. Number valid for 12 months after the last time the number was used for importation.
It is essential to clarify with the relevant authorities if your Custom Assigned Importer Number is present in Customs books before proceeding with any procedure.
Can you Have More than one CAIN?
No, you cannot have more than one CAIN as the number issued can be used in all future custom transactions.
The duplicate copy of the Custom Assigned Identification Number is returned to the party that filed it.
When can You File for a New Importer Number?
Businesses or individuals may file for new importer numbers in the following cases:
- When the previous importer number has been declared void.
- There is a need for an additional importer number.
When Does a Custom Deactivate CAIN?
Customs can deactivate your CAIN for the following reasons:
- If you do not use the CAIN for importation within twelve months.
- If you have not updated your current address or general information for a given amount of time.
- If you are using the CAIN for fraudulent transactions.
- If your CAIN number does not match with your bond number.
Can you Reactivate a Voided Customs Assigned Importer Number?
Yes, you can reactivate a voided custom assigned importer number, and though it is advisable to follow all the procedures in getting the CAIN to avoided it being voided.
A voided CAIN number may lead to extra charges for your shipment. Some of the costs that you might get due to avoided CAIN include:
- Demurrage costs.
- Per diem charges.
- Detention charges.
- Damage charges.
How can a Voided CAIN Affect your Shipments?
A voided CAIN can affect your shipments in the following ways:
- Long waiting times for customs to cancel your bond.
- Refund of your unused bond due to a voided CAIN also takes time.
- You will have to buy a new body after correcting or replacing the voided CAIN.
- You will have to lose the previous bong bought together with the voided CAIN.
- The importer number is deactivated, and you will have to reapply all over again; this will subsequently cause delays with your shipment.
- Your shipment will be held until the voided CAIN is replaced; holding shipments will result in higher costs, especially from warehouse storage.
Other problems that you might encounter that a voided CAIN directly or indirectly causes may include:
- Random custom exams and inspections to verify your knowledge and compliance with the customer specifications.
- One of the common problems you may encounter is custom clearance, and this occurs mainly when you are not familiar with the various customs requirements.
- Another major problem is delay costs associated with late freight release.
- Some of the delay charges that you might encounter include per diem, demurrage, and detention charges.
- Taxes and duties missing in your documentation are among the most common shipping problems encountered by first-time importers.
- It is prudent to pick shipping agents with experience in handling shipments.
- This is to avoid problems that arise from missing details on your CAIN.
- Sometimes you might be tempted to exceed the allowed weight capacity/limit.
- It might result in your cargo not meeting road weigh limits or I.M.O.’S Verified Gross Mass Regulation.
- Penalties such as Importer Security Filing (ISF) are common occurrences for shippers.
- Unexpected closures of ports due to unavoidable circumstances are also some of the problems you might encounter in shipping.
- It is not uncommon to hear of lost containers while on transit.
How do You avoid Shipment Delays to CAIN Problems?
Loading and offloading cargo
To avoid shipment delays resulting from CAIN problems; you can do the following:
- Ensure that you complete a bond application and power of attorney, especially if you are using a broker in importing.
- If you are a foreigner or a foreign-based company importing into the U.S.A.;
- Ensure that you get a Custom Assigned Importer Number (CAIN). It is a required document for any shipments into the U.S.A.
- Ensure that you provide your customs Tax ID to your broker. It is used in associating your customs bond with your CAIN.
- Ensure that you do not get a CAIN without a Tax ID on it; this is to avoid a situation where your bond number and CAIN do not match.
- Ensure that you use the right channels to get your CAIN number; using shortcuts will lead to inconsistencies in your document and may cause delays.
- Before ordering for imports, ensure that you communicate the same to your customs broker.
- It will help them in advising you on the procedures to follow.
- Always check with your broker that your CAIN is up to date, active, and in customs’ importer records.
- In case of long periods without using your CAIN, ensure that you liaise with a broker to update your customs importer records to keep it active.
- Always be proactive and provide documentation for your CAIN to your broker to file entry of your shipment on time.
With CAIN, do you still Need a License to Import into the U.S.?
Yes, with CAIN, you will still need to show a tax I.D. and other licenses necessary to import your shipment.
The CAIN is just a permit for you to import, but you must comply with other regulations.
How can You Update your CAIN Information?
CAIN is also the I.R.S. business registration number.
So, to update it, you will have to update your I.R.S. business registration.
The three significant requests allowed in requesting for CAIN information update include:
- Notification of identification number
- Change of name
- Change of address.
Some of the information that you can change in your CAIN include:
- Legal and mailing address information.
- Update responsible party.
- Update owners and members mainly for limited liability companies.
- Update contact information.
- Update cease tax accounts.
You can update your CAIN number through the Department of Homeland Security, U.S. Customs, and Border Protection.
You will have to fill the importer Identity Form.
The data required in the importer identity form may include:
- Importer/Business/Private Party Name.
- Internal Revenue Service (I.R.S.) Employer Identification Number (E.I.N.)
- Social Security Number (SSN)
- CBP-Assigned Number
- Mailing address
- Physical location address
- Phone number
- Email address
- Company information
- Bank routing number
- Certificate or Articles of Incorporation – (Locater I.D.)
- Certificate or Articles of Incorporation– (Reference Number)
- Business Structure/Beneficial Owner/Company Officers
- Provide certification.
Contact us now if you want to save time and cost when shipping from China to USA.