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- What is a Customs Exam?
- What is the purpose of Customs Exams?
- What are the different types of Customs Exam?
- How do Customs Select Shipments for Exams?
- How do Customs get Information about Shipments?
- What is Customs Examination Procedure?
- How will I Know if my Shipment is Undergoing a Customs Exam?
- Where do Customs perform Exams on shipments?
- Can I prevent my Shipment from undergoing a Customs Exam?
- How do you prepare for Customs Examination?
- WWhat is Customs Exam Fee?
- Who pays for Customs Exam Fee?
- How are different Shipments charged for Customs Exams?
- Who charges Customs Exam Fees?
- Must I pay the Customs Exam Fee before my shipment is released?
- How long does a Customs Exam take?
- What happens after Customs completes Examining my Shipment?
- What is a Customs Exam Hold?
- What are the Different Types of Customs Hold?
- How do I know if my Shipment is on Hold?
- Why is Customs still holding my Shipment even after Examining it?
- Do Customs Accept Liability for Shipments under their Hold?
- Which Shipments do Customs flag for Examination?
- How can I avoid Customs Exams and Fees?
- Can a Customs Broker help navigate Customs Exam and Hold?
What is a Customs Exam?
A customs exam is the inspection of goods in a container when suspicions arise regarding their content. The customs exam can be conducted through a Tail Gate, X-ray or intensive exam.
What is the purpose of Customs Exams?
The purpose of Customs exams is to inspect what gets into the U.S.
The customs exam is unavoidable.
It is very important for Customs and Border Protection to protect the United States from the entry of contraband goods.
The customs will undertake this measure to ensure that only the authorized goods, quoted value and the indicated quantities are allowed into the U.S.
Every year, a lot of containers going into thousands are held by the customs.
This is after they are examined and found to have goods not allowed getting into the country.
Some of the containers are re-exported back to the countries they came from.
Customs exam can be inconveniencing to the importer but it works for the good of the United States.
What are the different types of Customs Exam?
The customs will normally use three exam types in determining what is entering into the U.S. They include:
The X-rat is also referred to as VACIS or Non-Intrusive Inspection (NII) exam.
The Customs and Border Protection orders containers to be taken through an X-Ray machine located at the terminal.
They then review the images to determine if everything is okay.
If they are satisfied that everything is okay, the container will be released to be delivered.
If they determine that something is not okay, the exam will be escalated to the next exam.
Depending on the port the shipment is held and the container size, the fees will normally range between $150 and $350 for each container.
If the fees are charged per shipment, the charges will range from a minimum of $25 and go up to $100.
In this custom exam, the container is going to undergo examination at the pier.
The Tail Gate acts as the ‘drive-by’ of the exams.
The customs officer gets the container seal broken, opens the door, and takes a look inside.
If they are satisfied that everything is as it should be, they will release the container to the importer to proceed with the delivery.
If there are reasons to question the contents of the container, then the container will be subjected to the final examination level.
Normally the fees for this exam will range between $150 and $350.
This will depend on the container size and the port where the shipment is being held.
If the fees are charged per shipment, the charges will range from a minimum of $25 and go up to $100.
The intensive exam is commonly referred to as ‘Full Monty’.
This means that the whole container is taken by the truck to the Customs Exam Site (CES).
It is at this CES where the stripping of the container takes place.
A CES is any private corporation that is authorized by the CBP to remove the goods from the cargo and separate every parcel.
They are also allowed to open the designated boxes, prepare the cargo for a visual inspection by the Customs officer.
Where possible they can organize samples for the customs officer.
The fees charged for the intensive exam range from $1,000 to over $2,500.
How do Customs Select Shipments for Exams?
Customs selection of shipment.
The customs do not reveal what they target when finding out the shipments to hold for customs exams.
However, there are various factors that may come into play.
For example, if you are importing for the first time, you are subjected to a high-frequency inspection than an established importer.
In the same way, some goods, flagged entities and countries of origin have high chances of being picked from the queue for inspection.
This happens mostly with the new importers who are not conversant with the requirements.
How do Customs get Information about Shipments?
While selecting shipments for Customs Exams, the inspectors utilize a targeting system that gives scores on every shipment.
If the shipment scores over a given number, it creates an alarm for further review and maybe a customs exam can be conducted.
The Customs and Border Protection normally collects information from a range of sources.
Before your cargo is shipped, your airline, forwarder and the shipping lines will all make a submission on the details about your shipment.
This is done through the Automated Manifest System (AMS).
In case of an ocean shipment, your broker will transmit the compulsory Importer Security Filing (ISF) 24 hours before departure.
Days before the arrival of your cargo, your broker will transmit the data to the customs.
What is Customs Examination Procedure?
Once your cargo is flagged by the algorithm of the CBP for inspection, your cargo will be subjected to one of the following custom exams:
- The X-Ray
- Tail Gate
- The intensive
The manner in which the customs examination is performed depends on the type of exam that the cargo is subjected to.
If the cargo is chosen for an intensive customs exam, several things happen.
First, the shipper and the broker are notified of the status of the shipment.
The cargo is held at the port awaiting transportation to the Centralized Examination Station (CES).
At the Centralized Examination Station (CES), it will be queued waiting for other shipments to be examined.
This can take several days before the customs officers are done.
During the examination, the customs officers might be forced to break the container seal to completely offload it.
This may take time but it might be the only way of performing a thorough inspection on the shipment.
If the shipment has passed the customs exam, the contents will be loaded back to the container.
The shipment is then cleared to get into the U.S. without any more demands.
However, if your shipment does not pass the customs exam, several things may fall into place.
The customs may request the shipment be taken back to the country of origin.
This is done at the expense of the shipper.
If the shipment is considered illegal or harmful, it can either be incinerated or crushed at the CES location.
The shipper can never be compensated in any case for the loss arising from the decision to crush the shipment.
How will I Know if my Shipment is Undergoing a Customs Exam?
If your shipment has been selected for customs exam, the importer and the broker are notified by the customs.
After reviewing, the CBP decides on whether to go on and inspect the cargo using the different types of customs exams.
If further inspection is not necessary, they request for the submission of backup documentation, additional information and other relevant certificates.
The shipment is then released or taken for more examination using one or different types of customs exams.
Where do Customs perform Exams on shipments?
Customs Exams are conducted at the Centralized Examination Centre (CES). This is a privately owned facility that is operated with the authorization of the CBP.
This is where the cargo is taken to be examined by the CBP.
The CES can offer the transportation of cargo from the port to their facility as requested by the importer, steamship line or importer’s agent.
The CES helps in facilitating the examination process by offering the CBP transportation means and a facility to conduct their business.
CES providers are existing trucking and warehouse companies that choose to offer this as an additional service since they have required resources.
Can I prevent my Shipment from undergoing a Customs Exam?
Not getting selected for a customs exam is simply a bit of sheer luck.
You cannot prevent your shipment from going through a customs exam.
You can however undertake several measures to reduce the chances of being chosen for the customs exam.
Following the tips below can help you reduce the frustrations that come with customs exam.
Put your Paperwork Clear and in Order
If you are new in the importing business, you need an experienced freight forwarder to help you with the process.
They understand everything necessary and what kind of behavior may alarm the customs officials.
Choose a freight forwarder who can link you up with a customs broker that is experienced.
A good customs broker is going to help you clear your shipment promptly without delays.
Give Accurate Valuations for your Cargo
The custom officials do check the values of your goods and compare them with similar goods.
If the valuation of your cargo is way off, it is going to trigger the interest of the customs officials.
Your freight forwarder is going to give you a piece of good advice on this part.
Works Together with Partners who are Established
Always maintain an importing record.
Work with freight forwarders that are established and have a secured supply chain.
This will minimize the possibilities of ever being selected for a customs exam.
Avoid Consolidating Shipments from Strangers
LCL shipments can greatly save you money, they have high chances of being flagged for customs exam.
It is worth sending your cargo using a dedicated container.
This helps you avoid the chances of being subjected to a customs exam.
Familiarize yourself with the CBP by Applying for Continuous Customs Bond-
Building a good relationship with the CBP can help them see you as a reliable shipper.
They are able to expedite your cargo and reduce the possibilities of being selected for customs exams.
If you are shipping large volumes of goods, you can consider getting the CTPAT membership with CBP.
If you are able to adhere to all the requirements, you will be subjected to very few customs exams.
And in case you are selected, you can get a fast inspection.
How do you prepare for Customs Examination?
There is nothing much you can do once your shipment has been selected for Customs Exams.
Once your cargo gets to the port, you will have no time to prepare.
However, you can do a few things to get ready in case your shipment has been flagged for Customs Examination.
You can be able to prepare for the customs Exam even before the shipment is dispatched from the country of origin.
The custom examination is not a must but you must prepare in advance just in case your cargo is selected.
There are two ways that you can protect yourself from the customs examination. These are:
- Customs broker
To start with, an intensive customs exam can damage your freight.
It is a good idea that you invest in cargo insurance that is going to cover transit and damages relating to the inspection.
This way, in case your cargo gets damaged after undergoing intensive customs exams, it does not become devastating.
Secondly, having a customs broker can greatly help you in many ways.
Customs broker can help you reduce the chances of your shipment being selected for customs exams.
They will also help you in communicating with the customs as well as updating you on every process of examination.
Customs brokers are also going to help you correct the errors occurring on the documentation on your behalf.
This helps in moving the entire process smoothly.
What is Customs Exam Fee?
A customs exam fee is the charges incurred by an importer in case a shipment is selected for customs exams.
The Custom exam fee is dependent on the kind of inspection that is being performed.
The custom exam fee can range from $80 to $1000 and beyond.
Who pays for Customs Exam Fee?
It’s the importer’s responsibility to cater for the customs fees that are incurred on the shipments entering the United States.
These costs may include exam fees, service fees, transportation costs, and storage costs.
How are different Shipments charged for Customs Exams?
For Every type of customs exams that your shipment gets subjected to, it will attract a different fee.
The fees charged for the intensive exam for example will range from $1,000 to over $2,500.
The charges will depend on the amount of labour involved, the container size as well as the port from where the container is held.
If the fees are charged per shipment, the charges will range from a minimum of $250 going up.
For the case of an LCL shipment, the cost of every container is divided proportionally among the importers involved in the shipment.
The fees are calculated and the freight forwarder facilitating the movement of the goods from the country of origin collects them.
For FCL, the fees will be a one-off and the importer will be required to pay the charges associated with the customs exams.
Who charges Customs Exam Fees?
Custom exam fees are not charged by Customs and Border Protection (CBP).
Whenever you are required to pay the fees, they will be collected by:
The Centralized Examination Station (CES)
This is a private facility that is used by the CBP when they need to conduct an inspection.
They will handle the logistics, inspection, unloading and loading of the cargo to the container.
All charges accruing from these services will be charged to you.
You may also pay for storage in their warehouses.
This is the Company handling the movement of your shipment to the CS and back.
The fees will reflect as drayage charges on your invoice.
The Shipping Company
The Company handling your shipping may charge you for demurrage and detention since you are exceeding the time agreed on the container usage.
Depending on how the situation is, they may also request you to pay for storage charges.
Must I pay the Customs Exam Fee before my shipment is released?
Once the shipment has been subjected to a customs exam, all fees must be paid before the shipment is released.
To avoid that these payments do not cause delays and extra fees, you should have arrangements for prompt payments in advance.
How long does a Customs Exam take?
Normally shipments are held for around 45 days when undergoing customs exam.
Unfortunately, there is never a legal limit on the time the customs can keep your shipment when undergoing a customs exam.
Although the shipment is helping indefinitely, you can have your cargo released between 30-45 days.
This can even be earlier depending on the list of shipments ahead of you waiting to be examined.
The more time your shipment spends with the customs, the more charges you are going to rake to take care of storage fees.
Whatever you can do to speed up the customs exam process, you should do it.
This may involve payment of duties, provision of additional information and correction of documents.
This will highly impact the number of fees you will pay.
What happens after Customs completes Examining my Shipment?
Once the customs complete the examination process, they will release your shipment. At this point, you will be invoiced on the total amount so that you can pay.
Once you pay you can take your shipment.
If the customs find that the shipment violates the regulations and standards set, the shipment is returned to the country of origin at your own cost.
In the worst-case scenario, the shipment can be destroyed if the goods are found to be illegal or contraband.
What is a Customs Exam Hold?
Customs exam hold is where the shipment is held because there is something wrong with it.
Some of the wrongs include incomplete paperwork, unpaid taxes and fees. In short, a shipment is going to be held if you have made some errors during the process.
It can also be held whenever there is a pending thorough examination.
If your shipment gets held at the customs, it will remain there until the issues leading to the holding are resolved in their entirety.
This could mean you pay all the related charges, giving additional information, changing incorrect dates or any other necessary actions required by the customs.
What are the Different Types of Customs Hold?
Even when the shipment is not subjected to inspection, sometimes the customs will need to hold your shipment at the port of entry.
There are several types of customs hold each depending on the problem and situation.
However, all of them will subject you to long waiting before getting your shipment released.
The common types of customs hold are:
Manifest holds are placed when your shipment has incorrect shipping information.
The carrier’s manifest or the ISF data are the reasons why the manifest hold can occur.
To prevent this, make sure you have verified that is correctly entered and completed before the shipment is released.
Take time and double-check the information entered to save your time later when the shipment is being cleared.
Commercial Enforcement Hold
This type of hold is placed when the shipment does not comply with the customs regulations that apply to your shipment.
This can also happen if your shipment fails to comply with the regulations set by the government agencies that regulate your commodities.
How do I know if my Shipment is on Hold?
Shipments on hold
Once the shipment gets held or is chosen for customs exams, the “notify party” will be contacted via mail.
The notify party can be yourself or your broker.
Once that is done, you should contact customs or have your broker contact them.
This is done to find out if there is something you can work on to speed up the process.
In some cases your shipment will be held as a result of the “notify party” section being blank.
In such a scenario, the customs will contact any other contact person appearing on the documentation.
This can be the manufacturer, the packager, the shipper or your broker.
If nobody else is indicated and nobody is available to claim the cargo, it will have to be destroyed.
After all, it is upon you to make sure that you are doing everything correctly.
Why is Customs still holding my Shipment even after Examining it?
The customs will still hold your shipment if there is insufficient information on documentation.
They are not going to release your shipment until the information required has been submitted.
The customs are always going to think that something is being hidden.
It is important that you provide all the information they ask for.
Do Customs Accept Liability for Shipments under their Hold?
The customs are never going to accept liability for the cargo they are holding.
All fees and charges that accrue will be invoiced to the importer and the shipment can never be released until they are all settled.
It is your responsibility to ensure that everything is done right.
If your mistakes lead to losses, it is not up to them.
Which Shipments do Customs flag for Examination?
The CBP uses an algorithm which rates incoming shipment based on the risk levels.
They then select the riskiest and suspicious cargo for examination.
The factors included in the algorithm are not known since even the least expected shipments still find themselves in the examination list.
There is factors that easily attracts the attention of the customs to act and consider holding the shipment for examination.
- When the shipment involves a new shipper, one who hasn’t imported into the U.S. before, the customs will high suspect the shipment.
- If you are known for shipment mislabeling, doing things the wrong way, your shipments will always be suspected and selected for custom examination.
- The CBP takes into account everyone involved in your shipment while determining your risk factor.
So it does not mean that you are the only one to capture the attention of the CBP.
Handlers or the manufacturers, any of them with a bad reputation will make your shipment selected for inspection.
- Some Shipments will have more suspicious goods than others or easily mislabeled.
If your goods fall in that category, it is highly likely that they will be held for examination more often.
- The country of origin will also play a very significant role in determining the shipments to be flagged.
Shipments from some countries are regarding highly suspicious than those from other countries.
- It is not a very good idea for you to consolidate your cargo with other products even if it means saving money.
Your shipment can be held because of other goods contained in the container hence, you will suffer for their mistakes or actions.
- If your paperwork is not properly done or done incorrectly, the CBP is going to hold the shipment.
They have to determine if there is anything you are trying to hide and as such, they must inspect the shipment.
How can I avoid Customs Exams and Fees?
Customs exams and the fees that come along with is something that cannot be avoided once it occurs. They can only be prevented.
You must do all you can to avoid any suspicions.
Make sure you understand the shipping process and the requirements.
Adhere to every requirement and provide the necessary data to avoid being flagged.
In case you get flagged for inspection, prepare all the requirements the fastest possible to get cleared.
This will prevent you from excess fees that may accrue as storage fees.
Can a Customs Broker help navigate Customs Exam and Hold?
It is the easiest way you would consider in handling your customs examination.
You must choose a licensed customs broker.
They will come in handy especially if you are importing for the first time.
They are going to make sure that you do everything smoothly since they are specialists allowing you to focus on other things.
A customs broker is also going to help you reduce the chances of your shipment being flagged by filling all the documents properly.
In case your shipment is selected for customs exam, a customs broker can make you get informed about your shipment.
They will work to have your shipment cleared in a much faster way than you possibly could on your own.
Still, if you have any questions about customs exam, contact BanSar now.
At BanSar, we will help you in all your freight forwarding from China.