Importing 101: Navigating the North American Entry Process with Confidence

In North America, mastering the process of importing goods is crucial for businesses aiming to thrive in the global market.

The stats speak volumes: motor vehicles and parts alone accounted for 19.4% of the $362.9 billion in imports from the U.S. to Canada in 2021, with the U.S.’s direct investment in Canada hitting $500.7 billion, nearly half of the total investment.

In this blog, we aim to cut through the complexity of importing goods to help businesses like yours simplify and leverage international trade effectively. Whether you’re launching a global eCommerce venture, moving personal effects abroad, or looking to understand the oversight of Customs and Border Protection (CBP), this guide lays out the essentials.

Complete Checklist to Adhere to the Needs of CBP and CBSA

Compliance isn’t optional; it’s the cornerstone of ensuring your goods move smoothly across borders without unnecessary delays or penalties.

U.S. Customs and Border Protection (CBP) oversees the importation process and enforces regulations designed to protect the economy, residents, and environment. Similarly, in Canada, the Canada Border Services Agency (CBSA) manages the flow of goods into the country while enforcing import laws and regulations.

These agencies ensure that all imports meet North American safety, quality, and legality standards.

Here’s a complete checklist to understand both the regulations and procedures:

For U.S. Imports (CBP):

  1. Obtain an Importer Number: Typically, you use your IRS business registration number or SSN if you do not have a business number.  A CBP-assigned number is used for foreign entities.
  2. Determine the Harmonized Tariff Schedule (HTS) Code: Classify your goods accurately to understand applicable tariffs.
  3. Ensure Compliance with U.S. Regulations: Check for specific requirements based on your product (FDA, USDA, EPA, etc.).
  4. Prepare Necessary Documentation:
  • Commercial Invoice
  • Bill of Lading or Airway Bill
  • Packing List
  • Arrival Notice (provided by the carrier)
  • Certificate of Origin (if applicable)
  • Any permits or licenses required for your specific goods
  1. Calculate and Pay Duties and Taxes: Use the HTS code to calculate the duties. Import declarations can be submitted to CBP using ABI (Automated Broker Interface) software.  Import declarations can be submitted to CBSA using IID (Integrated Import Document) software.
  2. Utilize a Customs Broker: Consider hiring a broker for seamless processing, especially if you’re new to importing.
For Canadian Imports (CBSA):
  1. Get a Business Number (BN): Required for conducting import activities in Canada.
  2. Classify Your Goods: Use the Canadian Harmonized System (HS) to determine the duty rates and any restrictions.
  3. Check for Compliance with Canadian Standards: Ensure your goods meet all health, safety, and quality standards.
  4. Prepare Required Documentation:
  • Canada Customs Invoice or Commercial Invoice
  • Bill of Lading
  • Cargo Control Document (CCD)
  • Certificate of Origin (if claiming preferential tariff treatment)
  • Import permits if your goods are regulated
  1. Determine and Pay Duties and Taxes: Utilize the CBSA’s duty and taxes estimator to budget for costs.
  2. Consider Using a Customs Broker: This is especially beneficial for navigating complex regulations and ensuring smooth customs clearance.
Step-by-Step Guide to Getting Started

Follow the steps mentioned below to get started:

Step 1: Research and Understand Import Requirements

  • Learn Import Regulations: Familiarize yourself with import regulations, tariffs, and non-tariff barriers applicable to your goods.
  • Study the Compliance Needs: Learn about import paperwork, customs documentation, and the importance of complying with local safety standards, labeling requirements, and environmental regulations.

Step 2: Obtain Necessary Registrations and Identifications

  • U.S.: Obtain an IRS business number or use your SSN for the Importer Number. (CBP assigned number for foreign entities)
  • Canada: Apply for a Business Number (BN) with the CBSA for import activities.
Step 3: Classify Your Goods

Determine the Harmonized System (HS) code for your goods. This classification will dictate the tariffs and any import restrictions.

For example, if you’re importing coffee beans into Canada, you must determine the appropriate HS code. Coffee beans fall under HS code 0901.11: “Coffee, not roasted, not decaffeinated.” Knowing this code is crucial for calculating tariffs and identifying import restrictions or requirements for agricultural products entering Canada. 

Step 4: Evaluate and Comply with Product-Specific Regulations

Identify if your product needs to adhere to specific standards (safety, quality, and environmental) set by agencies like the FDA (U.S.) or CFIA (Canada).

For instance, if you import packaged food products into the United States, you must comply with the Food and Drug Administration (FDA) regulations. Here’s a brief look at the FDA compliance needs for packaged food products:

  • Safety Standards: Your product must be safe for consumption, free from harmful substances, and processed hygienically. This might involve testing products for contaminants and ensuring facilities meet the FDA’s sanitary standards.
  • Labelling Requirements: Labels on packaged food products must comply with FDA guidelines, which include listing ingredients, nutritional information, serving sizes, and allergen warnings in a prescribed format.
  • Prior Notice of Imported Foods: Before shipping your products, you must submit an FDA Prior Notice to the FDA, providing details about the products being imported, the manufacturer, and the shipper. This is part of the FDA’s effort to prevent contaminated or harmful foods from entering the U.S.

Step 5: Prepare Your Documentation

Gather and prepare essential documents, including the commercial invoice, bill of lading, packing list, and any required permits or certificates of origin.

Documentation Tips:

  • Ensure Accuracy: Double-check all details on the commercial invoice for accuracy, including product descriptions and values, to avoid customs delays.
  • Understand the details of the goods: On the packing list, itemize each product, including quantities and packaging details, for easy verification by customs.
  • Follow Bill of Lading Protocols: Ensure the Bill of Lading matches other shipping documents and accurately reflects the cargo details.
  • Secure Certificates Early: Apply for any required permits or Certificates of Origin well in advance to prevent shipment hold-ups.
  • Keep Copies: Maintain electronic and physical copies of all documents in case of loss or additional verification requests from customs.

Make sure you store these documents in a secure and easily accessible location. This will help streamline the customs clearance process and avoid unnecessary delays. 

Step 6: Calculate Duties and Taxes

Use the HS code to determine applicable duties and taxes. Tools like the CBSA Duty and Tax Estimator can be helpful. For instance, if you’re importing leather handbags into the United States, you’ll first use the HS code specific to leather handbags, which could be “4202.21.90.00” for handbags with a surface area of leather.

By inputting this HS code into a duty calculator or consulting the U.S. International Trade Commission’s Harmonized Tariff Schedule, you discover the duty rate for these handbags is 5.5%.

If the total value of your shipment is $10,000, the import duty you’d be expected to pay is $550. Tools like the CBSA Duty and Taxes Estimator for Canada or the U.S. Customs and Border Protection’s calculator can simplify this process, providing quick estimates of the costs associated with your import.

Step 7: Choose a Customs Broker (Optional but Recommended)

Consider hiring a customs broker to navigate the complexities of the import process, from documentation to clearance. Consider these things while making a decision:

  • Experience: Look for a broker with extensive experience in your specific industry or the type of goods you are importing.
  • Licenses: Ensure the broker is fully licensed and accredited by relevant authorities (e.g., CBP in the U.S., CBSA in Canada).
  • Reputation: Research their reputation through reviews or industry references to gauge reliability and service quality.
  • Communication: Choose a broker who communicates clearly and promptly, keeping you informed throughout the import process.
  • Customs Compliance: Verify their track record for compliance, ensuring they are up-to-date with the latest customs regulations and procedures.
Step 8: Ship Your Goods

Select a shipping method (air, sea, rail, or road) that aligns with your budget, timeline, and type of goods. Ensure your carrier provides the necessary shipping documents, like the Bill of Lading or Airway Bill.

Remember, choosing a shipping method is critical to cost and delivery timelines. Consider the nature of your goods, urgency, and budget constraints when making this decision. This will ensure a smooth and cost-effective transportation process for your goods.

Step 9: Track and Receive Your Shipment

Use the tracking system provided by your carrier to monitor your shipment’s progress. Be prepared to provide additional documentation or information to customs officials if requested.

Step 10: Review and Reflect

After completing the import, review the process to identify any areas for improvement. Keep records of all transactions and communications for future reference and compliance purposes. This will help you enhance your future import processes and ensure that you have a thorough record of your compliance efforts.

Conclusion

The essentials boil down to diligent preparation and compliance. Prioritize accurate classification of your goods, meticulous documentation, and understanding of duties and taxes.

Engaging a seasoned customs broker can be a game-changer, offering expertise and peace of mind. However, it’s crucial to familiarize yourself with the process, ensuring you have a solid foundation for successful imports into North America.

Remember, success in importing hinges on attention to detail and proactive compliance management. Armed with this guide, approach the import landscape confidently, ensuring every step from classification to clearance aligns with regulatory demands. 

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