The Harmonized System (HTS) is an internationally standardized system of names and numbers for classifying traded goods under a single commodity code. This system is used when exporting or importing products.
A customs broker assists with import and export activities.
Customs laws control what goods can be imported into the United States and how much import tax must be paid. These laws are primarily enforced by the U.S. Customs Agency and other government bodies at the federal and state levels.
The official customs authority of the United States
The majority of CBP's core mission goes unheralded. Their cast is so large that it should be no surprise that CBP is the largest law enforcement agency in the country! Their workforce consists of 45,600 federal agents with both a mandate for immigration enforcement and protection against terrorism attempts.
Customs duties
As a general rule, the United States imposes tariffs on the importation of goods. These tariffs, or "customs duties," are usually 3% of the total value of the product and are levied at the time of import. The duty is paid by the manufacturer, producer, or exporter of the product (not the importer).
However, the duty is waived for an importer's personal-use purchases and specific products used by non-profit and charitable organizations.
Finally, some products are entirely duty-free regardless of their source country. In other cases, specific products are given preferential tax rates. Regardless, any U.S. company selling goods internationally must be cognizant of customs duty taxes and understand tariffs that apply to their products, especially now with the changing U.S./U.K. customs tariff rates.
Penalties charged annually for being a membership-based business include:
- $350 on the IRS first-tier Form 720 and $50 per a statement on the final tier form 7004.
- $125 an hour to prepare corporate returns, plus $140 for not-for-profits
- $150 per state for corporate returns.
- $375 per state for not-for-profits.
Failure to comply with customs rules can result in severe penalties, including confiscating the imported goods, as well as civil and criminal penalties against those involved. The Customs Border Protection (CBP) has 62,000 employees and is the federal agency tasked with regulating and facilitating international trade.
Given the size of their workforce, they have much responsibility. Customs agents are responsible for enforcing trade laws and preventing prohibited and restricted goods from entering the country. CBP also enforces trade laws on behalf of 200 other government agencies to prevent goods coming into the country that could pose health and safety risks.
