It may be an international company’s worst nightmare. They work hard to develop products for international consumers. They go through the complex process of conducting market research, evaluating overseas partners and ensuring their product can make it safely to its destination. But then, they get the call that their goods have been held up at customs. Suddenly, all of that work has come to a standstill.
Companies that encounter stumbling blocks at customs must understand their customs problem before they can resolve it. The International Trade Administration (ITA) helps U.S. businesses expand into global markets through focused business tools and practical advice. The ITA has identified common issues that exporters may encounter with foreign customs houses to help them identify problems and address them as efficiently as possible.
- Inadequate documentation – When dealing with exporting goods, accurate and thorough documentation helps everyone, from the exporter to the customs house to the importer. Depending on what they are exporting, a company may need to make customs aware of hazardous materials or the contents of consumable items like food. Failing to provide accurate contact information or packing lists can make customs think twice about letting cargo pass through.
- Misclassification – Some companies may try to avoid paying high duties or tariffs by misclassifying their shipped goods. Misleading customs about the contents of your export can lead to expensive penalties. Companies should double check their goods classifications on all the necessary paperwork. Since this problem is such a major concern, the Automated Export System might reject improperly classified goods before they can even leave the country.
- Unanticipated duties – Imagine getting to the cash register at the grocery store and finding out your total will cost you thousands more dollars than you expected. When a shipment arrives at customs, it cannot reach its destination before someone fulfills all duties and tariffs. This can be a common problem for companies that are new to exporting and may have outdated or incorrect information about duties and exchange rates.
- Packaging regulation problems – Every country has their own standards for how to package goods, and regulatory bodies have set many global expectations for packaging. For instance, wood used in packaging must undergo thorough fumigation to avoid transferring potentially destructive insects from one place to another. If a company’s packing fails to comply with the regulations of the import country, customs may reject the shipment.
- Health, sanitation and safety concerns – Customs plays a key role in protecting a country’s inhabitants by regulating its trade. The list of banned items for any given country is lengthy but most often created with its citizens’ best interests in mind. If a shipment contains goods deemed a threat to the importer or their customers’ safety, customs serves as the first line of defense in preventing those goods from harming anyone.
As an exporter, whether new or veteran, companies with concerns over customs issues should work closely with professionals who are well-versed in transportation and business law.