General questions - Customs

What is a Customs Broker?

A licensed professional/firm authorized by CBP to prepare and submit customs entries on behalf of importers, using "reasonable care" to classify, value, and clear goods.

What does CBP stand for, and what is its role?

U.S. Customs and Border Protection - the federal agency that enforces import/export laws, collects duties, and inspects cargo entering the U.S.

What is an "entry" in a customs context?

The formal process/paperwork submitted to CBP to declare imported goods, classify them, and pay applicable duties so they can be released into U.S. commerce.

What does "Reasonable Care" mean for an Importer of Record?

The legal standard (from the Customs Modernization Act) requiring importers to use due diligence to correctly classify, value, and declare merchandise; failing to do so can lead to delays or penalties.

What does "Reasonable Care" mean for an Importer of Record?

The legal standard (from the Customs Modernization Act) requiring importers to use due diligence to correctly classify, value, and declare merchandise; failing to do so can lead to delays or penalties.

What is an HTS code?

A 10-digit Harmonized Tariff Schedule code used on U.S. customs entries to classify a product and determine its duty rate (the international HS code is only the first 6 digits).

What is a Customs Bond?

A financial guarantee (often backed by a surety) ensuring CBP will be paid duties, taxes, and fees owed by an importer, even if the importer fails to pay.

What is a Customs Bond?

A financial guarantee (often backed by a surety) ensuring CBP will be paid duties, taxes, and fees owed by an importer, even if the importer fails to pay.

What is ACE?

The Automated Commercial Environment - CBP's "single window" system used to file, track, and manage import/export data and compliance.

What is an EIN, and why does CBP require it from importers?

An Employer Identification Number - a unique IRS tax ID that CBP uses to identify an importer and link their entries, bonds, and duty payments.

Who is the "Importer of Record" (IOR)?

The entity (owner, purchaser, or licensed broker acting on their behalf) legally responsible for ensuring customs entries are accurate and duties are paid.

What is Section 301, and what does it commonly apply to?

A trade remedy tariff (separate from Section 232) most commonly applied to certain Chinese-origin goods, adding extra duties on top of standard rates.

What is Section 301, and what does it commonly apply to?

A trade remedy tariff (separate from Section 232) most commonly applied to certain Chinese-origin goods, adding extra duties on top of standard rates.

What is a Commercial Invoice (CI)?

The seller's invoice showing prices, quantities, and terms of sale for goods - the primary document used to prepare a customs entry.

What is a Packing List (PL) used for?

It details how goods are packaged (cartons, pallets, weights) and is cross-checked against the Commercial Invoice for accuracy.

What's the difference between a Master Bill of Lading (MBL) and House Bill of Lading (HBL)?

The MBL is issued by the vessel/carrier owner and covers the whole shipment; the HBL is issued by the freight forwarder/NVOCC for an individual shipper's portion of cargo.

What is an NVOCC?

A Non-Vessel Operating Common Carrier - a company that issues its own house bills of lading and consolidates cargo without owning the actual vessel.

What is an Arrival Notice (AN)?

A notice, usually from the carrier or freight forwarder, confirming when and where a shipment will arrive at a U.S. port, used to know when to begin clearance.

 

What is an In-Bond (IT) entry?

A movement type that lets cargo travel under CBP control to another port or inland destination before a formal entry is filed there.

What is an ISF (Importer Security Filing)?

Also called "10+2": data the importer must file with CBP at least 24 hours before an ocean shipment is loaded so CBP can assess security risk. This is the importer's responsibility, not the broker's.

Who typically files the ISF versus the AMS manifest?

The importer (or their agent) files the ISF; the ocean carrier (VOCC) or NVOCC files the AMS manifest data.

What is Country of Origin (COO) on an entry?

The country where a product was manufactured, produced, or substantially transformed - required for duty calculation and PGA purposes.

What is Country of Export (COE)?

The country goods departed from before heading to the U.S.; if it doesn't match COO, brokers confirm it using data like port of loading or the shipper's country on the B/L.

What is an MID (Manufacturer Identification Code)?

A code generated from the manufacturer's name, address, and country, used to identify the actual producer of goods on a customs entry.

Why does an entry need both a Buyer and Seller listed as "Involved Parties"?

CBP requires accurate identification of who is buying and selling the goods; incomplete or incorrect party info can cause the entry to be blocked or flagged.

Why is total invoice value important, and what's a key rule about it?

It's used to assess duties; an entry cannot show a total value of $0, and shipments under $2,500 generally qualify for a simplified informal entry (type 11).

What does "proration" mean in a customs context?

Distributing a shared cost (like freight or packaging charges) proportionally across all line items or products in a shipment for accurate per-item valuation. (either adding or subtracting costs- negative proration)

What is a PGA in customs?

A Partner Government Agency (e.g., FDA, USDA, EPA, CPSC, FCC) - a non-CBP federal agency whose import regulations CBP helps enforce.

What is Section 232, and what does it commonly apply to?

A trade remedy tariff applied to steel and aluminum imports, requiring importers to report the country where the metal was smelted/poured or cast.

What does AD/CVD stand for, and why is it risky for importers?

Antidumping/Countervailing Duty - extra duties on goods sold below fair value or unfairly subsidized. Rates can be extremely high and retroactive, so misclassification can be very costly.

What is the Lacey Act, and what does it require?

A U.S. law (enforced with Fish & Wildlife and USDA) making it illegal to import wildlife, fish, or plant products (including wood) obtained in violation of U.S. or foreign law; wood products need genus/species/element info.

What does SPI/FTA refer to on an entry?

The Special Program Indicator / Free Trade Agreement code identifying goods eligible for reduced or duty-free treatment under a trade agreement.

What does CPSC regulate, and what products commonly need its certification?

The Consumer Product Safety Commission regulates items like children's products, furniture, and flammable textiles, often requiring a Certificate of Conformity.

What is a Certificate of Non-Reimbursement used for?

To show an importer has not been and will not be reimbursed by the seller for antidumping/countervailing duties owed - required when claiming an AD/CVD exemption.

In Flexport's system, what is "Core"?

Flexport's internal platform where shipment details, workflows, and communication with shippers, consignees, and clients are centralized.

What is NetChb primarily used for?

The system used to prepare, transmit, and manage customs entries with CBP, including checking entry statuses and resolving issues.

What is a CMQ (Cargo Manifest Query)?

A query into AMS showing manifest data such as dates, status, and quantities - useful for verifying whether a bill has been manifested or matches other records.

What does a "Firms Code" identify?

A code identifying a specific facility (like a warehouse) that has registered with CBP to handle or store cargo.

In NetChb, what do "Green," "Yellow," and "Red" entry summary statuses generally mean?

Green = no issues; Yellow = a possible/minor issue to check; Red = a hold or definite issue requiring resolution before the entry can proceed.

What is the difference between a Census Warning and a rejection in NetChb?

A Census Warning flags data that seems statistically unlikely (e.g., an unusually high price for an HTS code) for review; a rejection means the transmission was not accepted by CBP at all.

What does the resolution code "CEN" typically involve?

Verifying each flagged line item for mistakes, then updating and retransmitting the entry as a "replace."

What does "REJ" mean as a resolution type, and how do you address it?

A transaction was rejected; you perform a cargo release entry query, review the rejection message, and correct/resolve the underlying issue.

What does "EDR" generally involve resolving?

A document/data request - upload the required document(s) to the document archive in NetChb (and to DIS if multiple documents are needed).

What is a "SUS" resolution code related to?

A suspended release, often because a PGA has placed a hold; resolved by reviewing cargo release/status updates and coordinating with compliance on the statement date if needed.

What is a Manifest Hold?

A CBP hold placed due to missing or inconsistent manifest or ISF data for a shipment.

What is a Manifest Hold?

A CBP hold placed due to missing or inconsistent manifest or ISF data for a shipment.

What is a PGA Hold?

A hold instructed by a Partner Government Agency (like FDA or USDA) to ensure a shipment complies with that agency's specific regulations before release.

What is a Statistical Validation hold?

A CBP hold triggered when an entry's reported data (like value or quantity) looks statistically unusual compared to similar shipments, requiring review before release.

What is typically required to resolve an FDA hold on a shipment?

Submitting the required FDA entry data (e.g., product and manufacturer info) confirming the goods meet U.S. safety/labeling rules before FDA releases them to CBP.

Who pays for costs related to a customs exam?

The importer is responsible for all exam-related charges, which can range from about $35 to over $1,500 depending on the exam type.

Why is it important to double- and triple-check total quantity (CMQ) on an entry?

Mismatched quantities between the Commercial Invoice, manifest, and system data can trigger holds, rejections, or compliance issues, so new hires verify it carefully before filing.

When should a new hire escalate an issue rather than resolve it themselves?

When something is unclear, high-risk (e.g., an ADD/CVD flag), or outside what new hires are authorized to resolve - always escalate to a manager rather than guess.

Why should new hires confirm an HTS classification with a compliance specialist rather than relying only on a keyword search?

A keyword search can return a similar-looking but legally incorrect code; compliance sign-off helps ensure "reasonable care" and avoids costly misclassification penalties.