February 16, 2021
Consumer and business demand for generators has risen in recent years and is projected to continue steady growth. During certain times of the year like Hurricane Season and Winter, demand skyrockets. Many generators are imported from the U.S.’ largest trading partner, China. Businesses looking to capitalize on this opportunity need to be mindful of some important details.
To import generators from China, importers will need to comply with numerous import requirements. The most strict regulations come from the EPA which requires imported generators comply with U.S. emission regulations. Importers are required to provide this proof at the time of import. If this documentation is unavailable, the generators will be refused at the port of entry.
While the process of importing generators from China can be scary, it can be made much simpler with the help of a Licensed Customs Broker. Below, we explain the requirements and processes involved for importing generators from China. We also outline how a Licensed Customs Broker can manage some or all of the process for you, ensuring a smooth import.
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As noted above, imported generators are required to comply with U.S. emission regulations. The entity responsible for enforcing these regulations is the Environmental Protection Agency, or EPA. Along with the EPA, Customs and Border Protection (CBP) serves as the first line of defense at the border for imports arriving in the U.S. CBP agents are tasked with reviewing import details and flagging shipments that aren’t in line with U.S. import guidelines.
In order to provide proof that your imported generators comply with emission standards, two important pieces of evidence are typically used: An EPA Certificate of Conformity and an EPA Emissions Control Label.
This document is a requirement for generators that are to be sold in the U.S. The Certificate of Conformity states that the engine used in the generator is compliant according to EPA emission standards. Manufacturers must obtain this certification prior to offering a generator for sale in the U.S. While CBP and EPA guidelines don’t dictate that the certificate be presented at the time of import, it’s highly advisable that it’s readily available. If there’s any question as to the validity of the generator being imported, CBP and EPA agents will look to the Certificate of Conformity for further clarification
The other important aspect that proves imported generators are compliant with U.S. emission standards is the EPA Emissions Control Label.
This label is located on or near the engine and indicates a few important details:
If this label is visible on all of the generators being imported, you should face little resistance for this portion of the customs clearance journey.
The last piece of documentation that importers need to have is EPA Form 3520-21. This form is used when importing heavy duty, nonroad, or stationary engines. Since
The information required on this form includes:
All of this information is reviewed by CBP agents at the time of entry to determine admissibility.
It’s important to note that this form isn’t required to be submitted as long as 4 conditions apply:
If ALL 4 of the above conditions are present for the imported generators, EPA Form 3520-21 is not required to be submitted.
Making generators available for sale in California will require some additional work on your part. This is due to the fact that California emission standards go beyond what’s required in the EPA’s federal guidelines.
For generators to be eligible to be sold in California, they’ll need to be certified as CARB compliant by the California Air Resources Board (CARB).
Engine manufacturers will need to follow a set process to certify their generators with CARB:
Once the above process is complete, the imported generators will be eligible to be sold in the state of California.
The specific rules for importing a generator can be confusing and challenging. Our Licensed Customs Brokers are here to help you every step of the way. We’ve helped numerous importers bring in generators and other restricted commodities without issues.
In order to truly understand the specific requirements in play when importing generators from China, properly classifying your generators is a critical step in the process. All imported goods into the U.S. must be classified with an accurate Harmonized Tariff Schedule (HTS) Code. Applying the correct code to your imported products is of the utmost importance as it determines a number of key details.
Classifying your product with an incorrect HTS code can lead to:
The best way to handle classifying imported goods with the correct HTS code is to work with a Licensed Customs Broker. Our team of licensed professionals has a deep understanding of the HTS and can identify the correct code for your imported generators. In turn, this will reduce further issues and problems at the border when importing.
Speaking of HTS codes, one of the biggest effects associated with the HTS code is determining the import duty. Each 8 digit subheading code has a specific import duty amount applied to it. Ensuring that you have the correct HTS code in place enables you to know the exact amount of import duty you’ll be required to pay with your import. Since your generators are coming from China, there’s even more reason to ensure that you confirm the HTS code and import duty.
In 2018, additional import duties were placed on imported goods from China through the introduction of Section 301 tariffs. The additional tariffs were rolled out in 4 separate products lists and range from an additional 7 to 25% on top of normal duty rates. While some products received section 301 tariff exclusions, many did not or the exclusions have since expired.
In addition to section 301 consideration, antidumping and countervailing duties can also come into play. Antidumping and countervailing duties are applied when an imported product is sold in the U.S. for well-below market value. The intent of the duty is to offset this low valuation and level the playing field for domestic manufacturers. Specific additional amounts are handled on a case-by-case basis depending on the specific factors of each situation.
Before initiating your import of generators from China, it’s highly recommended to consult with a Licensed Customs Broker. Our brokers will review your products to determine whether Section 301 or antidumping and countervailing duties are in place. This will ensure you’re not caught off-guard by unexpected fees when you import your generators.
Along with confirming your HTS code and import duties prior to importing your generators, another important detail to verify is the Incoterms of your shipment. Incoterms, short for International Commerce Terms, are set by the International Chamber of Commerce and outline responsibilities and costs associated with international transactions. These are agreed upon by the buyer and seller of the goods before an import occurs. In total, there are 11 Incoterms arrangements.
Not having a deep understanding of the Incoterms for your shipment can lead to some troubling issues. In some Incoterms arrangements, the buyer bears the bulk of responsibility and costs, while in others the seller does so. Other arrangements distribute the load evenly between the buyer and seller. Misunderstanding your responsibilities and costs related to an import can lead to unforeseen costs and delays in the overall process.
Our Licensed Brokers have a deep understanding of the Incoterms. We can review your import details to let you know exactly what your responsibilities are so that you’re not caught off-guard. To learn even more, check out our article What Are Incoterms?
The last important aspect of importing generators from China that you’ll need to take care of is obtaining a customs bond. In most cases, a customs bond is required when importing commercial goods into the U.S. A customs bond is an official document that acts as insurance policy for CBP to ensure import duties and fees are paid. Because generators are regulated by the EPA, a customs bond will always be required when importing.
The choice regarding what type of customs bond you should acquire ultimately comes down to how often you’re going to import into the U.S.
For importers only planning one import shipment of goods, a single entry bond is recommended. As its’ name states, a single entry bond provides coverage for a single entry of imported products.
Importers with numerous shipments scheduled to come to the U.S. in upcoming months should opt for a continuous customs bond. This type of import bond covers all import shipments for 12 months after the effective date of the bond.
We offer continuous customs bonds for just $245. Through our simple-to-use, online purchase and application process, your customs bond can be active and available to use in just 2 days.
As you can see, importing generators from China is a complex task with many hurdles and challenges to overcome. Luckily, you don’t have to embark on this journey alone. Our team of experienced and licensed professionals at USA Customs Clearance is here to help you.
We can manage the entire process of importing your generators from China to the U.S. Once we have the necessary details of your import, we handle the rest. You won’t need to worry about running into unexpected issues during the process.
In addition to managing customs clearance for you, we’re also able to offer a full suite of transportation and logistics services. This is made possible through our partnership with our sister company R+L Global Logistics.
We can provide you with:
When you’re ready, schedule a 1-on-1 consultation with one of our Licensed Customs Brokers. They’ll review your import needs and objectives to create a successful import plan.