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Understanding Customs Examinations

March 26, 2020
Julia Hecht
Customs examinations announcements can be some of the worst news a shipper can receive, but utilizing the experience of a customs broker can remove some of the strain on your company. Additionally, doing something as simple as double-checking your paperwork or not consolidating your shipments with others can significantly reduce your risk of getting selected in the first place.

If you’re an importer, the last thing you would want to hear is that your shipment was selected for a customs examination. Having your shipment selected for an examination would mean huge delays, large fees, and potentially damages to your cargo! Your customers won’t want to wait, and you can’t sell goods that have been damaged, so getting that email from customs can make it feel like your business is coming to a screeching halt. How do you navigate this obstacle? What can you do? Well, there are thankfully ways in which you can ease the strain on your business. If you’re nervous about customs examinations, don’t let that stop you from importing!

Customs examinations announcements can be some of the worst news a shipper can receive, but utilizing the experience of a customs broker can remove some of the strain on your company. Additionally, doing something as simple as double-checking your paperwork or not consolidating your shipments with others can significantly reduce your risk of getting selected in the first place.

What is a Customs Examination?

Even though customs examinations can feel like a pain in the neck for honest importers, they are an important aspect of national security. Even though these inspections can be a hassle, they are ultimately important to ensure the safety and security of U.S. civilians. 

In the early days of global trade, the government had to find ways of preventing shippers from misvaluing their shipments or smuggling in contraband into the U.S. However, since the terrorist attacks in 9/11, the nation’s priorities shifted to focus more on border security and anti-terrorism efforts. The Department of Homeland Security (DHS) was founded, and soon consolidated several standalone agencies to form Customs and Border Protection (CBP) in an effort to prevent the introduction of unregistered guns, contaminated food, or even weapons of mass destruction into U.S. ports. 

The CBP uses customs examinations in order to protect the country by monitoring what passes through the border. However, the CBP cannot reasonably inspect every single shipment that comes through the border, so they look for certain risk factors to help determine which shipments to inspect more closely. In fact, only about 3-5% of all shipments ever get inspected.

If your shipment is selected for examination, that doesn’t mean there is anything wrong with it, but you will have to wait longer for it to arrive since customs will hold it for several days at the port to conduct their examination. 

What is a Customs Hold?

what is a customs hold

Unlike with a customs examination, a customs hold almost always means there is something wrong with the shipment you are trying to move. Usually, this occurs as a result of incomplete paperwork or unpaid fees and taxes. In other words, a shipment is held at customs if the shipper has made some sort of error along the way. It could, however, also be held pending a more thorough examination.

If your shipment is held at customs, then it will become stuck until you resolve the issues that got it held back to begin with. That could mean paying off all related payments, fixing incorrect date, supplying additional information, or some other action. 

During either a 30-minute or 1-hour consultation session you can cover a lot of ground with one of our customs experts. Which one works for you?

Which Shipments Are Chosen for Exams and Why?

CBP has an algorithm by which they rate incoming shipments by their level of risk, and then select some of the riskiest or most suspicious shipments to examine. However, no one knows exactly which factors are included in this algorithm, and some shipments that have been carefully and correctly valued and documented still get selected for examination. 

Nothing you can do will ever completely eliminate the risk of being selected for examination. However, there are a few things that can drastically increase your risk of being one of those unlucky few. Here are some of the known factors that influence whether a shipment will be selected for examination or not:

  • If a new shipper is importing into the U.S. for the first time, customs may regard their shipment more suspiciously.
  • If you have a history of mislabeling your shipments or doing things wrong, then you’ll be at a greater risk of having your subsequent shipments examined. 
  • CBP considers all the individuals involved in the shipment to help determine the risk factor, so even if you don’t have a bad record, one of your manufacturers or handlers could, and they could get your shipment flagged for inspection.
  • Some commodities are more suspicious than others, or more likely to be mislabeled, so if your product falls under that category it could get picked for examination more often. 
  • Where the commodity is shipping from is also an important factor. Shipments from some parts of the world may be regarded more suspiciously that other locations.
  • Consolidating your shipment with other products is generally a bad idea, even if you can save a bit of money. If the other shipment gets seized for one reason or another, your shipment would get stuck with it since they were packed in the same container. 
  • If you didn’t fill out all the paperwork, or you filled it out carelessly or incorrectly, then CBP may determine you’re trying to hide something and flag your shipment for inspection.

Customs Examination Procedures

Customs Examination Procedures

The way the examination is carried out depends in large part on the kind of exam that will be done. However, if a shipment is selected for an intensive exam, then several things will happen.

The very first thing that happens is the shipper is notified that their shipment has been selected for examination. The shipment is held at the port of entry until it can be transported to a Centralized Examination Station (CES). There, it waits in a queue of other shipments that also need to be examined, which can sometimes take days for customs workers to get through. 

When the customs officers conduct the examination, they might have to break the seal on the container or unload it entirely. This can take a lot of time, but it is sometimes the only way to properly inspect a particular shipment. If the shipment passes the examination, it is reloaded and cleared to pass through into the U.S. with no further action needed. 

However, if a shipment fails to pass its inspection, a number of things could happen. It could be sent back to its country of origin at the shipper’s expense, and although that sounds bad, it’s not the worst thing that could happen to it. If a shipment is deemed harmful or illegal, then it could be either crushed or incinerated at the CES location. To make matters worse, the shipper would not be reimbursed for their lost cargo.

Types of Customs Examinations

There are three different kinds of customs exams that your shipment could be subject to, depending on how suspicious or problematic it appears to CBP. Each test varies in severity and invasiveness, with the most invasive one being the most expensive and time-consuming. If your freight is randomly selected for examination, and there isn’t really anything wrong with it, then it will likely be examined in the most non-invasive way. However, if one of the less invasive tests comes back with inconclusive or concerning results, then it can be escalated to a more intensive examination. 

VACIS/NII

The Vehicle and Cargo Inspection System (VACIS) or Non-Intrusive Inspection (NII) exam is the simplest kind of exam that your cargo could go through. At the customs exam site, your shipping container is X-rayed to see if there is anything inside that does not belong. It may also be tested for radiation or signs of pests, but the container itself is never opened. 

Because of its non-invasive nature, this type of exam is usually particularly inexpensive. Costs usually cap out at about $300, but that could be different depending on how far the shipment needs to be moved, how long it is stored, and what type of machinery is used to inspect it. Unless there is a large backlog of shipments that need to be examined, you can expect your freight to get through in about 2-3 days, so you won’t have to wait long.

During either a 30-minute or 1-hour consultation session you can cover a lot of ground with one of our customs experts. Which one works for you?

Tail Gate

Unlike with the VACIS/NII examination, a Tail Gate exam involves the customs workers breaking the seal on the shipping container to physically examine the cargo. This visual inspection doesn’t involve actually touching the cargo at all, but the process is still more intensive than the first type. 

Even though they sound simple, Tail Gate exams can end up costing you more than a VACIS/NII exam. You should expect to pay roughly $350, but like before, that cost also depends on other factors. It may also take your shipment longer to be processed, but it will likely get cleared within 4-5 days. 

Intensive Exam

As far as cargo examinations go, this is definitely one you don’t want to deal with. An Intensive exam takes physical inspection to the next level, by completely unloading the entire shipment to examine everything up-close. After all the cargo has been unloaded and thoroughly inspected, the CBP officers reload the shipping container. However, they are unlikely to treat your shipment with the same kind of care you did when you had it packed initially, and that could result in your shipment getting damaged. 

 As you can probably imagine, this process is expensive. You need to pay for the transportation of your cargo to a CES and the labor involved with unloading and loading the shipment. If your cargo is particularly heavy or cumbersome, you could end up with some hefty fees by the end of it. When your shipment is selected for an intensive exam, you should expect to pay thousands of dollars in fees, and you might have to wait anywhere between a week to a month before your shipment will be released again!

How to Prepare for a Customs Examination

How to Prepare for a Customs Examination

Unfortunately, there isn’t much you can do if your shipment is selected for inspection. By the time your shipment arrives at the port, it would be too late to really prepare. However, there are some things that you can do to prepare for the possibility of having your cargo inspected, before your shipment even leaves its country of origin. 

Customs examinations are not a guarantee, but you might still want to prepare for them ahead of time in case your shipment is selected. There are two main ways that you can help protect yourself from customs examinations: insurance and a customs broker. 

First, because an intensive inspection can result in your freight getting damaged, it is almost always a good idea to invest in some cargo insurance that covers transit- and inspection-related damages. That way, if your cargo arrives damaged after an intensive examination, it won’t be as devastating. 

Secondly, a customs broker can help you out in several ways. Not only could they reduce the risk of your shipment getting selected for examination in the first place, but they can help you communicate with customs and keep you updated on the progress of the examination. They can also correct any errors in the documentation on your behalf, to help the entire process go smoothly. 

Types of Customs Holds

Even if your cargo isn’t subject to inspection, there are other times in which customs may want to hold your import at the port of entry. There are different types of customs holds depending on the situation and the problem, but either way, you could end up waiting a long time to get your shipment released. This is one case in which a customs broker could be a tremendous asset to have on your side, so they could figure out why your shipment was detained and work towards getting it released. 

Manifest Hold

Customs will place a Manifest hold on your shipment if some information was entered incorrectly—or not entered at all. Missing information on the carrier’s manifest or ISF data is the most common reason for this type of hold. It can be prevented simply by verifying that all information is accurate and complete before sending the shipment out. Then after you’ve double-checked it, check it again to be extra sure. Taking the time to go over your information now could save you a lot of time later. 

Commercial Enforcement Hold

A commercial enforcement hold is typically placed on a shipment if it fails to comply with all the applicable customs regulations. This hold could also be placed on your shipment if it doesn’t comply with all the regulations for the other government agencies that regulate your particular commodity. For example, if you’re trying to import a type of wood that the USDA has restricted the import of, CBP may place a hold on your shipment until you can provide adequate proof to verify you have been granted an exception to import it. 

During either a 30-minute or 1-hour consultation session you can cover a lot of ground with one of our customs experts. Which one works for you?

Statistical Validation Hold

A statistical validation hold may be placed on your shipment if your documentation indicates different information than what is considered normal for that particular commodity. For example, if your shipment is too heavy for the size or quantity specified on the shipping documents, then that could trigger customs to place a hold on the shipment until they can verify the cause of the discrepancy. 

CET/A-TCET Hold

The CBP’s Anti-Terrorism Contraband Enforcement Team (A-TCET) may place a hold on your shipment if they have a suspicion that your shipment contains illegal weapons or contraband. Usually, this hold is triggered after a customs examination that came back with suspicious results. 

PGA Hold

Even if your shipment has no issues with it, and it complies with the CBP’s regulations, Partner Government Agencies (PGAs) may request that CBP place a hold on your shipment anyway if they have reason to believe it isn’t compliant with that agency’s regulations. These PGAs are agencies such as the FDA, USDA, CPSC, and others. 

Why Your Shipment Might Get Stuck in Customs

Why Your Shipment Might Get Stuck in Customs

There are several reasons why your shipment might get stuck in customs, and those reasons determine the type of hold placed on your shipment. Most often, shipments get held in customs as a consequence of the shipper not doing something right, so if you’re careful about how you do your documentation and you make sure you’re compliant with the laws, then you can significantly reduce the risk of your cargo getting stuck.

The most common mistakes that lead to shipment getting stuck are:

  • Incomplete or missing paperwork
  • Wrong HTS codes
  • Missing Country of Origin
  • Incomplete commercial invoice
  • Broker or notify party missing
  • Unpaid duties

However, sometimes holds get placed on your shipment for reasons outside your control. Customs can hold a shipment even if they have little to no real suspicion about what your shipment contains. Other times, you may be faced with different challenges. Laws may change suddenly, or you might learn about dishonest practices from your manufacturer the hard way. 

Regardless of the reason behind why your shipment is stuck, a customs broker can help you get it released again. 

How Long Can Customs Hold a Shipment?

How Long Can Customs Hold a Shipment

If your shipment is stuck in customs, you’re probably wondering just how long customs will be able to hold onto it before releasing it—or otherwise getting rid of it. And well, the answer probably isn’t what you want to hear. Shipments stuck in customs rarely get held more than 45 days, but unfortunately, there is technically no legal limit for how long customs can hold onto your shipment.

Even though customs could hold your shipment indefinitely, you will probably see your shipment released between 30-45 days, but it could be earlier than that depending on how many other shipments are being held at the time. However, the longer your shipment stays in customs, the more fees you’re going to rake in from storage costs. If you can do something to speed up the process, like paying duties, correcting documents, or providing additional information, then you should do that as soon as possible to minimize your bill.

During either a 30-minute or 1-hour consultation session you can cover a lot of ground with one of our customs experts. Which one works for you?

How Will I Know if my Shipment is Held in Customs?

If your shipment is held in customs or selected for examination, then the person or entity that was listed in the “notify party” section of documentation—whether that’s you or your broker—will be contacted via email. At this point, you should be contacting customs either yourself or through your broker to find out if there is anything you can do to speed up the process.

If your shipment is held because the “notify party” section was left blank, then customs will likely contact anyone else whose contact information is in the documentation. That could mean the shipper, the manufacturer, the packager, or even your broker. However, if they cannot easily find someone to claim the shipment, it may simply be destroyed. It is your responsibility to ensure you’ve done things correctly after all. 

What to Do if Your Shipment is Held in Customs

What to do if Your Shipment is Held in Customs

When you find out that your shipment is held in customs, the first thing you should do is tell your customer or customers. Your customers are waiting on the shipment, and if that shipment is delayed without notice, then you could end up angering them and severing ties with what could have been a good long-term business arrangement. Although your customers won’t be happy to hear that the shipment was held in customs, you will at least be informing them first-hand so they know what to expect.

Secondly, contact the carrier moving your freight. Sometimes, shipments can get snagged in customs, but your carrier can negotiate for its release quickly. Verify with them about the status of the shipment before you take any other steps. If you are working with a third-party logistics (3PL) company, then contact them instead, and they should be the point of contact between you and the carrier. 

Then, you should be prepared to provide any information that CBP might ask for, such as proof of the value of the goods, a corrected HTS code, a payment for outstanding duties, or anything else like that. The situation could have an easy fix, and you could get your shipment released and back on the road in no time. 

Keep in contact with all the players involved in the process to ensure that all paperwork is present and correct, all taxes, duties, and fees have been paid, all regulations were followed, and everything is in order. One person might notice a mistake that everyone else missed, so it is important to keep lines of communication open.

Unfortunately, in some cases, you will just need to be patient. There isn’t much you can do once your shipment gets stuck. The reason the shipment got stuck in customs might not even have anything to do with you at all. If you consolidated your shipment with a stranger’s to save money, and their shipment got detained, then your goods would get stuck in customs with it. There is no way to release only your part of the shipment, so you would need to wait for the other shipper to sort things out.

How to Avoid Customs Examinations

How to Avoid Customs Examinations

No matter how careful you are, there is always a chance that your shipment will get selected for examination. However, if you take all the right steps, you could reduce the chances of your shipment getting stuck to almost zero. Here are some of the best ways to stay under CBP’s radar and get your shipments through customs quickly. 

  • Accurately value your goods. This one should be obvious. Undervaluing your goods can not only get you in trouble with CBP, but it is also considered tax fraud, and thus comes with some pretty serious consequences. However, sometimes suppliers deliberately undervalue their goods from the beginning unbeknownst to the shipper. However, even though you weren’t the one to make the mistake, you can still get in trouble for it. So, even if the supplier provides this information, make sure you check it anyway.
  • Don’t work with shady partners just to save money. Remember that if any part of your supply chain has a nasty history with CBP, that could get your shipment stuck in customs even if you haven’t done anything wrong. Make sure you know who you’re working with before things go wrong.
  • Don’t consolidate your shipments, even if they’re small. If you can afford to get a full container for your shipment, you should absolutely do so. Consolidating your shipment with another shipper’s puts you at a much higher risk of inspection than if you were shipping alone. 
  • Make sure you use the correct HTS code. This is part of the documentation, but it is important enough to be worth mentioning by itself. The Harmonized Tariff Schedule (HTS) codes are extremely important for identifying the kind of commodity you are shipping, and even being slightly off in your classification could be enough to get your shipment stuck. 
  • Get a continuous customs bond. By getting this type of bond, you are showing customs that you know what you’re doing and you intend to import multiple times in a year. This way, you will likely reduce your likelihood of getting picked for examinations in the future, since customs will get more familiar with you and the things you ship.
  • Become CTPAT certified. Becoming CTPAT certified comes with many benefits for importers. Not only will you have a reduced likelihood of being selected for examination, but you will also experience faster customs processing and shorter border wait times. 

Customs examinations are inevitable, but you can still take it upon yourself to prepare for them in advance. By showing CBP that you are a reliable importer, your risk will also decrease naturally over time. 

During either a 30-minute or 1-hour consultation session you can cover a lot of ground with one of our customs experts. Which one works for you?

Can a Customs Broker Help Navigate Customs Examinations?

Can a Customs Broker Help Navigate Customs Examinations

The absolutely easiest way for you to handle customs examinations is with a licensed customs broker. If you’ve never imported before, you should absolutely get a broker to make sure everything goes smoothly, but they aren’t just for beginners. Even if you’ve been importing things for years, a customs broker can take the responsibility off your hands so you can focus on other aspects of your business. 

A customs broker can considerably reduce the risk of your shipment getting examined by filling out all the required documents for you. They would have the power of attorney over your shipment to handle all legal and financial paperwork on your behalf, to make sure everything gets done right the first time. If your shipment gets picked for customs examinations, then a customs broker can make sure you are well informed on the status of your shipment, and they can work to get it cleared much faster than you could likely do on your own. 

Customs examinations can be a real headache to deal with, but a customs broker can make it much less stressful. By letting someone else handle the legal side of the issue, you can focus your attention on making your customers happy in the meantime. 

How USA Customs Clearance Can Help

USA Customs Clearance can make it easy to get through customs examinations. Our team of expert import-export consultants can help you understand the process of importing from start to finish, and we can walk you through what to do if your shipment gets stuck in customs. Our customs consulting services come in either 30-minute or 1-hour sessions, and you’ll be surprised at how much we can cover in that span of time. 

If consulting isn’t for you, we also have experienced customs brokers that can assist you more directly throughout the entire process of importing your goods. Our licensed customs brokers are experienced professionals in the industry, and have helped hundreds of importers get their shipments safely through the U.S. border. We even offer customs consulting for importing face masks.

Need help navigating the mysteries of customs examinations? Schedule a consulting session today, or get in touch with us at (855) 912-0406 or through the chat at the bottom right part of the screen!

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