US Customs 101: A Beginner's Guide to Importing

Why Understanding US Customs Matters

Every product that enters the United States must clear customs. This process, managed by US Customs and Border Protection (CBP), determines what duties you pay, what regulations apply, and whether your goods can legally enter the country. Getting it wrong can mean seized shipments, hefty fines, and criminal penalties. Getting it right means your goods flow smoothly, you pay the correct amount, and you build a track record that makes future imports easier. Whether you are importing $5,000 worth of samples or $5 million in raw materials, the fundamentals are the same.

Step 1: Get Your Importer Number

Before you can import anything into the US, you need an importer number. For most businesses, this is your IRS Employer Identification Number (EIN). If you do not have an EIN, you can apply for one on the IRS website at no cost. Alternatively, you can use your Social Security Number (SSN) if you are importing as an individual. Once you have your importer number, CBP uses it to track all your import activity, apply your entry history, and communicate about your shipments.

Step 2: Understand Entry Types

CBP recognizes several entry types depending on the value, nature, and intended use of your goods. The most common ones are:

• Informal Entry (Type 11): For shipments valued under $2,500. Simplified process, lower fees. Often used for samples and low-value commercial goods.
• Formal Entry (Type 01): Required for commercial shipments valued at $2,500 or more. Requires a customs bond and full documentation.
• Temporary Import Bond (TIB, Type 23): For goods entering the US temporarily (exhibition, testing, repair). Must be exported within one year.
• Foreign Trade Zone Entry (Type 06): For goods entering a designated FTZ where duties are deferred until the goods enter US commerce.
• Warehouse Entry (Type 21): For goods stored in a bonded warehouse with duties deferred until withdrawal.

Step 3: Obtain a Customs Bond

A customs bond is a financial guarantee to CBP that all duties, taxes, and fees will be paid. It is required for all formal entries (shipments over $2,500) and certain regulated goods regardless of value. There are two types: a single-entry bond (covers one shipment, costs approximately $50-$100 per entry) and a continuous bond (covers all entries for one year, typically costs $500-$1,500 depending on your import volume). If you import regularly, a continuous bond is almost always more cost-effective.

Step 4: Classify Your Products

Every product imported into the US must be assigned a Harmonized Tariff Schedule (HTS) code. This 10-digit number determines the duty rate, any applicable trade agreements, and regulatory requirements. The HTS is maintained by the US International Trade Commission (USITC) and contains over 17,000 line items. Classification is based on the product's material composition, function, and physical characteristics — not its commercial name or intended market.

Step 5: Calculate Your Duties

Duties are calculated based on the HTS classification and the customs value of your goods. The customs value is typically the transaction value (price paid or payable) plus certain additions like assist costs, royalties, and packing charges. Duty rates vary widely: many products enter duty-free under trade agreements like USMCA, while others face rates of 25% or more under Section 301 or Section 232 tariffs. Always calculate your landed cost before committing to a purchase.

• Column 1 General: The standard (MFN) duty rate for most countries.
• Column 1 Special: Preferential rates under free trade agreements (USMCA, CAFTA-DR, GSP, etc.).
• Column 2: Higher rates for non-MFN countries (Cuba, North Korea, etc.).
• Section 301: Additional tariffs on products from China (up to 25%).
• Section 232: Tariffs on steel (25%) and aluminum (10%) from most countries.
• AD/CVD: Anti-dumping and countervailing duties on specific products from specific countries.

Step 6: Prepare Your Documentation

• Commercial invoice: Shows the transaction value, seller, buyer, product description, and terms of sale.
• Packing list: Details the contents, weight, and dimensions of each package.
• Bill of lading or airway bill: The transport document from the carrier.
• Arrival notice: Notification from the carrier that your goods have arrived.
• Customs bond: Your continuous bond or single-entry bond.
• ISF filing: Importer Security Filing (10+2) must be filed at least 24 hours before vessel loading for ocean shipments.
• Certificate of origin: Required to claim preferential duty rates under trade agreements.

Step 7: File Your Entry

Customs entries are filed electronically through the Automated Commercial Environment (ACE) system. Most importers use a licensed customs broker to file entries on their behalf. The entry must be filed within 15 calendar days of the goods arriving at a US port. Entry filing includes the entry summary (CBP Form 7501), which details all the products, their classification, value, and calculated duties. Once filed, CBP reviews the entry and either releases the goods or flags them for examination.

Step 8: Pay Your Duties

Duties and fees must be paid within 10 working days of entry through the ACE system via ACH (Automated Clearing House) debit. The main charges are: merchandise processing fee (MPF) of 0.3464% of the goods value (minimum $31.67, maximum $614.35 per entry), harbor maintenance fee (HMF) of 0.125% for ocean shipments, and the applicable duty based on your HTS classification. If you participate in CBP's Periodic Monthly Statement (PMS) program, you can consolidate all your duty payments into a single monthly payment.

Common Mistakes New Importers Make

• Not filing the ISF on time: Penalties of $5,000 per violation. File before the vessel sails, not after.
• Incorrect HTS classification: Can result in overpaying or underpaying duties, both of which have consequences.
• Undervaluing goods: CBP actively monitors transaction values. Undervaluation triggers audits and penalties.
• Missing a customs bond: Your goods will sit at the port accumulating storage charges until you get one.
• Not checking for additional duties: Section 301, Section 232, and AD/CVD duties are in addition to the regular duty rate.

“The US customs system rewards compliance and punishes ignorance. The difference between a smooth import and a nightmare is preparation. Take the time to understand the process before your first shipment arrives.”

— Camtom Team