The Top Five Considerations for E-Commerce Imports
by Lenny Feldman, Senior Member
Sandler, Travis & Rosenberg Trade Report
As e-commerce transactions become more prolific, the stakes for traders and regulators alike are growing as well. Here are five important issues to consider in structuring compliant e-commerce transactions.
Click here to register for ST&R’s May 10 webinar on these and other e-commerce issues.
Know What Role You and Your Business Partners Are Playing
E-commerce involves non-traditional trade flows and often results in parties to these transactions taking on non-traditional roles. For example, some intermediaries such as customs brokers and freight forwarders are considering whether to assume the role of importer of record to provide e-commerce fulfillment operations for shipments that may lack a purchaser at the time of entry. Meanwhile, domestic consumer-consignees, as well as foreign suppliers, are increasingly unsure whether regulators may view them as the responsible party, perhaps as a resident or non-resident IOR. E-commerce marketplaces or platforms are left in the middle, increasingly relied upon to provide accurate information and data required for compliance. However, parties to e-commerce transactions must remember that stringent legal standards still apply as to who can play what role, when they can play it, and how they can play it accurately.
Understand What Data is Needed and What Might be Missing
Depending on whether you are importing via manifest or entry, the data needed to meet legal entry requirements will vary greatly. For example, data elements such as the importer, buyer, seller, and HTSUS number are needed for entry but not for manifest importations. However, U.S. Customs and Border Protection and partner government agencies have suggested, and in the future may require, additional data elements, or at least more detailed product descriptions, that would enable them to better assess what is entering the stream of commerce and the associated risk. That’s why traders need to consider data quality and, in many cases, the specific data elements at their disposal to minimize delays and maximize efficiencies.
Determine PGA Admissibility Requirements
Under the customs regulations, aside from a few products such as alcohol, tobacco, and perfume, imports under a de minimis value level (which covers many business-to-consumer e-commerce shipments) are exempt from many information reporting requirements upon entry. With the recent increase in the de minimis value from $200 to $800, however, PGAs are increasingly asserting that they need ACE cargo release data to determine the admissibility of de minimis shipments of goods under their jurisdiction. As a result, traders who typically haven’t collected this additional, product-specific information for de minimis transactions will now need to develop protocols to do so.
Familiarize Yourself with Applicable Penalty and Seizure Laws
CBP’s laws address a wide range of compliance issues that can arise in the e-commerce context, from false or omitted information to copyright or trademark infringement to smuggled or undeclared merchandise. CBP will continue to have the ability to flex its enforcement muscle against most parties in e-commerce supply chains that directly or indirectly violate traditional customs laws. Understanding the ramifications of non-compliance will help companies avoid problems as CBP solidifies its e-commerce enforcement stance.
Leverage Partnership Programs
If you are a member of a CBP partnership program such as CTPAT or Importer Self-Assessment, there may be some benefits ahead for e-commerce shipments. For example, CBP may consider how to facilitate such shipments for its trusted partners, such as through fewer inspections. With an ever-growing list of new players in this sector, CBP and the trade community could be well-served, for both facilitation and enforcement purposes, by employing risk management principles to facilitate shipments from known, trusted actors and permit greater focus on those that are less well-known. CBP is also expected to roll out enhancements to its partnership programs in the near future.