The last thing any global business wants is a shipment held by customs. Yet, this is a very common practice in global trade, with customs inspection and exams becoming a routine procedure. The idea is to protect public health and safety, ensure compliance with federal regulations, and prevent smuggling.
Due to the unexpected delays from customs exams, businesses incur additional costs and have to work with strained timelines. Sometimes the inspections can be random; other times they are targeted. Either way, these unnecessary disruptions can be cumbersome to deal with.
In this article, we’ll explain everything you need to know about U.S. customs examination and inspection, and what steps you can take to minimize said delays.
What is a U.S. Customs Examination?
U.S. customs examination is conducted by government authorities, the U.S. Customs and Border Protection (CBP). These procedures verify that the imported goods comply with the laws and regulations. The customs inspection and exams have become a fundamental component of international shipping.
From machinery and apparel to food products and electronics, every single shipment crossing the U.S. border is subject to potential examination. In the simplest of words, a U.S. customs examination is just a security and compliance checkpoint, with the goal of confirming that the importer has met all legal requirements.
Customs officers will confirm whether the declared items match all that is inside the container. Moreover, they may verify accurate valuation, classification of goods, proper labeling and packaging, along with adherence to the rules set by the FDA, USDA, or the EPA.
That’s not all, though. The customs inspection serves a broader purpose, too. It helps in enforcing trade policy, collecting the appropriate amount of taxes and dues, along with protecting the public from illegal and unsafe products.
Understanding why it happens can help importers in taking proactive steps to reduce the chance of goods being held for customs inspection.
Common Reasons Shipments are Held by Customs
Not all customs holds are a cause for concern, but they definitely can impact your supply chain if not addressed right away. Here are some of the most common reasons your shipment may get a U.S. customs examination:
Inaccurate Documentation
If your paperwork is missing or it’s inconsistent, customs may flag your shipment and hold it until the discrepancies are sorted. For example, if you forgot to attach the bill of lading or if the packing list has typos in the product description, your goods might get examined, and it may add another week to the arrival of your customs hold package. Similarly, vague value declarations or mismatched HS codes or HTS codes can cause scrutiny.
High-Risk Commodities or Countries of Origin
If your shipment is coming from a country flagged for trade restrictions or for security concerns, it’s most likely that the import customs will keep it for inspection.
In addition to that, items like chemicals, food products, and pharmaceuticals can raise red flags due to safety, tariff, and intellectual property concerns.
Suspicious Packaging or Inconsistent Shipping Details
Due to sophisticated algorithms and scanning systems, the CBP is very well-equipped to see if the container’s packaging has been tampered with. Or, if the declared content doesn’t match the container size or weight.
If your shipment raises such concerns, it may be flagged and selected for inspection. The idea is to check if undeclared goods are being smuggled.
Random Selection
Not every single hold is a result of some compliance error, some are just part of routine border inspections.
CBP’s spot checks are a part of their security program.
Previous Compliance Issues
If an importer delays duty payments or has had some past violations, like misclassified shipments, the CBP places their future shipments under very close scrutiny. Even a single incident can change how your future imports are treated.
Types of Customs Holds
Once the CBP flags a shipment, they place it under a specific type of hold. Each CBP hold serves a different purpose. Learning about the various types of holds may help you coordinate better with your broker or customs officials when dealing with the U.S. customs examination.
Manifest Hold
An example of early-stage inspection is the manifest hold. It occurs before shipment arrival, preventing the release of the container because of discrepancies in the Importer Security Filing (ISF) or due to an error in the shipment’s manifest. It’s often resolved just as quickly; all it requires is an accurate resubmission.
Commercial Enforcement Hold
This is imposed when CBP suspects a violation of trade laws or other import regulations. For example, undervaluation of a shipment, misclassification, or even intellectual property concerns. This could escalate into something more thorough upon investigation, and for resolution, you may need legal or compliance documentation.
Statistical Validation Hold
If the import details don’t match what CBP expects based on trade statistics, the statistical validation hold is triggered. It could include unusually high or low declared values, an abnormal volume of imports, or even improper tariff codes.
CET Hold (A-TCET Program)
This is short for Anti-Terrorism Contraband Enforcement Team. As the name suggests, it occurs when there’s a security concern related to restricted materials or possible terrorism-related threats.
The shipment is subject to an in-depth exam, and for further inspection, it is sent to the Centralized Examination Station.
PGA Team
PGA stands for Participating Government Agencies, and this type of hold is placed when one of the PGAs needs to verify compliance. An example would be the FDA holding goods for verification or the USDA requiring an agricultural exam.
All of these hold can cause delays ranging from a few hours to several days and weeks. Sometimes even longer, depending on the nature of the concern. That’s why it’s encouraged to know the details about these holds, to ensure you’re proactive in resolving such concerns.
Types of Customs Inspection and Exams
If a shipment has been flagged and is under hold, the CBP subjects it to one of several types of customs exams. Each varies in intrusiveness, time, and cost.
X-Ray Exam
A X-ray exam is sometimes also called an NII exam, which is a general category for all non-opening scans. It is done using a large X-ray machine, with officers scanning the entire shipment without opening the container. You may also have heard of the VACIS exam, which is another type of X-ray exam, primarily used at ports and border entries.
The X-ray exam can take up to two days, and if there are no red flags, the shipment is released by customs. If something looks suspicious, the CBP will hold the shipment for further examination.
Tailgate Exam
The tailgate exam involves opening the back of a container and then looking through the accessible portion of the shipment, without removing anything. The packaging, labeling, and physical characteristics of the declared goods are verified.
This can take up to four days, sometimes even a week, depending on port congestion.
Intensive Exam
This is the most thorough and time-consuming type of customs exam. First, they take the container to a Centralized Examination Station. Then, they open it and completely unload it, inspecting every piece by piece.
It takes around five days minimum, and up to 10 days or more. This is used only when the CBP strongly suspects a violation or contraband.
To sum up, there are typical durations for different types of customs exams:
X-rays can take up to 1-2 business days,
Tailgate is anything between 2 days and a week.
Intensive Exam takes at least five days and could even be two weeks.
Delays are also dependent on port congestion or third-party exam station availability.
Who Pays for U.S. Customs Examination?
The importer bears all the associated costs, from transportation to the exam site, unloading, storage, and labor fees, regardless of whether any issues are found. Neither is the CBP liable for any damages occurring during the inspection process.
No matter how well you prepare for possible inspections, no importer can completely avoid them. Of course, you can take measures to significantly reduce the chances of getting flagged, shorten the time it takes, and reduce the costs required to resolve them.
Strategies to Minimize Delays From Customs Inspection and Exams
Here are some strategies that may help:
Double-Checking Documentation
It’s easy to make a mistake on your commercial invoice, packing list, or any required certificate. So, after filling in the paperwork, read it back again before submitting it for delivery.
Using Correct HS Codes And Commodity Descriptions
An up-to-date HS code for every product is extremely important to avoid a red flag due to misclassification. Steer clear of terms like “parts” or “miscellaneous goods”, such vague terminology only raises suspicion. Be specific and clear.
Working With a Trusted Customs Broker
A trustworthy licensed broker can be your best investment. They are your first line of defense against any possible issues during cargo clearance, as they can catch errors before filing. They can also communicate directly with the CBP on your behalf, and help resolve holds a lot quicker.
Opt for someone experienced, especially if you’re dealing with high-volume imports and regulated goods. Or you can just choose to partner with a reliable global freight forwarder like Foresmart, which develops long-term relationships with experienced customs brokers.
Partner With C-TPAT Certified Vendors
The Customs-Trade Partnership Against Terrorism (C-TPAT) ensures lower inspection rates and even expedited processing. If you’re not already C-TPAT certified, you can work with certified carriers, warehouses, and forwarders. That will not only add credibility to your brand but also save you a lot of hassle.
Package and Label Consistently
Inconsistent labeling or packaging sticks out like a sore thumb. Especially when it doesn’t match the declared contents. You should use uniform packaging, and do not reuse boxes.
Conclusion
When shipping goods to the USA, U.S. Customs examination might be unavoidable, but they don’t need to be a complete hassle. If you’re an importer, your best bet is preparation and proactive communication. Working with trusted logistics, compliance partners, and maintaining accurate documentation while complying with regulations helps a lot.
Frequently Asked Questions (FAQs)
What does held by customs mean?
This means your shipments are flagged due to various reasons that include random selection, inconsistent paperwork, country of origin problems, history of previous compliance issues, etc.
How do you know if you are flagged by customs?
If your goods are placed on hold, your customs broker or freight forwarder will notify you. Registering with the Automated Commercial Environment (ACE) system can also help, as it also sends updates.
What is the IBET customs exam?
The IBET exam is conducted by IBET, a joint U.S.-Canada task force that includes CBP, RCMP, ICE, Coast Guard, etc., focusing on cross-border criminal activity. It is far less common than routine customs exams.
How long can customs hold my package?
This depends on what type of U.S. customs examination is conducted. Generally, it takes two weeks to get your goods released from customs.
