The U.S. Customs and Border Protection (CBP) is the primary U.S. administrative law enforcement agency responsible for compliance management in international trade and ensuring businesses and individuals obey U.S. customs laws and regulations. A comprehensive regulatory system constrains international trade and customs to uncover illegal activities and serve out punishment according to the law. In global trading, many agencies are involved. While different countries have different laws, U.S. customs enforcement aims to promote security and a convenient environment to support smooth international trade. Therefore, Chinese cross-border e-commerce, logistics, international shipments, and other related Industries should be aware of the following essential aspects:
Export Compliance: Export compliance refers to the regulations and procedures businesses must follow when exporting goods, including but not limited to applications for export licenses, preservation of product classification records, certificates of origin, and corresponding export declaration forms.
Import Compliance: Import compliance refers to the regulations and procedures businesses must follow when importing goods, including but not limited to tariff classification, commodity classification, filling import documents and declarations, health and quarantine requirements, etc.
Customs Declaration: Customs declaration refers to the customs procedure of individuals or businesses needing to submit necessary documents and information for international trade. Includes filling out import and export declaration forms, providing detailed information about the goods, and declaring the value and quantity of the goods.
Customs supervision: Customs supervision of international goods includes inspection, monitoring, and auditing of goods. Businesses must cooperate with customs regulatory requirements for safety and security.
Intellectual property protection: The United States Customs also has enforcement measures for goods infringing on intellectual property rights. Businesses and individuals need to comply with customs to take necessary steps to protect their products and intellectual property from infringement.
Counter-terrorism financing and anti-Money-laundering measures: Businesses and individuals must comply with US anti-terrorism financing and anti-money laundering regulations. This includes researching trading partners and business dealings prior to ensuring that the company is not associated with any terrorism-related activities or money laundering activities.
Compliance Training and Internal Control: Businesses need to establish a structured import and export regulatory system, along with internal control measures that provide targeted training on customs regulations and requirements for employees, ensuring the legitimacy of the company's international trade operations.
How can Chinese cross-border e-commerce and logistics shipping companies avoid legal risks caused by customs non-compliance?
MOSAIC Paradigm Law Group provides advice on how to eliminate potential legal risks related to customs compliance management to Chinese cross-border trading businesses, e-commerce platforms, shipping, and logistics companies involved in international trade. Here are some tips:
1. Adhere to and stay up to date with the compliance policy:
Understand and abide by complete customs regulations, such as the United States Customs and Border Protection (CBP) regulations and other trade-related laws. Including export controls, import tariffs, and goods quality standards, businesses should stay up to date with compliance policies and adapt to new changes in customs regulations. At the same time, Chinese international e-commerce trade and platforms, shipping, and logistics companies should take a proactive approach to risk reduction by familiarizing themselves with the political environment, customs, logistics foundation, consumer habits, and other aspects of the host country.
2. Accurate classification and complete declaration of goods:
Import and export goods have corresponding customs commodity codes; each code has related customs duties, import and export restrictions, and other requirements. Misclassification of goods may lead to incorrect payment amounts and legal issues. Therefore, ensuring the accuracy and completeness of all import and export declarations is the bare minimum in avoiding potential legal issues. Any misreporting may result in fines, confiscation of goods, or prohibition of import or export, while also causing losses in time, financial resources, and labor costs.
3. Maintain good record keeping:
Keep all documents and records related to import and export. Businesses must submit accurate and complete customs declaration documents and materials to the U.S. Customs (including goods description, shipping and transportation records, insurance policies, Commercial invoice, value evaluation, certificate of origin, goods classification code, etc.). The information on records must be accurate and meet relevant requirements to pass customs audits or investigations.
4. Implementing compliance plans and professional assistance:
Establishing an internal customs compliance plan is beneficial to reduce risk-related import and export activities. The company can form a customs compliance affairs team dedicated to customs regulations and stay informed on changes that occur. This department is typically responsible for regular compliance training, internal auditing, and developing plans to address potential issues in advance. The company can hire professional customs lawyers or consultants to help establish effective compliance plans and handle potentially complex legal matters.
5. Maintain transparency and early disclosure:
Suppose a company discovers certain commercial activities may violate customs import and export laws and regulations. In that case, the company should consult with professional customs lawyers as soon as possible, then report and correct these issues (if necessary) under the guidance of their attorney. The U.S. Customs and Border Protection Agency will mitigate potential fines and other consequences when businesses report potential violations early and proactively.
6. Customs-Trade Partnership Against Terrorism (CTPAT) Compliance:
The U.S. Customs and Border Protection Agency (CBP) has released a detailed description of the main requirements of the CTPAT trade compliance program and updated industry compliance requirements aimed at preventing forced and exploitative labor. Businesses involved in international trading should have a thorough understanding of CTPAT requirements.
By considering and implementing the suggestions above, Chinese international e-commerce can effectively minimize legal liability and provide legal protection for operation and cost management for Businesses focusing on logistics and shipping.
Remember that legal compliance is only one aspect of reducing enterprise operation, and it is equally important to consider other complex business factors, such as business models, market competition, management efficiency, and so on. When a business encounters legal issues, consulting a professional lawyer as soon as possible before taking any legal action can be crucial in ensuring the business's profit and reputation.
What assistance can MOSAIC Paradigm Law Group provide?
MOSAIC Paradigm La Group's lawyers have experience and are familiar with US customs laws, trade policies, export controls, anti-dumping and countervailing duties, prior disclosure procedures, tariff classification, and commodity valuation. MOSAIC’s attorneys can provide expert assistance in developing import and export compliance plans and training. They can represent you in handling enforcement actions such as petitions, penalties, seize, and confiscations. For more details, please call the MOSAIC Paradigm Law Group corporate legal consultation hotline: 281-805-7169; 713-818-8866.
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