Are you exercising “reasonable care” as CBP Requires?
“An importer of record’s failure to exercise reasonable care could delay release of the merchandise and, in some cases, could result in the imposition of penalties…One of the most significant effects of the Customs Modernization Act is the establishment of the clear requirement that parties exercise reasonable care in importing into the United States.… Despite the seemingly simple connotation of the term reasonable care, this explicit responsibility defies easy explanation.”Informed Compliance Publication Reasonable Care (cbp.gov), emphasis added
“Informed Compliance” and “Shared Responsibility” are two of the guiding precepts of the Customs Modernization Act. Informed Compliance means U.S. Customs (CBP) has an obligation to provide the trade community with better information about its responsibilities under Customs regulations. Shared Responsibility means that CBP and the trade community will work together to voluntarily comply with those regulations.
What is Reasonable Care?
Reasonable care is one of the main tenets of informed compliance and shared responsibility. CBP expects the trade community to use reasonable care in all aspects of its dealings with CBP’s regulations and related laws.
Though CBP recognizes deciding whether or not an importer has used reasonable care is subjective, they know it when they see it.
Taking proactive steps to be informed demonstrates reasonable care. A lack of reasonable care can result in Customs penalties or fines. On the other hand, the use of reasonable care can be a mitigating circumstance in a penalty situation.
Examples of Reasonable Care
Here are some examples and questions to guide you as you think about your current practices.
- Designate one person who ‘knows’ the articles you import and is ‘responsible’ for the import or export process vis-à-vis CBP’s regulations and related laws.
- If you use a Customs Broker (CHB), be able to articulate why and how you chose that particular broker. Do they interact on a regular basis with your ‘knowledgeable and responsible’ person, whether by email, newsletter, or verbal communication?
- Are you sure you have provided Customs with a complete and accurate description of your imported articles and that the subsequent classification is correct?
- Do you know what CBP’s requirements are for invoice descriptions and classifications?
- Discuss the classification and valuation processes for your imported articles. Discuss assists, royalties, records retention, country of origin, marking, buying and selling commissions, related parties with your CHB. Is your CHB willing and able to explain them?
- Be sure you and your CHB are CTPAT-certified. This voluntary program helps to ensure a higher level of supply chain security and demonstrates a willingness to comply with best practices.
- Provide CBP and/or your CHB a complete, accurate description of your product(s) and obtain binding rulings.
These are just a few examples of best practices. U.S. Customs expects importers and exporters to apply the concept of reasonable care in every aspect of their importing and exporting process.
Additional Compliance Resources
U.S. Customs’ Informed Compliance Publications (ICPs) cover “What Every Member of the Trade Community Should Know” about key subjects, and provide a wealth of information for importers and exporters wanting to ensure they are compliant with CBP’s regulations.
Your Customs Broker
Don’t take chances with reasonable care. A mandate so broadly defined, yet so important to an importer’s compliance with CBP regulations, can best be fulfilled by having a strong relationship with an experienced Customs broker.
C J International is a full-service Customs broker and international freight forwarder with the expertise to help you make sure you are compliant in your import and export operations.
We also offer Compliance Audits as a service, if you are interested in a more thorough investigation of your company’s procedures.
We strive to be more than just a service vendor. Our goal is to be a partner in your success.
This post was originally published on 03/25/16 and has been updated for readability and to include additional information.
Our blog posts are for informational purposes only. While we use reasonable efforts to furnish accurate information, C J is not liable or responsible for the accuracy or reliability of any information contained herein.