Today is the time when global trade is recovering from pandemic turmoil. Given the tricky customs compliance in freight forwarding, this article will discuss a few techniques to keep your business thriving.

Clearing goods at ports can cause obstacles to business growth if not handled properly. The delay in cargo delivery and the rise of penalties from regulatory bodies make compliance a heavy burden on forwarding business.

Our motive is to give you ways to navigate through tariff engineering and find legitimately shaping supply chains or goods for better duty rates. The strategy is dependent on classification codes: the Harmonized Tariff System.

What is HTS or Harmonized Tariff Systems?

It is the only available guide for determining tariff classifications. HTS codes talk about the eligibility for free trade agreements and other preference programs. It determines the duty rates, restrictions, prohibitions, and several further cargo item details.

Ideally, a customs broker is the one who understands the Harmonized Tariff System and cross-checks it for freight forwarders. However, each forwarder is responsible for any organization’s customs compliance for its accuracy. So, it becomes crucial to share the most up-to-date product information from your suppliers. Your hired customs broker delivers HTS codes for your approval based on the info you give.

Why Forwarders Need a Customs Broker

The best duty rates available require comprehensive masterly classification by scaling across hundreds or thousands of products from multiple countries and through tons of data. Although automation comes to play, to date, much of customs classification is managed by brainpower by your customs broker for you.

The easy part: Once you hire an expert like ACI with years of experience in freight forwarding, shipping becomes easy. They help you populate your products in support of everything from order management to duty reconciliation for any shipper functioning across any industry.

This ensures that you save time for your shipments, as you get the codes right in the first place, which helps to ensure efficiency across your supply chain. The forwarders understand the compliance mechanism thoroughly to give exceptional benefits that are listed below;

1. Correct Tariff Treatment and Country of Origin Regulations

It is often seen that states have bilateral and multilateral tariff treatments with other countries. To explain better, let take an example – the duty rate for a specific tariff code changes from one country to another. If you import a product made in the U.S into Canada, the product will be based on the United States tariff (UST), and the duty rate might be zero. On the other hand, if the product is made in China, it will fall under the favoured nation clause (MFN), and the rate might be high. Imagine that you import ice cream under HS tariff code If the ice cream is made in the USA, it would be free of import duty, but if it is made in China, the duty would be 9.5%. (Source:

2. Correct Valuation of Customs Duty

Every time any cargo is shipped, the product should be declared to customs for calculating the import duty and taxes. Usually, the customs duty calculation is not always the same as the invoice generated by the importer. It has been seen that some products’ value may change from time to time in customs calculations. So, it becomes imperative that customs brokers analyze the product’s updated value for the importer of record.

If the customs officers do not approve the declared value, it may increase customs duty and incur fines and penalties. Due to COVID-19, the prices of many products have changed, and customs brokers and importers should actively monitor them to avoid additional costs.

3. Deferred payment or guarantees

Some countries are encouraging the importation of essential products by allowing a longer time for import duty payment. In other words, the importers of specific products in some states are enjoying deferred payment of customs duties. The broker is expected to inform the importer of the most recent regulations on this subject.

4. Tax and duty refund

In some circumstances, a refund of taxes and customs duties may apply to your shipment. For example, if a product is temporarily imported, the importer can be refunded the amount paid to customs. You and your customs broker should be aware of all applicable refund opportunities to ensure due diligence is applied to receive them.

5. Cost Reduction by providing proper shipment documentation

The customs brokers play a vital role in reducing the cost of additional expenses on documentation. Due to COVID 19, few authorities might request new documents to check compliance with new regulations, while some might be omitting certain documents to facilitate importation. Likewise, generating documents that are not required may cause additional fees and not preparing the documents needed, and your shipment may get stuck at the border.

The guide is general rules applied in customs compliance. However, you have to check your respective country and regions of trade while shipping to use the ways mentioned above to save customs duties. ACI is an expert’s freight forwarder across the globe, and we shall be helping you ship your goods and consider all the factors above, visit us for more information.

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