Customs inspection is an indispensable and important part of import or export clearance. No one can 100% guarantee that shipments won’t be inspected by customs. So, it is essential to get a good knowledge of customs inspections. In this post, I explain it from 8 points as follows.
- What is customs inspection?
- How do customs inspections work?
- What shipments are easier to be inspected by customs?
- What are customs officers looking for? (8 aspects)
- China customs inspections (4 methods & process explained)
- What are the common 5 customs exam types in the US?
- What about the customs inspection fees and time?
- What to do if your cargo is held at customs?
1. What is customs inspection?
Customs inspection or examination is an official measure that targets imported or exported products at a certain rate. The purpose for customs officers to carry out inspections includes the following 3 points.
Confirm the goods are the same as the documentation issued.
Usually, the export or import declaration form, packing list, etc. For example, customs officers will inspect the carton boxes to see if the shipment info is consistent with the export declaration form, such as the product name, quantity, and so on.
Check the real situation to avoid smuggling, tax evasion, etc.
Chances are that a kind of cheap goods has a low tax refund rate but uses another HS code to get a high tax reimbursement.
Conduct effective administration and supervision.
Customs inspection is an important means of supervision to make sure all export or import businesses are safe, clear, and clean. And relevant data is useful for compiling statistical information about a country’s foreign trade.
2. How do customs inspections work?
Basically, customs inspection works in 2 situations.
Situations 1 — random control by the customs system
In the customs computer system, imported and exported goods have been classified and set with risk parameters. The larger the risk parameter is, the higher the inspecting probability is.
Situations 2 — manual control by customs officers
The main reason is that there is something wrong or suspicious with the declaration info submitted to the customs authorities. For instance, if customs officers have doubts about the contents of your declaration form, they will manually issue instructions on the customs computer system. That is, examine whether this batch of goods is consistent with the info recorded in the document.
In general, the customs inspection rate is about 5%. Note this ratio is subject to change from time to time. For instance, during a certain period, U.S. Customs will conduct quick and intensive inspections of some products that are prone to infringement. But such situations are rare as a whole.
3. What shipments are easier to be inspected by customs?
From the customs perspective, sensitive goods are usually high-risk. The main reason is that such products are easy to produce high export tax refunds or falsely high tax refunds. So customs would focus on the export prices of these goods. Additionally, for sensitive goods, many freight forwarders choose to mix sensitive goods into general cargo to facilitate customs clearance. Therefore, sensitive goods are more likely to take customs inspection.
In export and import, common sensitive products include the following 5 types:
Products with batteries
Items with batteries, like toys, are hot-selling products. Due to safety concerns about built-in battery shipping, customs authorities conduct stringent examinations of such products.
Branded products and luxury goods
The customs mainly check whether these products are fake or not. Take the counterfeit products inspected by US customs for example. The most common branded product types include clothing and accessories, consumer electronics, shoes, watches and jewelry, handbags and wallets, etc. Data on fake products seized by U.S. CBP (Customs and Border Protection) shows that more than half are these types of brand items.
Liquid, powder, and other unstable items
Common examples include cosmetics, such as facial masks, perfumes, lipsticks, etc. These items are prone to changes during transportation, resulting in heat generation and explosion.
Optical disc and CD products
These products usually come with high political or cultural risks. The risk exists if there is internationally confidential content involved or any coverage of political, economic, cultural, and ethical content.
Food and medicine
Common examples include meat, seeds, kitchen flavoring, various drugs, etc. These items may have the risk of biological invasion. So, the import and export customs officers strictly review the quarantine certificate and conduct random checks according to their experience and government policies.
In addition, if there is a tax reimbursement increase for a certain commodity, the customs will step up efforts to inspect this product type during this period. Because there might be tax fraud.
4. What are customs officers looking for?
Customs mainly focus on
- Whether the freights are the same as described in the submitted documents or not.
- Whether there is contraband or dangerous goods or not.
- Whether the products involve infringement or not.
- Whether there is omission and false customs declaration or not.
Specifically, customs inspections focus on the following 8 aspects. Let’s look one by one.
1. The product name
Carefully check whether there is any difference between the declared product name and the actual cargo type. If there is, further evaluate whether it is evading of declaration or false declaration. Two common error situations are,
- Muddle the product’s usual name and formal name.
- Combine multiple product names to save trouble. This will easily cause the product price, net weight, and quantity to be higher than the real ones.
Once it’s detected that the declared product name differs from the actual cargo, Customs will analyze the specific case and take measures, which might impose a fine or destroy shipments.
2. The weight
Examine whether the declared gross and net weight is the same as actual goods’. Take freights charged by weight for example, if you only know the gross weight and use it to calculate the net weight, this will lead to an inconsistency with the actual net weight and is easy to inspect.
The allowable weight error range is 3% up and down. This is because weighed measurements can’t be so accurate. In practice, the error scope is at 1%. For example, the declared container weight is 10 tons, but the actual container weight is 10.1 tons. This is OK.
3. The total quantity
When examining the goods, the customs often do not count packages one by one but check the carton box number according to the data written on the declaration form. This act is to prevent the concealment of certain products.
The common issue is that the actual total quantity of goods is larger than the declared number. Because the customs declaration form is usually prepared before the goods are packed and shipped. If there is an increase or decrease of cartons actually loaded into the container, the declared number needs an update, which is easy to forget. Take the last packed carton, samples, and free gifts, for example, you need to count them in the declaration form.
4. Whether products involve infringement issues
Customs strictly check this point. If products have brands, trademarks, or copyrights, Customs will examine the brand authorization file. If not, Customs will judge whether this batch of shipments involves the infringement.
5. HS code of products
Check whether the product HS code you declare to the customs is accurate or not. Because the HS code relates to the product tariff rate. Using the wrong HS code for declaration can lead to paying less or more tax than required.
It is error-prone to classify multi-function products. For example, a tablet with a call function should be classified as a mobile phone rather than a tablet. Here the key is to use the customs HS code to declare your product, avoiding punishments from customs.
6. Product price
For each item, the Customs system has recorded its HS code and price range into the database. And Customs system has set an early warning function. Once the declared value is lower or higher than the set range, the system will immediately inform the officer that there is a problem with the price. So, it is not possible to declare the product value as much as you want, which is easily held by customs.
7. Samples for testing
This is rare and usually applied to chemicals that can’t be judged by eyes and need testing. For example, dangerous and corrosive products.
8. Container inspection
Check the container. If without careful inspection, it is hard to find any problems. Generally, Customs will carefully check special types of containers.
5. China customs inspections (4 methods & process explained)
For LCL and FCL shipments transported from China, there is some difference in terms of customs inspections. Keep reading.
LCL shipments
At the departure port in China, Customs carry out random inspections. If your cargo is right as what you declare to customs and not sensitive goods, Customs clearance is within 1-3 days.
The randomly picked packages will be taken to the customs exam area for manual inspection.
- Manual inspection method — take out goods from containers and unpack carton boxes. Then, Customs Inspector checks actual shipment conditions. Bulk cargo inspection is done before loading into the container. So, there is no need to open containers.
In most cases, customs officers conduct a partial inspection.
- Partial inspection method — inspect some packages of your shipment, according to a certain ratio. This proportion is subject to the inspection requirements that can determine the product name, specification, quantity, and weight of shipments.
Suppose a batch of shipments is 50 carton boxes in total. The inspector randomly unpacks 5 boxes. If there is something suspicious with 4 cartons, there will be a complete inspection. This takes more time.
- Complete inspection method — after opening all your packaging boxes, the inspector will carefully check the product classification, specification, quantity, weight, and other details.
FCL shipments
For FCL shipments, the container has been sealed and will be carried by trailer to the customs inspection area for machine inspection.
- Machine inspection method — uses high-tech means such as a weighing machine and an X-ray scanning machine to analyze and judge the actual conditions of goods. Usually, there is no need to open the container or unpack carton boxes.
If detecting suspected items, customs officers will require opening the container and unloading packages inside. Then, they conduct a practical inspection. Once it’s confirmed that there is a problem, they will examine the entire container, i.e., complete inspection.
Quick Tip
In practice, FCL shipments are easier to inspect by Customs than bulk cargo under LCL.
What about the customs inspection procedures?
Once the customs inspection has been decided, customs authorities will take steps as follows.
1. Issue the “Letter of Notice of Inspection”
The notice letter tells that Customs inspect your goods in a legal way. The forwarder or customs broker will receive it.
2. Arrange the inspection plan
Customs officers usually make the schedule, as there are a lot of goods needing inspections. It may be the next day after the decision-making date or a week later. In this case, your cargo may not be able to ship at the original date and have to wait for the next shipping date. Your freight forwarder will tell you.
3. Inspection on the spot
Your Chinese suppliers or their clearance agent will arrive at the inspection area, and move the goods to the designated site. Then, inspectors will conduct on-site examinations.
4. Signature after inspection
After the inspection, customs officers will issue a report. Your agent will sign it.
Here you may think that the goods would not encounter import customs inspections after export customs exams. Actually, the two do not affect each other. Chances are that, unluckily, your shipment gets chosen for inspection by the import customs. I take the US customs examination for example.
6. Common five customs exam types in the US
Typically, U.S. CBP conducts customs inspections of imported goods. According to the inspection method, we can divide U.S. Customs inspections into 3 types as follows:
X-RAY Exam (VACIS/NII)
VACIS (Vehicle and Cargo Inspection System) or NII (Non-Intrusive Inspection) is the most typical inspection method, also known as X-RAY Exam.
When containers arrive at the port of destination, there will be scanning by the X-ray machine. Customs officers only need to look at the pictures to judge shipments’ conditions. Just like taking the subway, your backpack needs to be scanned by the machine. If all goes well, the officer will release containers. Basically, this kind of inspection will not affect the normal transportation of goods.
Tail Gate Exam
After X-RAY Exam, if customs officers still have questions about your container, they will open it and simply check the packages inside. Usually, this won’t be a complete inspection. If everything is normal, they will release your container.
Intensive Customs Exam
If there is a problem, officers will conduct the most stringent Intensive Inspection Exam. The entire container will be delivered to CES (Centralized Examination Station). This is a private firm authorized by US Customs, responsible for opening containers, loading and unloading packages, plus unpacking each carton. All these facilitate the physical examination by customs officers in a complete way. In case of suspicious items, officers take samples for testing.
This is the inspection type that buyers and suppliers fear the most. It takes a week to 30 days, depending on how many other shipments are in the inspection queue.
In addition, according to the type of CBP team who conducts examinations, we can divide the inspection into the following 2 types:
CET (Contraband Enforcement Team) Exam
Mainly check contraband items such as weapons and drugs.
MET (Manifest Examination Team) Exam
Mainly check whether cargo matches the submitted paperwork such as manifest, packing list, etc. After opening the container, unloading and unpacking cartons inside, officers will examine the number of boxes, the product name, and HS code, the declared value, etc. Also, smuggling and infringement issues are included in the officers’ checks.
Besides CBP inspection, some American functional departments have the right to inspect imported goods. For example, FDA mainly inspects items related to the human body, like cosmetics. CPSC mainly checks products related to children’s safety, like toys. FCC mainly checks communication-relevant items, like wireless earphones. These departments can do inspections after CBP releases your cargo. And if there is a problem, they will hold your goods.
7. Customs inspection fees and time
Many people have such a misunderstanding — the inspection fee is charged by Customs. Actually, the customs office won’t charge you any fees. They are just an administrative law enforcement department of the nation.
Customs inspection fees refer to a series of fees generated in the process of inspections, including venue, equipment, and labor costs. These charges may include but are not limited to,
- Crane fee and weighing fee.
- All logistics fees from the located place of your shipments to the customs inspection site.
- Storage/demurrage/detention charges while your goods await customs inspections.
- Any labor cost for sorting goods, unpacking, unloading, and reloading packages, opening or re-sealing of the container.
The labor cost accounts for the most. Furthermore, the more complex the inspection type is, the higher the prices are. In China, the customs inspection of one 40’GP or HQ is roughly $140. One 20’GP is cheaper.
The labor cost of each country is different. So, inspection fees vary from one nation to another. For the precise inspection fees, directly ask your customs broker or freight forwarder. Your agent will pay first and collect this sum of money from you. Before paying, you can ask for the invoice to make sure that it is real. Oftentimes, the port or transportation company will issue the official invoice for relevant charges.
Customs inspection time
The customs inspection time is generally 2-15 days. For the complicated inspection, it may take 20 days to one month, or even longer. And for the same customs inspection, it’s faster in China than in other countries.
8. What to do if your cargo is held at customs?
In case your cargo is held at customs after inspections, Customs will issue a notice. It’s necessary to carefully read it. The key is to know why the goods were detained. Then, take action to cope.
Supposing that the HS code is not right, Customs will ask for a statement describing why your product is wrongly classified, and whether it is tax evasion or not. Sometimes it may only be necessary to reclassify the item, revise the document, and pay a fine. Then, your goods will be released. If Customs officers don’t accept your explanation and think your freight involves major problems, they will hand it over to the anti-smuggling department for treatment.
In the event of lacking certificates, you need to supplement relevant documents as required by Customs and submit them within the fixed time. For example, children’s toys imported into the US must have CPC, CPSIA, and ASTM F963 test reports.
If the declared value is lower than the range set by Customs and officers demand an additional tax payment, you repay it to Customs within the specified time, then pick up your goods. If this time limit is exceeded, your cargo will be returned to the place of origin.
The above is for your reference, and it is hard to list all cases. What I suggest here is to find professional customs brokers to deal with cargo hold issues. Customs will decide whether to release it or not.
For the detained and confiscated goods, Customs usually deal in the following 2 ways:
- Auction — target goods that are not specified by national laws and regulations.
- Destruction processing — destroy contraband items on the spot. For pirated CDs, illegal publicity materials, etc., there will be harmless destruction.
The end
I hope this blog could give you a rough idea about customs inspections. Should you have any further questions, leave a comment below.
As a leading Chinese sourcing agent, StrategicSourcing has rich experience in helping clients source and ship products from China. We offer competitive product prices. And more importantly, the goods we export are rarely held by customs after inspections. CONTACT US to support your import business.
