Small businesses often struggle with trade compliance, which may not be the most exciting part of running a company. U.S. borders see millions of goods travel through them every day, along with all the strict regulations every business must follow. U.S. Customs and Border Protection collected $100 billion in duties, taxes, and fees in 2023, which shows just how big and complex the job is.

With policies like the Uyghur Forced Labor Prevention Act coming into effect, more emphasis is placed on importing goods from high-risk regions. Lack of knowledge is no longer an excuse; staying informed has become essential for businesses.

Here are six essential trade compliance tips you need to know if you are a small business owner in the United States. Keep reading these practical tips for saving time and avoiding common mistakes by being compliant.

Why Trade Compliance Matters

Compliance with trade laws is more than just checking a box. Every time goods cross borders, customs regulations will apply to them with rigor and inspection processes. Your reputation and bottom line could suffer if you fail to comply with such rules, which could result in costly fines, shipping delays, or even the seizure of goods.

For example, the U.S. Customs and Border Protection (CBP) will collect more than $100 billion in duties and fees in 2023. This shows how high the stakes are in trade operations. Small mistakes, such as misclassifying goods or missing documentation, may incur penalties. The Uyghur Forced Labor Prevention Act (UFLPA) is one of such regulations that demand clear proof that its imports are free from forced labor which becomes a challenge for those who are not prepared.

You can also count delays as latent costs. Without the observance of regulations on import-export, goods may be held at ports for additional inspection leading to delays in your supply chain and subsequently time and money. For a small business, disruptions are pretty hard to handle.

Compliance also translates into concrete benefits:

• Faster customs clearance: Following rules and regulations and presenting correct documents helps in smooth crossing over the borders.
• Lower costs: You are saving more money by avoiding fines and storage fees at ports.
• Better customer relations: A reliable delivery system builds trust and repeat business.

Understanding U.S. Trade Laws

The US trade laws ensure that goods move across borders safely, compliantly, and get collected. These laws are crucial for small businesses that must avoid costly errors, delay disappointments, and keep their operations running smoothly. In simple words, it’s every importer’s and exporter’s duty to be aware of these things.

Export Documentation Requirements

The backbone of trade compliance is accurate documentation. Every export shipment includes required paperwork based on regulations from both the U.S. and the destination country. A few include:

• Commercial Invoice: It indicates the value and description of the goods.
• Packing List: This contains weight, measures, and contents details to enable inspection activities.
• Bill of Lading (BOL): Evidence of shipment and order to deliver.
• Export License (if applicable): Some things such as electronics or military equipment are under special license.

Without these documents, your goods can be held up at borders or even rejected. As of 2023, U.S. Customs has been setting its sights on exports to ensure that these exports meet trade agreements and sanctions.

Import Duties and Taxes in the U.S

When importing goods, businesses should pay duties and taxes established by:

• Harmonized Tariff Schedule (HTS) Codes: These are codes that classify merchandise and, consequently, the corresponding duty rate.
• Country of Origin: Products from some countries might be entered into under more favorable tariffs because of FTAs.
• Declared Value: The customs charge shall be calculated on the value of the consignment, including insurance and freight charges.

Undervalued or misclassified goods would most surely attract audits, penalties, even seizure of shipments for small businesses.

Customs Clearance Checklist

Clearing customs smoothly requires a systematic approach. Here is a quick checklist to follow:

• Confirm your HTS Code shipment and its applicable duties.
• Proper documentation should be prepared through the invoices, certificates of origin, and packing lists.
• Make sure your customs broker has all the information needed for timely filing.
• Check if the goods, such as food, pharmaceuticals, or electronics, are even restricted and require more permits.

With this checklist, staying organized will prevent last-minute issues that might lead to delays or extra costs.

Small Business ISF Filing Guide

ISF is required for ocean freight imports. Known as the “10+2,” this document essentially gives advanced cargo information to CBP to enhance border security. Small businesses submit an ISF at least 24 hours before the cargo is aboard a vessel headed to the U.S.

Penalties for failure to file on time or inaccurate information up to $5,000 per violation. So, be sure to work closely with your customs broker so that it is done correctly and timely.

Common Compliance Mistakes and Tips

Poor or Incomplete Documentations

The most common errors on compliance are due to documentation. Whether a typo in the Commercial Invoice, a missing Certificate of Origin, or missing details in Bill of Lading, it will cause little mistakes at points that seriously delay shipments at the customs check.

Impact: Incorrect or missing documents may result in the shipment being held, fines levied, or returned back to the shipper.

Tips to avoid the impact: Double-check every document before submission and work with a customs broker to avoid making errors in the bookkeeping.

Misclassification of Goods:

Any import into the U.S. must be classified according to the HTS. Misclassifications can result in payment of incorrect duties—or, at worst, being flagged for non-compliance.

Impact : CBP audits or fines errors either intentional or unintentional.

Tips to avoid the impact: Ensure proper classification by using CBP’s online HTS search tool or seeking professional consultation.

Undervaluation of import duties and taxes

Import duties and taxes tend to catch even the smaller companies off guard. Most companies forget to budget for costs such as Merchandise Processing Fees (MPF) or Harbor Maintenance Fees (HMF) because those can add up quickly.

Impact: Surprises can bring huge pressure on your budget and disturb cash flow.

Tips to avoid the impact: Calculate duty and tax before shipping and add it to your product pricing strategy.

Ocean Freight: Filing ISF Filed late

All ocean imports must have an ISF filing completed 24 hours before goods are loaded onto a vessel for arrival in the United States. Small businesses often miss this procedure and incur considerable penalties.

Impact: Up to $5,000 fine per violation and ship delays.

Tips to avoid the impact: Team up with your freight forwarder or customs broker to avoid any untimely ISF submission.

Reduction of Rationed Goods or Trade Barriers

Many goods carry stricter regulations, including certain prescriptions, electronics, or shipments from restricted countries; failure to research these could result in confiscated shipments or fines.

Impact: legal problems and money loss.

Tips to avoid the impact: Check frequently on the CBP list of restricted goods as well as on updates on trade sanctions that may influence imports or exports.

Insufficient Record-Keeping

All businesses, by law of the U.S., are obliged to maintain records on all import and export transactions for at least five years, though many small businesses forget about it and remain ill-prepared.

Impact: Non-compliance penalties and difficulties proving one’s case in disputes.

Tips to avoid the impact: All documentation must be placed in a digital archive to maintain accessibility and compliance.

How a customs broker can simplify your trade processes

With years of experience and a record, Clearit specializes in making customs clearance easy, quick, and transparent for small businesses. From the first-time importer to seasoned traders, we help them save time, money, and hassle.

Here’s How We Make Trade Easy for You:

Paperwork Streamlined: Forget paper errors. Our staff pay attention to detail and ensure all forms, whether an ISF filing or commercial invoice, are correct and complete. 

Expert Duty Classification: Avoid costly misclassifications. Our experts classify your imports correctly under the Harmonized Tariff Schedule (HTS). We ease the way through customs, thereby delivering shipments more quickly by directly supporting U.S. Customs. 

Compliance Peace of Mind: Your imports and exports are in full compliance with all applicable U.S. trade laws and regulations. Questions? Concerns? We at Clearit USA are here with 24/7 Support.