Import for Your Business? Customs Is Asking Whether You Should Hand Over Your Supplier's Export Paperwork

Your overseas supplier already fills out paperwork for its own customs office before your goods leave the dock: an export declaration, an invoice, a packing list ^[1]. In an advance notice published Sept. 2, U.S. Customs and Border Protection asked whether it should get copies of those records, and whether you, as the importer, should be the one to collect and hand them over ^[1]. If you bring in goods for your shop, your online store or your production line, this is a notice to read now, while it’s still a list of questions.

What CBP put on the table

An advance notice of proposed rulemaking is the step before a proposed rule. It has no regulatory text. CBP says it will use the comments, “potentially,” to draft a proposed rule later ^[1]. EY’s trade practice put it plainly: “The notice does not impose new obligations” ^[4].

Here’s the short version of what CBP is weighing ^[1]:

• Foreign export documents. Export declarations, commercial invoices, packing lists, certificates of origin, export licenses and transport documents that the exporter filed abroad. CBP asks whether importers should submit them with each entry, keep them as records, or face random requests for them.
• Who made and shipped the goods. Today importers report a manufacturer identification code, or MID, built from the maker’s name and address. CBP says the MID is not always unique and doesn’t always identify the party it cares about, and asks whether to replace it with full names, addresses or global business identifiers such as a D-U-N-S number or Legal Entity Identifier.
• More parties. Whether online marketplaces that facilitated a sale, or the party the goods are ultimately delivered to, should be named.
• Earlier filing. Whether entry should be filed sooner than it is now.
• Tracing technology. What tools companies use to trace supply chains and whether participants in CBP’s voluntary security program, CTPAT, should be required to use them.

CBP says the aim is catching illegal transshipment, which it defines as routing goods through a third country to hide their true origin, and discrepancies such as “dual-invoicing” ^[1]. In plain English: one price on the paperwork filed abroad and a lower one declared here.

Where this came from

The notice carries out part of Executive Order 14411, signed June 3 ^{[1, 2]}. Section 3 of that order told the Homeland Security secretary to require disclosure of foreign tax and business identifiers and supply chain details, and, within 90 days, to take steps toward requiring the documents a foreign exporter gave its own customs office ^[2].

The order makes the administration’s case directly. “Customs reform is long overdue,” it says, and it lists undervalued imports and duty-avoidance schemes as examples of noncompliance that “disadvantage domestic businesses” ^[2]. The rest of the order reaches further than this notice: higher minimum bonds, a “good standing” test for importers, and disclosure of ownership and beneficial ownership by importers of record ^[2]. Those pieces are directed to happen within 180 days of the order ^[2].

That ownership item may ring a bell. FinCEN dropped beneficial ownership reporting for U.S. companies last month; the customs order is a separate request aimed only at importers ^[2].

The U.S. Chamber of Commerce wrote to CBP in July. It said it agrees updating customs practice is “long overdue” and supports stopping counterfeiters ^[5]. But it warned that policies aimed at bad actors “may inadvertently hurt the broader U.S. business community, especially small businesses that frequently have fewer resources and lower minimum continuous bonds to adapt to these policies” ^[5]. It asked CBP to use notice-and-comment rulemaking ^[5], which is the route this notice starts down.

Does this apply to you?

If you’re the importer of record on your own shipments, yes, eventually, depending on what CBP proposes. Two hypotheticals:

A hypothetical online kitchenware seller that imports through a customs broker. The near-term issue for this business isn’t the Sept. 2 notice. It’s a separate CBP notice from Aug. 19. Starting Sept. 18, CBP will void an importer of record number if the information on CBP Form 5106 is inaccurate or incomplete, and a voided number can’t be used to enter goods ^[3]. The address must be the business’s actual location. CBP says it “cannot be a registered agent, customs broker, freight forwarder, P.O. box, a business service center, or an address of another person or entity” ^[3]. A home-based seller can use the owner’s home address ^[3]. The email and phone must belong to the importer, not the broker ^[3].

A hypothetical cabinet shop that buys hinges and hardware from one overseas factory. Under the ideas in the Sept. 2 notice, this shop might someday need copies of the factory’s export declaration and invoice, and might need to explain any gap between the value declared abroad and the value declared to CBP ^[1]. EY lists the questions an importer would face: whether it can get those documents, whether its supplier contracts require the supplier to share them, and whether its systems can store them ^[4].

One threshold to know: shipments valued at $2,500 or less can generally use informal entry, which CBP describes as less burdensome ^[1]. The notice asks whether new requirements should be phased in by entry type, but it doesn’t propose exempting low-value entries ^[1].

What to do this month

Start with Sept. 18, since that one is real. Ask your broker to show you what’s on your Form 5106, and fix anything that’s the broker’s address or email instead of yours ^[3]. Brokers must also hold a power of attorney signed directly with you ^[3].

Then think about the Dec. 1 comment deadline ^[1]. CBP asked specifically whether small entities should get different timelines, what tracing tools cost large and small businesses, and how long it takes to get documents from foreign suppliers ^[1]. Those are questions a small importer can answer better than anyone. CBP asks commenters to cite question numbers and show their math ^[1].

My view on process: asking before proposing is the right order. The burden question will turn on details CBP hasn’t written yet, such as whether documents are filed every time or kept on hand for a request.

What I’m keeping an eye on

Sept. 18. The first day CBP can void importer numbers over bad Form 5106 data ^[3]. Watch for how CBP handles reinstatement requests.

Dec. 1, and whether small importers show up. CBP says about 70% of CTPAT members are small businesses ^[1]. Whether a proposed rule treats them differently depends partly on what they put in the docket.

— Sally