Customs Clearance Procedures

For years, trade compliance has largely been viewed as an operational function. Necessary? Absolutely. Strategic? Sometimes. A boardroom issue? Rarely. That era is ending. CBP officials have been told to no longer refer to their mission as trade facilitation, but to go back to old ways...it's trade enforcement again. Buried within CBP’s latest guidance is a sentence that should make every importer pause: “The era when a company can claim ignorance of its upstream partners’ activities is over.” Read that again. This isn’t just about customs classifications or paying the correct duty. CBP is signaling a fundamental shift in expectations. They are looking beyond transactions and asking harder questions: Do you actually know your supply chain? Can you prove your suppliers’ representations? Does your executive team understand the risks? Is your compliance program capable of detecting problems before the government does? The language goes further, referencing negligence, reckless disregard, willful blindness, and even the role of the DOJ in evaluating corporate conduct. It also points squarely at the C-suite and boardroom, making it clear that trade compliance is no longer confined to the logistics department. The enforcement landscape isn’t changing overnight. It already has. The companies that invest in oversight, due diligence, and governance today will likely weather what’s coming. The companies that still believe customs compliance begins and ends with filing an entry summary may discover that the next audit isn’t about a shipment. It’s about whether their entire compliance program can survive scrutiny. I've been doing this long enough to remember "the old ways..." the relationship between trade and Customs was one built on fearful respect. The detante between us appears to be crumbling. Winter doesn’t arrive all at once. First, the temperature changes. Then the leaves fall. The smart companies don’t wait for the snow.

Three device companies just got warning letters. • One misclassified product. • One didn't document design changes. • One cancelled legitimate complaints. Same root cause: inadequate QSR compliance. ➫ Here's the reality for device manufacturers and importers: You need formal classification procedures because you can't guess your own product code. You need complaint handling with real escalation because cancelled complaints look like negligence to FDA. You need to document every design change because undocumented modifications make it look like you reverse engineered your compliance records. You need thorough contemporaneous records. Your team needs to understand what actually counts as a design change. Do this before the FDA shows up. Don't scramble to build systems under pressure. Companies that don't get warning letters treat compliance as infrastructure, not paperwork. Build the systems now. You'll never have to rebuild them in a panic later. #FDA #DeviceCompliance #QualityManagement #ImportCompliance #Imports

If you can't fully meet the deadline, my recommendation is obviously not to do nothing or put activities on hold, but to demonstrate that you have taken reasonable steps towards compliance. In practice, this means focusing on the highest-exposure parts of your packaging portfolio, being clear on the minimum preparations required for it, preparing as much technical documentation as possible, and documenting any gaps together with actions and timelines to close them. I would focus on demonstrating good-faith efforts towards compliance and maintaining records of the actions taken. This includes keeping evidence of supplier requests, follow-ups, risk assessments, assumptions taken, management decisions and a documented remediation plan. ➡️ That said, strictly speaking, packaging that does not meet the applicable requirements applicable from 12 August 2026 should not be placed on the EU market. Consequently, economic operators placing your packaging or packaged products on the market, Importers and Distributors, should not place non-compliant packaging or packaged goods on the EU market. So, while the overall industry sentiment seems to be that enforcement is unlikely to start across all Member States from day one, in my view the biggest risk sits within your own value chain. That risk is ultimately a business continuity risk. I think that at this stage the supply risk is likely to materialize faster than authority enforcement. Once your B2B customers (EU importers, distributors, retailers..) start requesting  your PPWR documentation, companies that are unable to provide a Declaration of Conformity may face blocked onboarding, supply interruptions, delisting risks, contractual non-compliance findings… This is why I would make establishing Declarations of Conformity the immediate priority, while simultaneously launching supplier outreach to collect the information needed to demonstrate conformity with the substances of concern requirements and, in parallel, addressing packaging traceability requirements using short-term solutions that can be available, even if they are not ideal. Even where some information is still missing, having a documented process, active supplier engagement and a clear action plan will hopefully put you in a better position than having no compliance framework in place at all. The good news is that there is still about 1 month to go. While achieving full compliance across an entire packaging portfolio when starting only now is challenging, there is still a lot that can be done to reduce your risks. __________________ ✅ Follow my content for practical guidance on how to get ready for the EU PPWR. Please note that this is not legal advice.

A US importer receives a UFLPA detention notice. Their goods are held at the border. The clock starts ticking. To secure release, they need to rebut the presumption that goods were produced with forced labor. They pull out their compliance documentation: audit reports, readouts from a leading supply chain risk platform showing no Xinjiang-region connections, a due diligence policy. On June 9, CBP published new consolidated forced labor enforcement guidance. As someone who doesn't routinely read trade compliance guidance, one passage struck me. The guidance states that if an importer fails to provide information regarding the production of even a single supplier in the chain, the submission is insufficient and the shipment will be denied entry. One procedural gap - perhaps a single non-responsive sub-tier supplier. Not a finding of forced labor, just a documentation hole. Goods denied. The clock runs 30 days. CBP may require a bond at three times the value of detained goods from day one. Storage costs run throughout. The guidance is explicit: be prepared before importing, not in the 30 days after a detention notice arrives. For European markets, the same logic holds even where the regulatory mechanisms differ. CS3D, LkSG, and other national HRDD frameworks require companies to demonstrate that proportionate, evidence-based steps were taken to identify and address forced labor risk. The EU Forced Labour Regulation, applying from December 2027, adds product-level enforcement to that picture. Establishing a proactive, evidence-based due diligence program now is the right posture regardless of which regime you’re operating under.

𝗠𝘆 𝗽𝗵𝗼𝗻𝗲 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗯𝘂𝘇𝘇𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸, 𝗮𝗻𝗱 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝗼𝗳 𝗿𝗲𝗳𝘂𝗻𝗱 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀. Several companies across industries have reached out after receiving 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝗻𝗮𝗶𝗿𝗲𝘀 𝗳𝗿𝗼𝗺 𝗨.𝗦. 𝗖𝘂𝘀𝘁𝗼𝗺𝘀 𝗮𝗻𝗱 𝗕𝗼𝗿𝗱𝗲𝗿 𝗣𝗿𝗼𝘁𝗲𝗰𝘁𝗶𝗼𝗻 (𝗖𝗕𝗣) asking whether they utilize the 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗳𝗼𝗿 𝗘𝘅𝗽𝗼𝗿𝘁 method of appraisement. These letters appear intended to 𝗶𝗱𝗲𝗻𝘁𝗶𝗳𝘆 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘂𝘀𝗶𝗻𝗴 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗮𝗻𝗱 𝗮𝘀𝘀𝗲𝘀𝘀 𝘁𝗵𝗲 𝘀𝗰𝗼𝗽𝗲 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 𝗽𝗿𝗼𝗴𝗿𝗮𝗺𝘀, which could lead to additional scrutiny or potential First Sale audits. Given the current trade environment and increasing duty exposure, we are clearly in a 𝗽𝗲𝗿𝗶𝗼𝗱 𝗼𝗳 𝗵𝗲𝗶𝗴𝗵𝘁𝗲𝗻𝗲𝗱 𝗲𝗻𝗳𝗼𝗿𝗰𝗲𝗺𝗲𝗻𝘁. I would not be surprised to see 𝗮𝗱𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗕𝗣 𝗶𝗻𝗾𝘂𝗶𝗿𝗶𝗲𝘀 𝗮𝗻𝗱 𝗿𝗲𝘃𝗶𝗲𝘄𝘀 in this area. For companies that received these letters, or that currently rely on 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲, now is the time to ensure your program can withstand examination. Some immediate steps importers should consider: • 𝗖𝗮𝗿𝗲𝗳𝘂𝗹𝗹𝘆 𝗿𝗲𝘃𝗶𝗲𝘄 𝘁𝗵𝗲 𝗖𝗕𝗣 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝗻𝗮𝗶𝗿𝗲 and understand exactly what information is being requested • 𝗣𝗿𝗲𝗽𝗮𝗿𝗲 𝗮 𝗽𝗿𝗲𝗰𝗶𝘀𝗲 𝗮𝗻𝗱 𝗮𝗰𝗰𝘂𝗿𝗮𝘁𝗲 𝗿𝗲𝘀𝗽𝗼𝗻𝘀𝗲 and avoid providing information beyond the scope of the request • 𝗘𝗻𝘀𝘂𝗿𝗲 𝘆𝗼𝘂𝗿 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗰𝗼𝗺𝗽𝗹𝗲𝘁𝗲, including purchase orders, invoices, contracts, and supporting transactional records • 𝗖𝗼𝗼𝗿𝗱𝗶𝗻𝗮𝘁𝗲 𝘄𝗶𝘁𝗵 𝘀𝘂𝗽𝗽𝗹𝗶𝗲𝗿𝘀, as CBP may request supporting financial documentation such as trial balances or general ledger information • 𝗜𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁 𝗼𝗿 𝗮𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗺𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴 to review First Sale transactions and identify potential compliance gaps • 𝗣𝗿𝗲𝗽𝗮𝗿𝗲 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗽𝗼𝘀𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗼𝗳 𝗮 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗮𝘂𝗱𝗶𝘁 by ensuring records are organized and accessible • 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝗹𝗹𝘆 with legal, compliance, and procurement teams to ensure a coordinated response 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝗮 𝗽𝗼𝘄𝗲𝗿𝗳𝘂𝗹 𝗱𝘂𝘁𝘆 𝗺𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆, but it must be supported by 𝘀𝘁𝗿𝗼𝗻𝗴 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻, 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝗹 𝗰𝗼𝗻𝘁𝗿𝗼𝗹𝘀, 𝗮𝗻𝗱 𝗼𝗻𝗴𝗼𝗶𝗻𝗴 𝗺𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴. At 𝗞𝗣𝗠𝗚, our team regularly helps companies 𝗽𝗿𝗲𝘀𝘀𝘂𝗿𝗲 𝘁𝗲𝘀𝘁 𝗲𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝗽𝗿𝗼𝗴𝗿𝗮𝗺𝘀, 𝗿𝗲𝘀𝗽𝗼𝗻𝗱 𝘁𝗼 𝗖𝗕𝗣 𝗶𝗻𝗾𝘂𝗶𝗿𝗶𝗲𝘀, 𝗮𝗻𝗱 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝗼𝗻𝗴𝗼𝗶𝗻𝗴 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗳𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸𝘀. If your company has received one of these questionnaires or wants to 𝗽𝗿𝗼𝗮𝗰𝘁𝗶𝘃𝗲𝗹𝘆 𝗲𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝘁𝗵𝗲 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗙𝗶𝗿𝘀𝘁 𝗦𝗮𝗹𝗲 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲, we would be happy to discuss. #Customs #TradeCompliance #FirstSale #CBP #Tariffs #ImportCompliance

How a Fortune 500 Company Turned Trade Compliance Into a Million-Dollar Strategy This is how they did it. They overhauled their trade compliance program. 1) Centralized Trade Compliance Function The company set up a global trade compliance team to standardize processes. They also implemented a global trade management (GTM) software solution. This helped automate classification, origin determination, and customs documentation. 2) Tariff Classification and FTA Optimization They reviewed their product portfolio to ensure accurate Harmonized System (HS) code classification. They identified and applied for preferential duty rates under FTAs like USMCA, ASEAN, and the EU’s Generalized Scheme of Preferences (GSP). 3) Duty Recovery and Drawback Programs They audited past customs entries to identify overpaid duties and filed claims for refunds. They also implemented a duty drawback program to recover duties paid on imported materials used in exported products. 4) Customs Audits and Risk Management The company developed a robust internal audit program to proactively identify and address compliance risks. They trained staff on customs regulations and best practices to reduce errors and improve compliance. Results: $12 Million in Duty Savings By leveraging FTAs and optimizing tariff classifications, the company reduced its duty burden significantly. $5 Million in Duty Recovery The company successfully recovered overpaid duties through retrospective claims and duty drawback programs. Eliminated Penalties Improved compliance processes eliminated customs penalties and reduced the risk of future audits. Operational Efficiency Automated processes reduced shipment delays and improved supply chain predictability. Enhanced Reputation The company strengthened its reputation with customs authorities and gained a competitive edge in the market. Key Takeaway: Investing in a robust trade compliance program is crucial. By centralizing processes, leveraging technology, and proactively managing risks, companies can unlock significant cost savings, avoid penalties, and enhance operational efficiency. For this Fortune 500 company, getting trade compliance right was not just a regulatory necessity—it was a strategic advantage that saved millions and strengthened its global operations. CTA: Discover the step-by-step overhaul that saved millions. Learn how a strategic compliance transformation can drive operational excellence in your organization!

Fashion brands are asleep at the switch—and tariff enforcement is the alarm. Tariffs aren’t just line-items in P&L forecasts anymore. They’re becoming legal landmines for fashion brands that haven’t updated how they source, ship, and declare. DDP missteps, opaque importer-of-record practices, and loose definitions of transshipment are now front and center. Here’s what’s changing—and what smart Brands are doing: DDP is risky business. Delivered-Duty-Paid sounded nice for customers, but under new enforcement, it can expose brands to unexpected liability, compliance failures, and surprise costs. Importer of Record (IOR) rules are tightening. If you don’t know who is officially “importer,” which duties are due, or where HS codes fall under new origin rules—you’re vulnerable. Transshipment definitions are shifting. Countries used to act as “middle stops” for goods. Now those pathways are being audited, challenged, or redefined in ways that can trigger duty if product origin isn’t crystal clear. You might think your cost-push is mostly raw materials or tariffs. Nope. Lots of brands will bleed margin (or get blindsided) because they ignored trade compliance operations. The things nobody saw because “it always worked before.” What to do now to stay safe and lean: Audit your DDP and IOR contracts—know who’s responsible for what. Map your supply chain: every country of origin, every possible transshipment route—make them transparent. Harden your customs paperwork: HS codes, origin declarations, testing documentation. Errors here cost way more than you think. Lean on nearshore + alternate sources where possible—not just for cost, but for compliance predictability. Build in compliance into design and sourcing decisions—it should be as fundamental as style or fabric. Every brand I talk to says “we’re getting ahead.” But price shocks and enforcement notices that come later always hit harder. If you aren’t questioning your trade setup right now, you are wrong-footed. 👇 Curious: who here has had a surprise compliance or duty hit from what seemed like a small trade technicality? Let’s swap war stories.

Importers: Have you clearly defined the stop points where your Customs Broker should pause and contact you before moving forward? Customs Brokers: Have you trained your teams to recognize when something just doesn’t look right? Weeks like this remind us that timing matters. Whether it’s a tariff change, a system update, or a government action, the decisions made in the first few hours can have significant compliance and financial consequences. That starts with the people working the entries. Are your desk-level teams trained to recognize when an ACE message may be signaling a larger issue? How are those messages being escalated? Is management receiving meaningful reports or KPIs that identify trends before they become problems? Over the past few weeks, I’ve noticed an increase in DIS requests seeking documents that many importers don’t typically maintain in the ordinary course of business—things like product photos, engineering drawings, and blueprints. Are staff members recognizing those requests as potential red flags and involving management? Likewise, when an entry summary is rejected post summary payment, is someone taking the time to determine why the rejection occurred before simply resubmitting data? Or is the rejection prompting a conversation with the importer to validate that the underlying information is actually correct? Not every message from CBP is just another task to complete. Sometimes it’s the first indication of a much larger compliance issue. Processes are important. Technology is important. But experienced people who know when to stop, ask questions, and escalate are still one of the strongest compliance controls an importer or Customs Broker can have. What operational “stop points” has your organization put in place to help catch issues before they become violations or costly corrections? I’d love to hear them.

What a week in trade. In the past week alone: USTR proposed Section 301 tariffs on 60 economies over forced labor imports. A Section 301 investigation into global excess capacity is pending. Another 301 investigation was just announced targeting Brazil's trading practices. Multiple Section 232 actions remain active or in the pipeline. And now, today, a new executive order that may be the most operationally significant of all of them: https://lnkd.in/gDc4MhaW Today's executive order, "Strengthening Customs Enforcement," significantly overhauls the infrastructure of who gets to import and on what terms. A few things that jumped out: → Foreign importers of record are banned from filing informal entries. For formal entries, they lose access to continuous bonds (unless they can individually demonstrate to CBP that revenue is protected and compliance assured) and must either be CTPAT-validated or use a CTPAT-validated broker. That doesn’t eliminate formal entry for foreign IORs, but it makes it significantly more expensive and operationally difficult. → Every importer will need to maintain "good standing" with CBP, defined by compliance history. Lose it, and you're locked out—no importing, no designating a broker to act on your behalf. → The penalty *floor* for noncompliance is now 50% of the assessed penalty. Mitigation for repeat offenders is eliminated entirely. → Importers will be required to submit whatever documentation the foreign exporter filed with its own customs authority before shipping to the U.S. The EO directs DHS to implement these changes on timelines ranging from 90 to 180 days, with some actions required "promptly." While this EO doesn't impose more tariffs, it puts into place the framework to enforce the tariffs already in place. The administration has spent the last 18 months layering on trade actions, and now it's pulling out the hammer to make sure those actions actually stick. More analysis to come.

ACE data is your secret weapon. Most importers don’t even use it. When starting a trade compliance program, many importers focus on processes but overlook the foundation: assessing risks in their supply chains. The first question to ask: *What could go wrong?* Here are common risks: - Shipment documents from suppliers may be incomplete or inaccurate. - HTS codes or countries of origin might be reported incorrectly. - Missing certificates could disqualify goods from Free Trade Agreements (FTAs) or duty-free claims. - Brokers might lack key data for Partner Government Agencies (PGAs) like FDA or USDA. The result? Delayed import clearance-or worse, detained shipments. Fixing these issues takes time and effort, and it doesn’t stop there. Customs and PGAs might flag the importer as a compliance risk, leading to more scrutiny on future shipments. So, how can importers proactively assess these risks? By using ACE data. The ACE system provides a detailed record of your import activity-a treasure trove of insights. When I work with a new importer, analyzing ACE data is always one of the first things I do. Here’s what ACE data can help you uncover: - Errors in customs data, like incorrect HTS codes or unusual countries of origin. - Opportunities to reduce duty costs. - Unauthorized customs brokers clearing your shipments. With these insights, you can: - Improve processes for import data and documentation. - Strengthen communication with suppliers. - Identify importing functions you weren’t aware of. - Tighten controls on who can request broker Power of Attorneys (POAs). - Implement clear instructions for customs brokers. - Explore and qualify goods for duty-saving programs. The best part? ACE data is free. It’s your data-use it. What other valuable insights have you gained from ACE data? I am Elizabeth Lomax, import/export compliance expert helping pharma and biotech companies create more efficient international supply chains. DM me or visit my LinkedIn profile to learn more. To stay updated, click the notification bell on my profile. 🔔