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7 Steps To Limit Your Importing Liability

Apr 4, 2008
Importing is one of the more complex forms of product sourcing. Any time you import goods, you're legally responsibility for ensuring that they comply with all U.S. Customs regulations. That sole fact scares away many would-be importers. But steering clear of importing, while it allows you to avoid any liability issues, also means you're missing out on the considerable cost savings and unique, cutting-edge products that importing affords your business.

Easy-to-Follow Tips

"It really comes down to covering your bases," advises Kelby Woodard, principle of import consulting firm TradeInnovations.com. "There are some common-sense precautions you can take to limit your liability and protect your business interests." He offers the following insights:

1. Start in phases. Don't just jump on the Internet and place a large order with a company you haven't vetted. Take your time, research potential suppliers, and start with small orders.

2. Consider starting out importing from a country that's close in proximity, like Mexico or Canada. Countries in South or Central America or the Caribbean basin, for example, will tend to have easier logistics than Pacific or Asian countries. And many of them have free trade agreements, as well, so they provide the additional competitive advantage of being duty-free.

3. Do your homework. In 1992, Congress passed a law that made the U.S. government responsible for making all necessary knowledge on Customs regulations available to importers, either by website or publication. This concept is known as informed compliance. There are several online resources that can help you learn more about your responsibilities in this area:

* CPB.gov is the official website for the Customs and Border Patrol. As part of the agency's official informed compliance requirements, their site offers a great deal of education regarding different regulations.

* TRGDirect.com offers information for companies or individuals interested in learning how to file their customs entries directly (without the services of a Customs Broker).

* TradeBridgeInternational.com provides a tremendous amount of knowledge geared towards helping small- to medium-sized importers.

* TradeInnovations.com provides direct information on the subject of importing, as well as numerous links to other helpful sites.

4. Use a third party validation firm to inspect the quality of your products and ensure that they meet all applicable U.S. requirements. While you can't outsource your liability, you can get expert help with the process.

5. As you increase your importing volume, you might think about sourcing your products from multiple countries. If one country develops quality assurance problems or customs issues, you're not cut off from your only product source.

6. Watch your buying terms. If your purchase agreement states that you're buying your products FOB (Free on Board), then your supplier is responsible for getting your goods through the export customs process. However, if the terms state that you're buying X works, then you take possession of the goods at the manufacturer's shipping door. That means you're responsible for knowing the export regulations of the country in which that manufacturer is located. So pay attention to your agreement, and make sure you're comfortable with the terms before you sign.

7. Keep thorough, accurate records. You need to have those records and documentation available, whenever Customs asks for it. This will not only help protect you legally, it will also speed up the time it takes to get your goods cleared through Customs.

Don't Make a Mountain Out of a Molehill

Informed compliance and legal liability may sound rather like rather daunting terms. But don't let them scare you away from realizing the tremendous deals importing can supply. It's really just a matter of taking some very simple steps to mitigate your risk. Says Woodard, "If you do your due diligence, you really don't have to worry. The benefits far outweigh any extra effort that's required."
About the Author
Product Sourcing Radio is Created and Hosted by Chris Malta and Robin Cowie of WorldwideBrands.com, Home of OneSource: The Internet's Largest Source of Genuine, Factory-Direct Wholesalers for online sellers. Click Here for more FREE E-Biz & Product Sourcing info!
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