I recently met a woman who is considering starting up an import business of jewelry and other locally made crafts from Central America. The products she described sounded fantastic and it sparked my former interest in a jewelry and crafts import business I too once had. As we went through some of the product ideas however, it was clear within minutes that there was much more to consider than what color bracelets to import!
Different U.S. agencies have their specific requirements when it comes to imports and US Customs assists them with enforcing their regulations. Let me shed some light on the import issues that came up by going through a few product ideas.
Beaded wooden necklace – Lacey Act Declaration
Painted bracelet for girls – Lead Paint and CPSC* General Certificate of Conformity
Cooking oils – FDA** Advance Notice Declaration
Product declarations and certifications aside, there are other import issues to consider. For example, depending on which country the goods are ultimately imported from, there may be a free trade, or other preferential trade program that she could take advantage of, such as when importing from a country eligible for tariff reductions under the Generalized System of Preferences, of which many Central American countries are.
In everyday language, this means that the amount she would have been responsible for paying in duties is now reduced thanks to the lower duty rate resulting from the preferential program.
Being aware of compliance issues and duty consequences, or benefits, are important to know about prior to your first importation. In fact, consulting of this kind would be beneficial at any time beginning even, believe it or not, during the creation of a business plan. After all, these costs will need to be factored in when determining break even amounts, profit targets and other financial projections.
Consulting of this kind is further important, so that you are not hit with penalties on your first importation as a result of non-compliance which can wipe away any start up capital you once had. Or even worse - it can leave you in serious debt.
I know of a case where an importer's first shipment of goods had been seized, i.e. taken (and in this case, for good), due to an allegation of the products being counterfeit. Though mitigation (reduction) of the penalty imposed by US Customs decreased the penalty to 10% of the original claim, the mitigated amount was still over half a million dollars! And that was on their first importation. Needless to say, that kind of penalty can take its toll!
Starting up an import business can be a lot of fun but there is also a complex maze of government compliance issues to consider and successfully navigate through.
Thinking about starting up an import business? Feel free to contact me with any questions at clark.deanna@gmail.com.
*Consumer Safety Product Commission
** Food and Drug Administration
No comments:
Post a Comment