The Anatomy of a Customs Entry

                                                                                               Winter 2010-2011

Over the last decade, U.S. Customs and Border Protection (CBP) has undergone a massive overhaul affecting imports for corporate events, concerts, tradeshows, theatrical productions, scientific programs, and general merchandise. They have automated reporting systems in an attempt to streamline the clearance process, however, security concerns have prompted a tightening of the requirements resulting in additional forms, procedures, and penalties. Understanding the main documentation requirements can help shippers navigate the complexities of the clearance process.


A standard “entry packet” for a shipment arriving by airfreight consists of an Entry Summary (Form 7501), Entry/Immediate Delivery (Form 3461), commercial invoice, and an air waybill. The packet for shipments arriving by ocean freight contains an ocean bill of lading (instead of the airway bill).  Ocean shipments also require an Importer Security Filing (ISF), filed electronically without a form. Most customs brokers have designed their own ISF forms to collect the data required for electronic submission.


The most common delays that occur during the clearance process are attributed to incorrect information on the airway bill or ocean bill of lading. Although exhibitors normally receive detailed shipping and consignment instructions from the official freight forwarder, the important details sometimes become “lost in translation,” causing difficulties at the port of entry in the U.S. Some of the most important details include:


·         The ultimate consignee on the Entry Summary and the Entry/Immediate Delivery forms MUST match the ultimate consignee on the airway bill or ocean bill of lading.


·         The ultimate consignee on the airway bill or ocean bill of lading MUST be the venue where the event is being held. For example, exhibition shipments destined for a show at McCormick Place in Chicago should be consigned as follows:


McCormick Place

2301 South Lake Shore Drive

Chicago, IL 60616

Exhibitor:  ACMR Machinery

International Machine Tool Show


·         The description of goods should be as detailed as possible on the airway bill or ocean bill of lading so that they match the description on the Entry Summary. For example, “concert equipment” is not an acceptable description.


·         The actual company/band, name, and address MUST be listed as the Shipper (not the freight forwarder) on the air waybill or ocean bill of lading.


·         The Importer of Record listed on both the Entry Summary and Entry/Immediate Delivery must be a U.S. Company with a federal ID number or the exhibitor’s customs broker.


·         The airway bill or ocean bill of lading must be list the customs broker as the “Notify Party.” For example, this section (for an event in Los Angeles) should read:


Notify Party:

Rock-It Cargo

Los Angeles, CA

Mr. Luis Valle

(310) 216-6221


·         The commercial invoice is the most “flexible” of the documents. The description of the goods must match the descriptions on the bills of lading and the Entry Summary, etc. and the invoice is addressed to the importer of record, in care of the exhibition. For example (for an exhibition in Las Vegas):


Rock-It Cargo

C/O Hardwood Floors Expo 2010

3150 Paradise Road

Las Vegas, NV 89101

Exhibitor name:_________ Booth#:________

Notify on arrival:  Rock-It Cargo Phone: (310) 410-0935
Fax: (310) 410-0628


Entries for temporary import clearance may also involve the use of ATA Carnets—special documents designed to accommodate temporarily exported and imported commercial goods. Advance preparations must be made by the shipper to obtain an ATA Carnet in their country of origin. The Carnet is most useful when the importer knows that the goods will be immediately re-exported after the event. It is often a lower cost option for temporary imports, however, all goods covered by the carnet MUST be re-exported.


Surety bonds are a major requirement for nearly all shipments imported into the U.S. with the exception of personal effects and government shipments. There are two basic types of import surety bonds:  continuous and single entry.  A customs broker can issue a continuous bond on behalf of the importer when they anticipate having more than one shipment per year at different ports/airports or when they import a high value item. A broker can also issue a single entry bond for a specific import transaction at a specific port/airport.  


The documentation for goods shipped to an overseas event and returned to the U.S. qualifies them for a duty exemption when it meets certain requirements. All (non-carnet) shipments must be described by a standard shipper’s invoice that includes a statement indicating that the goods are returning to the U.S. after temporary use abroad, at a specific event, and were used without being improved or advanced in value or condition. The shipper’s invoice should also clearly state the ultimate delivery address of the cargo (as this is often different than the address of the importer). 


Shipping documents must also be prepared in a specific manner for U.S. Goods returning from an event or duty paid goods returning to the U.S. after an event. On the air, ground or ocean bills of lading, the consignee or “ship to” address should be that of the importer or the importer “care of” (c/o) the customs broker or forwarder. The “notify party” should be the forwarder or customs broker. The rest of the documentation necessary depends on the nature of the material being re-imported into the U.S. 


In recent years, clearance procedures have become more complex because of increased security measures on the part of CBP and the U.S. Government. Documentation is critical, the windows of opportunity for submitting the documents are smaller, and the penalties for non-compliance are higher (for example, $5,000 per late ISF, $5,000 per inaccurate ISF, and $5,000 for the first inaccurate ISF update). An experienced customs broker with expertise in time-sensitive or high value shipments can help shippers choose the most appropriate clearance options and provide them with the most up-to-date shipping and clearance instructions.



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