Importing Basics A little knowledge goes a long way when navigating foreign trade waters.
By Frederick L. Baehner
You just found out that you might need to source product from overseas to meet pricing pressure for your best customer. Or, perhaps, you want to import consumer products. This is new terrain, and you don’t know where to turn to get needed information. After all, most federal agencies are focused on aiding exporters, not importers.
Product Source Once you know what product you require, you can do some preliminary investigation on the Internet. Sources to visit include: • www.tradeshowweek.com. This site lists international trade shows throughout the world by product category, and is helpful in providing a sense of what is out there. • www.globalsources.com. This site lists trade shows in China, Taiwan and Hong Kong, along with specific Chinese suppliers. • www.tsnn.com. An international trade show gateway, this site leads you to specific expos by product category. • www.chinaleads.net. This is a Kansas-based site that gives you the ability to cast a wider net for trade leads in China.
Once you identify the source for your product, it pays to visit that factory or company. You will want to inspect the facility and meet the principals yourself. A good, strong personal relationship with factory management will go a long way to ensure quality and timeliness.
Self Protection The next step is to write a proper agreement that will protect you in case of a disagreement with your overseas partner. This may take some back-and-forth communication to hammer out a workable agreement for both parties, but it is worth it in the long term. If for some unlucky reason you end up in litigation, you will need someone with experience in international law to help pull you through. There are a number of international business lawyers in the Kansas City area. For more information, do an advanced search on www.findlaw.com.
Transportation You also will need to plan transportation to your facility here, which will be easier with the help of a professional transportation and customs expert. Customs brokers assist businesses with both imports and exports—by air, land or water. They serve as your watchdogs to ensure all international procedures are followed. The U.S. Customs and Border Protection licenses brokers, who must be knowledgeable of federal custom and border regulations.
Your customs broker can tell you the best way to ship your goods, at the fairest price. They also will figure duty rates for your product, which you will then have to figure into the cost of shipping product.
There are a number of customs brokers here in the Kansas City area. For information on local brokers, go to www.kcsmartport.com under Service Providers>Shipping and Carrier Services>Customs Brokers.
Records Maintenance Even though your customs broker keeps records, ultimately, you are responsible for your own accurate record keeping. Develop your own record-keeping system, including proper storage and maintenance of mandatory documents. Import records must be maintained for at least five years from date of entry. And when you are called upon to pull up that documentation, you will need to do it by date of entry.
Missing records come with their own set of penalties, above and beyond non-compliance penalties. Penalties can range upwards of $100,000 per import record-keeping violation.
Special Trade Programs We have various trade agreements with countries allowing reduced duty for imports. The most notable is the North American Free Trade Agreement (NAFTA) with Canada and Mexico. The United States also has trade agreements with Australia, Chile, Israel, Jordan, Morocco, Panama, Singapore and several Central American countries through the Central America Free Trade Agreement (i.e., Costa Rica, Honduras, Nicaragua, El Salvador, Guatemala and the Dominican Republic). With each of these agreements, you may qualify for reduced rates of duty, depending on your product category.
For information on trade agreements go to www.ustr.gov.
Security Since 9/11, the Department of Homeland Security has launched several programs to protect the United States from terrorist activities. This includes protection for import containers. Most important, the United States has moved its border security out to foreign ports in an effort to inspect containers before they are shipped to the United States.
The most notable program for importers is the Customs-Trade Partnership Against Terrorism, which offers importers a means to speed up customs inspection through voluntary participation. For information on security programs, visit www.customs.gov.
There are few organizations available for importers, but one to investigate is the International Trade Council of Greater Kansas City (www.itckc.org), whose membership cost is reasonable and programs are substantive.
The first step to crossing into international trade is education. So learn all you can and prepare for success before taking your business overseas. Frederick L. Baehner is president of InterMark3 Inc., which specializes in international public relations, consulting and marketing. He can be reached at (913) 248-7770 or
