U.S. Customs Entry Process & Lifecycle
Trade Talk Blog • July 8, 2021
hen you’re importing goods into the United States, the Customs Entry and import process may seem complex, with a lot of steps to follow and a raft of documents and forms to be filed. GHY is here to simplify this for you, so that you have a good understanding of the process and requirements.
One of the biggest questions U.S. importers ask is, ‘How long is the process of a Customs Entry?”. To help answer this question, let’s breakdown the lifecycle of a Customs Entry and the most important milestones.
Importing Goods to the United States
So, you provided all the paperwork to your customs broker, your shipment has arrived in the United States, you paid your broker for the entry and the duty, and now you’re feeling pretty good.
Mission accomplished, right? You’re ready for that gold star that says, “way to go! You’ve successfully imported goods to the U.S. without a hitch!”. I will pause for a moment and give you a big high-five because importing into the U.S. can be quite the celebration-worthy victory.
However, the life of a Customs Entry continues beyond the arrival of your shipment. In fact, U.S. Imports go through a customs lifecycle that can extend for about a year (and in some cases longer) after entry.
Before we dive into the process, let’s start with a basic understanding of the Customs Entry.
Defining a Customs Entry
The mission of U.S. Customs and Border Protection (CBP) is to “Protect the American people, safeguard our borders, and enhance the nation’s economic prosperity.” So, it is CBP’s job to make sure that who and what enters the border does not jeopardize the safety of the people, the borders or the economy of the United States. In order for CBP to do this when it comes to imported goods, it has to know what is coming and from where. This is where a Customs Entry comes in. A Customs Entry is a declaration that includes specific information about the merchandise you’re attempting to import. If you’re working with a customs broker, they will file the Customs Entry documentation on your behalf and guide you through the process.
Understanding the lifecycle of an entry can be extremely powerful. It allows you to prioritize and utilize certain tools for correcting or changing a Customs Entry even after CBP has released your shipment. It can also help you understand what outstanding risk you might have open. Let’s take a look at some of the milestones within a typical Customs Entry.
Importer Security Filing (ISF)
Although an Importer Security Filing (ISF) is not usually part of the U.S. Entry process, I believe it’s worth mentioning as part of a shipments’ story. If you’re not familiar with the term, an Importer Security Filing (ISF) is a set of data that is required to be filed at least 24 hours before a shipment is loaded onto the vessel destined for the United States. This is only required for shipments traveling by sea.
You can learn more about what is required for an ISF and why it is required in our Importer Security Filing (ISF) on Canadian Imports article.
Entry & Entry Summary
There are two parts to filing a Customs Entry: The Entry and the Entry Summary. Both of these presentations are required by the Federal government as part of their procedure for allowing goods to flow freely between countries.
In a nutshell, the Entry presentation helps U.S. Customs and Border Protection (CBP) determine the admissibility of the merchandise while the Entry Summary presentation helps assess the duty obligation.
Filing your Customs Entry and Entry Summary correctly is a sure way to avoid penalties and fines when importing goods to the United States. Let’s review them both so you’ll know the right information to file and how you’ll know if it is in the right place.
Customs Entry Presentation
Before your shipment arrives in the US, your customs broker will need paperwork from you and your freight forwarder in order to put together and file the Customs Entry. The declaration includes information like:
- What is coming
- How much is coming
- Who is responsible for it
- Where it is coming from
- Where it is going
- How it is getting here
- Where it was made and who made it
- Information required by any Partnering Government Agencies (PGAs) that regulate the product being shipped, such as the Food and Drug Administration (FDA)
This information allows CBP to determine whether it wants to take a look at the paperwork, examine the actual shipment, or go ahead and release the shipment.
Customs Entry Summary Presentation
The Entry Summary – also known as CBP Form 7501 – refers to all documentation required by CBP in order to assess duties, collect statical information and determine if additional requirements have been met on imported goods.
Ten days after the shipment is released, the Entry Summary must be filed and the estimated duties must be paid. The Entry Summary presentation includes things like:
- Customs Value of the merchandise
- How much duty is owed
- Information regarding special rates of duty such as Free Trade Agreements, Section 301, Section 232, Antidumping, and/or Countervailing duty
- How much taxes or fees are owed
- How duty will be paid
- When duty will be paid
- Special licenses, permits or certificates
It is important that the information reported to Customs at the time of entry presentation is complete and accurate, however, during the 10-day window between entry and entry summary, some changes can be made fairly easily. If you notice any discrepancies, make sure to tell your customs broker right away.
It is important to note the use of the word estimated when it comes to the payment of duties at this time. As we will discuss later, the amount you are required to pay at the time of the Entry Summary presentation could change later.
Liquidation of a Customs Entry
When you hear that a Customs Entry has liquidated, it essentially means that Customs has moved your entry over to the “done” pile. Now is when you can celebrate because Customs has either decided not to review the entry or has completed the entry review and determined the final duty amount owed.
Most entries are liquidated within 314 days from the date of entry, whereby CBP determines the final assessment of customs duty. A Customs Entry can be liquidated in one of 3 ways:
- No Change – This means that the final duty amount is equal to the estimated duty paid.
- Increase – Customs has determined that the actual duty owed is higher than the estimated duty paid, and a bill will be issued to the importer for the difference.
- Decrease – Customs has determined that the actual duty owed is lower than the estimated duty paid, and a refund will be issued to the importer for the difference.
Note that interest is assessed on an increase or decrease so you can expect to pay interest for an increase or receive interest from Customs for a decrease.
What happens between Customs Entry and Liquidation?
Most of the time, a Customs Entry doesn’t make an appearance again between Entry Summary presentation and liquidation. In fact, liquidation will likely come and go without much fanfare, so be sure to give yourself that high-five while you’re thinking about it.
This period of time allows CBP to review and determine if all is well before liquidating the entry and giving you that proverbial gold star. CBP may ask for more information about the shipment in order to determine if it was entered correctly and the appropriate duty amount was paid. If this happens, Customs might be selecting your entry for review randomly or it may have an inkling that something is off and wants to dig a bit further.
If you end up being one of these lucky ones that doesn’t get to forget about a Customs Entry between Entry Summary and liquidation, don’t panic! Although any correspondence with US Customs should be taken seriously, it’s important to stay calm, consult your customs broker or trade attorney, and respond thoughtfully and timely.
How do I know if my entry is liquidated?
Your customs broker should be able to provide reports that show which entries have liquidated and which ones remain unliquidated. If you have multiple brokers or want to gather this information yourself, you can apply for an ACE Portal account and run reports to determine this information. You can also contact one of our Trade Experts for support.
For more information about the Customs Entry process and entry regulations, check out the CBP’s Importing into the United States guide. Book a meeting with us and we’ll be happy to answer your questions and support you through the process of importing goods to the United States.
Seamless importing and guaranteed compliance: Are you importing goods to the United States and need the services of a customs broker? Are you unsure about setting up a customs entry, or confused about preparing your Entry Summary and Customs Entry Presentation? If your answer is yes to any of these questions, we’re here to help! Contact our Trade Experts to get your Customs Entry and Entry Summary documents completed correctly, on time, every time.
Kristin Zaichkin | Trade Services Consultant, GHY USA