Did you know many people unknowingly have fallen victims
of good delays, even seizure or impounding due to wrong or false declaration
during the importation process? Do you believe you can avoid being a victim by
reading through this article? Valuehandlers
International is giving you the likely mistakes and errors leading to wrong
or false declarations, the implications of such on you, your business and your
company as well as why you must be cautious of it.
The following are but not limited parts and parcels of
wrong/false declarations and the implications embedded in importation process:
Read also: Goods under NAFDAC regulation
1. Wrong Contact, Packing and Payment
Information
If you provide the wrong contact, packing or
payment information for your export documents, your goods might be delivered to
the incorrect address.
·
If you have the wrong contact name or if you
don’t have a contact’s name and phone number listed for
your shipments and there are problems en route, your goods may arrive late or
not arrive at all. The wrong contact information will delay shipments, so make
sure you’ve checked with all parties and verified their contact information
before you start your paperwork (and again before you send your goods on their
way).
·
If you have the wrong address on a waybill,
your goods could be delivered to the wrong location.
The container may end up sitting in a warehouse, and you will be stuck paying
fees to store it while you’re getting it straightened out.
·
Creating inaccurate packing lists.
If customs wants to review your goods—and the goods are incorrectly
labeled—officials may have to tear apart your entire shipment in order to find
and examine what they’re looking for.
·
Wrong information on bank draft: If
your bank draft form isn’t filled out correctly, you may not get paid on time
2. Wrong Classification of Goods
Schedule
B vs. HTS Codes
There are potentially expensive consequences
for misclassifying your goods, so it’s crucial to get your product
classification correct. You can classify your products by using either the
Schedule B or Harmonized System (HS) codes.
Regardless of which set of codes you use to
classify your goods, you want to make sure you are using all 10 digits on your
export paperwork. For documents that are used internationally, you will
typically list only the first six digits of the codes, since these are the same
in almost every country.
Automated
Export System (AES)
Your
product classification doesn’t appear on just your export documents. You are
required to file the proper 10-digit codes when filing your electronic export
information (EEI) through AESDirect. That includes using the correct quantity
and units of measure for your goods as defined in the Schedule B and HTS Codes.
Whether you’re relying on your freight
forwarder to file through AES for you or you’re doing it yourself, if you’re
not submitting the correct unit of measure and quantity, you will run into
problems:
·
AES may reject your misclassified filing.
·
If AES doesn’t reject your
filing and the transaction continues, you’re committing fraud, and you could
face fines and other penalties.
Export
Control Classification Number (ECCN)
In addition to classifying your products with
the proper Schedule B or HTS code, you need to determine whether or not your
products require an export license before you ship them. The first step of this
process is determining who has jurisdiction over your goods. Once you’ve
determined jurisdiction, you need to identify whether or not your products have
a classification number under the International Traffic in Arms Regulations
(ITAR) or the Export Administration Regulations (EAR). Most products fall under
the jurisdiction of the EAR, and most items don’t require an export license.
But you should never just make that assumption.
3. Wrong Value
After you’ve created your commercial invoice,
you may have a customer who requests you change its value to allow them to save
money on import duties. Don’t do it! This is one situation where the customer
isn’t right.
If you create export documents where the
value of your goods is wrong, you could be committing fraud. At best, your
compliance can cost you and your company your reputation. At worst, your
‘adjustment’ can lead to fines and penalties.
4. Wrong Product Description
Avoid using a product description that
doesn’t match your letter of credit. The product descriptions and other fields
must match how your good is described on the letter of credit. Discrepancies
could lead to delays in shipments and delays in payment.
5. Having the Wrong Person Fill Out Dangerous
Goods Forms
To put it plainly, there are potential
disastrous consequences if you mislabel your dangerous goods. The easiest way
to avoid these consequences is to make sure the right person is filling out
these forms.
Depending on the size of your company, you
may be the only person who should complete this paperwork, or you could have a
small number of trained employees who are responsible for the job. We think
(and the government agrees) that it’s critical to be properly trained in
handling and dealing with these types of goods before you fill out these forms.
6. Wrongly Assuming Your Goods Qualify for
Preferential Rates
When you use free trade agreements, you are
certifying that your goods qualify for duty-free treatment under very specific
rules, and you can prove it if you are audited. There’s no room to assume your
goods qualify. If they don’t qualify under the rules of origin, you’re
committing fraud and you could be fined.
The consequences of your assumptions don’t
affect just you. Your customers may be forced to pay substantial penalties if
the goods don’t qualify for the reduced duty rate.
Whether these mishaps occur because of carelessness,
a lack of knowledge of rules and regulations, or just simple typographicals, it’s
important to realize that it doesn’t matter how big your company is. If you
make a mistake when creating your export documents, you’re responsible for it.
Without the correct paperwork, you’ll delay your shipments and ultimately
delaying getting paid.
Therefore, wrong or false declaration
in import process can lead to non-compliance penalties, border delays, seizure
of the products, or even a denial of import privileges. As the exporter of the
products, you are responsible for correctly classifying them, and therefore you
are liable. When in doubt it is best to seek expert. Read more about our other
services here.
About the Blogger: Valuehandlers is a Supply Chain
Management Company Specializes in Air & Sea Freight Shipping, Customs
clearing & cargo servicing from and to 80 countries.
Get Quote now
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