What Causes A Customs Inspection?

You have made arrangements to export your vehicle from the US and have completed all the necessary payments, documentations, and container bookings. However, your transport provider has given you some bad news: your shipment has to undergo a Customs inspection. This unexpected development has now disrupted your entire shipping schedule. But what if you could have avoided this step altogether?

Although some Customs inspections are conducted randomly, there are a few measures you can take to decrease your likelihood of being selected. Certain factors are more likely to trigger a customs inspection, and being aware of them can help you avoid any unnecessary delays.

During a Customs inspection, Customs officers and representatives from other Participating Government Agencies (PGA) work together to prevent the export or import of goods that do not meet US Customs and Border Protection regulations. The inspection aims to identify contraband, counterfeit goods, improperly declared items, prohibited goods, embargoed items, or any other goods that do not comply with the stipulations set by US Customs and Border Protection.

Customs officers carry out inspections for the following three reasons:

Verify that the goods match the documentation issued.

This usually includes the export or import declaration form, packing list, and other relevant documents. For instance, customs officers will examine the carton boxes to ensure that the shipment information matches the export declaration form, including the product name, quantity, and other details.

Confirm the authenticity to prevent smuggling, tax evasion, etc.

It is possible that some inexpensive goods have a low tax refund rate but use a different HS code to receive a higher tax reimbursement.

Ensure effective administration and supervision.

Customs inspection is a critical means of supervision to guarantee that all export or import businesses are safe, transparent and ethical.

2. How does customs inspection work?

Customs inspection works in two situations:

Situation 1 — Random control by the customs system

The customs computer system classifies imported and exported goods and sets them with risk parameters. The higher the risk parameter, the higher the probability of inspection.

Situation 2 — Manual control by customs officers

Manual control by customs officers occurs when there is something wrong or suspicious with the declaration information submitted to the customs authorities. For example, if customs officers have doubts about the contents of the declaration form, they will manually issue instructions on the customs computer system to examine whether this batch of goods is consistent with the information recorded in the document.

In general, the customs inspection rate is about 5%. Note that this ratio is subject to change from time to time. For instance, during a certain period, U.S. Customs will conduct quick and intensive inspections of some products that are prone to infringement. However, such situations are rare as a whole.

There are many reasons why your shipment may be selected for inspection. Some of the most common reasons include:

Random inspections
Discrepancies in related paperwork
The container has no seals or the seals are damaged
X-ray scans of containers to ensure no restricted or prohibited items are present
Thorough inspections of goods coming to or from countries that are sanctioned by the USA.

3. Which Shipments are More Likely to be Inspected by Customs?

Sensitive goods are often considered high-risk by customs officials. This is because such products are easy to manipulate for high export tax refunds or falsely high tax refunds. As a result, customs officials tend to focus on the export prices of these types of goods. Furthermore, many freight forwarders mix sensitive goods into general cargo to make customs clearance easier. This means that sensitive goods are more likely to undergo customs inspection.

Common sensitive products in export and import include the following five types:

Products with Batteries

Items such as toys that contain batteries are popular products, but they are subject to stringent examination by customs officials due to safety concerns surrounding built-in battery shipping.

Branded Products and Luxury Goods

Customs officials primarily check to see if these products are counterfeit or not. For example, US customs officials regularly inspect counterfeit clothing and accessories, consumer electronics, shoes, watches and jewelry, handbags, and wallets. According to data from U.S. CBP (Customs and Border Protection), more than half of the counterfeit products seized are these types of branded items.

Liquid, Powder, and Other Unstable Items

Cosmetics such as facial masks, perfumes, and lipsticks are common examples of items that can undergo changes during transportation, potentially leading to heat generation and explosion.

Optical Disc and CD Products

These products often come with high political or cultural risks, such as internationally confidential content or coverage of political, economic, cultural, and ethical content.

Food and Medicine

Common examples include meat, seeds, kitchen flavoring, and various drugs. These items may carry the risk of biological invasion, so import and export customs officers strictly review the quarantine certificate and conduct random checks according to their experience and government policies.

Additionally, if there is a tax reimbursement increase for a certain commodity, customs officials will step up efforts to inspect that product during that period. This is because there may be tax fraud involved.

4. What do customs officers investigate?

Customs officers mainly focus on the following:

Whether the freight matches the description in the submitted documents.
Whether there are any contraband or dangerous goods.
Whether the products involve infringement.
Whether there are any omissions or false customs declarations.
Customs inspections focus on eight aspects. Let’s look at them one by one.

1) Product name

Carefully check whether the declared product name matches the actual cargo type. If there is a difference, further evaluation is needed to determine if there was an attempt to evade or falsify the declaration. Two common errors are:

Confusing the product’s usual name with its formal name.

Combining multiple product names to save trouble, which can cause the product price, net weight, and quantity to be higher than the real ones.

If Customs detects that the declared product name differs from the actual cargo, they will analyze the specific case and take measures, which could include imposing a fine or destroying shipments.

2) Weight

Examine whether the declared gross and net weight matches the actual goods. For example, if freights are charged by weight, using the wrong weight to calculate the net weight can lead to an inconsistency with the actual net weight and is easy to spot.

The allowable weight error range is 3% up and down. This is because weighed measurements can’t be so accurate. In practice, the error scope is at 1%. For example, the declared container weight is 10 tons, but the actual container weight is 10.1 tons, which is acceptable.

3) Total quantity

When examining the goods, customs often do not count packages one by one but check the number of carton boxes according to the data written on the declaration form. This is done to prevent the concealment of certain products.

The most common issue is that the actual total quantity of goods is larger than the declared number. This is because the customs declaration form is usually prepared before the goods are packed and shipped. If there is an increase or decrease of cartons that are actually loaded into the container, the declared number needs an update, which is easy to forget. For example, the last packed carton, samples, and free gifts must be counted in the declaration form.

4) Infringement issues

Customs strictly check this point. If products have brands, trademarks, or copyrights, customs will examine the brand authorization file. If not, customs will judge whether this batch of shipments involves infringement.

5) HS code of products

Check whether the product HS code you declare to customs is accurate. The HS code relates to the product tariff rate, and using the wrong code for declaration can lead to paying less or more tax than required.

It is error-prone to classify multi-function products. For example, a tablet with a call function should be classified as a mobile phone rather than a tablet. It is essential to use the customs HS code to declare your product, avoiding punishments from customs.

6) Product price

For each item, the customs system has recorded its HS code and price range into the database, and the system has set an early warning function. Once the declared value is lower or higher than the set range, the system will immediately inform the officer that there is a problem with the price. So, it is not possible to declare the product value as much as you want, which is easily held by customs.

7) Samples for testing

This is rare and usually applied to chemicals that can’t be judged by eyes and need testing. For example, dangerous and corrosive products.

8) Container inspection

Check the container. If without careful inspection, it is hard to find any problems. Generally, customs will carefully check special types of containers.

5. Customs Inspections in China (4 Methods & Process Explained)

If you are transporting LCL or FCL shipments from China, you should be aware of the differences in customs inspections. Read on for more information.

LCL Shipments

At the departure port in China, customs will randomly inspect shipments. If your cargo is as you declared it and does not contain sensitive goods, customs clearance can take 1-3 days.

The randomly selected packages will be taken to the customs examination area for manual inspection.

Manual Inspection Method — goods are taken out of containers and cartons are unpacked for the customs inspector to check the actual shipment conditions. Bulk cargo inspections are done before loading into the container, so there is no need to open the containers.

In most cases, customs officers will conduct a partial inspection.

Partial Inspection Method — a certain ratio of packages in your shipment will be inspected according to inspection requirements. The ratio will determine the product name, specification, quantity, and weight of the shipments.

Suppose a batch of shipments consists of 50 carton boxes in total. The inspector randomly unpacks 5 boxes. If there is something suspicious with 4 cartons, there will be a complete inspection, which takes more time.

Complete Inspection Method — the inspector will carefully check the product classification, specification, quantity, weight, and other details after opening all your packaging boxes.

FCL Shipments

For FCL shipments, the containers are sealed and transported by trailer to the customs inspection area for machine inspection.

Machine Inspection Method — the actual conditions of goods are analyzed and judged using high-tech means such as a weighing machine and an X-ray scanning machine. Usually, there is no need to open the container or unpack carton boxes.

If suspected items are detected, customs officers will require the container to be opened and packages inside to be unloaded for practical inspection. Once confirmed that there is a problem, they will conduct a complete inspection of the entire container.

Customs Inspection Procedures

Once a customs inspection has been decided, the customs authorities will take the following steps:

1) Issue the “Letter of Notice of Inspection”

The notice letter informs that Customs will inspect your goods in a legal way. The forwarder or customs broker will receive it.

2) Arrange the inspection plan

Customs officers usually make the schedule as there are a lot of goods needing inspections. It may be the next day after the decision-making date or a week later. In this case, your cargo may not be able to ship on the original date and have to wait for the next shipping date. Your freight forwarder will inform you.

3) On-Site Inspection

Your Chinese suppliers or their clearance agent will arrive at the inspection area and move the goods to the designated site. Then inspectors will conduct on-site examinations.

4) Signature after inspection

After the inspection, customs officers will issue a report. Your agent will sign it.

Onestopimport has long-term reliable customs brokers to smooth the inspection process

You may think that the goods would not encounter import customs inspections after export customs exams. Actually, the two do not affect each other. Chances are that, unluckily, your shipment gets chosen for inspection by the import customs. The US customs examination is taken as an example.

5) Common five customs exam types in the US

Typically, U.S. CBP conducts customs inspections of imported goods. According to the inspection method, we can divide U.S. Customs inspections into the following three types:

X-RAY Exam (VACIS/NII)

VACIS (Vehicle and Cargo Inspection System) or NII (Non-Intrusive Inspection) is the most typical inspection method, also known as the X-RAY Exam.

When containers arrive at the port of destination, they will be scanned by the X-ray machine. Customs officers only need to look at the pictures to judge shipment conditions. Just like taking the subway, your backpack needs to be scanned by the machine. If all goes well, the officer will release containers. Basically, this kind of inspection will not affect the normal transportation of goods.

Tail Gate Exam

After X-RAY Exam, if customs officers still have questions about your container, they will open it and simply check the packages inside. Usually, this won’t be a complete inspection. If everything is normal, they will release your container.

Intensive Customs Exam

If there is a problem, officers will conduct the most stringent Intensive Inspection Exam. The entire container will be delivered to CES (Centralized Examination Station). This is a private firm authorized by US Customs, responsible for opening containers, loading and unloading packages, plus unpacking each carton. All these facilitate the physical examination by customs officers in a complete way. In case of suspicious items, officers take samples for testing.

This is the inspection type that buyers and suppliers fear the most. It takes a week to 30 days, depending on how many other shipments are in the inspection queue.

In addition, according to the type of CBP team who conducts examinations, we can divide the inspection into the following two types:

CET (Contraband Enforcement Team) Exam

Mainly checks contraband items such as weapons and drugs.

MET (Manifest Examination Team) Exam

Mainly checks whether cargo matches the submitted paperwork such as manifest, packing list, etc. After opening the container, unloading and unpacking cartons inside, officers will examine the number of boxes, the product name, and HS code, the declared value, etc. Also, smuggling and infringement issues are included in the officers’ checks.

Besides CBP inspection, some American functional departments have the right to inspect imported goods. For example, FDA mainly inspects items related to the human body, like cosmetics. CPSC mainly checks products related to children’s safety, like toys. FCC mainly checks communication-relevant items, like wireless earphones. These departments can do inspections after CBP releases your cargo. And if there is a problem, they will hold your goods.

6. Fees and time for customs inspection

There is a common misunderstanding that Customs charges inspection fees. In fact, Customs is simply an administrative law enforcement department of the nation and does not charge any fees. Customs inspection fees refer to a series of fees generated during the inspection process, including venue, equipment, and labor costs. These charges may include but are not limited to:

Crane and weighing fees

All logistics fees from the location of your shipments to the customs inspection site

Storage/demurrage/detention charges while your goods await customs inspections

Labor cost for sorting goods, unpacking, unloading, and reloading packages, opening or resealing the container

Labor costs account for the most significant portion of inspection fees, and the more complex the inspection type, the higher the cost. In China, customs inspection for one 40’GP or HQ container costs roughly $140, while a 20’GP is cheaper.

The labor cost varies from country to country, so inspection fees also differ. For precise inspection fees, it is best to directly ask your customs broker or freight forwarder. Your agent will pay the fees first and collect the money from you later. Before paying, you can ask for an invoice to ensure that it is real. Often, the official invoice for relevant charges is issued by the port or transportation company.

Customs Inspection Time

The customs inspection time usually ranges from 2-15 days, and for more complicated inspections, it may take up to one month or even longer. In China, customs inspection is generally faster than in other countries.

7. What to do if Your cargo is held at customs?

If your cargo is held at customs after inspections, Customs will issue a notice that provides information on why your goods were detained. It is necessary to carefully read the notice and take appropriate action.

For example:

If the HS code is incorrect, Customs will ask for a statement to describe why your product is wrongly classified and whether it was tax evasion or not. Sometimes, reclassifying the item, revising the document, and paying a fine will be sufficient to release your goods. However, if Customs officers do not accept your explanation and think your freight involves major problems, they will hand it over to the anti-smuggling department for treatment.

If you lack certificates, you need to supplement the relevant documents as required by Customs and submit them within the specified time. For example, children’s toys imported into the US must have CPC, CPSIA, and ASTM F963 test reports.

If the declared value is lower than the range set by Customs and officers demand an additional tax payment, you can repay it to Customs within the specified time and then pick up your goods. If this time limit is exceeded, your cargo will be returned to the place of origin.

It is difficult to cover all cases, but it is recommended to seek the assistance of professional customs brokers to deal with cargo hold issues. Customs will decide whether to release the goods or not.

For detained and confiscated goods, Customs usually deal with them in two ways:

Auction – target goods that are not specified by national laws and regulations.

Destruction processing – destroy contraband items on the spot. For pirated CDs, illegal publicity materials, etc., there will be harmless destruction.

The end

I hope this blog post has given you a general understanding of customs inspections. If you have any additional questions, please feel free to leave a comment below.

As a top Chinese sourcing agent, Onestopimport has extensive experience in assisting clients with sourcing and shipping products from China. We offer competitive pricing for our products, and, more importantly, our exported goods are rarely held by customs after inspections. If you need support for your import business, please contact us.

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