When articles are sold in countries with higher ease of doing business, opportunities to grow increase immensely. However, importing products to other countries does involve checking the legitimacy of the business and the nature of the goods that are being imported. To import goods, foreign companies need to possess an import license to conduct business.
What is an Import License?
An import license is a documentation or submission of an application to the concerned authorities before the import process. An import license is a documentation of acknowledgment that the government recognizes the business and the certain goods that the company imports. A US import license is considered a non-tariff barrier to discriminate between the imported goods and domestic goods to protect the domestic industry. There is usually a restriction on the volume of imports allowed, which is mentioned in the import license. Import licensing also provides security from legal disputes and financial losses for businesses engaged in international trade.
What are the requirements for importing into the United States?
The US is one of the most import-friendly countries in the world. In majority of the cases, an import license is not needed to import articles into the US except in case of specific articles, which may require a special license, permit, or other certification.
In general, this checklist should be kept in mind for a smooth import process into the US:-
Familiarize yourself with the US import rules and regulations
Keep the "Informed compliance" requirements ready
Refer to the requirements for the permits, licenses, or other certifications based on the nature of articles to be imported
Avail of some background information about the business factors for importers
Adhere to the guidelines and requirements of the Customs and Border Protection (CBP) and the federal agencies
Reach out to the local port of entry that will import the goods
Fill out the CBP entry forms within 15 calendar days of the date the articles enter the US port of entry
Mention the importer number on all the forms. The IRS business registration number is considered as the import number. In case you do not own a business, your social security number becomes the importer number.
Ask the CBP to share the assigned number by filling out the CBP Form 5106 and sharing the same with the port of entry
Also Read : Most Common Shipping Documents For Importing In The US
How to get an Import License in USA?
The US is a license-friendly nation and does not require a license to import most of the goods into the country. However, the entry of a few commodities require a permit or a special license. These commodities are regulated by the Partner Government Agencies (PGAs). Every PGA has its form and regulations to comply with. Generally, these forms are free of cost. For example, if you are importing alcohol, then you will have to fill the form TTB F 5100.24 associated with the Alcohol and Tobacco Tax and Trade Bureau (TTB). In case you are not sure if the importing item requires a permit from a PGA, it is best to consult a licensed customs broker. There are licensed customs brokers available on the CBP website that are approved by the US Customs Clearance authorities to answer all import-related queries.
What commodities need licenses or permits?
As mentioned above, the PGAs regulate the entry of some goods in the US and command a special license or permit. Some of these special commodities that require a license and their respective agencies are mentioned below.
- Agricultural commodities:- Cheese, fruits, and vegetables require a special license along with their inspection and certification. A phytosanitary permit is a must for imported plants and plant products.
Agencies: US Department of Agriculture (USDA) and The Food and Drug Administration (FDA).
- Arms and ammunition:- Imported firearms and alcohol require a license and are subject to the excise tax.
Agency: Bureau of Alcohol, Tobacco, Firearms, and Explosives (TTB).
- Commercial equipment:- Energy-efficient labels are a must for air conditioners and furnaces.
Agencies: The Department of Energy (DOE) and the Federal Trade Commission (FTC).
- Consumer products:- Toys for children under the age of three cannot have hazardous materials, leading to choking. Moreover, the U.S. Consumer Product Safety Commission(CPSC) limits the use of phthalates and other prohibited materials in children’s toys.
Agency: The U.S. Consumer Product Safety Commission (CPSC).
- Precious metals:- Gold with error in its finesse is prohibited.
Agencies: CBP and the Federal Bureau of Investigation (FBI).
A few government agency restrictions that are not commodity-based are as follows:-
The Office of Foreign Assets Control (OFAC) administers regulations that impose sanctions.
The International Trade Commission (ITC) restricts imports where unfair methods of competition take place.
Common US Federal Agencies and the type of products they oversee for Import License:-
FDA:- The agency oversees the import of medications, cosmetics, foodstuff, house, and food-related items, health devices, etc. Prior notice has to be given to the FDA before importing food products.
Environmental Protection Agency (EPA): The officials oversee the import of chemicals and its related items.
Department of Transportation (DOT): According to the CBP, the DOT regulates the import of cars and motor vehicles.
Consumer Product Safety Commission (CPSC): The CPSC regulates all general products, non-food items which are imported for the masses. They also regulate the import of all toys and children’s products.
FTC: Apart from enforcing the Civil US Anti-Trust Law and protecting its consumers, the FTC also oversees the import process as a whole, including product labeling.
USDA: The agency oversees the import of plants, wood, animals, plant-based products, and more. For many products, the USDA enforces the requirement of an import permit.
TTB: The TTB oversees the import of alcohol and tobacco. They issue permits like Federal Basic Permit, Certificate of Label Approval (COLA), Natural Wine Certificate, and Certificate of Origin and age to alcohol and tobacco importers.
Apart from the above-mentioned agencies, there are countless other PGAs that importers need to know about when importing goods. A customs broker or a law agency can help in meeting these requirements.
Who handles Import Regulations?
The U.S. Customs and Border Protection (CBP) are responsible for import laws and regulations.Every shipment that crosses the border into the United States is subject to, and subsequently released by, CBP before they can be delivered to their destination.
How much does an import license usa cost?
Generally, these licenses/permits are free. You simply need to complete the associated agency form and follow the necessary instructions. Many people mistakenly considers customs bond as an import license, which is not that bad since you need to pay the bond amount if the value of a commercial import exceeds $2,500.
Do I need license to import from china?
Importing goods from China generally does not call for an import permit. However, an import permit from a US Federal Agency is necessary when importing certain goods from the country. The Federal Agency will change and their requirements will vary based on the types of goods to be imported. The importer must comply with all the federal requirements to take ownership of the goods once they land in the US. These requirements sometimes will include an import permit/license.
There are certain essential things that need to be kept in mind when importing from China.
- Verify if the goods from China are legally allowed to be imported to the US:-
Some products/goods from China have special rules when it comes to importing to the US. A customs broker or a law agency can determine if the products can be legally imported to the US and also help with the required documentation.
- Finalize the shipping costs and Incoterms:-
Based on the Incoterms followed, either the importer or the seller will be responsible for the shipping costs and the risk attached. The importer needs to work with the seller to finalize the Incoterms.
- Determine if the product information is clear:-
The importer needs to be aware of the exact product information before importing the goods. This is essential because submitting incorrect information to the CBP is illegal.
- Follow the correct customs procedures:-
The importer should follow the proper customs procedures when importing from China. A customs broker or a third party law agency can help verify the proper steps and regulations.
- Product liability insurance:-
When importing from China, the importer can select product liability insurance by engaging with an insurance professional. This will cover the importing party from losses from defective products.
- Verify the customs bond:-
The importer should ensure that the appropriate customs bond has been granted for their business. A customs broker can help in selecting the correct customs bond.
Import License vs Import Permit
Import license is issued by the government or by one of the PGAs to import certain types of goods into the country. The terms ‘license’ and ‘permit’ are essentially the same but there is a minor difference in their meaning.
Import permit is a temporary document that is issued to import one specific type of restricted goods whereas an import license is a permanent document issued to the importer.
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