Understanding US Customs Notifications, Actions and Exams

Perhaps some of the least popular Customs topics, and ones that have the potential to be the most painful, are Customs’ notifications and exams. This blog post will provide a brief overview of the several types of CBP notifications, holds, and exams that an importer might receive on inbound shipments to the United States, what an importer should do if a notification is received, and some best practices on how to deal with each of these situations.  

This post will cover: 

1. Process Timeline 
2. What is CBP Looking For? 
3. Types of Notifications 
4. Types of Holds and Exams 
5. What to do if you receive a notice, hold or are subject to an exam 
6. Notification and Exam Best Practices for Importers 

Although there may be some overlap, our review follows the timing of the entry process and when the importer and/or their broker would be contacted by CBP:  

• Pre-Entry 
• Active Entry 
• Post Entry 

The 'What, How, and Where' of Customs requests 

During the pre-entry period, CBP’s focus is to analyze and investigate, to determine and prevent any danger related to national security. They do this through analysis of manifest data transmitted prior to the physical arrival of the goods at the first US port of entry. If any “red flags” are found, the importer, or in most cases their Customs Broker, is contacted via Customs interface. 

During the entry process (which consists of transmission of data to US Customs and their subsequent review), customs requests for information can be prompted by a variety of factors. In some cases, the notification/request can be driven simply due to random sampling of entries, in which, any number of factors may have selected the import for further review. In other cases, Customs may be targeting specific shipments based on country of origin, commodity, value, trade lane, specific manufacturer or importer flags, and others.  

Types of Notifications 

CBP has several different methods to “request” and gain additional information.  

REQUEST FOR INFORMATION – CUSTOMS FORM 28 (CF28) 

CBP will issue a CF28 to request additional information related to a specific entry. Among other areas of interest, this may cover questions regarding the HTS classification, declared value, the country of origin, whether the product qualifies for Free Trade Agreement, application of Antidumping or Countervailing Duties, Section 301 tariffs, etc.  

NOTICE OF ACTION – CUSTOMS FORM 29 (CF29) 

With a CF29, Customs has reviewed specific entry information and is indicating they have enough information to take a specific “action” that often will result in an increase in assessed duties. Upon receipt, importers are encouraged to review the contents of the CF29 quickly and carefully and the specific CBP action taken. 

Customs Holds 

There are three main types of holds: 

• Manifest hold: CBP places a hold placed on shipments with an incorrect manifest. 
• Statistical Validation Hold: A hold placed on shipments when the goods listed on the manifest do not match the expected weight, value, etc. 
• CET Hold (A-TCET): A hold placed by the Anti-Terrorism Contraband Enforcement Team to determine if a shipment may contain illegal contraband. 
• PGA Commercial Enforcement Hold: A hold place on a shipment to ensure that it complies with regulations enforced and governed by Participating Government Agencies (PGAs) (i.e.: FDA, USDA, CPSC). It’s important to note that CBP’s authority does not supersede any other PGA, but each has its own unique requirements – get rejected by any one of them and everything stops until resolved. 

US Customs Inspections and Exams 

If CBP flags a container for an inspection, they will conduct an examination to decide if they should confiscate or release the cargo. There are three main types of customs exams: 

• X-Ray Exam (VACIS exam): Not dissimilar to the X-Ray exams of passenger cargo and carry-on luggage at the airport, flagged containers are scanned by CBP using an X-ray machine at the terminal. Based on their findings, CBP will either release the container or flag it for an additional exam. 
• Tail Gate Exam: Typically, these exams are conducted at the port. The container is inspected at the pier where CBP will break the container seal and physically inspect the shipment. Depending on their findings, they will either release the container or flag it for an intensive exam. 
• Intensive Exam: When a container is flagged for an intensive examination, the entire container is taken to a Customs Exam Site (CES), where a customs officer will conduct a full inspection of the cargo. 

As an Importer, what should I do if I receive a notification, request for information, hold, or exam notification?  

In most cases, your Customs Broker should already be aware of the request and will have contacted you already. If not, make sure to immediately contact and engage with your Customs Broker to review the requests and coordinate a response. Typically, unless otherwise specified, CBP will expect some form of response within 24-48 hours of receipt of notification. If the requested information is not immediately available (not ideal…) be sure to communicate back to CBP a reasonable period of time in which the request can be accommodated.  

There can be both direct and indirect costs involved with notifications, holds and exams. From the time needed to respond, to secure and provide the requested information, and time involved while a container is on hold or subject to exam. Holds and exams can also get particularly costly as demurrage, storage, examination site and administrative costs accrue. 

Notification and Exam Best Practices for Importers 

• Be prepared with all required information prior to entry – if you wait until CBP makes a request, you risk exposure to additional costs (demurrage/storage/storage/etc.), delays and potential compliance risks. 
• Work with your Customs Broker to get shipments cleared before arrival at the destination port. Five to seven days prior to arrival is recommended. 
• Contact your Customs Broker if you receive notifications directly from CBP. 
• Be patient - While this can be an anxious time for many importers, it is important to understand that CBP can be quite methodical in their approach -processing and responses can often take time. 
• Make sure if you always check ahead of time with your Customs Broker/Freight Forwarder, if you are changing your business model in any way - such as adding new product lines, importing from a new country, changing manufacturing processes, how the production is handled, how the packaging looks or feels;  any kind of change to your product or where it's coming from so that you can have a clear understanding of Customs requirements. 

It's an understatement to say that these are challenging times, but they are. Do not let customs notifications, holds and exams add to the current supply chain headaches of port congestion, lack of transport capacity or one of the many other challenges. Plan ahead to prevent avoidable issues and in the event of a CBP notification or action, respond quickly with the help of your trusted Customs Broker.  

Still have questions or current challenges where you could use some additional help? Please contact Ashley Coxey, National Director of Business Development, Customs Brokerage or any member of our expert Customs Compliance team at compliance@laufer.com.