1. Review Import Data for Accuracy

Begin with a thorough audit of your import data. Confirm that HTS classifications are correct and current, declared values accurately reflect your transactions, and country-of-origin determinations are well documented. Small mistakes can lead to large penalties.

2. Reassess Tariffs and Duty Exposure

Year-end is the ideal time to evaluate whether you are paying unnecessary duties and explore your options for tariff mitigation strategies. Consider what exclusions have changed, whether tariff engineering may reduce costs, or whether sourcing strategies should be updated. Many importers discover duty-saving opportunities simply by reassessing their tariff positions annually.

3. Strengthen Forced Labor Compliance

With UFLPA enforcement intensifying, importers must confirm that supplier information, ownership structures, and supply chain documentation are up to date. Now is the time to verify traceability records, refresh internal training, and assess whether high-risk suppliers require additional review.

4. Update Written Compliance Procedures

If your compliance manual or SOPs haven’t been updated this year, they’re likely outdated. Written processes should reflect current regulations, product updates, tariff changes, and internal workflow adjustments. CBP expects importers to document their compliance efforts clearly and accurately.

5. Conduct a Recordkeeping Audit

Recordkeeping is a key part of an importer’s duty to use reasonable care. Ensure you can quickly retrieve all required import documents from invoices and packing lists to HTS support, bills of lading, and supplier certifications. Recordkeeping failures are one of the most common issues CBP flags during audits, and year-end is the perfect time to clean up files.

6. Update Internal Training

Import compliance is only as strong as the people involved. Year-end is an excellent opportunity to refresh your team’s understanding of classification, valuation, country-of-origin rules, reasonable care, and forced labor compliance. Well-trained teams help prevent mistakes and reduce future risk.

7. Assess Audit Readiness

Consider how prepared your company is to respond to a CBP Form 28 or 29, a Focused Assessment, or a forced labor detention. If gaps or uncertainties exist, year-end provides the chance to correct them, strengthen documentation, or make a plan to improve your readiness approach over the coming weeks. 

8. Set Compliance Goals for the Upcoming Year

Finally, look forward. Establish measurable goals for the new year, whether it’s improving classification accuracy, reducing filing errors, tightening supplier oversight, implementing new technology, or enhancing training. Strategic goals help transform compliance from a reactive function into a competitive advantage.

Contact Diaz Trade Law for Compliance Help

A year-end compliance review is one of the most valuable things an importer can do to reduce risk, control costs, and prepare for the evolving trade environment. Diaz Trade Law has decades of experience helping importers with pre-compliance. With an increased focus on enforcement expected in 2026, NOW is the time to get your compliance strategy in order. Contact us today for assistance. 305-456-3830 or info@diaztradelaw.com.

Learn more:

• Bloomberg Law: CBP Recordkeeping Requirements
• Bloomberg Law: Responding to a CBP Form 28 or 29
• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Band-Aid or Stitches? What’s Your Compliance Approach?
• UFLPA DHS Forced Labor Guidance – What Importers Need to Know
• Know Your Supply Chain: Forced Labor
• Webinar: Tariff Mitigation Strategies
• Webinar: Importing 101 – Introduction to U.S. Customs
• Webinar: ACE: Auditing Your Import History
• Webinar: CBP 201 – Building & Maintaining an Effective Import Compliance Plan

 Many mistake the ease of importing to mean there is no liability or obligation on the part of the importer. However, if you import merchandise into the U.S., you may not realize, but, you are the responsible party! That means you have a duty to exercise “reasonable care” when importing.  

 What is reasonable care? Importers must conduct themselves as a reasonable importer would under the circumstance with respect to importing prior to entering goods into the United States. They must:  

• Meet the standard to enter, classify and determine the value of imported goods 
• Provide other information necessary to aid U.S. Customs and Border Protection (CBP) in properly assessing duties and collecting accurate statistics 
• Determining whether other applicable legal standards and requirements have been met 

Read more about reasonable care in our Bloomberg Law article here. 

All importers should have a plan in place to navigate merchandise descriptions & classification, product valuation, country of origin, intellectual property rights, forced labor, quotas, requirements of other agencies, and more. 

In this presentation, our speakers will discuss how to comply with CBP’s vast laws and regulations. By the end of the event, you will know and understand the importance of tariff classification, customs valuation, country of origin marking, intellectual property rights and free trade agreements. 

You will also learn basic customs concepts and terms like CBP Form 7501, protests, seizure cases, liquidated damage claims, penalties/fines, prior disclosures, and the FP&F process.  

Additionally, you will learn the top 10 tips when importing to ensure compliance. This event will provide valuable assistance to all importers, customs brokers, and all trade professionals. 

Session Highlights: 

• Importance of CBP Rulings for Classification, Valuation and Country of Origin 
• Cost Savings practices like utilizing Free Trade Agreements 
• Importance of protecting intellectual property rights 
• Basic customs concepts and terms 
• Top tips to proactively work with your Customs Broker 
• What to do if you encounter a CBP detention and/or seizure case 
• Learn when to submit a prior disclosure to CBP 
• Top 10 tips when importing to ensure compliance 
• Learn key best practices and hear real life case studies 
• Learn what to do, and more importantly, what NOT to do, and what the consequences are for non-compliance 

Who Should Attend? 

• Importers 
• Customs Brokers 
• Regulatory Affairs Professionals 
• In-house Legal Counsel 
• Product Development Managers 

We look forward to seeing you there! Register HERE. 

Learn more about import compliance:  

Relevant blog posts: 

• Bloomberg Law: What is an Importer’s Reasonable Care Standard? 
• From Chaos to Compliance: A Guide for Importers 
• Band-Aid or Stitches? What’s Your Compliance Approach? 
• UFLPA DHS Forced Labor Guidance – What Importers Need to Know 
• Know Your Supply Chain: Forced Labor 

Relevant on-demand webinars: 

• Importing 101 – Introduction to U.S. Customs 
• ACE: Auditing Your Import History 
• CBP 201 – Building & Maintaining an Effective Import Compliance Plan 

How Did We Get Here?

December 8th, 1993, the Dow Jones reached a record high of 3734.53, Janet Jackson’s “Again” remained number one on the charts, and President Bill Clinton signed the Customs Modernization Act (Mod Act). The Mod Act altered the import compliance landscape by making it the responsibility of the importer to classify items, determine their value, etc. The law also imposed a legal obligation to use “reasonable care” in doing so, or else Customs could (and would) impose penalties.

What Exactly is “Reasonable Care”?

Reasonable care requires importers to conduct themselves as a reasonable importer would under the circumstance with respect to importing goods into the United States.

Reasonable care requires importers to:

• Meet the standard to enter, classify and determine the value of imported goods
• Provide other information necessary to aid CBP in properly assessing duties and collecting accurate statistics
• Determine whether other applicable legal standards and requirements have been met

CBP is required to provide the public with guidance on their legal obligations regarding customs and trade regulations. CBP’s Informed Compliance Publication, What Every Member of the Trade Community Should Know: Reasonable Care, provides valuable insights for importers to utilize in ascertaining whether their current processes follow CBP’s reasonable care standard.

Import Compliance is a Continuous Process

Trade is a constantly changing industry. Regulations and guidelines are updated frequently, and supply chains shift often. Below are practical compliance tips on key topics under the umbrella of reasonable care.

Merchandise Descriptions & Classifications 

Importers must also be specific with descriptions included on their commercial invoices. CBP recently sent CSMS 60011750 titled “Announcement of Vague Merchandise Description Cargo Messages”. CBP advised the trade community that CBP regulations require a precise, or specific, description of the merchandise and that CBP is aiming to address vague cargo descriptions such as:

• General merchandise
• Gift
• Parts
• Accessories
• Consolidated

Deleon Trade LLC compiled a useful list of vague commodity descriptions to avoid here. The Canada Border Services Agency also provides a helpful resource on not acceptable/acceptable commodity descriptions here.

All merchandise imported to the U.S. is either subject to, or free of, duties in accordance with the Harmonized Tariff Schedule of the U.S. (HTSUS). The HTSUS is used to determine an imported article’s duty rate and whether the article is eligible to use a free trade agreement or any other trade preference program.

Importers should:

• If relying on a broker for a HTSUS classification, double check their work
• Establish reliable procedures to provide a correct and complete description of merchandise
• Consult a customs attorney if you’re unsure of the appropriate HTSUS

Product Valuation

Determining the value of imported goods is essential to calculate the total duty to be paid and often the most complicated area of Customs law.

Importers should:

• Understand the terms of sale and whether or not charges like freight, insurance, assists, indirect costs, or royalties were (or should be) included in the value.
• Keep a complete set of records from the import transaction

If you are purchasing from a related party, as defined in 19 U.S.C. §1401a(g), importers must review CBP’s tests for determining the acceptability of related party pricing. CBP’s Informed Compliance publication “Determining the Acceptability of Transaction Value for Related Party Transactions” is a good resource.

• If you are importing from a related party, ensure you speak with counsel to confirm you’re using the appropriate valuation methodology.

Country of Origin

Determining a country of origin may seem straightforward, but often a final good has multiple components from multiple countries, making the analysis more complicated.

Importers should:

• Have a process to conduct ensure you know what raw material comes from what country and understand what specific process occurred in what country.
• Ensure every imported item is marked conspicuously and legibly.

Intellectual Property Rights

CBP works with rightsholders to prevent the unauthorized importation of merchandise which bears a recorded trademark or copyright.

When importing goods with a trademark or copyright registered with the USPTO, importers should:

• Check to see whether or not the trademark or copyright is registered with the USPTO and recorded with CBP.
• Document permission from the trademark or copyright holder.
• Importers should also always check to see if the merchandise is subject to a U.S. International Trade Commission or court ordered exclusion order.

Forced Labor

Section 307 of the Tariff Act of 1930 prohibits the importation of all goods and merchandise mined, produced, or manufactured wholly or in part in any foreign country by forced labor, convict labor, and/or indentured labor under penal sanctions, including forced child labor.

Importers should:

• Utilize the Sweat and Toil app to conduct research regarding goods produced with child labor and forced labor
• Have a process in place to track where your goods are made and under what labor conditions.
• Conduct periodic internal audits to check for forced labor in your supply chain.
• Vet new suppliers for forced labor risk.
• Put a comprehensive social compliance system in place.
• Establish a procedure to maintain and produce any required entry documentation.

Importers should also be prepared for unannounced audits of their supply chain for forced labor.

Penalties

Failing to use “reasonable care” in your import compliance plan can cost you. Pursuant to 19 U.S. Code § 1592, if Customs determines that you committed a violation, and it was the result of fraud, they can impose penalties up to the value of the import. In the case of fraud, there can also be criminal consequences, which can result in additional fines and jail time for the offender.

Failure to keep adequate records can result in more penalties. Pursuant to 19 CFR § 163.6, a willful failure to “maintain, store, or retrieve” said records (for a period of 5 years) could cost you 75% of the value of the import or $100,000, whichever is less.

Other Considerations 

Import compliance goes beyond the practices outlined above. Have you considered other agencies and their regulations? The FDA is always involved when you are importing food, cosmetics, medical devices, for example. You’ll need a permit from TTB to import alcohol. Do you know if your import is subject to quotas? What about countervailing or anti-dumping duties – did you check the about 700 scope rulings? Are there special labeling requirements? What about active sanctions with the country of origin? Compliance is a complex and continual process that requires the help of an experienced professional.

A Customs Attorney Can Help Your Business Set up an Import Compliance Plan

Diaz Trade Law has significant experience in a broad range of trade compliance matters, including helping companies customize their own Import Compliance Program. The program can entail developing import compliance documents, ongoing training for various departments in your business, regular internal audits, record keeping, and more.

Such a program can help you not only avoid penalties and potential criminal liability but can also help in the mitigation process should a violation be discovered. From evaluating an existing compliance plan to developing one from scratch, Diaz Trade Law can help. Contact us at info@diaztradelaw.com or call us at 305-456-3830.

Want live training on this topic?? Join us on May 23 at the World Trade Center Miami for a LIVE training: “Navigating CBP Regulations: Essential Practices for Import Success.” You will learn top tips for importing into the United States as well as basic customs concepts like protests, seizures, liquidated damages, and the Fines, Penalties, and Forfeitures process. Register here!

Learn more about import compliance:

Relevant blog posts:

• Band-Aid or Stitches? What’s Your Compliance Approach?
• PERSONAL LIABILITY FOR OWNERS OF IMPORTING COMPANIES!  
• UFLPA DHS Forced Labor Guidance – What Importers Need to Know
• Know Your Supply Chain: Forced Labor

Relevant on-demand webinars:

• Importing 101 – Introduction to U.S. Customs
• ACE: Auditing Your Import History
• CBP 201 – Building & Maintaining an Effective Import Compliance Plan

If so, Pre-Compliance is key. Diaz Trade Law prides itself upon creating custom pre-compliance plans targeting your specific business needs including all of your “reasonable care” requirements. The end goal is to expedite your supply chain with your very own custom compliance program. Often times, this will also encompass taking advantage of voluntary compliance programs.

What are my legal obligations as a U.S. Importer of Record?

A U.S. Importer of Record has vast legal obligations to meet including ensuring they have a process in place to properly identify the classification, valuation, country of origin, intellectual property rights, and free trade agreement compliance. CBP has vast resources to assist you in understanding your responsibilities as a U.S. importer.

Compliance Successes:

After successfully resolving a CBP seizure case, assisted a major electronic importer with developing a “pre-compliance” program reviewing intellectual property rights prior to importation and reporting the same to CBP proactively and thereby decreasing intensive examinations and detentions of merchandise by CBP.

Want More Information?

Relevant blog posts:

• Band-Aid or Stitches? What’s Your Compliance Approach?
• Do You Want to be a “Trusted Trader”? CTPAT is No Longer Enough
• Intellectual Property Rights are High Priority for CBP
• Food Importers – FDA Issues New Guidance Aimed at Expediting Your Importations
• CBP Pilot Program Focuses on Pre-Compliance
• Exports from China are on the Rise – What is your IPR Plan?
• Why Pre-Compliance is a MUST
• Between a Rock and a Hard Place – Conflicting U.S. & EU Sanctions Policies Towards Iran
• CBP Issues WRO on Cotton, Tomato, & Downstream Products Made in Xinjiang
• FTC issues a Record Breaking $1.2 Million Penalty
• New Developments in U.S. Aluminum & Steel Import Procedures
• USMCA Import Considerations for Practitioners

Relevant on-demand webinars: 

• Importing 101 – Introduction to U.S. Customs
• How to Build and Maintain an Effective Import Compliance Plan

Want More Information?

Relevant blog posts: 

• Band-Aid or Stitches? What’s Your Compliance Approach?
• PERSONAL LIABILITY FOR OWNERS OF IMPORTING COMPANIES!  
• Top 10 Tips When Importing/Exporting      
• USDA National Organic Program – Enforcement & Compliance Overview
• Between a Rock and a Hard Place – Conflicting U.S. & EU Sanctions Policies Towards Iran
• An Introduction to Safeguard Investigations
• CBP Issues WRO on Cotton, Tomato, & Downstream Products Made in Xinjiang
• FTC issues a Record Breaking $1.2 Million Penalty
• New Developments in U.S. Aluminum & Steel Import Procedures
• USMCA Import Considerations for Practitioners

Relevant on-demand webinars: 

• Importing 101 – Introduction to U.S. Customs
• ACE: Auditing Your Import History
• FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions
• Importing Medical Devices in Compliance with U.S. FDA
• CBP 201 – Building & Maintaining an Effective Import Compliance Plan

FDA’s classes of medical devices:

“The Food and Drug Administration (FDA) has established classifications for approximately 1,700 different generic types of medical devices.”

The device classification is broken up into three regulatory classes (Class I-III), which is “based on the level of control necessary to assure the safety and effectiveness of the device”. To determine the device classification, the FDA looks at “the intended use of the device and also the indications for use“. According to the FDA’s Guidance on Device Regulation, the intended use of a device “means the general purpose of the device or its function, and encompasses the indications for use”. Indications for use is “a general description of the disease or condition the device will diagnose, treat, prevent, cure, or mitigate, including a description of the patient population for which the device is intended”. (21 C.F.R. §814.20(b)(3)(i)). The class for which your medical device would belong to, determines the type of pre-market submission or application that is required for FDA clearance to sell the medical device in the United States.

Class I medical devices are considered to be low risk devices, which allows them to be subjected to the least amount of regulatory controls. These devices only need general controls to determine the safety and effectiveness of the device. Most Class I medical devices are exempt from the Premarket Notification (510(k)), however this class does require an Establishment Registration for manufacturers and importers; and also requires the device to be listed. A good example of a Class I medical device would be a band-aid, because it has a low risk of harm to the user.

Class II medical devices are considered to be intermediate risk devices. Most Class II medical devices require a Premarket Notification (510(k)). “A 510(k) is a premarket submission made to the FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device that is not subject to PMA.” (21 C.F.R. §807.92(a)(3)). There is no 510(k) form, but there are certain requirements that must be met for a 510(k) submission, which can be found at 21 C.F.R. §807. Once a submitter receives a letter from the FDA stating that the device is substantially equivalent then the device is cleared for commercial distribution within the United States. An example of a Class II medical device would be a powered wheelchair, because it would pose an intermediate risk of harm to the user.

Class III medical devices are the highest risk devices because they generally support or sustain human life, which make them subjected to the highest levels of regulatory control. These devices typically have to be approved by the FDA before they can be marketed inside the United States. Most Class III medical devices require a Premarket Approval (PMA). A PMA is “the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices…and are the most stringent type of device marketing application required by the FDA”. An example of a Class III medical device would be a defibrillator, because it has a high risk of harm to the user.

The FDA Registration Process:

Any owner or operator of an establishment that is involved in the production and distribution of medical devices, and are intending to distribute those medical devices within the United States, must register annually with the FDA. Most of the establishments that register are also required “to list the devices and the activities performed on those devices at the establishment”. The FDA has a list of which domestic and foreign establishments should register and list their devices.

There is an annual establishment registration fee, and for the year 2017, the fee would be $3,382. The initial registration must be within 30 days of initiating any activity requiring registration, and also includes processing devices for exportation and importation of devices into and outside of the U.S. Foreign establishments should register prior to exporting their devices into the U.S. The FDA will not process the registration or assign a registration number until the establishment has notified the FDA that production will begin within 30 days of the registration. If an establishment is registering for the first time, then they should submit both the registration and listing forms together.

If you are an establishment that is involved with the production and distribution of medical devices and are looking to market within the United States, then contact info@diaztradelaw.com to make sure that your establishment properly registers and lists their medical device with the FDA.

Did you receive a Notice that looks like this from CBP?

(If so, we can help. See below)

Did you receive a Notice that looks like this from the
U.S. Customs and Border Protection?

(If so, we can help. See below)

Do you agree with my comments?

CBP is asking for 9 volunteer filers to submit IPR Authenticating data via email into the Document Image System (DIS). Approved IPR authentication data may be submitted as documents via a PDF attachment to an email. IPR Authenticating data may be sent by shipment and is open in all shipping modalities. Participants will  include those who have previously experienced negative IPR violating exams. A great way to get back on CBP’s good side!

What documents is CBP looking for in advance of importation?

• Licensee Agreements
• Service Agreements
• Maintenance Agreements
• Packing Lists
• Non-commercial invoices
• Serial Numbers
• Bar Codes
• Photos of product, packaging, container seals,

CBP has already begun accepting volunteers – you have a limited time left to submit your company name.

Why volunteer?

CBP anticipates that this process will improve IPR targeting efficiencies, reduce the rate of negative IPR exams, facilitate authorized trade and increase CBP port productivity. Within one year’s time, CBP will conduct an evaluation of Advance Information on negative exam rate (and I was informed they will actually SHARE this data with participants! – you can finally let upper management know your compliance role has a real impact on your supply chain and saves the company time and money).

Importance of Pre-Compliance!

I created an extremely similar program for my clients years ago, where, through our pre-compliance plan, EVERY shipment is checked by me prior to importation (the boxes, product itself) and thereafter proactively reported to the CBP port of entry (we provide data to CBP on the IPR licenses in place, product information including images). We have noticed a dramatic difference in CBP intensive exams – as CBP has all information about the product in advance of importation. It has worked wonderfully for my clients.

When I discussed the new pilot program with CBP, the real advantage is officially knowing the your “targeting score” is lowered for IPR purposes – which is why this program made perfect sense to me to be in conjunction with CTPAT – where your security targeting score is lowered as a result of proactively advising CBP, both in writing, and in person, of your supply chain security practices. CBP may integrate the IPR pre-compliance program with CTPAT in the future, it is being discussed now.

CBP’s new pilot program should have you re-visiting my favorite question – what’s my Pre-Compliance approach?  Every company should have their own specialized pre-compliance program. If you are noticing more and more CBP exams on your importations, a slower supply chain then you would like, now’s the time to make changes. If you have a brand, spend money marketing your brand, then why not protect your brand?  We’ve previously discussed the necessity of “RECORDING” your trademark or copyright with Customs – if you haven’t made the time to look into this, now is the time!  Might as well have CBP help you protect your brand, especially when CBP provides you with the opportunity to train CBP on counterfeits so they can help you – what more can you ask for?

CBP is asking for 9 volunteer filers to submit IPR Authenticating data via email into the Document Image System (DIS). Approved IPR authentication data may be submitted as documents via a PDF attachment to an email. IPR Authenticating data may be sent by shipment and is open in all shipping modalities.