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The errors we find most often in new client portfolios — and how to find them in yours.
Customs brokers are licensed by CBP. Most are competent professionals. But the industry has a structural problem: high transaction volume, low margin per entry, and limited accountability for errors that don't generate CBP penalties. The errors that hurt importers most — overvaluation, wrong HTS codes, missed deductions — often go uncorrected for years because no alarm goes off. You just overpay, quietly.
In our experience auditing client entry portfolios, the majority of importers who have worked with a broker for more than 12 months have at least one systemic error that is costing them money on every single entry.
As the importer of record, you are responsible for your customs entries — not your broker. CBP penalties for inaccurate entries fall on you. Finding and correcting broker errors isn't just about recovering money — it's about protecting your compliance record.
The single most frequent error. A broker classifies your product at the heading level but doesn't go deep enough into the subheadings — using a generic catch-all code instead of the specific subheading that accurately describes your product. Or they use the code from your first entry forever, without reviewing it when products change or when new rulings are issued.
How to check: Look up your code on hts.usitc.gov. Read the description. Does it actually describe your product in all relevant characteristics? Search CBP's CROSS database for rulings on similar products.
Under U.S. customs law, international freight and insurance are non-dutiable when separately stated. If you buy on CIF or DAP terms, the cost of ocean freight and insurance embedded in your invoice price should be deducted before declaring value. Many brokers skip this — either from error or because they don't have the freight invoice in front of them. You pay duty on money you paid your carrier, not your supplier.
How to check: Compare your entered value on CF 7501 Block 33 against your commercial invoice. If you bought CIF and the values are equal, your broker isn't stripping the freight.
If you use a buying agent in the origin country — someone who sources product, inspects factories, or arranges purchases on your behalf — their commissions are not dutiable under §1401a(b)(1)(A). These must be separately stated on invoices. Many brokers don't ask about your buying structure and just declare the total invoice value.
Errors go both directions. Some brokers fail to apply Section 301 tariffs where they should (creating underpayment and CBP penalty risk). Others apply them where they shouldn't (e.g., goods that are not China-origin, or covered under an exclusion). Both are problems.
Country of origin determines tariff treatment, ADD/CVD applicability, and trade agreement eligibility. Errors happen when: goods are processed in a third country but origin is assessed incorrectly, when manufacturers claim a non-China origin to avoid Section 301 but the goods don't meet the substantial transformation test, or when USMCA qualification is claimed without proper certification.
Importer Security Filing must be submitted no later than 24 hours before vessel departure at the origin port. Late ISF filing carries a $5,000 per violation penalty. Some brokers file ISF late habitually — the penalty isn't always assessed, so they continue doing it. You carry the risk.
Any shipment of food, dietary supplements, or beverages requires FDA Prior Notice before U.S. arrival. Failure to file results in the shipment being refused entry. Some brokers simply don't know FDA requirements apply to your product category — or they forget to file it for expedited shipments.
If the entry has not yet liquidated (within 1 year of entry date): file a Post Summary Correction (PSC) through your broker to correct the entry before it liquidates. This is the cleanest resolution.
If the entry has liquidated: you have 180 days from the liquidation date to file a protest under 19 U.S.C. §1514. A protest can claim refund of overpaid duties, contest a rate determination, or challenge a valuation decision. Your broker or a licensed consultant can prepare and file the protest.
If the error resulted in underpayment: you should voluntarily disclose and correct the entry. Voluntary prior disclosure under 19 U.S.C. §1592 significantly reduces penalty exposure. Do not ignore underpayment errors — CBP audits do find them, and the penalties for willful violations are severe.
We specialize in broker error recovery. Our Import Compliance Restructuring Program starts with a full audit of your entry portfolio — we identify errors, calculate recoverable duty, and file protests on your behalf. Contingency-based pricing means we only get paid when you recover money.
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