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Getting your cross-border goods shipped to the destination port entails costs, time, and effort, including documentary hurdles upon arrival to clear goods for onward transport.  These hurdles can be deftly and swiftly managed with the right oversight and preparation. This takes not only reliable software systems to provide key documents, but also professional expertise at the appropriate times to prepare the data elements required. This is the next level of detail in executing transactional excellence.

Potential document failures

The five critical documentary hurdles consist of: 1) commercial invoices, 2) packing lists, 3) bills of lading provided by the carrier, 4) certification of origin, and 5) other admissibility certifications. A general breakdown of data elements and potential failure points are as follows:

Commercial Invoice

• Data Elements
  • Shipper identification
  • Tariff codes
  • Description of goods
  • Quantities
  • Value
  • Consignee information
  • Destination
  • INCOTERMS®
• Failure Points
  • Incomplete shipper info,
  • Incorrect tariff codes,
  • Abbreviated/unclear goods description,
  • Quantity units not matching tariff system,
  • Incorrectly declared value,
  • Incomplete consignee info,
  • Unclear destination,
  • Missing INCOTERMS®

Packing List

• Data Elements
  • Quantities
  • Descriptions
  • Consignor/consignee
  • Order number/invoice number
  • Packaging
• Failure Points
  • Mismatched data vs. invoices and vs. bill of lading,
  • Inconsistent descriptions vs. other documents,
  • Inconsistent fonts vs. other documents,
  • Lack of heat-treated wood packaging, blocking, and bracing

Bill of lading

• Data Elements
  • Shipper and consignee
  • Quantities
  • Descriptions
  • INCOTERMS®
  • Type and serial number of BOL
  • Issuing carrier
  • Security pre-filings
  • Seal numbers and data
  • Departure/arrival ports
• Failure Points
  • Inaccurate/incomplete details on consignee, descriptions and quantities,
  • Missing signatures/certifications
  • Failure to identify/classify/label dangerous goods,
  • Mismatch of data on BOL vs. packing list and/or invoice

Certificate of origin

• Data Elements
  • Clearly stated basis for origin:
    • Product of, made in, grown in
    • Required elements of FTA
    • Last country of substantial transformation
  • Tariff codes
  • Tracking information
  • Transshipment declaration
• Failure Points
  • Wrong basis to declare origin
  • Does not meet/incomplete data required by country of import
  • Lack of signatures/certifications required by country of import
  • Missing/errors in tariff codes, descriptions, tracking numbers

Proof of admissibility

• Data Elements
• • Pre-approval of certain types of goods (e.g., chemical, autos, agricultural, pharmaceuticals)
  • Quota limitations
  • Origin marking
  • Heat treatment of wood packaging
  • Authorization of buyer to import/import licensure

• Failure Points
  • Missing/incomplete pre-admission documents
  • Applicable quota has been exceeded
  • Missing origin marking on goods
  • Missing wood treatment stamping
  • Mismatch of admissibility data with other import documents
  • Lack of import license/authorization

Consequences of document failures

When documentation fails at the border, costly delays, fines, and penalties can arise.  Customs authorities are on the lookout for fraud and illegal tariff avoidance, and their suspicions can arise from any appearance of wrongdoing. While some offenses may appear very clear (i.e., misaligned pricing from one invoice to another), there are also more subtle issues that can set off alarm bells. Deeper reviews can be triggered by simply having fonts that are inconsistent among documents that indicate they were not produced by the same party.  Such an enforcement atmosphere demands transactional excellence and extra diligence by organizations in cross-border trades.

Preventing document failures

The path forward requires preventative measures that can be supported by supply chain management software.  Key preventative measures include:

• Develop vetted reference data for data elements that commercial staff can use for:
  • Tariff codes
  • Invoice descriptions that customs authorities can understand and can match with the tariff codes (i.e., do not rely on SKU’s and jargon)
  • Pre-determine invoice value/price that includes assists, freight cost, supplied tools and dies, and other considerations required by the importing country
  • Ensure INCOTERMS® are clearly stated
• Ensure that software that generates documents has cross-checks of data among them
• Ensure that the carrier issued bill of lading is checked versus reference data and among the required documents
• Only issue certificates of origin that are vetted and pre-approved
• Ensure that admissibility documents are vetted and pre-approved

The bottom line

Taking time and providing resources to prevent document failures at the border is well worth the effort.  Even if there is no malfeasance, goods detained by customs authorities result in missed sales and revenue, and there is the added cost of very expensive detention storage while customs authorities sort out the issues.

Interested in learning more about how we can assist with preventing document failure at the border? Reach out to Jerry McAdams to discuss your business’ needs.