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We break down the different kinds of customs holds and exams; what are they and how can you avoid them.
In the wake of the terrorist attack on September 11, 2001, Border Patrol, Immigration and Naturalization Service, Department of Agriculture, and the U.S. Customs Service joined forces and became what we now know as the U.S. Customs and Border Protection (CBP), Homeland Security’s largest and most complex organization.
CBP is one of the largest law enforcement organizations in the world. Their main responsibility is to protect the United States from dangerous people and materials while promoting economic growth and global competitiveness by supporting lawful trade and travel. To this end, the CBP is responsible for border supervision and control through managing customs, immigration, border security, and agricultural protection.
As such, the mission of CBP, when it comes to trade, is to protect the United States border and ports of entry from terrorism, smuggling, illegal immigration, and agricultural pests, while promoting the movement of legitimate goods. To accomplish this goal the CBP monitors all cargo coming in and out of the U.S.
Customs cargo inspectors have a variety of tools and equipment at their disposal to determine if a shipment is a potential risk. For example, most overseas and domestic ports utilize gamma scanning technology to detect signs of radiation.
With these tools, inspectors use a targeting system that generates a score for every shipment. If a shipment gains a score over a certain threshold, inspectors are alerted to give the shipment further review or possibly an exam.
Where does the criteria for this score come from? While customs does not publicly disclose the specifics, they likely take into account how often the shipper imports, the kind of commodity being imported, and the country of origin. This information is gathered from documents submitted by your forwarder, carriers, and broker.
If the cargo gains a score that alerts the CBP, your shipment may be placed under a customs hold and possibly be subject to an examination as well. We break down the kinds of exams and holds, below, as well as how to avoid them in the first place.
Manifest Hold.
This hold is based on data or missing information on the carrier’s manifest or the Importer Security Filing (ISF). If you're missing a document or piece of information, prepare for a manifest hold.
Commercial Enforcement Hold.
A catchall for the many agencies that regulate goods coming into the United States, CBP places this hold on shipments that have a potential issue with Customs regulation, but also with any of these other agencies including the Food and Drug Administration (FDA), United States Department of Agriculture (USDA), U.S. Consumer Product Safety Commission, or Federal Communications Commission (FCC).
Statistical Validation Hold.
This hold indicates that the data declared on shipment documents is different than what the historical data would indicate the cargo should be in terms of value, weight, etc. for a given product. Avoid this hold by providing proof of changes in market conditions, cost of materials, or optimization that may have influenced a legitimate discrepancy.
CET Hold.
The Anti-Terrorism Contraband Enforcement Team Contraband Enforcement Team (A-TCET) or Contraband Enforcement Team (CET) can instruct CBP to place this hold on a shipment that they suspect. CET is looking for illegal cargo including drugs, weapons of mass destruction, smuggling, and other contraband.
PGA Hold.
This final hold is on behalf of any of the Participating Government Agencies (PGA) as the FDA, USDA, CPSC, etc, that can have CBP place a hold on a shipment to be reviewed or examined. The only difference between this hold and the Commercial Enforcement hold is that Customs related issues are ruled out with a PGA hold.
If CBP determines that a hold needs to be placed on your cargo, they will notify you, the importer, and your broker electronically. After further inspection, they may request further or missing information, including backup documentation (commercial invoices, packing lists, various certificates, etc). If the documentation satisfies Customs, the hold may be released. However, if not, the hold may be escalated to one or more kinds of exams, which we will break down next.
VACIS Exam.
The Vehicle and Cargo Inspection System exam, also known as the Non-intrusive or the X-Ray exam is just that...an X-Ray. If your cargo is subject to this exam, CBP asks that the container be driven through an X-ray machine at the point of arrival. CBP will then review the images and if all is in order, they will release the cargo. If not, well, you will be looking at the exam being escalated to one of the next two exams.
Fees for this exam range from $150-$250, depending on the size of the container.
Note: Shippers, unfortunately, are responsible to pay for the customs exams process as well as any charges gained accrued due to delays at the port like storage fees. When shipping LCL, the fees are split between each importer using the container. The freight forwarder is usually in charge of calculating and collecting the fees.
Tailgate Exam.
If, after viewing the X-ray images, CBP is not satisfied, the cargo will move to the tailgate exam, which is fairly simple. In this exam, the cargo inspector will break the seal on the container, open the doors, and have a look inside. If they don’t see anything to worry them, then the container can be released and be on its way. However, if the officer is still concerned, the cargo will move to the most involved exam, the intensive.
This exam costs between $150-$350 per container, depending on the port and size of the container and they usually take between 2-3 days, for ocean shipments. Air shipment examinations usually only take a few days no matter the exam type, as air freight is usually loose, rather than in containers or on pallets.
The Intensive Exam.
This final exam, like its name, is intense. For the intensive, the entire container is moved to a Customs Exam Site (CES), a private corporation contracted by Customs to prepare the shipment for inspection. A CES does this by offloading the container, separating the sets of parcels, opening boxes, and readying the cargo. If the cargo passes the examination, your shipment is free to go.
As the most labor-intensive exam, it is also the most costly. Fees for this exam can run from $1,000-$2,500 or beyond. The price is calculated based on the labor involved, the size of the container, and the port it is being held at. This exam can take anywhere from 5-7 days.
“You’ve been randomly selected!”
Make sure you have all of your documents in order. Be readily available should your forwarder or broker need any information for you about your shipment.
Budget some extra cash to pay any necessary customs exam fees as well as the possible demurrage, Per Diem, Chassis, or other fees you may incur as a result of the extra time your shipment will spend in the port.
If CBP finishes an exam, but your cargo is still on hold, it is likely a PGA needs to examine it as well.
Ensure your suppliers are properly vetted and that they are creating your products in compliance with any applicable federal guidelines.
Work with a knowledgeable freight forwarding company with a Customs broker who can ensure your documents are in order, possibly saving you thousands of dollars in fees and precious time.
