US Import Regulations for Key Industries

Seeing a German car in Boston or buying Alphonso mangoes from India from a local Washington grocery store is common in today's global and connected world. All this is possible, thanks to imports. Not only do these goods from other countries offer more options for customers, but they are also often cheaper when compared to similar products produced within the country.

The overall US trade with other countries in 2019 was USD 5.6 trillion, of which USD $3.1 trillion was in goods and services imports. In this blog, we look at the main industries that import goods in the US and the guidelines and regulations put forth by the government to ensure consistency in quality. There are separate regulations for importing goods from different industries. Also, we will look at the important government agencies that regulate trade for each industry.

Machinery

This sector, including computers and hardware, accounted for USD 379 billion of imports in 2019 and is the United States’ top industry for imports. Most machinery is subject to Environmental Protection Agency (EPA) regulations. Some importers require additional documentation and inspection by other government agencies to satisfy the regulations, depending on the precise nature of the machinery, equipment, and intended usage.

For example, the machinery of the medical industry will also be subject to Food and Drug Administration (FDA) regulations. Importers need to file paperwork with the EPA, FDA, and other agencies for clearance. Importers will also need to submit documents in the country of origin.

Electronics Equipment

The electronics market accounted for USD 352.3 billion in imports in 2019. Consumer electronics include smart devices, air-conditioners, hearing aids, and other wearable devices. Importers need to share details about the specific compositions and parts of their merchandise and ensure that they are compliant with safety regulations put forth by the FDA, Customs and Border Protection (CBP), Federal Communications Commission (FCC), and Underwriters Laboratories (UL).

Electronic product imports must receive approvals from these agencies before being introduced to the US market. For radiation-emitting products, an additional form is filed where the importer guarantees that the product meets the established safety standards.

Several government agencies regulate the importation of electronic devices. It is essential that you are familiar with all the regulations and requirements so that your import does not get stuck anywhere while on its way to American port of entry. Although it is mostly the responsibility of the producer to ensure compliance, sometimes importers can get in trouble as well.

Make sure you know that the products you are importing are compliant with safety regulations. Attempting to import products that are not compliant with the regulations is illegal and will result in your imports being confiscated and possibly destroyed. You may also encounter further legal repercussions.

Vehicles and Automobiles

In 2019, vehicles and automobiles made up USD310.1 billion of the total imports into the US. Three main US laws lay down the basic requirements for importing vehicles and automobiles. The 1966 National Act on Traffic and Motor Vehicle Safety requires that car manufacturers comply with safety requirements to protect the public from accidents caused by vehicle design, construction, or service.

The 1968(amended in 1977 and 1990) Clean Air Act mandated that the EPA create national emission standards for all sources of air pollution, motor vehicles being one of them. Finally, the Motor Vehicle Information and Cost Savings Act of 1972 notes that car manufacturers need to have specific labeling about the vehicles' fuel efficiency and prescribes penalties against car manufacturers who exceed the requirements of average fuel economy. 

Cars entering the US market must also comply with CBP requirements. CBP officials do a thorough inspection of vehicles and can penalize the importer or seize the vehicle for any stray item left in the vehicle or if the vehicle is not properly sanitized and carrying contaminants into the country. 

Minerals, Fuels, and Oil

The US imported about 9.14 million barrels per day of petroleum from about 90 countries in 2019. This amounted to USD $210.1 billion. It is important to abide by the regulations put out by the Federal Energy Regulatory Commission (FERC), the Energy Department, and the Transportation Department. Although FERC approval is not needed for the actual import or export of natural gas, the Commission supervises imports of natural gas. It can review the proposed rates for interstate transportation and sale of imported natural gas.

There are no restrictions or limits on importing mined or refined minerals unless the Department of Homeland Security or State Department finds the minerals to be a national security risk. Uranium or rare earth components are subject to greater scrutiny.

Food and Beverages

This is the fifth-largest group of imports amounting to USD 151 billion in 2019. The FDA Food Safety Modernization Act (FSMA) seeks to ensure the safety of the US food supply by preventing contamination. FSMA is applicable to domestic and imported food, so international food and beverage producers must adhere to the same safety requirements as of US domestic farmers and food companies. While there are seven rules issued under the FSMA by the FDA, three are relevant for companies importing food and beverages into the US.

1. The Preventive Controls for Human Food Regulation mandates that importers and facilities that produce, process, pack, or carry human food must perform a hazard analysis and enforce risk-based preventive controls for defined hazards 
2. The Foreign Supplier Verification Programs (FSVP) rule for food importers needs importers to conduct assessments and verify that the food to be imported in the US has been produced in a manner that meets the relevant US safety requirements 
3. Accredited Third-Party Certification is a voluntary program run by FDA to accredit third-party certification bodies. Such third-party certification bodies carry out food safety audits and issue certifications for international facilities and foods manufactured by them. They are also expected to conduct facility audits and inform the FDA of any public health risks.

Prior notification to the FDA is a critical aspect of importing food items into the US. Notices must be sent to the FDA by importers no more than 15 calendar days before the anticipated date of arrival for submissions made through FDA's Prior Notice System Interface (PNSI) and no more than 30 calendar days before the anticipated date of arrival for submission made through CBP's Automated Broker Interface of the Automated Commercial System (ABI/ACS).

It guarantees that the FDA and CBP have sufficient time to prepare for the incoming shipment and can make their assessment, instead of 5 calendar days window provided earlier. 

Textiles and Apparel

In 2019, the US imported USD 27,461 million and USD 83,822 million worth textile and apparels respectively. Multiple government agencies monitor imported textiles and apparels, and failure to comply with any regulation will result in the seizure of the shipment upon entry. The CBP's regulations require textiles and apparels to have labels that accurately identify the country of origin, the quality and composition of the cloth, the manufacturer, and the instructions for the treatment of the textiles. The EPA checks the textile and apparel imports for toxic substances and pesticides.

Also, the Federal Trade Commission (FTC) agents are largely accountable for checking product labeling and compliance with intellectual property regulations. In case of infringement of intellectual property laws, the textiles and apparels are often confiscated. Organic clothes are inspected by the Department of Agriculture to test if they are synthetic-free, while the Consumer Product Safety Commission (CPSC) ensures that textiles and apparels comply with flammability criteria. 

Pharmaceuticals

The import of pharmaceuticals amounted to USD 128.2 billion in 2019. The FDA controls the import of pharmaceuticals, and compliance with all import regulations of the FDA and CBP is essential. For any drug manufacturers looking to import to the US, the first move is to register their company with the FDA and list all their drug products for commercial sale in the country. The FDA tests these latest drugs once registered and sets rules for them. It is a simple process if a business imports a prescription drug that is already approved by the FDA.

Once the imported drugs meet the FDA requirement and are out in the market, periodic checks will be carried out by the Administration to ensure that the drugs preserve their effectiveness and have not become harmful to the public. Although having a green light from the FDA is important, the actual clearance of the shipment through the customs is the most critical component. At that point, even with the FDA approval, the CBP can refuse to clear imports if the forms are not correctly filled in.

Medical Equipment and Supplies

Hundreds of thousands of medical devices are imported into the US each year and they are critical in meeting the domestic healthcare industry demands. In 2019, the country imported USD 50.2 billion in the import of medical instruments, appliances, and diagnostic apparatus. Specific information such as comprehensive product description, the relevant affirmation of compliance codes, importation product code, Harmonized Tariff Schedule (HTS) code, and country of origin is required by the FDA and CBP for these imports. Failure to provide all of the information needed upon entry will lead to the CBP permanently detaining the goods.

Importers need to register with the FDA if they are importing medical devices. In addition to the above, when importing, the FDA may require additional details and documentation, which should be submitted to and checked by the CBP at the time of entry.

Lighting Fixtures

Light fixtures do not require special licenses or permits, unlike some of the other industries we are looking at. However, a breakdown of the materials that make up each light fixture is required by US Customs. For tariff classification purposes, this breakdown is done in terms of the weight of each item and component, such as metal, glass, wood, and more. This information can be provided on the invoice presented at entry or attached to a separate sheet provided by the supplier. 

When importing light fixtures, it is important to remember that the product has been approved by UL. UL is a testing facility, which guarantees the safety of electrical goods for light fixtures and other electronic equipment. Certain electricians would not install Non-UL certified fixtures, and counterfeit UL certification may lead to a fine for the company responsible.

Toys

Before toys are imported into the US, the items have to go through different tests. The Consumer Product Safety Improvement Act (CPSIA) introduced by the Consumer Product Safety Commission(CPSC) regulates toys and goods for children sold in the US. The commission demands that toys and children's goods bear a Children's Product Certificate (CPC) before being introduced to the market. The importer has to comply with the CPSIA regulations to import toys or children's products legally into the US. The products must comply with all applicable safety requirements, be subjected to laboratory tests to verify this, and have a tracking label applied to the packaging and to the product itself.

Another thing to keep in mind when importing products into the US is that there are different laws, even within the same industry. For example, there are sub-categories in the machinery industry under which different goods are divided, and different controlling bodies regulate each sub-category. Before beginning the process, importers need to research their product category and understand the necessary requirements .

Furthermore, the customs clearance process can be complicated, and importers must have all their documents in order. You can read about the paperwork required by the US Customs in our other blog here. As seen earlier, incorrect documentation can result in goods being stopped at Customs, despite having approval of other regulatory bodies such as the FDA. CBP requires importers to fill out a customs bond if the merchandise being imported into the US for commercial purposes is valued at more than USD 2,500. Proper paperwork will save you a great deal of time and effort.

Apart from just the actual product crossing boundaries, importing also helps bring together  people from different cultures. It also helps companies expand their business abroad but to do that, it is important to follow all the necessary laws and regulations to ensure smooth and successful operations.