US CBP Cracks Down: SMEs Warned to Stay Compliant or Face Penalties

SME importers in the US are advised to budget for trade compliance as the Customs Border Protection (CBP) increases its inspection frequency and capabilities.

Hugo Pakula, CEO of customs compliance company Tru Identity, informed: “Customs came up with a new slogan this year, which is ‘economic security is national security, as the stakes are higher now, because there’s money at risk.

“CBP’s job has a revenue function as much as an enforcement function.”

He warned that the CBP had been issuing penalties of some $5,000 for each mistake for incorrect codes, valuations, country of origin, etc. on shipments entering the US.

“You could be importing 12 items; that’s [a potential fine of] $5,000 times 12 – a very big impact on importers.”

And, according to Mr Pakula, not only has the sanctions regime become harsher, but “it’s got a lot more eyeballs on it”. Over the past seven years, he said, enforcement had risen 521%.

“If you think 521% is a lot, wait till it’s a 1,000% or 5,000%.

They’re Implementing technology to find these mistakes, it’s not going to be humans anymore.”

He explained: “The senior people at customs get a group of officers together and say, ‘what should we look for today?. Someone says ‘shoes’ so they then randomly go and pick shoes off shelves and check them. That’s the tooling they have.

“They say they have better luck randomly searching than anything else so far.

“When they implement Al, which they’re aggressively doing; when they implement new software solutions, which they’re doing; when they have $40m of budget they never had before, things are going to change,” warned Mr Pakula.

He advised businesses exporting to the US, particularly SMEs that might not be as prepared as their larger counterparts, should ensure they are familiar with the trade compliance requirements, and set aside a budget for tools or partners if needed.

“Because it’s only getting more complicated, and if you haven’t found an Issue in advance, you’ll find the issue after, and it will be more expensive.

“There’s two ways to do things, right and again,” added Mr Pakula.

“No one is proactive ever, until they get a slap on the wrist. So, if you don’t do it proactively, it’s going to hurt. It’s not worth finding out,” he said.

Meanwhile in the ongoing trade war, the EU is to suspend its countermeasures to US tariffs for six months, following its deal with President Trump that sees most EU goods face a 15% tariff.

An EC spokesperson announced yesterday that, although the countermeasures were set to enter force on Thursday, they would be postponed, pending a joint statement from the two nations confirming details of the agreement.

The US CBP’s heightened enforcement efforts are putting pressure on SMEs to maintain strict compliance in freight logistics. Failure to meet regulatory requirements could result in significant penalties, making proactive compliance strategies essential for protecting operations and supply chains.

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