When startups and scaling manufacturers enter new markets, customs compliance can seem like an administrative detail—until a shipment is held, a product launch is delayed, or an audit reveals years of incorrect entries.
The enforcement environment is active. In July 2026, the Department of Justice (DOJ) reported it uncovered more than $1 billion in additional duties, penalties and forfeitures owed under the Enforce and Protect Act (EAPA) and the False Claims Act (FCA). Under these authorities, the new Trade Enforcement Task Force, now made up of more than 500 prosecutors, investigates duty-evasion schemes such as illegal transshipment, misclassification, and undervaluation.
The cost is rarely limited to unpaid duty. A single compliance failure can cause shipment delays, production disruptions, corrective filings, penalties, seized inventory, loss of customer confidence, and a drain on an already stretched operations team.
For consumer-electronics, medical-device, and industrial-hardware companies, the answer is not simply to “be careful.” It is to build customs and trade-compliance controls into product development, sourcing, purchasing, and logistics processes before international volume scales.
Why Growth Creates Customs Exposure
Growth brings more SKUs, suppliers, countries, distributors, shipping lanes, freight forwarders, customs entries, and the need for a fluid, predictable supply chain to feed demand. It also multiplies the impact of a small initial error.
For example, a wrong HTS classification entered into an ERP system can be copied across hundreds of shipments. An unsupported country-of-origin assumption can affect every import from a new supplier. A missing value component—such as tooling, engineering, or a royalty—can create an underpayment pattern that is only discovered during an audit.
Customs clearance is not the same as customs approval. Importers remain responsible for the accuracy of declarations made on their behalf, even if a customs broker files the entry. That is why scaling companies need a repeatable governance process: clearly documented product data, validated supplier information, clear broker instructions, and a way to identify exceptions before goods move.
Dimerco’s customs specialists can help companies establish that operational discipline across markets—connecting shipment execution with the data, documentation, and local regulatory knowledge needed to keep cross-border supply chains moving.
How automation can reduce entry risk: One Dimerco customer, an auto-parts distributor managing thousands of products, multiple invoices per shipment, and hundreds of HTS codes per entry, needed a faster, more reliable customs entry process.
Dimerco implemented DIMBOT to validate part numbers, HTS codes, and countries of origin before entries were prepared. The result: more than a 90% reduction in entry-preparation time, over 30 hours of manual work eliminated each week, and fewer errors that can contribute to clearance delays or customs inspections. Read the case study.
Top Trade Compliance Mistakes to Avoid
Manifest Fraud and Inaccurate Cargo Data
Manifest issues can involve inaccurate cargo descriptions, quantities, parties, or routing details. They can also include splitting shipments to avoid scrutiny or obtain preferential freight treatment.
Even unintentional discrepancies can create holds when the manifest, invoice, packing list, and customs entry do not align. As shipment volume grows, manually maintained product descriptions and ad hoc shipping instructions become a major vulnerability.
What to do: Standardize product descriptions and shipment data across systems. Before tendering cargo, validate quantities, weights and measures, shipper and consignee data, origin, and commercial documents. Dimerco can help coordinate pre-shipment documentation and customs-entry requirements so that operational data supports compliant clearance.
Wrong Country of Origin
The country a product ships from is not automatically its customs country of origin. Origin depends on preferential and non-preferential rules of origin and, in many cases, whether work in a country resulted in a substantial transformation.
Risk arises when goods are routed through a third country, repacked, relabeled, or minimally processed and then declared as originating there. Similar problems occur when a company assumes that final assembly changes the origin without reviewing where components were made and which manufacturing processes were used.
Use strategic tariff and origin engineering to make legitimate product, sourcing, or manufacturing decisions before importation, taking into consideration a product’s final customs classification and compliant origin to mitigate unnecessary customs costs, ensuring the lowest possible, compliant duty rate.
What to do: Document origin determinations for high-volume products and sourcing changes. Maintain bills of materials, supplier origin declarations, manufacturing-flow documentation, and the reasoning behind the origin conclusion. Dimerco’s local customs expertise can be particularly valuable when companies shift production, component sourcing or establish regional distribution hubs.
Incorrect HTS Classification
An HTS code is not merely a shipping description. It drives duty treatment and may affect trade remedy tariffs, admissibility requirements, and other regulatory obligations.
A finished good may be incorrectly classified as a part to obtain a lower duty rate. Or a company may rely on a generic classification without examining a product’s materials, functionality, construction, technical specifications, or integrated features. This is especially risky for consumer electronics, medical devices, and industrial hardware.
What to do: Build a controlled classification library, including technical specifications, classification rationale, reviewer name, effective date, and change history. Use a customs expert when products are new, technically complex, or being sourced from a new country.
Undervaluation
Undervaluation occurs when an importer declares a lower price than the amount actually paid for the goods or fails to include dutiable elements in the customs value. Common issues include omitted assists, tooling, molds, engineering, royalties, commissions, and intercompany valuation adjustments (arms length valuation).
More serious cases can involve two sets of invoices—one reflecting the real transaction value and another with a lower value for customs purposes. And suppliers in some countries sometimes create two invoices with one for export clearance at origin and one for import clearance at destination. New U.S. regulations may require presentation of both invoices to U.S. Customs upon request.
What to do: Reconcile customs values with purchase orders, supplier invoices, transfer-pricing agreements, tooling arrangements, royalty payments, and all payments made to your suppliers for any reason. Auditing payments made to a supplier against import commercial invoices follows the same approach CBP would take during an audit. Compliance, procurement, and finance should share responsibility for validating value declarations—not leave the task solely to a broker or logistics provider.
Illegal Transshipment
Illegal transshipment occurs when goods move through a third country without enough manufacturing or transformation to establish a new origin. Repacking, sorting, relabeling, simple assembly, or changing routing generally does not change origin.
The risk grows when companies react to tariffs, capacity shortages, or geopolitical disruption by routing goods through new hubs without examining the trade implications.
What to do: Treat every sourcing or routing change as a compliance event. Before declaring a new origin, assess the manufacturing steps, origin of all component material, origin rules, and supporting evidence. Understand that the U.S. is taking a new approach to origin determination. Focusing sourcing strategies on significant processing, local component sourcing, and factory investments will be easier to defend than minimal assembly, packaging, or products containing a substantial volume of third-country components.
Dimerco’s regional footprint can help companies evaluate the operational and customs implications of moving production or distribution across Asia and other key trade lanes.
AD/CVD Non-Compliance
Antidumping and countervailing duties—AD/CVD—apply to goods subject to U.S. trade-remedy orders. Exposure can result from a wrong HTS code, inaccurate manufacturer declaration, origin data, illegal transshipment, or failure to recognize that a product falls within the scope of an order.
The consequences can be severe because AD/CVD rates substantially exceed ordinary duty rates. CBP identifies detecting and deterring circumvention as a central enforcement concern. CBP’s AD/CVD guidance explains the agency’s role in enforcing these trade remedies.
What to do: Review products for AD/CVD applicability using both HTS codes and AD/CVD scope descriptions. When a supplier or country changes, reassess applicability rather than assuming the prior treatment remains valid.
Unsupported FTA Claims
Free Trade Agreements can lower or eliminate duty, but preferential treatment is not automatic. The good must satisfy the agreement’s specific rules of origin, which may require a tariff shift, regional value content, or other qualification.
A product assembled in an FTA country can still fail to qualify when it contains non-originating components or does not undergo the required substantial transformation.
What to do: Maintain product-specific FTA qualification records, including bills of materials, component origins, classifications, calculations, and supplier declarations. Revalidate qualification when suppliers, components, or manufacturing locations change. Many of the FTA rules are complex. Engage an expert like Dimerco to help confirm qualification.
Manage FTA eligibility: Dimerco arranged a Singapore transit solution and identified the need for a Back-to-Back Form E to preserve ACFTA preferential-tariff eligibility on cargo moving from Shanghai to Johor Bahru.
Shell Company and Broker Risk
A shell importer of record (IOR) with no real assets, operating history, or capacity to meet customs obligations can expose a company to enforcement and supply-chain disruption. The same is true when an importer assumes that its customs broker owns the compliance risk.
A broker files entries based on the information provided. The importer remains, by law, the responsible party for the accuracy of those entries and using reasonable care to comply with all laws and regulations.
What to do: Vet importers of record, intermediaries, and brokers. Give brokers written, product-specific instructions covering HTS codes, origin, valuation, AD/CVD flags, and Partner Government Agency requirements. Periodically review entry data for accuracy and consistency.
In the U.S., understand that the rules recently changed. Merely maintaining an address in the U.S. or hiring a company to use for service of process no longer qualifies a company as a U.S. entity. Customs will require information about the company’s U.S. assets, ownership structure, employee and manufacturing resources in the U.S., and more. If a company is determined not to qualify as a U.S. importer, foreign importers of record will soon have much more onerous bonding requirements and limited options in the U.S. for entry filing. For example, foreign importers must be CTPAT certified or work with a CTPAT certified and validated Customs broker, like Dimerco.
Drawback and PGA Non-Compliance
Duty drawback can help eligible companies recover duties on goods that are later exported or destroyed, but it depends on accurate and traceable records. Unsupported claims, incomplete documentation, or an inability to connect the import to the export can create compliance problems.
Imports may also be subject to U.S. Partner Government Agency requirements. Depending on the product, this can involve FDA, USDA, EPA, Fish and Wildlife Service, or more than 40 other agencies. Medical-device companies, for instance, may have accurate customs entries but still encounter delays if agency data, registrations, or product information are incomplete.
What to do: Build traceability across imports, inventory, manufacturing, and exports. Create a product-level PGA matrix identifying applicable government agency requirements, filings, certifications, licenses, drawback eligibility, and internal owners.
Forced-Labor Exposure
Forced-labor enforcement can halt a supply chain with little warning. Detention, exclusion, seizure, and import bans can result when imported goods are connected to forced labor or when an importer cannot substantiate the supply chain. Most importantly, forced labor actions are made public in the U.S., causing substantial reputational damage.
The most difficult risk often sits below the direct supplier, in tier-two and tier-three components or raw materials. CBP stopped 3,138 shipments valued at $220 million in FY 2026 under forced-labor enforcement authorities. It’s clear that forced-labor compliance is a material supply-chain continuity issue.
What to do: Map high-risk supply chains beyond tier one. Obtain supplier information, trace critical inputs, document due diligence, and prepare a response process before a detention occurs.
Denied-Party and Export-Control Screening Misses
Trade compliance does not end with imports. Electronics, software, technical data, industrial equipment, and certain medical technologies may raise export-control and sanctions concerns.
Screening only the direct customer is insufficient. Companies may need to evaluate the consignee, end user, intermediary, ownership structure, destination, intended use, and diversion risk.
The U.S. government has stepped up protection of advanced technologies with the Disruptive Technology Strike Force. The agency has brought 26 criminal cases involving export-control violations, sanctions violations, smuggling conspiracies, and illicit transfers of sensitive goods and technology since its inception in 2023.
What to do: Build restricted-party screening and end-use checks into export order acceptance and shipment release. Escalate unusual transactions, new intermediaries, high-risk destinations, and unclear end-use statements before goods ship.
Scale Compliance with Controls, Not Assumptions
The critical shift for operations and logistics leaders is to stop viewing compliance as a final shipping check. Classification, valuation, origin, supplier due diligence, restricted-party screening, and documentation should be designed into the commercial and supply-chain process from the start.
Before entering a market, launching a product, or changing suppliers, companies should validate:
- Product descriptions and HTS classifications
- Customs value and dutiable additions
- Country-of-origin determinations
- AD/CVD applicability and FTA eligibility
- Supplier documentation and traceability
- PGA requirements
- Broker instructions and entry-data quality
- Restricted-party, end-user, and end-use screening
Dimerco combines freight execution with in-house customs brokerage, trade compliance expertise, customs-entry support, and local-market trade knowledge—helping shippers align product data, documentation, routing, duty treatment, and clearance requirements before cargo reaches the border. By integrating Dimerco’s team into your supply chain, we can help you avoid the costly trade compliance mistakes that slow growth and drain your team’s resources.
For guidance on your trade compliance strategy, contact a Dimerco specialist today.
