Best Practices for Evaluating Importers

How Business Data Can Help Customs Agencies Succeed

In recent Congressional testimony, U.S. Customs and Border Protection (CBP) Commissioner R. Gil Kerlikowske highlighted for lawmakers why CBP’s trade enforcement mission is so highly complex.

“We enforce nearly 500 U.S. trade laws and regulations on behalf of 47 federal agencies, facilitate compliant trade, collect revenue, and protect the U.S. economy and consumers from harmful imports and unfair trade practices,” Kerlikowske said. “Annually, CBP manages over 300,000 active unique importer-of-record numbers, accounting for 30.4 million commercial transactions, which represents approximately $2.4 trillion dollars in imports, and generates over $40 billion dollars in duties, fees, and taxes.”*

The CBP commissioner also could have added that more than 26 million imported cargo containers pass through the nation’s ports of entry every year—or roughly 72,000 every day.**

Now add to this all of the goods flowing in and out of all nations, including $1.5 trillion worth of U.S. exported goods, and you’ve got a massive number of companies, containers, and transactions to monitor—not just in the United States, but in every port of entry worldwide.

Constant Vigilance of Data Quality is Required
Information is dnamic. In the next 60 minutes:
  • 3 businesses will file bankruptcy
  • 64 business will move
  • 159 new businesses will open their doors
  • 182 CEO owner changes will occur
  • 302 business telephone numbers will change or be disconencted
  • 360 businesses will have a suit, lien or judgement field against them
In a year

  • 2% of all addresses change
  • 7% of CEOs will change
  • 11% of telephone numbers will change
Based on Dun & Bradstreet US business data as December 2015

Company Data is Always Changing ̶ are You Keeping Up?

Managing the risks and ensuring the safety of the myriad goods and transactions begins with a clear and holistic view of the companies that are importing goods through ports of entry, including their suppliers. “This is even more challenging than it sounds,” said Chris Corrie, Dun & Bradstreet Director of Global Trade and Cargo Security, “because corporate business information is constantly changing.”

Every hour, 64 businesses will move, 159 new businesses will open their doors, 182 CEOs or owners will change, and 360 businesses will have a suit, lien or judgment filed against them.

And so, aside from the accidental errors that can be introduced and perpetuated in their databases, customs agencies and their global partners face the difficult challenge of maintaining business data to ensure that it is constantly updated and verified—a capability few have. Without a comprehensive and accurate database of suppliers, agencies cannot perform the analytics necessary to identify hidden risks.

Spotting Red Flags and Confirming Importer Legitimacy

Nowhere is having an accurate database more important—or more difficult—than with first-time importers. Customs organizations across the globe are charged with maintaining accurate importer databases to help them effectively assess importer risk, but many databases provide limited visibility into first-time importers.

“The problem is that you don’t know what you don’t know,” Corrie said. “If it’s a company you’ve never seen before, then you probably don’t have enough information in your database to make an accurate risk assessment.”

Although customs organizations have extensive records of container sizes, tonnage, trade routes, and related information to detect anomalies in goods being shipped, they don’t gather the kind of commercial business data that will enable them to assess whether a first-time importer may be a shell or shelf company transporting illegal or sanctioned goods.

This is where third-party data providers can provide valuable assistance by enriching a customs agency’s commercial data to help it spot red flags and anomalies. For example, a company that has annual revenue of tens of millions of dollars but is operating out of a virtual office with only a handful of employees would trigger a red flag. So would the identification of a corporate executive who is found to be connected to multiple companies that were previously fined or sanctioned.

With this increased visibility into first-time importers, customs agencies can prevent the import of unauthorized goods and, equally important, speed the assessment and processing of legitimate trading companies. Given the immense number of global importers and shipping containers flowing across international borders each day, this capability can save millions in customs resources while improving both trade and security.

Facilitating Commerce While Securing Trade

Initial screening of first-time importers doesn’t have to be rocket science, particularly in “reducing the haystack” to determine those entities that require more intensive scrutiny. You just have to be able to accurately identify phone numbers, addresses, corporate executives, and other firmographic information. But having all of the essential business data—centralized and vetted as accurate, complete, and up to date—can trip up even the most vigilant customs organization. Business information for established importers is constantly changing; and first-time importers may present a virtually blank slate that significantly complicates a risk assessment.

The key to gaining enhanced visibility into importers is enhanced business data, along with the advanced analytics enabled by that data. With this capability, customs agencies can gain the needed insight to enable both expedited and secure trade.


*CBP Commissioner R. Gil Kerlikowske, “Effective Enforcement of U.S. Trade Laws,” testimony before the U.S. House Committee on Ways and Means, September 22, 2016. 

**BP, “CBP Releases Fiscal Year 2015 Trade and Travel Numbers,” March 4, 2016.