Import and customs glossary: key terms for importers

A–E

Anti-dumping duty — An extra duty imposed when an exporter sells goods into a market below fair value (or below the home-market price), calculated to offset the dumping margin. It is separate from, and stacks on top of, the normal customs duty for that classification.

Bill of lading (B/L) — The carrier's document that acknowledges receipt of cargo, sets out the contract of carriage, and (for an original "to order" B/L) acts as a document of title you surrender to collect the goods. The air-freight equivalent is the air waybill.

Biosecurity charge — An Australian government fee for quarantine/biosecurity assessment, levied on imports over AUD 1,000: AUD 46 for air consignments and AUD 68 for sea. It is charged in addition to the Import Processing Charge.

Bonded warehouse — A secure facility where imported goods are stored under customs control with duty and import tax suspended until the goods are withdrawn for home consumption (or re-exported, in which case the charges may never fall due). Useful for cash-flow timing and goods awaiting sale.

Certificate of origin — A document declaring where goods were produced, used to claim a preferential (often zero) duty rate under a free-trade agreement, or to satisfy general origin-marking rules. Under modern FTAs this is often a self-certified statement on the commercial invoice rather than a stamped form.

CIF (Cost, Insurance and Freight) — An Incoterm where the seller's price includes the goods plus insurance and freight to the named destination port. Most countries assess customs duty on this CIF value — though the US and Australia are notable exceptions that use an FOB basis; see CIF vs FOB.

Commercial invoice — The seller's billing document for the goods, showing description, quantity, unit and total price, currency, and terms of sale. Customs uses it as the primary evidence of the transaction value, so accuracy here drives your declared customs value.

Country of origin — The country where goods were grown, produced, or substantially transformed — not necessarily where they were shipped from. It determines the applicable duty rate, FTA eligibility, and (for the US) whether Section 301 China tariffs apply.

Customs bond — A financial guarantee (common in the US) ensuring duties, taxes, and penalties will be paid to the government. Importers post a single-entry or continuous bond, usually arranged through a surety or customs broker.

Customs broker — A licensed agent who prepares and lodges import declarations, classifies goods, and arranges payment of duty and tax on the importer's behalf. Broker fees are privately set and negotiable, not government-fixed; see customs brokerage fees.

Customs duty — The tax a government charges on imported goods, calculated as a percentage of the customs value at the rate set by the goods' tariff classification. It is the headline "import duty" most people mean, distinct from import VAT/GST.

Customs value — The valuation base on which duty is calculated, normally the transaction value (the price actually paid or payable) adjusted for the country's rules. Most countries use a CIF basis; the US and Australia use an FOB/transaction-value basis that excludes international freight and insurance.

DDP (Delivered Duty Paid) — The Incoterm placing maximum obligation on the seller: they deliver to the buyer's door with all import duty and tax paid. The buyer's quoted price is fully landed — nothing further is owed at the border.

De minimis — A value threshold below which a shipment is admitted free of duty and/or tax. Thresholds are volatile: the US$800 Section 321 de minimis is currently suspended for all countries (so US duty applies from the first dollar). Australia keeps a separate pair of rules — an AUD 1,000 border threshold (no duty/GST at the border below it, alcohol and tobacco excepted) and a distinct point-of-sale rule (LVIG) under which overseas sellers collect GST at checkout on consignments of AUD 1,000 or less. See de minimis explained and verify current status before you rely on it.

Dutiable value — The portion of a shipment's value that is actually subject to customs duty after applying the valuation rules — effectively a synonym for customs value in duty calculations.

EXW (Ex Works) — The Incoterm placing minimum obligation on the seller: the buyer collects the goods at the seller's premises and bears all transport, export clearance, freight, insurance, and import costs from that point.

F–M

Formal vs informal entry — Two US clearance tracks based on value. Formal entries (customs value over $2,500) require a bond and incur the percentage Merchandise Processing Fee; informal entries ($2,500 or under) are simpler and carry only a small flat fee. The split affects which fees you pay, not the duty rate.

FOB (Free On Board) — An Incoterm where the seller's responsibility ends once the goods are loaded on the vessel at the origin port; the buyer pays freight and insurance onward. The US and Australia value duty on this FOB/transaction-value basis, excluding international transport.

Free-trade agreement (FTA) — A treaty between countries that reduces or eliminates customs duty on qualifying originating goods (for example, USMCA, AUSFTA). Claiming the preferential rate requires meeting the agreement's rules of origin and holding the right documentation.

GST (Goods and Services Tax) — A value-added consumption tax applied to imports in countries such as Australia (10%), though some categories are GST-free. It compounds: Australian GST is charged on the VoTI, which adds international freight and insurance back into the base even though duty excluded them. See GST on Australian imports.

Harbor Maintenance Fee (HMF) — A US fee of 0.125% of customs value on ocean shipments only, with no cap. Air and land entries do not pay it.

HS code (Harmonized System code) — The 6-digit international product-classification number that determines a product's duty treatment worldwide. Countries append further national digits for their own tariff schedules. See HS codes explained.

HTS (Harmonized Tariff Schedule) — The United States' 10-digit national tariff schedule, built on the international 6-digit HS and published by the USITC. The full HTS line sets the US base duty rate for a given product.

IEEPA tariffs — Tariffs imposed under the International Emergency Economic Powers Act. Like Section 301 and 232 measures, they are added on top of the base HTS duty on the same customs value; rates change frequently, so look them up by HTS code and origin rather than treating any figure as permanent.

Import Processing Charge (IPC) — The Australian customs lodgement fee, applying only when customs value exceeds AUD 1,000: AUD 50 for values of AUD 1,000–10,000 and AUD 152 above AUD 10,000 for electronic lodgement.

Import VAT — Value-added tax charged at importation in VAT countries, typically on customs value plus duty plus freight/incidentals — so it compounds on the duty. The United States has no federal VAT; its state sales/use tax is separate and not collected at the border.

Incoterms — The ICC's standardized three-letter trade terms (2020 edition) that define where risk and cost transfer between seller and buyer. The chosen Incoterm tells you what is already in the price and therefore what to add (or strip out) to reach the customs value; see Incoterms explained.

Landed cost — The total cost of getting a product to your door: goods, international freight and insurance, customs duty, import VAT/GST, brokerage, and any other fees and tariffs. It is the number that actually determines your margin; see how to calculate landed cost.

Merchandise Processing Fee (MPF) — A US customs processing fee. For formal entries (customs value over $2,500) it is 0.3464% of customs value, with a minimum of $33.58 and maximum of $651.50 (FY2026); informal entries pay a small flat fee instead, not the percentage or the floor.

N–Z

Rules of origin — The criteria (wholly obtained, tariff-shift, or regional-value-content tests) that decide whether goods "originate" in an FTA partner and therefore qualify for the preferential duty rate. Meeting them is what gives a certificate of origin its value.

Section 232 tariffs — US tariffs on national-security grounds, notably on steel and aluminum. They stack additively on top of the base HTS duty for affected goods; see Section 301, 232 and IEEPA.

Section 301 tariffs — US tariffs targeting specific China-origin goods, added on top of the base HTS duty on the same customs value. Whether they apply turns on the HTS code and the country of origin, so verify both before pricing.

Tariff — A duty or tax on imported (or, rarely, exported) goods. In everyday use "tariff" and "customs duty" are interchangeable, though "tariff" often refers to the rate schedule or to special measures like Section 301; see duty vs VAT vs tariff.

Tariff classification — The act of assigning the correct HS/HTS code to a product, which sets its duty rate. Importers self-classify but can request a binding ruling from the customs authority for certainty.

Transaction value — The price actually paid or payable for the goods when sold for export, the primary and preferred basis for customs valuation under WTO rules. It is adjusted (for assists, royalties, freight, etc.) according to each country's method to arrive at the customs value.

VoTI (Value of the Taxable Importation) — The Australian GST base: customs value plus customs duty plus international transport and insurance. Because the freight and insurance excluded from the duty base are added back here, Australian GST effectively captures them.

Excise — A domestic tax on specific goods such as alcohol, tobacco, and fuel, charged in addition to customs duty and import VAT/GST. It is why "low-value" alcohol and tobacco are excepted from de minimis relief and still attract charges at the Australian border.