Tea is getting more and more popular in America, according to the statistics published by Tea Association of USA, so it’s a good time to jump into the tea business. There are so many teas available. You can buy tea from a domestic wholesaler or from the origin directly for some real benefits. Although it’s a little complex to deal with importing business, here is some guidance to help you make the task easier.
There is no import license, customs duty or VAT (value added tax) needed for tea importation. All you have to do is register with the FDA and make sure the imported teas meet the food regulations. It’s best to hire a forwarding agency and customs broker or it will be a time- and energy-consuming job.
Be aware of the Prior Notice to FDA before shipment: there is a “US BORDER CUSTOMS & PROTECTION ISF REQUIRED INFORMATION” form that needs to be filled out.
The Chinese tea supplier should offer you the documents for customs clearance, such as the commercial invoice and packing list.
You can avoid most of this paperwork if you just order a small quantity. (More detailed information can be found in Appendix I: Avoiding complicated paperwork on small tea orders.)
Forming a business is the first step to be a tea importer. In the United States, the form of tea business typically depends on state law; it is best to consult your accountant or tax attorney.
Taking on a corporate form or any other form requires filings with the state authorities and it’s best to register your trade name with local authorities for protection.
According to the the Bioterrorism Act, any facilities engaged in manufacturing, processing, or holding food for consumption in the United States should be registered with the FDA.
Here is an online registration instruction for registering as a tea importer once you login the FDA Industry System. Your supplier should be registered here as well.
There are many good teas and tea suppliers in China. (There are some tips in Appendix II: Finding the right Chinese tea supplier.) Once you confirm the teas you want and all the terms with the supplier, you can sign a formal contract. or more commonly, use a Proforma Invoice (P/I).
In China, the supplier should meet 2 requirements for tea exporting: the first is the tea should come from a government registered plantation; the second is to get a phytosanitary certificate from the CIQ, or your teas will not have the rights to be inspected.
The HTS (Harmonized Tariff Schedule) for tea is 0902. Green tea is 090220, black tea is 090240. (There is no specific code for Oolong and Puerh because the U.S. Customs considers Oolong and Puerh tea leaves to be fermented or partially-fermented black tea(090240)).
There is a detailed reply from U.S. Customs and Border Protection - The tariff classification of Green, White, Oolong and Black Tea from China
Normally, tea itself is duty-free under the United States HTS. However, imported tea loses duty-free status when it is merely an additive to another beverage or dietary supplement.
The supplier should provide you the packing list and invoice for Customs clearance.
According to the Food Safety Modernization Act (FSMA), all food imports (including tea) are better to offer a third party testing to ensure the foreign food facilities comply with U.S. food safety standards. SGS, Eurofins could be your choice of analysis lab. For the best practice and future concern, heavy metal lead and microorganism should be on the list excpet pesticide residue.
Pursuant to the Bioterrorism Act, tea importers/supplier are required to give the FDA advance notice of shipments before import into the USA. Here is the step–by-step guide for Prior Notice. You can do it by yourself or provide your Registration Number and let your supplier do it for you.
And under the new rule, before merchandise arriving by vessel can be imported into the United States, the “Importer Security Filing (ISF) Importer,” or their agent must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing. This requirement only applies to cargo arriving in the United States by ocean vessel; it does not apply to cargo arriving by other modes of transportation.
Entities that want to become Importer Security Filing filers using either AMS or ABI should call 571-468-5500 to be assigned a Client Representative.
ISF needs to be filed before ship departs while FDA Prior Notice needs to be filed in no more than 15 days before a shipment arrives the first port of USA.
International trade business can be pretty complicated, especially with Customs. You will lose if you are not familiar with what the Customs regulations, so it’s better to hire a Customs broker. Sometimes the broker can be a forwarding agency too, that also can do the Prior Notice for you.
The broker can also purchases a Customs Bonds for you which is a must have if the value of imported goods exceed $2500. It can be Single Transaction Bonds (for one-time importation) or Annual Import Bonds for multiple entries in 12 months which costs about $750.
You can also choose “DDP” terms, which means the supplier will offer you a door-to-door price. In this case, all you need to do is pay one sum directly to your Chinese supplier. It will take care of everything including shipping, insurance, and Customs clearance and deliver the teas to your warehouse. That’s the easiest way for you.
The HTS code of tea is 0902, all teas are free of tariff except flavored one which needs to pay 6.4%. You can check the whole details on The Premier Source of Free U.S. Trade & Tariff Data.
However something changed since 02/14/2020 within the Trump administration, all teas come from China need to pay 15% and later cut to 7.5% now. You can open USITC Tariff Database and input 99038815 to check the details. This extra tariff might change and we will keep this post upated.
Once you get the tea and prepare to sell it, you should be sure your label meet the labeling regulation.
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While the regular postal service will save you some money, it takes a longer time. The DHL/EMS/FedEx will cost more, but it only takes about five days to receive the shipment. Normally a professional exporter gets a big discount from them.
Be sure to remind the shipper to mark the tea as tea gift or sample and claim the value under 800 USD.
You also can search for suppliers on the internet. Sure, it’s convenient although you’d better double check the information you find.
Or you can email to the author - Mr. Daniel Hong who is an expert of China tea as well as tea tour organizer, the company he founded -Hong China Tea Company- can help you with the exporting and logistics.
You can make a trial order to test the supplier and all procedures. Any questions, ask in the tea forum like Linkedin groups - Tea Enthusiasts and Entrepreneurs. Most of the tea men are quite willing to help others.