Planning an International Purchase

When purchasing goods from an international supplier, shipments must be transported from the supplier’s point of origin to the final delivery destination. Importing goods into the United States involves a range of regulatory, documentation, and logistical requirements that must be carefully managed throughout the process.

Prior to initiating any import-related activity, departments and purchasers should consider the following:

• Compliance with U.S. Customs and import regulations
• Applicable duties, taxes, tariffs, and fees
• Shipping methods and delivery timelines
• Required import documentation and declarations
• Risk management and insurance considerations
• Coordination with vendors, freight carriers, and customs brokers

Addressing these requirements early in the procurement process helps minimize delays, avoid unexpected costs, reduce compliance risks, and ensure the successful delivery of international shipments. Contact us at customsduties@umd.edu with any questions.

When Selecting a Foreign Supplier, Plan for Duties, Taxes, and Fees

• Budget for import duties, brokerage fees, storage, and handling charges.
• Import guidance applies to all imports, whether a customs broker is used, or if goods are being imported via FedEx, UPS, or DHL.
• Duties may be refundable under certain conditions (e.g., tariff exclusions or appeals), but the process can be lengthy and there is no guarantee that a refund will be granted.
• Services are typically not subject to tariffs. If a supplier is providing services exclusively, any proposed tariff charges must be substantiated with clear justification. To prevent unnecessary or inflated fees, ensure your documentation clearly distinguishes between goods and services.

Executive Orders (EOs) include significant tariff policies that are reshaping the economic landscape. These tariffs are subject to change and are updated regularly based on new EOs and policy announcements and are likely to affect the cost and availability of several common goods purchased at the University.

To mitigate the impact of tariffs, assess your current and future procurement needs, explore domestic sources or countries not subject to high tariff rates, and stay informed of changes to policies. If importing goods from a country with high tariffs, consider using the following tactics to limit impact on the price of goods:

• Ask for a breakdown of components (for large/complex equipment)
• Negotiate with the supplier to share tariff costs (for single-source goods)
• Lock in pricing or document price increase terms (for long-term relationships)
• Identify potential lead time challenges or product availability risks

Contract and Risk Considerations

At the time of contract, negotiate terms most favorable to UMD.

Shipping Terms
It is recommended that shipping terms (Incoterms) be DDP (Delivered Duty Paid), by which the seller pays all costs, including taxes and duties related to import clearance.

Timing of Payments
Consider structuring your contract and requisition with milestone payments. These milestones should be consistent with the transfer of ownership defined by the agreed-upon shipping terms.

Risk
The buyer’s risk begins when ownership of the goods has transferred from the seller. Note that the point of transfer depends on the agreed-upon Incoterms.

Buyers should consider purchasing insurance for high-value (monetary or non-monetary) goods. If the value of the goods exceeds the insurable value offered by the seller and/or carrier, contact Procurement for guidance on how to proceed.