Why Does U.S. Customs Want My Social Security Number?

For those of you who have ever ordered something online, say a gift for someone at Christmas, only to find yourself being called by a customer service representative from some freight forwarding company or brokerage agency, you probably asked this question. In this article, I will try to give you a clear answer.

There are many different ways that Customs has to grant entry to packages coming into the U.S. from abroad. Many, many shipments are cleared off a ship's manifest and we as the receivers may never give a thought to Customs or that, for the journey of that package, we are importers! And beyond that, there are various other ways a shipment may be entered by Customs that you as the importer never need know. However, there are also many shipments that do require further information or documentation to meet Customs regulations, and that is when you may get a call from your friendly freight forwarder!

One of the most frequently requested pieces of information that Customs can require is verification of the receiver's U.S. tax ID number. There are many reasons for this and shortly I will explain some of them. Also bear in mind that each freight carrier, large and small, have their own internal compliance requirements and may ask for that verification in a variety of ways. For example, some companies will call and ask that you verify your Social Security number on the phone. Others may require you to provide supporting documentation, such as a copy of something that has your Social Security number and name on it! Sounds like some pretty serious invasion of privacy for a Christmas present!

Nonetheless, those freight carriers and brokers have some pretty good reasons for asking for documentation. U.S. Customs has the authority to audit any brokerage agency at any time within a five year period and demand validation of an individual's Social Security number. If the agency cannot provide good proof of that number, the brokering agency can be penalized to the tune of thousands of dollars for every shipment entered under that ID number! Obviously, brokerage agencies, including freight forwarders, have some serious motivation to protect themselves!

That's the freight forwarder's reasoning for asking for your social, namely, compliance with Customs regulations and liability. But why does Customs require this? There are a few reasons we can look at immediately.

When a shipment of goods enters into the country, they become part of the U.S. marketplace, and as such, may be dutiable. Dutiable just means there may be duty charges on whatever that particular commodity is. Well, Customs wants their money! Should some unscrupulous individual or company try to avoid paying, Customs can cheerfully ring up the IRS and, lo and behold, you have a garnishment on wages or your tax refund appropriated. That's a pretty rare occasion, but you get the picture.

Secondly, there is a Homeland Security component to this. Now I don't want to make this sound like any kind of "big brother" kind of thing, I sincerely don't think that's the case. However, several years ago, Customs merged parts of their database with that of the IRS. On a federal accountability level, no doubt this just made sense in terms of being able to manage and account for the vast trade, both import and export, that makes up a tremendous amount of our national economy.

Yes, but what's that got to do with me? All I did was order a cool blu-ray video player for my honey for Christmas! True, that, but should it happen that you find yourself being asked by a reputable freight forwarder or brokerage agency for your Social Security number, take a deep breath and know that yes, it's a legitimate request. You'll find that that alone will lower your blood pressure a little. Obviously, do your own due diligence. Verify the legitimacy of the company requesting the information. No reputable company will balk at providing you with numerous ways to verify them. Never give your SSID number without doing this, whether the caller says they are from FedEx, UPS, DHL or any of the other legitimate companies importing goods for U.S. companies and citizens.

I hope this helped to answer at least some of your questions regarding why in the world someone would call you to ask for your Social Security number, for a Christmas present you bought online! I will be writing a few more tips and tactics for making your importing experience a more pleasant one soon, so stay tuned!