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  • QA 090
    Question:
    What is involved in importing small amounts of coffee directly from growers into the United States? Taxes? Licenses? Regulations?
    Background:
    I would like to import a small quantity of coffee directly from a farm in Venezuela for distribution in the USA. What are basic steps for starting this type of business, import taxes, laws, ect.
    Asked by:
    Small Roaster - USA
     
    Answer:

    The United States does not levy any duties or taxes on the importation of coffee, be it green, roasted or soluble, nor is any kind of import license needed.However, direct importation is rather different from buying through an importer: 

    • Your supplier has to conform to all local export regulations;
    • A formal purchase agreement is needed, based on the Green Coffee Association's standard contract.
    • Imports into the US are only permitted from FDA registered suppliers;
    • Transportation of small quantities can be complicated;
    • Goods will most likely have to be paid up front, i.e. before receipt;
    • Even if the quality is unsatisfactory, the goods cannot be returned;

    Local export regulations in many countries usually require anyone wishing to export coffee to be licensed to do so. Your supplier will probably have to make such arrangements or use the services of an export agent. See also QA 082 in the Q&A Archive.

    The purchase agreement should clearly stipulate how delivery will take place, that the goods have to pass FDA inspection, and where any arbitration will take place in case of a dispute. See section 04.04.03 of the Guide.

    US Food and Drug Administration regulations, under the Public Health Security and Bioterrorism Preparedness and Response Act, require all those handling green coffee to be registered with it and to declare shipments before they take place - see www.cfsan.fda.gov or www.ncausa.org. This applies to both suppliers and receivers of green coffee, also for small amounts - even samples…See also sections 05.04 and 12.06 of the Guide.

    Transportation of small amounts (less than a container load which is about 20 tonnes) is difficult to arrange - today almost all coffee travels in containers. Alternative options include paying for an entire container whilst using only part of it - this is expensive; sharing a container with other goods - this is dangerous as coffee could become contaminated; shipping the goods by airfreight - this is again expensive but possibly an option; or using international courier services as DHL, Fed-Ex, TNT, UPS etc - suitable for really small quantities.

    Payment up front means having to rely entirely on your supplier's integrity. You can perhaps require the goods to be inspected before despatch and a certificate of quality to be provided, for example by a competent coffee authority in the country of origin.

    Returning directly purchased goods that turn out to be unsatisfactory (or that have been rejected by the FDA) is feasible in theory but mostly impossible in practice. However, it is probably also true to say that it would be unusual to receive something that cannot be used at all, i.e. a certain amount of risk is simply part of the deal when importing direct.

    Our recommendation is for you to consider using well-established international courier services such as DHL, Fed-Ex, UPS, TNT or others who have experience in the importation by air of small amounts of green coffee. 

    To-day even samples of green coffee are subject to Customs Clearance and require a 'Prior Notice Interface' if sent via courier, showing the company's FDA registration number, invoice etc. Your supplier should contact their equivalent local courier services and/or mail service as to what is required by the US. The current set of regulations remains under constant review and further changes are quite likely.

    Finally, another potential solution is of course to identify a friendly importer who might be able to combine your parcel with other coffee coming in…

    Posted 28 April 2006

    Related chapter(s):
    Related Q & A:
    QA 002, QA 082