Importing on a daily basis can be a tedious undertaking. With the landscape of constant changes in government regulations and global business conditions, the importer is faced with many challenges. One way they can ease these challenges is to work with a good service driven Customs broker.
US Customs/CBP (US Customs and Border Protection) are in charge of the collection of duties and seeing that the country’s rules and regulations are adhered to. The Customs broker is a licensed individual or firm that is regulated and authorized by US Customs/CBP to assist importers and exporters in meeting the Government requirements.
The Customs broker must complete and pass the customs examination, pay their fees and be approved by US Customs. While there are some that take the exam and pass, the test includes very detailed classification, duty, and regulation questions taking up to 4 hours to complete. As a result, many would be Customs broker candidates start by working with brokerage firms under the guidance of a licensed customs broker. They learn the industry, rules, and jargon along with best practices and import standards. They generally start at the bottom doing paperwork as directed by the licensed broker. Each brokerage firm is required to have an officer that is a licensed broker to conduct Customs business on behalf of the importer. This broker is responsible to oversee the import process making sure that their import clients and the staff that assists them are fully compliant.
Once in the field including after studying and training, they take a test to get the Custom Broker’s license. Most people will take the test a few times before they pass. The questions are very demanding. Since the broker represents US Customs which involves them in the classification of goods along with the collection and payment of duties, they want to make sure each broker is qualified and approved. Even after they pass the brokerage test, they must go through a long background check to make sure they are worthy to get the license. After all the bases are satisfied, the new broker gets their license. The license is only the beginning and experience must be gained.
The Customs broker is an expert at dealing with clearing shipments through Customs. He or she can classify products and make sure the regulations are followed for all imports. The Customs broker is the first defense against poor compliance that can result in heavy fines and penalties. Importers into the US also encounter over 40 agencies that have imported goods regulations; US Customs is the enforcement branch for them all.
The Customs broker keeps up with the latest changes in regulations. They also keep aware of business conditions by observing any changes to the shipment of goods. If an importer needs to know if there is new dumping duty on their product, the broker will find out, and many times prevent the importer getting charged additional duty by warning about the duty changes before the shipment.
Another issue is treaties and their effect on duty. Agreements between countries can change rapidly. The broker can inform the importer if any of these changes will affect their products. Sometimes this change may lead to new opportunities to use new suppliers and save the importer money and time.
Where the Customs broker really shows their value is in solving daily problems that would otherwise plague the importer and waste too much of their time. If Customs wants to query the importer about their invoice, for example, the broker can answer their questions in the most straight forward manner that will take into account Customs regulations thus minimizing the chance that Customs will want a deeper investigation. Ideally, the Customs broker has already anticipated the issues involved and was ahead of any Customs inquiry.
Also, the Customs broker can apply for a binding ruling on the importer’s behalf to eliminate the chance that Customs will change a classification after the entry has cleared and demand to go back years to change all previous entries.
When the importer has a good broker, they can focus more on growing their business knowing that they have the best possible protection against disruptive import issues. If a shipment gets caught in limbo, the Customs broker has probably seen that situation before and has the best practices to solve it.
To conclude, this background of the Customs broker process along with some of the import issues is important to importer’s as the broker and the importer can and should work together with the seller or manufacturer to make sure the goods enter into the US without delay or additional costs. Getting to know the broker and matching them to your firm can be the critical step to effectively manage your importation of products. Proper shipping, clearance, transit times and managing the Customs entry process is key to a steady and consistent import business.
Article by: Howard Fox, Import Compliance Manager