• Trade Advice
    Customs Broker | Everything you need to know for US Customs Clearance

    What Is A Customs Broker And When Do You Need One?

    Who is a Customs Broker?

    A customs broker is a private individual, an entity, or a corporation licensed to assist international traders in complying with all the federal laws, rules, and regulations related to the import and export process. The expertise of a customs broker is useful because the rules that govern the import and export of goods are complex and beyond the comprehension of ordinary people.

    One of their main responsibilities is to ensure that the customs clearance procedure is quick, smooth and hassle-free. In this case, their key role is to fill out the required paperwork and make sure that all of the rules are complied with. All customs brokers must be certified and accredited by the US Customs and Border Protection (CBP). They must possess the official verification to have the right to operate on the market and provide their services to importers and exporters.

    Also, the role of a customs broker is vital in a business transaction. This is because business owners or companies do not know all the complex and confusing CBP regulations that are implemented at various levels and different points of the journey of goods.

    What does a Customs Broker do?

    A customs broker will ensure that every shipment entering the country complies with all the legal requirements as stated by the CBP. These brokers organize and submit the necessary documentation, review the invoices and the packing lists, and verify whether the taxes and duties are calculated properly. They also make sure that the goods are classified appropriately based on the relevant Harmonized Tariff Schedule (HTS) Code.

    Customs brokers conduct business on behalf of the importers and often represent them at checkpoints. That is why they have a valid Customs Power of Attorney from the Importer of Record in their file. As they operate with joint and several liabilities with the importer, they may be held responsible for any violation of rules and may even have to face legal actions if the importer is found guilty of fraud or negligence.

    Why do I need a Customs Broker?

    Clearing their goods from customs is one of the most common problems faced by businesses as otherwise, they may have to pay fines, penalties, deal with the loss of reputation, etc. By using the services of a qualified and experienced customs broker, you can ensure that the required documentation and customs clearance processes are in order and presented to the customs authorities for smooth, efficient and timely clearance of goods.

    Customs brokers understand the goods clearance process inside-out and will quickly resolve any problem that you may face with the customs authorities. They will take care of all the critical tasks such as submitting the necessary documents, transaction records, furnishing the information related to shipment origin, destination, suppliers, classifications, routines, and others. They will then confirm whether all the necessary documents are collected and if so, later file them in the required order and present the same for clearance.

    What do I look for in a Customs Broker?

    Factors to look for in Customs Broker

    With so many customs broker firms ready to offer their services to clients, the options for choosing one are seemingly endless. You need a customs broker who is an expert, is ready to guide you through the shipping process and has the connections and the contacts to ensure that your consignments enjoy a smooth passage at the customs.

    It is important to find the right customs broker as the consequences of making the wrong choice can be costly and will result eventually in the loss of time, money and effort. Hence, finding the one that fits the needs of your business may require some research.

    You must keep the following things in mind while choosing a qualified and professional customs broker:-

    • Choose a broker with expertise in your area of business who must also possess decent knowledge about the goods that you generally ship. Moreover, a good customs broker will always be plugged into the developments in the industry and will stay on top of the changes in regulations as and when they occur.

    • Check if the account is handled by an individual or an enterprise-- the latter is a reliable option.

    • Verify if the individual or firm is appropriately authorized to carry out the necessary services.

    • Look for reviews posted about their services by the former and present clients.

    • Ask for references from fellow business owners so that you know you are working with a trusted name.

    What questions should I ask a Customs Broker?

    By asking your customs broker/firm the right questions, you can find out more about their expertise, competency, and capabilities in handling the various types of import and export consignments. You must ask the following top six questions:-

    1. Is the broker/firm experienced in handling the types of products you will be importing? If so, do they meet the specific requirements of the federal government regulatory agencies that also have jurisdiction over these types of goods?

    2. Which system/procedure do they use for the customs entry preparation? Do they follow the ‘assembly line’ system or does only one person handle an individual file? If so, will this person be present right through the customs clearance process?

    3. Do their team members undergo regular training or do they host information update sessions to share knowledge about any recent developments in the industry? Do they keep a close watch on the changing rules and regulations and make certain that these changes are then shared with the team members and also incorporated into the processes?

    4. When the specialists are reviewing the requirements of a shipment, do they also review and confirm the correct classification? Do they re-verify the valuation of the imported products to avoid last-minute hassles at the customs office? Are adequate measures and actions taken to prevent potential regulatory compliance issues, both with the customs department and with the other US federal government regulatory agencies?

    5. Are the firm’s team members trained to reach out to me and my office proactively for information seeking/sharing? Do they check the information provided and make sure there are no discrepancies between the information they have and those reflected in the papers/documents?

    6. Do they also coordinate with truckers, warehouse operators, ocean carriers and their agents, terminal operators, and the final recipients of import shipments? Do they follow this routinely to facilitate timely and efficient deliveries? Do they have a track record for avoiding unnecessary delays and storage expenses?

    How do I find a customs broker?

    With around 11,000 customs brokers operating in the US, finding a customs broker can be relatively easy. However, you need to find the right one and that takes some time and effort. You can use the following resources to quickly find a qualified customs broker:-

    • List of customs brokers on the CBP website

    The official website of the CBP lists all the US-based customs brokers licensed by the organization. The list is classified according to the different points of entry.

    It is a simple and effective way of finding all the registered customs brokers in one convenient place along with their names, addresses, contact details, and so on.

    • Member directory of the National Customs Brokers & Forwarders Association of America (NCBFAA)

    The list of registered customs brokers can also be found on the NCBFAA’s member directory. The NCBFAA is a group of leading freight forwarders, customs brokers, ocean transportation intermediaries, and air cargo agents registered in the US.

    This site is similar to the CBP website and provides the same tools and methods to find a customs broker of your choice.

    The search for a broker is based on the location. So, begin your search with the desired port of entry to get a list of those brokers that can potentially work with you. Their membership directory also provides the contact information of all the members.

    • Online resources

    You can look for customs brokers on the internet by just typing ‘top customs brokers' followed by the desired location in the search engine bar.

    Thus, by using the right and relevant keywords, you can find the best customs brokers for a specific location.

    When you search online for customs brokers, you will also see reviews that can help you narrow down your choice to the top two or three customs brokers/agencies.

    What is the Difference between a Freight Forwarder and a Customs Broker?

    Many exporters, especially those who are new to the industry and relatively inexperienced, believe that freight forwarders and customs brokers are two different names for the same roles. This is however not true.

    Freight forwarders are experts connected within the supply chain and focus mainly on the logistics and physical transportation of cargo, i.e. they act as an intermediary between a business and a transport company. Customs brokers, on the other hand, specialize in assisting importers and exporters in complying with the regulatory requirements of the US government in the import and export process. In short, they act as an intermediary between a company and the US customs department.

    Many freight forwarders can become customs brokers but not every customs broker is a freight forwarder.

    The freight forwarder of the exporter can work with the customs broker to help resolve any issues with the export transaction. Whereas, a customs broker only helps the importer and takes care of the import elements of a trade transaction. Exporters do not need the services of a customs broker because they are shipping out of the country.

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    Alexandra Ortiz
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