Customs Broker: Functions & Responsibilities

Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

In this era of globalization, products constantly flow across borders. It's the job of a customs broker to ensure shipments meet federal regulations as they move in and out of the U.S. In this lesson, we'll examine the duties of a customs broker.

Getting It Across the Line

Did you ever wonder how all those ''Made In China'' items come into the United States? Trade laws are extremely complex, so who helps companies legally get their products into this country? That's the job of a customs broker.

Functions of a Customs Broker

A customs broker can be a private individual or an entity regulated, licensed, and empowered by the U.S. government's Customs and Border Protection (CBP) to help importers and exporters comply with federal law. What does this mean? Let's look at some ways a customs broker can help a client:

  • Act as a liaison between the client and government agencies.
  • Make sure shipments meet all legal requirements.
  • Put together the necessary paperwork and payments, and submit them to customs authorities.
  • Review the classification of goods to make sure that the taxes and duties owed are properly calculated.

A customs broker is required to have a valid Customs Power of Attorney on file from the Importer of Record since the broker is transacting business on the importer's behalf. In 2016, the U.S. Bureau of Labor Statistics reported about 13,000 active licensed customs brokers in the United States.

A customs broker makes sure these goods are brought here legally
Shipyard

Why Use a Customs Broker?

If you're an importer or exporter and you need to deal with U.S. Customs, you're required to go through a customs broker. What are some other reasons it make sense to use a customs broker?

  • Complex Rules - You may not know all the rules and regulations of the country you want to import from and the clearance process may differ depending on your port of entry. You are also legally responsible for all of the declarations (a statement showing goods imported and their value) you make. If they're not accurate you can be subject to fines and audits.
  • Avoiding Unnecessary Costs and Delays - Delays and possible confiscation of goods due to mismanagement or lack of procedural knowledge are a huge risk to take.
  • Proper Classification of Goods - The duties owed for imports are based on how they're classified in the Harmonized Tariff Schedule of the United States (HTSUS). A good customs broker will make sure your imports are properly classified so you pay the lowest possible duties or taxes.

Qualifications

How does someone become a licensed customs broker? To be eligible to apply, you need to be at least 21 years old, you can't be a current federal employee, you must be a U.S. citizen, and you must be of good moral character. You'll have to pass a test called the Customs Broker License Examination, which is an open-book test consisting of 80 multiple-choice questions . The test is based on the latest version of these items, according to the U.S. Customs and Border Protection:

  • The Harmonized Tariff Schedule of the United States (HTSUS)
  • Title 19, Code of Federal Regulations
  • Specified Customs Directives
  • Customs and Trade Automated Interface Requirements document (CATAIR)

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