6/21/2018 Customs Brokerage 101: Everything You Need to Know

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Everything You Need To Know

Customs Brokerage 101: Everything You Need to Know

If you want to succeed in today’s global market, you have to master the art of International trade.
That includes knowing your way around the complexities of customs clearance. Alternatively, you
can simply outsource all of the stress and use the services of quality customs brokerage experts.

What does customs brokerage involve?

Doing export and import is by no means a simple endeavor. There are documents to be collected
and e-forms to be lled. Depending on the nature of the goods, there are various taxes, duties and
excises to be paid. Also, international trade is governed by a whole host of regulations. To
maximize compliance, importers/exporters need to be familiar with all applicable laws.

As experts in the eld, customs brokers help you navigate the sea of changing regulations and
understand import speci cs related to particular commodities. They are highly knowledgeable in
all entry procedures, admissibility requirements, classi cation, valuation, and the duties and taxes
imposed on imported goods.

Customs brokers can do their job as employees or associates of freight forwarders, independent
businesses, shipping lines, importers, exporters and customs brokerage rms.

To engage in the customs business, companies must have a broker license. This means that they
have to employ at least one individually licensed o cer, partner or associate. As a client, you grant
your customs broker the authority to act on your behalf.

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Things your customs broker can do for you

The job of your customs broker is simply to help you clear your shipments at the border. But, this is
by no means a simple task.

In the scope of achieving this for you, a customs broker will:

Help your goods meet state requirements governing import and export and act as liaison
between you and the relevant agencies

Prepare and submit necessary information and payments to the Customs authorities on
your behalf (country of origin and destination, suppliers, routings, intended use of goods,
etc)

Assess commercial documents to see if they are compliant with regulatory requirements,
prior to their submission

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Make sure your goods are correctly classi ed so duties and taxes can be properly
determined

Use their expertise to help you spread your business to new markets. If you’re interested in
reaching customers across the border, a customs broker with presence at both sides of the
border can make sure your goods reach your customers quickly and safely.

Provide personalized advice – all enterprises have speci c business needs, especially
small-size businesses with lower export/import volumes. A good broker will pay due
attention to your particular needs and contribute to your business success.

Why should you use the services of a customs broker?

There are many reasons why you should consider using customs brokerage services, and it
depends on your particular business. What follows are the main reasons that are likely to resonate
with your particular needs.

1. Knowledge in complex regulatory requirements

Some businesses can’t afford personnel versed in the complex regulatory requirements governing
the transport of goods across borders. In this case, they can outsource this business hassle and
hire a customs brokerage company.

Good companies offer a complete portfolio of import/export services, including logistics, freight

forwarding, warehouse and distribution, so you can rest assured your business is fully taken care
of.

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2. Skills to facilitate the customs clearance process

Customs brokers make sure your shipments cross the border and reach their intended destination
safely. They have the skills to facilitate the entire customs clearance process, regardless of the
port of entry.

3. Help in avoiding unnecessary costs

Rules and regulations in cross-border transactions keep changing. As experts in the requirements
for each type of goods, customs brokers can help you avoid costly delays, nes, con scation of
the merchandise and other penalties.

4. Veri cation of declarations

Another thing to keep in mind is that you are legally responsible for all customs declarations
prepared on your behalf. As faulty declarations can result in audits, nes and even sanctions for
your business, make sure to have your declarations veri ed by a licensed customs broker.

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5. Convenient paperwork

Although you’re not required by law to use the services of a customs broker, many companies
prefer to work with one. This is because of the convenience in entrusting all the paperwork and
communication with relevant agencies to an expert. Even more importantly, their expertise in the
eld can save you from making costly mistakes.

6. Correct identi cation of goods

Customs brokers are well versed in the Harmonized Tariff Schedule – a compilation of duties or
taxes levied on goods as they enter a country. Each good receives a speci c classi cation number
and they are divided into major groups and sub-groups to allow correct and easy identi cation for
the purposes of charging customs duty.

7. Easy clearance of shipments with formal entry

Some commodities automatically require a formal entry (formal declaration of speci c information
on the imported goods). This applies to food and pharmaceutical products, cosmetics, chemicals,
biological materials for research and medical use, as well as agricultural and dairy products.

A formal entry is also needed if your shipment exceeds a certain value, regardless of its nature. For
instance, any shipment exceeding $2500 in value ($250 for textile) requires a formal entry.

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These goods are held at the customs until the necessary paperwork and requirements are met for
the shipment. In this case, it’s a good idea to hire a customs broker because of their knowledge of
the rules, regulations and protocols needed to clear your shipments.

How your customs broker can help you with the NAFTA certi cate

When it comes to collecting customs data, some documents are easy to complet. This includes
packing slips, commercial invoices and customs invoices. All you need is shipping or invoicing
data, such as shipper, consignee, carrier name, description of goods, etc.

However, the NAFTA Certi cate of Origin is a different story. The main difference is that all the
products you list on this document must qualify under the NAFTA and there are rules that must be
observed.

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NAFTA is the North-American Free Trade Agreement signed by USA, Canada and Mexico, granting
importers substantial reduction or even elimination of customs duties on qualifying goods.

To bene t from these advantages as an importer, your goods must have valid certi cates of origin.
If required, the exporter should provide the customs authorities with evidence that your goods
qualify under the rules of origin (NAFTA Certi cate of Origin).

As this can get a bit complicated, certi cation of the originating status of the goods is best left to
the customs experts. Keep in mind that any irregularities in your NAFTA Certi cate of Origin can
expose you to penalties, nes and shipment delays.

Your customs broker is uniquely positioned to help you with this issue. They can conduct a
thorough analysis to determine the origin of the goods and recommend alternative solutions if the
good doesn’t meet NAFTA requirements.

With over 35 years of experience, A & A is the leading provider of freight, warehousing, and
customs brokerage services. Contact our A & A customs brokers at any time of day and night to
help you ease the entire clearance process.

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