What is a Customs Broker?
International trade is governed by many laws and regulations and each country has its own rules surrounding how goods may be imported or exported. A Customs Broker communicates with government agencies on your behalf and ensures documents, duty and tax payments, and other requirements related to the import or export of your goods comply with these regulations. Many companies hire a Customs Broker to avoid the risks and costs of delayed shipments or fines due to errors.
In this article, we look at the roles and responsibilities of a Customs Broker and the benefits of hiring one for your international shipping.
What are the Roles and Responsibilities of a Customs Broker?
Overall, the role of a Customs Broker is to facilitate and manage the import and export of goods on your behalf, including:
- Providing advice on your overall import and export activities
- Reviewing and assessing purchase orders and shipping documents to ensure accuracy and compliance with import and export regulations
- Determining correct tariff classification, valuation, and appropriate duty and taxes for your goods
- Identifying ways to reduce or eliminate the amount of duty you will pay
- Preparing and submitting documents and supporting information to Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), and Other Governmental Departments
- Maintaining accurate records
- Post-clearance activities (e.g. accounting, applying for refunds, cancelling temporary import bonds, assisting with customs compliance audits, etc.)
What are the Benefits of Hiring a Customs Broker?
In-Depth Knowledge and Expertise
Customs clearance goes beyond simply selecting a tariff classification for imported goods and clearing it through customs at the time of arrival. It involves understanding Rules of Origin, free trade agreements (e.g. CETA, CUSMA), product restrictions (e.g. steel, dairy, etc.), accounting and reporting requirements, and much more.
Customs Brokers are highly knowledgeable, skilled, and experienced in customs laws and regulations and stay on top of changing policies and procedures. Outsourcing your customs clearance process can free up time and resources needed to understand customs legislation and deal with government officials, allowing you to focus on your core business.
Duty & Tax Savings
Prior to shipment, a Customs Broker will review Purchase Orders, Commercial Invoices, and other documentation to identify whether any duty savings strategies apply. Depending upon the origin, composition, or intended use of the goods, they may be eligible for relief, reduction or refund of duties (e.g. qualification under a free trade agreement or other trade program). A Customs Broker can help identify eligible products and assist in obtaining information from suppliers, as well as completing and submitting the required paperwork to customs.
Minimized Costs & Risks
As an importer or exporter you are responsible for ensuring that declarations made to CBSA, CBP, and other agencies comply with import and export laws and regulations. Incorrect declarations can result in compliance audits, penalties under the Administrative Monetary Penalty System (AMPS), or confiscation of goods at the border. A Customs Broker will ensure accurate and complete information is submitted to ensure your shipments remain compliant with all applicable rules and regulations.
Streamlined Supply Chain
In addition to customs clearance services, many customs brokerage companies offer full international trade and logistics services. Companies that provide integrated services – such as freight forwarding, warehousing, local trucking, etc. – offer expertise in all modes of transportation and can provide efficiencies all along the supply chain.
How to Select a Customs Broker
Are They Licenced?
In Canada, to operate a customs brokerage business, the broker must be licensed by the Canada Border Services Agency (CBSA). To obtain a licence, at least one officer or partner must be a Qualified Officer, appointed upon successful completion of a professional exam.
Are They Experienced?
Ensure the Customs Broker is an established business with experience in providing the services you require. Ask if they have experience with the goods that you will be importing and/or exporting.
Are They Well-Recognized in Their Industry?
Check to see if the broker is a member of industry associations. The Canadian Society of Customs Brokers (CSCB) is the leading authority for customs brokerage in Canada. Being a member of an industry association like the CSCB allows Customs Brokers to remain current on international trade topics and trends and maintain professional designations, including Certified Customs Specialist (CCS) and Certified Trade Compliance Specialist (CTCS).
Are They Tech Savvy?
In a world where everything is going digital, it is important that the customs broker you select uses the latest technology. Current customs software allows the broker to transmit electronic customs clearance data to the CBSA, CBP, and other government agencies, providing efficiencies and minimizing delays in clearing your shipments. Some brokers also maintain Electronic Data Management Systems (EDMS) that allow for better reporting and quick access to your customs documents, records, and invoices.
Do They Offer Integrated Logistics Services?
Customs Brokers that offer integrated services, such as freight forwarding, warehousing and local delivery of shipments, understand all facets of the supply chain and can provide added value through increased efficiencies and a single point of contact for all your international trade needs.
Choose PF Collins
Established in 1921, PF Collins provides safe, high quality international trade and project logistics solutions to create leaner supply chains for our clients. Our integrated services include: Customs Brokerage and Customs Consulting, Freight Forwarding, Warehousing & Distribution, Immigration Consulting, and Marine Agency. We combine our expertise in import/export regulation with modern technology to expedite customs clearance and ensure your shipments arrive on-time.