What Is A Customs Broker?
Most people have no idea of what a Customs Broker is or what they do. The truth of the matter is that they have achieved the highest professional degree recognized in the transportation industry and earn a very respectable income.
The history of Customs Brokers goes back to shortly after we became a nation in the late 1700's, yet few people know about the profession. I have been asked to provide a brief explain, in laymen terms, what a Customs Broker actually does.
A Simple Example
Let's take a scenario where a large company imports into the Untied States a large piece of machinery for their factory. The machinery arrives via vessel and the company sends a driver to pick up the machinery and take it back to the factory. But there is a problem - U.S. Customs will not release the machinery to the driver. Merchandise, just as passengers, must pass through Customs before being released into the United States.
This is where the Customs Broker comes into the scenario. U.S. Customs will advise the company that they need to hire a Customs Broker to "clear" the machinery through Customs, and then they will release the machinery to the factory.
Why a Customs Broker?
Technically, the company (importer) can clear the shipment through Customs, but where do you begin? There are literally hundreds of government forms, which ones do you fill out, how do you fill them out, do you pay duty, etc etc.
Actually it's more than forms alone. The Customs Broker will determines if this article is eligible for admission into the United Sates, the Country of Origin, determines a Duty Rate or if the merchandise qualifies for any of the Duty Free programs that are available for certain products. The Customs Broker will also issue a surety (Bond) to the government on behalf of the importer that the importer will adhere to all Customs demands, including demands that may occur after import.
A skilled Customs Broker can also advise the importer of options on future imports to legally avoid paying duty. Certain imports that are normally dutiable, with slight manipulation abroad, can be imported into the Untied States duty free by taking advantage of the many programs that are available to importers.
How to Become a Customs Broker
Customs Brokers are issued a Federal license jointly by the U.S. Treasury Department and Customs and Border Protection.
To obtain a Customs Broker License, an applicant must pass an exam of eighty questions. The Customs Broker Exam is given twice each year - on the first Monday of April and the first Monday of October. The Customs Broker Exam is based on the Code of Federal Regulations Part 19 (CFR 19 Customs Duties) and the Harmonized Tariff Schedule of the United States. The applicant is given four hours to complete the 80 question exam. The American Customs Association
provides courses to prepare applicants for the Customs Broker Exam.
A Customs Broker is very similar to an attorney; they can work independently or go to work for a firm with several Customs Brokers on staff, with each Customs Broker specializing in a particular field.
The future outlook is directly correlated to our nation's importing trends. The difference between what we export and what we import is measured by our trade deficit. For the last few decades, we have imported more merchandise than we exported and there are no signs of any slowdown of that trend. 2007 shows record level trade figures and the ratio of import to export is 4:1 in favor of imports.
I would suggest anyone in the transportation arena to get a Customs Broker license. One interesting fact is that the license is issued for life, even if you choose not to use it right away. Many people pursue the license as a way of validating their knowledge and skills in the transportation industry - and not to mention that an education is something that you keep for life.