Your CUSTOMS HOUSE BROKER (CHB) is more important than your CERTIFIED PUBLIC ACCOUNTANT (CPA).
Time is money and money is crazy important!
Making sure goods clear customs in a timely and efficient manner is every importer/exporter’s main concern. When shipments get stuck on the wrong side of the border, you better have the best Customs House Broker’s (CHB) on your team.
CHBs are your soldiers on the ground. They work 24/7 clearing goods, working through mountains of paperwork regardless of holidays.
So choose wisely.
It’s not just the Customs and Border Protection (CBP) they have to deal with, Customs House Brokers interact with – bare with us, it’s a long list: The Food And Drug Administration (FDA), Fish and Wildlife Services (FWS), United States Department of Agriculture (USDA), Department of Transportation (DOT), The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), basically any agency you can think of, they are in contact with and maintain broad knowledge of regulations for each.
A CHB is Your BFF.
Tariffs change on the fly these days and have far greater implications than most tax code amendments – when’s the last time a tax rate increased by 25% overnight? CHBs are in constant contact with clients, as they deal with paying duties and taxes on a daily, weekly or monthly basis.
On that note: did you know Customs House Brokers can get you refunds on exported items you’ve already paid import duties on!? Freight forwarders claim they can do the same but they are often unqualified to do so. Having unqualified people speaking on your behalf can sour even the most professional relationships.
Choosing the right Customs house Broker is key. It’s important for importer/exporters to maintain good standing with CBP in order to maintain a healthy business and supply chain. Brokers assist in enrolling importers into The Broker-Known Importer Program (BKIP) and Customs Trade Partnership Against Terrorism (CTPAT), programs to help simplify importing items across the border in a smoother and faster fashion.
All these actions help importer/exporter’s business run smoothly and keep things liquid; but when it comes to finances, most people think of their Certified Public Accountant (CPA). Don’t get it wrong, CPAs are helpful but the importance of having the right CHB on your team is grossly undervalued and that has got to stop!
CHB? What does that even mean?
Customs House Brokers (CHB) are private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection to assist importers and exporters in meeting Federal requirements governing imports and exports.
Brokers submit all necessary information and appropriate payments to CBP on behalf of their clients. They plan and implement a lot of different strategies that streamline border crossings and ultimately improve their client’s bottom-line.
Brokers duties on duties.
The duties of a broker range from advising to representing clients when dealing with customs. Brokers must keep their license current and hold permits for each district they transact business in. Brokers can face penalties and fines if they neglect their duties or willfully violate the law. Yikes!
While not a full list, here are brief descriptions of a broker’s main duties:
- They Represent Their Client – Customs brokers must have a valid power of attorney from their client, which gives the broker the authority to perform any lawful act in the course of transacting Customs business.
- They Complete Customs Transactions – Customs Brokers submit all necessary documentation on a client’s behalf. They prepare necessary entry forms and paperwork needed to qualify imports for trade programs like the North American Free Trade Agreement.
- They Ensure Payment of Duties and Fees – Customs duties are due within 10 working days of the Customs Release date. That’s the rule: plain and simple. Broker or no broker. There are Periodic Monthly (PM) Statement options, but entries cannot be pulled from this statement after the 10th day. The broker can also apply for refunds (or Drawbacks) of overpaid duties on a client’s behalf.
- They Are Masters of Recordkeeping – Customs Brokers retain all documents in an orderly, itemized manner (this is not a time for your shoebox filing system) for at least five years. This includes: powers of attorney, invoices, and manifestos from the date of entry. Rest easy. These records are confidential.
Are we making our point about the VALUE of a CHB?
Do you see all the responsibilities Customs House Brokers have to juggle? They are felt on every level of your business, from educating clients on remaining a compliant importer/exporter to helping with proper pricing of the product and cash flow planning. Choosing the right CHB affects your business’s bottom line in ways that aren’t always immediately apparent.
For example: Involving CHBs in product development and design could greatly minimize costs due to their extensive understanding of duties and taxes based on engineering a product a certain way or in a particular country. Custom House Brokers deal with duty rates changing several times in a calendar year, often having to think on their toes as entries need immediate customs release. They are usually front to back end operators, providing support for clearances from before goods get shipped to when the entries are liquidated.
There’s no legal requirement for a company, individual or organization to hire a CHB to clear goods through customs, just like it’s not required to hire an accountant to file your taxes come tax season. Take the time to research Customs House Brokers and find which is best suited to you and your business’s needs. Ensuring you have the right one on your team could save you a ton of money, open your eyes to new opportunities, and avoid some major headaches along the way.
If you have any further questions, please contact us.