What is a Customs Broker?
Customs Brokers are private individuals, partnerships, associations or corporations licensed, regulated and empowered by the U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting federal requirements governing imports and exports. Brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service. Brokers must have expertise in the entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise.
Why use a Customs Broker?
According to the International Trade Administration, the U.S. imports more than $2,000 billion of merchandise every year. Getting all those goods from there to here is not an easy task. At best, importing goods into the United States is a complex process. That’s why many businesses employ the services of an expert Customs Broker. Customs Brokers are highly knowledgeable professionals licensed by CBP to assist in conducting customs business on behalf of others. Customs Brokers should possess knowledge as well as the requirements of some 40 government agencies. Selecting a talented Customs Broker can be the key in helping a company advance its import operation.
Those activities involving transactions with the Customs Service concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges assessed or collected by the Customs Service upon merchandise by reason of its importation, or the refund, rebate, or drawback thereof. It also includes the preparation of documents or forms in any format and the electronic transmission of documents, invoices, bills, or parts thereof, intended to be filed with the Customs Service in furtherance of such activities, whether or not signed or filed by the preparer, or activities related to such preparation.
All goods which are imported into U.S. Customs territory must undergo a legal process called entry in order to be clear Customs and legally be imported into the U.S. Entry of imported goods into U.S. Customs territory does not legally occur until the import has arrived at the U.S. port of entry, Customs has authorized the entry of the goods, and any estimated duties owed on the goods have been paid. Imported goods are said to have cleared Customs when the goods have been successfully undergone entry.
When imported goods physically arrive within U.S. Customs territory, entry documents must be filed with U.S. Customs before Customs will release the goods. Once the goods arrive and are presented for entry, and the goods are either examined by Customs or examination is waived, Customs will release the goods upon either the filing of certain required entry documents or the filing of an entry summary, provided that no legal violations pertaining to the imported goods have occurred. Note that even after the release of the imported goods by Customs, however, Customs still has jurisdiction over the goods until the entry of the goods has been liquidated by Customs.
Clearance of my merchandise: What do I need?
We require the following, at a minimum, in order to prepare an entry:
-Power of attorney
-Bill of lading or air waybill – This is the transport document that covered the movement from origin to the port of entry.
-Country of origin marking – One of the most common problems that will hold up an entry is when the product or merchandise does not have any marking which indicates its origin.
-Some products are also subject to approval by other government agencies (OGA) before entry is approved we will coordinate entry with these agencies as part of our service.
-Your cooperation – the client should work closely with us in supplying needed information and paying duties (import taxes) on time.
Import duty refers to the tax an importer must pay to the US Government in order to bring foreign products into the commerce of the United States. Import duty differs from product to product and is dependent on the commodity being imported, its declared value, its country of origin, and other factors like anti-dumping legislation and quota controls. Import duty values can be as low as zero or as high as 100% (or more) of the product’s declared value.
What is a Merchandise Processing Fee (MPF) and why do I have to pay it?
Formal and informal entries are subject to a Merchandise Processing Fee (MPF). Customs law requires the importer of record to pay the fee to CBP at the time of presenting the entry summary. Effective October 1, 2011, the MPF for formal entries is an ad valorem fee of 0.3464 percent. The fee is based on the value of the merchandise being imported, not including duty, freight, and insurance charges. The maximum amount of the fee shall not exceed $497.99 and shall not be less than $25.67. For example, if .3464 percent of the amount of your merchandise is greater than the maximum amount of $497.99, the importer is only required to pay the maximum amount of $497.99.
What is Harbor Maintenance Fee (HMF)?
The fee is intended to require those who benefit from maintenance of U.S. ports and harbors to share the cost of the maintenance. The fee is currently .125% of the value of the commercial cargo shipped through identified ports. You can obtain a list of ports subject to HMF on the CBP web site.
Automated Commercial Environment (ACE)
The Automated Commercial Environment (ACE) is a multi-year project to modernize the business processes essential to securing U.S. borders, speeding the flow of legitimate shipments, and targeting illicit goods. ACE modernizes and enhances trade processing with features that will consolidate and automate border processing and will replace the current system, the Automated Commercial System (ACS). It provides a centralized online access point to connect CBP and the trade community. ACE will facilitate collection and distribution of standard electronic import and export data required by all Federal agencies participating in the International Trade Data System (ITDS).
How to Participate in Periodic Monthly Statement?
Importers can establish their own ACE Secure Data Portal account. The ACE portal is essentially a customized homepage that connects CBP, the trade community and Participating Government Agencies.
An alternative for participation is to have the importer participate as a Non-Portal account through a Broker who has an ACE Secure Data Portal account.
ACE Periodic Monthly Statement Benefits
-Payment of duties and fees on a monthly basis
-Duty payments on the 15th working day of the month, which can result in significant cash flow benefits
-Online tracking of trade activities through customized account views
-Access to more than 125 customizable reports that can be used to track compliance and monitor daily operations
What will be the role of the customs broker with the implementation of ACE?
The role of the Broker under ACE will remain largely as it does in the current environment. In addition, ACE will benefit Brokers in numerous ways: brokers will be able to manage their account information on line; view their account information and history; generate over 80 customized reports; and pay on a periodic monthly basis. ACE will also improve communications between Brokers and their CBP counterparts by allowing on-line, live capabilities to send information and inquiries.
Is my current CBP Broker Account Manager going to be my CBP ACE Account Manager and what happens if they are not available to approve changes?
Yes, your current CBP Broker account manager will be your CBP ACE account manager. ACE allows for multiple CBP Account Managers to be assigned to an account. CBP Account Managers should ensure that assistance is available to accounts at all times.
Can a foreign importer of record become an ACE participant, and take advantage of periodic payment?
A foreign importer of record can become an ACE participant and take advantage of periodic monthly statement payment, if the importer has resident agent with a U.S. address. The U.S. business address provided to CBP can be that of his Broker.
Intellectual Property Rights
Basic Question: Have you determined whether your merchandise or its packaging use any trademarks or copyrighted material or are patented? If so, can you establish that you have a legal right to import those items into and/or use them in the United States?
1. If you are importing goods or packaging bearing a trademark registered in the United States, have you established that it is genuine and not restricted from importation under the “gray-market” or parallel-import requirements of United States law (see 198 CFR 133.21), or that you have permission from the trademark holder to import the merchandise?
2. If you are importing goods or packaging that contain registered copyrighted material, have you established that this material is authorized and genuine? If you are importing sound recordings of live performances, were the recordings authorized?
3. Is your merchandise subject to an International Trade Commission or court-ordered exclusion order?
4. Can you produce the required entry documentation and supporting information?
Trademarks and Trade Names
Articles bearing counterfeit trademarks are subject to seizure and forfeiture. A counterfeit trademark is defined as a spurious trademark that is identical with, or substantially indistinguishable from, a registered trademark. Articles with marks that copy or simulate a registered trademark that has been recorded with CBP are subject to detention and possible seizure and forfeiture.
CBP may asses a civil penalty when merchandise is seized and forfeited under 19 U.S.C.§ 1526(e). (See 19 U.S.C. § 1526(f)) A personal exemption for merchandise bearing an infringing mark is permitted for articles that accompany any person arriving in the United States when such articles are for his or her personal use and not for sale. Only one infringing item of each type bearing a registered trademark is permitted. An individual may take advantage of this exemption only once within a 30-day period.
Articles imported into the United States that are pirated (bootleg, counterfeit) copies of any registered copyright are subject to seizure and forfeiture.
An import quota is a quantity control on imported merchandise for a certain period of time. Quotas are established by legislation, by directives, and by proclamations issued under the authority contained in specific legislation. Import quotas may be divided into two types: absolute and tariff-rate.
What is Reconciliation?
The reality of modern international trade is that many elements of a transaction may be undeterminable at the time the merchandise is entered. For example, the final value of equipment provided as an assist may not be known until the close of an accounting period, so the correct value of the merchandise is not known until that time.
Reconciliation allows the importer, using reasonable care, to file entry summaries with CBP with the best available information, with the mutual understanding that certain elements, such as the declared value, remain outstanding. At a later date, when the specifics have been determined, the importer files a Reconciliation which provides the final and correct information. The Reconciliation is then liquidated, with a single bill or refund, as appropriate.
What are the requirements for country of origin marking on goods that are imported into the U.S.?
Prior to importing your goods into the United States, you should ensure the overseas supplier has marked the goods with the country of origin. The marking must be legible and permanent enough for the ultimate purchaser to be made aware of the goods origin. The ultimate purchaser is the person who will last purchase or receive the article in the condition in which it was imported. That could be a consumer (one who buys), processor (one who further processes materials or recipient (receiver of a gift). There are exceptions to this requirement. For instance, for goods that are incapable of being marked (i.e. fruit), it is appropriate to mark the outer container with the country of origin.