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Hiring a Customs Broker

Customs brokers' knowledge can save your company time, reduce costs, and heighten customer satisfaction. Here are a some tips on how to select the brightest for your business.

by Carol West

As a global manufacturer, whose customers expect expeditious receipt and delivery of their international goods, you're very familiar with the newspaper stories regarding rising tensions in international trade and the call for enhanced cross-border security measures. With these increased demands, are you aware of how your customs broker can contribute value and help to allay these pressing corporate concerns?

Using a customs broker can help your firm minimize the rising cost of complying with Canada-U.S. border security measures. These measures are costing the Canadian trucking industry an estimated net $405 million (CDN) annually according to a Transport Canada Cost Impact Study published in May 2005. Table 1 lists the elements of this estimate.

Brokers can help you comply with the Canada Border Services Agency's partners in Protection (PIP) program, which will likely become more closely aligned with U.S. Customs and Border protections' Customs-Trade Partnership against Terrorism (C-TPAT) initiative in the near future. This alignment means there will be an even more extensive and rigorous approach to supply chain security for Canadian traders, customs brokers, forwarders, carriers and shippers.

C-TPAT, and by extension PIP, is a partnership program that requires importers to take responsibility for the security of their supply chain, both within their own firm and on behalf of their supply chain partners outside of Canada.

Hiring a customs broker

Customs brokers gather, organize, and manage the commercial and trade data required to submit goods for release to the Canada Border Services Agency (CBSA) on behalf of their clients. As well, they can handle the payment of appropriate duties and taxes on your goods to the CBSA.

Customs brokers provide a bevy of skills and knowledge about trade processes and procedures, including classification, valuation, admissibility requirements, duty rates and taxes. They can help your company avoid AMPS penalties. The CBSA's Administrative Monetary Penalty System, or AMPS, determines penalties for a wide variety of non-compliant customs-related behavior. Table 2 summarizes some of these non-compliant behaviors.

How do you go about choosing a customs brokerage business partner? Here is a checklist of questions that can help you select the right broker.

Is the broker a member of the Canadian Society of Customs Brokers? Do they subscribe to the CSCB e-mail service that provides daily up-to-date operational and policy information from CBSA and other international trade resources?

It's important that the broker understands your firm's products and business. In addition to providing the broker with details regarding the goods your firm imports and exports, you should arm your broker with information to address the following questions:

The Canadian Society of Customs brokers (CSCB) represents Canada's customs brokers. CSCB seeks and achieves improvements in Canadian government policies and procedures on behalf of its members and their clients. It also provides advice and guidance to Canadian and international regulators on new policy directions. The CSCB's membership includes the majority of customs brokerage firms in Canada. A comprehensive list of CSCB's members is available at: http://www.cscb.ca.

The CSCB offers the CCS (Certified Customs Specialist) program. Those individuals who successfully complete the year-long course gain the CCS (Certified Customs Specialist) designation. The CCS designation is now recognized in the United States as well as Canada.

The American CCS education program was introduced at the beginning of 2006, and there are currently more than 1,550 CCS designates in the United States. There are now more than 2,300 CCS designates in Canada.

An integral element of the CCS designation is ongoing professional development. Every year, the individual holding the designation must undertake agreed training and professional development activities in order to fulfill the requirements for maintaining the designation.

Members of the CSCB received information regarding advocacy activities and technical and operational updates on a daily basis.

In addition, the CSCB is uniquely positioned to offer a range of professional development and training tools, including a range of courses, such as an "Introduction to Customs" as well as professional development modules covering Canadian Harmonized System of Tariff Classification, Understanding NAFTA, Valuation, Refunds, AMPS and Export Documentation and regulations.

Why are knowledgeable customs brokers vital to your business?

Traditionally, importers rely on customs brokers to manage customs clearance. But customs brokers have other roles to assist with your business in addition to working with you on security and compliance issues. Customs brokers are in the centre of trade transactions. They can help importers leverage customs information into a strategic advantage by turning this data into essential business intelligence. They can offer a growing range of specialized services to assist you in development of new business lines, exploration of new markets and ways to reduce costs.

Your customs broker can also provide invaluable guidance about changes in Customs regulations and programs that directly affect your business. For instance, implementation of Advance Commercial Information in air mode this year requires significant changes in the type of data your company provides and how it is transmitted to Customs.

Customs brokers are at centre of the international trade.

If your customs broker is a member of the Canadian Society of Customs Brokers (CSCB), they have benefit of the Society's longstanding involvement in issues concerning trade facilitation and security, as the CSCB acts as the Secretariat for the International Federation of Customs Brokers Associations (IFCBA). The IFCBA is close to discussions at the World Customs Organization about security and trade facilitation.

In June, 2005 the World Customs Organization introduced the SAFE Framework of Standards program. The Framework is an international initiative to secure and facilitate global trade. Based on co-operation between international customs authorities and international business, the Framework builds a structured platform to facilitate the movement of legitimate goods, while securing the trade supply chain. Companies meeting the WCO standards as secure traders are expected to have the advantage of expedited Customs processing and a minimum number of cargo security inspections, as well as numerous other benefits.

In March, 2006 the World Customs Organization convened the first meeting of the Private Sector Consultative Group (PSCG). This group, a collection of 30 companies and trade associations, have been chosen by the organization representing the world's customs administrations to provide them with advice on implementing the SAFE Framework of Standards. That Framework will form the basis for establishing national customs' standards for supply chain security around the world, and through the IFCBA, members of the CSCB are represented at the table.