Role of a Customs Broker
A customs broker can be an individual, an association, a partnership, or a corporation. They must be licensed and the government regulates their actions and empowers them. The duty of the customs broker is to assist exporters and importers in meeting the Federal requirements for international shipping.
How Does the Customs Broker Conduct Business?
The Customs broker submits all necessary information on behalf of the client to the U.S. Customs and Border Protection (CBP) agency. The broker is also responsible for submitting necessary payments on behalf of the client. For this service, the broker receives a fee. The broker is well versed in classification of items, valuation, rates of duty, applicable taxes, entry procedures, and requirements for admission of imported merchandise.
Why Businesses Need the Services of a Customs Broker
The broker requires a license, and there are approximately 11,000 brokers in the United States. Corporations and other organizations must have a licensed broker to conduct business as brokers. If a business goes without a licensed customs broker as an employee for more than 120 days, it can lose its broker’s license. Most organizations have multiple employees who are certified customs brokers.
What are the Qualifications for Becoming a Broker?
Becoming a broker requires testing prior to licensing. To be eligible for licensing, certain criteria must be met. Applicants in America must be U.S. citizens and at least 21 years of age; however, these requirements are relative and similar elsewhere. Additionally, individuals must have good moral character and cannot be employees of the Federal government. Upon meeting these requirements, individuals will study for the examination which must be passed successfully to earn the right to be a broker.
How Does an Individual Become a Broker?
Anyone who wants to be a broker must pass the Customs Broker License examination and submit an application with all applicable fees. This is not a guarantee of acceptance because the applicant must be approved by CBP. The examination consists of 80 multiple-choice questions taken from four customs publications. The test takes place at CBP service points on the first Monday of each April and October.
Miscellaneous Requirements and Rules for Brokers
An applicant must submit a $200 fee at least 30 days prior to the examination date to qualify for testing. A score of 75% or better is required to pass the examination. Anyone who fails the test can retake it as many times as possible to receive a passing percentage. Anyone who passes the test has three years afterwards to apply for the broker’s license. A person does not have to be a U.S. resident to take the test, but it is necessary to be a U.S. citizen before a license can be issued.
The customs broker is a highly responsible position, which requires honesty and integrity. As the representative for importers and exporters, they act on the behalf of others and are liable for those actions. Using a customs broker can expedite approvals and assure that shipments are legal and timely.
If you enjoyed reading about Becoming a Customs Broker then see our next article about Export Compliance
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