Why you should work with a Customs Broker

The trading relationship between Canada and the United States is the largest in the world. For many companies, moving goods and services quickly and efficiently across the border is critical to their supply chain. Yet few have the human or financial resources to keep pace with the regulatory and technological changes under way in both U.S. and Canadian customs administrations.

That is where a Customs Broker comes in!

A Customs Broker's job is to ensure that its clients' shipments move seamlessly across the border and reach their destination on time, adhering to customs laws and regulations.

An ideal Customs Broker!

An ideal Customs Broker is one that has offices located in every major commercial port of entry across the Canadian/U.S. border; a client service structure that enables you to work with a single contact; one that knows you and your business; one that provides specialized services to fit your needs and one that uses cutting-edge technology, such as, Electronic Data Interchange (EDI) and software solutions to streamline your trade activity and ensure compliance with customs regulations.

How has Customs changed?

Canada Customs has changed the way in which customs and trade legislation is enforced. In the past, Customs verified one import at a time at the port of entry. Officers at the port inspected shipments and documents at the time of release. However, changes in trade environments, together with ongoing administrative cost constraints, have challenged Customs to find more efficient ways of enforcing its laws and regulations. Like their private-sector counterparts, customs administrations are under constant pressure to do more with less. As a result, Customs has moved from the old, transactional model of enforcement to comprehensive on-site audits of importers. This has greatly increased the legal onus on importers to ensure the correctness of customs accounting. Importers' customs accounting will be further tested when Canada Border Services Agency implements its comprehensive penalty mechanism, Administrative Monetary Penalty System (AMPS). AMPS will impose penalties on importers not only for customs accounting errors having a revenue implication, but also for errors in the submission of purely statistical information.

Why use a Customs Broker

The challenges of the new customs compliance environment can seem overwhelming to an importer; therefore, customs brokers should be used as key consultants as customs requirements change.

The most compelling reasons for using a Customs Broker:

1. Risk Management:

• A Customs Broker will ensure that the importer is meeting the many new conditions under Canada Border Services Agency (CBSA) on-site compliance. The CBSA has embarked on a new and aggressive method of checking compliance - new on-site compliance will target all importers taking advantage of NAFTA, duty reductions, and other duty relief programs.
• A Customs Broker will assist the importer with the increased complexity of NAFTA regulations, enabling him to take advantage of NAFTA and other trade agreement opportunities that can have a significant impact on the firm's bottom line in reducing duties and taxes
• A Customs Broker stays abreast of the growing number of rules, regulations, and conditions that allow the importer to qualify for NAFTA.
• A Customs Broker provides timely delivery of goods that is critical for good customer service.

2. Flexible staffing

• Customs Brokers alleviate the need for importers to have staff with specialized customs knowledge and so frees up the importer to concentrate on revenue-generating core competencies.
• Customs Brokers manage peaks and valleys of importing volumes, creating automated entry documents from previously classified goods. This work is generally clerical in nature with some demand for knowledge of customs entry regulations.
• Customs Brokers provide post-entry work that may take the form of a refund or other payment amendment request to the CBSA. Changes in information regarding the description, value, quantity or origin of the imported goods often requires further processing.
• Customs Brokers provide shipping advice and monitoring and tracking of goods.

3. Decreases the importer's fixed costs
Customs Brokers provide:

• IT support
• Hardware
• Software
• Hardware/Software maintenance costs
• Personnel and associated overheads

4. Passive Control
New technology on the part of the Customs Broker gives importers the ability to gain control over importing information without taking on the function (e.g. web-based trade information management solutions).

5. Brokerage Fees
Customs Broker fees are usually only a small portion of the firm's overall importing cost.

Determine your need when considering a Customs Broker

Customs Brokers allow the importer time to take care of other aspects of the import business. The more complicated the shipment, the better it is to have the support of a Customs Broker. With a wide variety of goods under various classifications in one shipment, there are more chances for mistakes in documentation. Consider the nature of the product because special import controls may apply. The volumes handled and the frequency of shipments may also be determining factors. Assess your specific needs and determine the costs and benefits for using a Customs Broker.

A Customs Broker's expertise in bringing goods across the border can avoid errors that cost time and money. Oversights in documentation, incorrect classification of goods, missed opportunities created by new regulations, and mistakes in dealing with current regulations are all common occurrences that hinder the smooth entry of products into Canada.

Shop Around

Based on your specific needs, obtain quotes from different Customs Brokers. Be sure to ask what charges apply to specific services and get advice to determine what services are required for your operation. When a Customs Broker also serves as a freight forwarder, the entry of goods may be better timed. Involvement in brokerage and freight forwarding services means greater responsibility for the Customs Broker. Make sure your Customs Broker understands your business. Specify what you want of the broker and establish a good working relationship - one that gets your work done when you want it done.

A searchable database of Customs Brokers in Canada is available on the Canadian Society of Customs Brokers website at www.cscb.ca .

Using a qualified Customs Broker for your import business makes good sense. Choose one that is best suited to your needs and will fit in with your overall business strategy.