What Is A Customs Broker?
Licensed by Revenue Canada, a customs broker may act as an agent for commercial businesses importing product to Canada in order for a shipment to be released by Canada Customs and other government bodies, such as Agriculture Canada or the Ministry of Transportation, all of which may require forms and documents to be supplied to them. A Harmonized System Tariff classification number must be applied to each product imported. This code determines the rate of duties and taxes that must be paid to Revenue Canada. With all the changing rules and regulations in cross-border transactions, it makes good business sense to use a customs broker.
What Is The Advantage Of Using A Customs Broker?
- 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 the timely delivery of goods, which is critical for good client service.
- 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.
- Decreases the importer's fixed costs Customs brokers provide:
- IT support
- Hardware/Software maintenance costs
- Personnel and associated overheads
- 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).
- Brokerage Fees Customs broker fees are usually only a small portion of your company's overall importing cost.
From what a customs broker does to the advantages of using customs broker, this video is a collection of frequently asked questions about customs brokers.
Do you have questions about customs brokerage? We welcome your comments below or email Ask Your Broker.
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