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Customs Brokerage: Understanding The Basics

If you've recently delved into international trade, you would have been faced with all the complexities of customs clearance. But don't you just wish there was an easier way to manage such issues so you could have seamless shipping on every order? Well, there is. You can outsource the headache of customs clearance by using the services of a customs brokerage expert.

What is customs brokerage?

International trade involves a host of ever-changing regulations as well as documents to be collected and e-filed. Most often than not, there are taxes and duties to pay on goods imported or exported. To stay compliant, every importer/exporter must be familiar with all the regulations and prepare every required document on each shipping. That's a whole lot to keep track of.

Custom brokers are experts in customs clearance and can help you shoulder the burden of keeping up with regulations and file all required import documents on your behalf. They are well-versed in import duties, paperwork, permissible and banned goods, and valuation.

Customs brokerage is all about outsourcing the hassle of customs clearance to professional customs brokers. While some of these brokers work as independent brokerage firms, some do their job as freight forwarders, importers/exporters, or shipping lines. Your customs broker will be acting on your behalf, so you must ensure that they have a broker license.

What does a customs broker do for you?

A custom broker essentially clears the shipment at the border on your behalf. If you're new to it all, it may sound simple, but far from it.

A customs broker will:

● Ensure your goods meet the requirements to be permitted to cross borders.

● Acts as a liaison between you and governing agencies.

● Prepare and file the plethora of import/export documents on your behalf.

● Make payments to Customs authorities on your behalf.

● Offer personalized business advice that you may need since every trade and trader is different. A good customs broker will evaluate your business after some time to see where you can improve or cut expenses.

● Ensure goods are classified appropriately to help determine the right amount of duties and taxes.

● Help ensure your shipment reaches the customer quickly if the broker has a presence in the destination country.

● Ensure you stay compliant by assessing all your commercial documents.

Reasons to consider customs brokerage

Of course, you can do all that yourself, and hiring a customs broker isn't a necessity. But if you haven't made up your mind yet, here are reasons why using a customs broker benefits you:

Access to expert knowledge right from the get-go

Let's face it, the requirements and regulations surrounding import/export are many. It can take a while before you get familiar with half of it, and that's not before making costly mistakes.

Now, hiring in-house personnel to handle these complex regulatory requirements can be expensive, especially for startup e-commerce store owners. It will surprise you to know that a brokerage firm offering a variety of import/export services, including freight forwarding and logistics, is much more affordable.

Helps you avoid unnecessary costs

Cross-border regulations are ever-changing. A slight mistake can lead to fines, confiscation of shipment, and other penalties. If you didn't know that some law has changed, you may fall victim. Customs brokers can help you keep track of all that so you can focus on satisfying your customers.

Entrusting all the paperwork to a professional

A professional customs broker can help you handle all the customs paperwork so you don't have to. This includes the country of origin and destination, the intended use of goods, and lots more. Besides, their expertise will help prevent you from making costly mistakes.

Help in handling formal entry goods

Some imported goods, such as food, pharmaceuticals, cosmetics, chemicals, and agricultural and dairy products, require a formal entry, which is a declaration of specific information about the goods.

Additionally, any shipment valued at over $2500 ($250 for textiles) must also have a formal entry. These goods may be held at customs until the required paperwork and requirements are met. Hiring a customs broker can be helpful in navigating the rules and regulations involved in clearing shipments.

Correct identification of goods

Custom brokers have extensive knowledge of the Harmonized Tariff Schedule, a classification system used to determine duties and taxes on imported goods. This system assigns each goods a specific classification number and organizes them into major groups and sub-groups to facilitate accurate identification and assessment of customs duties.

The bottom line

No law requires you to work with a customs broker. Customs clearance is something you can do if you have the time, energy, and required know-how. But if you feel you have to focus all your strength on your business and customer satisfaction, you want to leave those administrative hassles on someone else's shoulders.


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