What a customs broker actually does

A customs broker is a private party that US Customs and Border Protection has licensed under 19 U.S.C. 1641 to conduct customs business on behalf of somebody else. The rules governing that licence sit in 19 CFR part 111, and they are worth reading once, because they describe a relationship most importers assume is something other than what it is. We act as your agent in front of CBP. We are not your insurer, and hiring us does not move your liability onto us.

The licence belongs to a person

An individual earns it by passing the Customs Broker License Examination: eighty multiple-choice questions in four and a half hours, open book against the HTSUS, title 19 of the CFR and the CBP directives, with 75 percent required to pass. It runs twice a year, and pass rates swing hard between sittings, from single digits to the low thirties. A background investigation follows.

A corporation can hold a licence too, but only if at least one of its officers holds an individual licence and genuinely exercises what 19 CFR 111.28 calls responsible supervision and control. A corporate licence with nobody qualified actually running the desk is a shell, and CBP treats it as one. Keeping the licence alive takes work as well: every third year the holder files a status report and pays the fee, and a missed report suspends the licence by operation of law before it is revoked. There is also a continuing-education obligation measured in credits across each triennial cycle.

Since the 2022 broker modernization rule, permits are national rather than granted district by district. In practice that means a broker sitting in New Jersey files at Long Beach, Laredo and O'Hare on the same afternoon. Pick a broker for what they know about your commodity, not for how close they are to your terminal.

Customs business is a defined term

19 CFR 111.1 spells it out: transactions with CBP concerning entry and admissibility, classification, valuation, rate of duty, drawback, and the payment of duties, taxes and other charges, together with the documents and electronic transmissions that carry them. Moving the freight is not on that list. Only a licensed broker may conduct customs business for another party for compensation. That one sentence is the reason a power of attorney exists, and the reason an unlicensed intermediary cannot lawfully stand between you and your own entry.

What that looks like on a live container

• Classification against the HTSUS, argued through the General Rules of Interpretation and the section and chapter notes, not found by typing a keyword into a search box.
• Valuation under 19 U.S.C. 1401a, including assists, royalties, packing and any price adjustment that lands after the invoice was cut.
• Origin, which is a legal test and not the port of loading. It decides Section 301 exposure, Section 232 metal content, and marking under 19 CFR part 134.
• The ISF, transmitted at least 24 hours before the container is loaded overseas, under 19 CFR part 149.
• Cargo release and entry summary through ACE: the data behind CBP Form 3461 and CBP Form 7501, plus the bond on CBP Form 301.
• PGA message sets for FDA, USDA, EPA, DOT, TTB and anyone else with jurisdiction over the article.
• Everything after release: duty payment, exam coordination, responses to a CF-28 request for information or a CF-29 notice of action, post-summary corrections and protests.

What the licence does not do

You remain the importer of record. 19 U.S.C. 1484 puts the reasonable care standard on you, and a penalty under 19 U.S.C. 1592 is assessed against the importer of record rather than against the agent who keyed the number. A broker who classified your goods carelessly has a problem with CBP under 19 CFR 111.39, and probably with you, but the duty bill and the penalty notice still arrive at your address.

That is the argument for using a broker willing to tell you no. 19 CFR 111.39 forbids us from withholding information from a client and requires us to say so when we believe you are not complying. A broker who never once questions a commercial invoice is not being easy to work with.

Broker, forwarder, NVOCC

Different licences, different agencies, different liabilities. An ocean transportation intermediary, meaning a freight forwarder or an NVOCC, is licensed by the Federal Maritime Commission under 46 CFR part 515. That licence says nothing about CBP and confers no authority to file an entry. Plenty of companies hold both. We hold one: DAPE Solutions is a brokerage and nothing else, and we file behind whichever forwarder you already use.

What to ask before you put anyone on file

• Who classifies your goods, a licensed person or a clerk copying the supplier's six-digit HS code off the invoice.
• How many days before arrival they transmit an ocean entry, and what happens on a Friday sailing.
• Whether a post-summary correction or a protest is part of the service or treated as somebody else's problem.
• How they keep records. Both of you are on the hook for five years under 19 CFR 163.4, and CBP will ask you, not them.
• Whether they will put a classification position in writing, with the reasoning attached.

Related reading: what you are signing on a customs power of attorney, and the full sequence of an import from purchase order to liquidation.