LinkedIn Comment- Freight Fwders

David Noah• President at InterMart, Inc.

Most exporters use freight forwarders to manage international transportation for their goods. But, especially with shipping costs on the rise, you may wonder if you could save money by booking container space on your own. Consider these four points first.

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant

There is really no advantage to going it alone with the possible exception of large multi-national corporations. For all other exporters it is best to develop strong freight forwarder relationships.

NLR? Maybe

My recent post “Got Alphabet Soup?” covered ECCNs (Export Control Classification Numbers) and EAR99 which is used for items subject to Export Administration Regulations without having a specific ECCN. License determination is the next step in export compliance and I remind shippers that automatically using EAR99 and NLR (No License Required) is risky.

§ 738.4 DETERMINING WHETHER A
LICENSE IS REQUIRED

(a) Using the CCL and the Country Chart
(1) Overview. Once you have determined that
your item is classified under a specific ECCN,
you must use information contained in the
“License Requirements” section of that ECCN in
combination with the Country Chart to decide
whether a license is required. Note that not all
license requirements set forth under the “License
Requirements” section of an ECCN refer you to
the Commerce Country Chart, but in some cases
this section will contain references to a specific
section in the EAR for license requirements. In
such cases, this section would not apply.

Contact mitch@adhoclogistics.com for help with export regulations.


Character Matters

Applicants who passed the April 2022 CBLE (Customs Broker License Exam) are, no doubt, anxiously awaiting issuance of their license. This question from previous exams illustrates part of the process:

Below are the basic requirements to obtain an individual broker’s license EXCEPT:

A. Be a citizen of the United States
B. Not be an employee of the Unites States government
C. Be at least 18 years old at the time of submission of license application
D. Be of good moral character
E. Obtain a passing grade of 75% on the Customs Broker License Exam (CBLE)

The correct answer is C as applicants must be at least 21 years of age. As for D how does CBP judge moral character? An extensive background investigation as noted by CBP:

Each broker license applicant must undergo a background investigation that includes a fingerprint analysis and a review of character references, credit reports, and any arrest record. Arrests or convictions do not necessarily preclude the issuance of a license.

Licensed Customs Brokers are responsible for the assessment and potential collection of revenue for the United States in the form of duties and taxes. They must also ensure that they and their clients comply with the laws and regulations in all transactions. So the background check is more than a mere formality. Be patient applicants!

HTS Codes Are Not Set In Stone

Clients often say “we’ve used the same harmonized codes for years” and “our products are duty free“. As a Licensed Customs Broker and consultant this tells me that I need to do some checking on the client’s behalf. Using obsolete or invalid HTS (Harmonized Tariff Schedule) codes is a sign of an amateurish operation. It is likely that, for these clients, commercial invoice descriptions need updating. If they are also an exporter we should check ECCNs, License Exceptions, and Schedule B numbers as well.

The tariff archives show that the 2021 HTS was revised 12 times. The 2022 version already lists 6 revisions. Here are the links to the changes: https://hts.usitc.gov/view/list

Don’t assume that your codes are valid. A little due diligence helps avoid problems down the road. Contact mitch@adhoclogistics.com for a review of your HTS codes.

True North

July 1st is Canada Day for our neighbor to the north. Known as Dominion Day until 1982, this is the anniversary of the Constitution Act establishing the nation of Canada.

I happen to be planning logistics for upcoming trips to Newfoundland and Quebec as well as researching Canadian export regulations for a client. As with all countries the regulations require careful reading. However, I have found the CBSA (Canada Border Services Agency) website and tariff to be user friendly and easy to navigate.

https://www.cbsa-asfc.gc.ca/menu-eng.html