The need for C-level leadership is a common topic among compliance professionals. Here is another example:

Screening export shipments has become routine for most companies involved in international trade. Export software packages can perform this task or it can be manual; using the Consolidated Screening List https://www.trade.gov/consolidated-screening-list or individual lists. No one wants to do business with the bad guys. However, the routine nature of export screening makes it likely that upper level management is not involved in the process.

SUPPLEMENT NO. 3 TO PART 732 – BIS’s “KNOW YOUR CUSTOMER” GUIDANCE AND RED FLAGS

(3) Do not self-blind. Do not cut off the flow of information that comes to your firm in the normal course of business. For example, do not instruct the sales force to tell potential customers to refrain from discussing the actual end-use, end-user, and ultimate country of destination for the product your firm is seeking to sell. Do not put on blinders that prevent the learning of relevant information. An affirmative policy of steps to avoid “bad” information would not insulate a company from liability, and it would usually be considered an aggravating factor in an enforcement proceeding.

For help with exports or developing an ECP (Export Compliance Program) contact mitch@adhoclogistics.com

From the Federal Register

This document provides notice to customs brokers that the annual user fee that is assessed for each permit held by a customs broker, whether an individual, partnership, association, or corporation, is due no later than January 31, 2025. Pursuant to fee adjustments required by the Fixing America’s Surface Transportation Act (FAST Act) and the U.S. Customs and Border Protection (CBP) regulations, the customs broker permit user fee payable for calendar year 2025 will be $180.57.

Payment of the 2025 Customs Broker Permit User Fee is due no later than January 31, 2025.

Customs brokers may either submit the fee through the eCBP portal or submit the fee at the processing Center, as defined in 19 CFR 111.1, in accordance with the remittance procedures in 19 CFR 24.22(i). CBP encourages customs brokers to pay the annual customs broker permit user fee electronically via the eCBP portal, located at https://e.cbp.dhs.gov/​brokers/​#/​home. Customs brokers who are first time users of the eCBP portal must create a Login.gov account. Instructions and training resources, such as user and quick reference guides, for customs brokers on how to create a Login.gov account and how to use the eCBP portal can be found on CBP’s website at https://www.cbp.gov/​trade/​eCBP.

I just reviewed a draft of an applicant’s appeal of 2 questions on the October CBLE (Customs Broker License Exam). I admire the applicant’s diligence and tenacity but disagreed with their justifications for the appeal.

We are well within the 60 day period for first appeals, but let me suggest a different strategy. If you are considering an appeal you are most likely very close to a passing grade and hoping to gain a reversal on a small number of incorrect answers.

In fact it is very difficult to gain additional points upon appeal, and preparing a compelling argument is time consuming. I know many brokers who have passed the exam on a second attempt. So, since you came close to passing the exam on October 23rd, a better use of your time would be to begin preparing to pass the April exam instead of appealing your recent score.

If you choose to appeal here is some info from the CBP website: 

The applicant must submit a compelling argument why his or her answer is correct or why the appealed question has no possible correct answer.

https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal

Congratulations once again to all who passed the October 2024 Customs Broker License Exam.

It may come as a surprise that it can take up to a year before your license is issued. In addition to a passing grade on the CBLE, eligibility to become a customs broker requires applicants to be a US citizen at least 21 years of age, not be a current Federal Government employee, and possess good moral character.

Character is determined by an extensive background investigation. From the CBP website:

“Each Broker license applicant must undergo a background investigation that includes a fingerprint analysis and review of character references, credit reports, and arrest records.  Arrests and convictions do not necessarily preclude the issuance of a license.  In partnership, association, or corporation applications, individuals identified as principals with controlling interest, officers, partners, or members will also undergo a background investigation.”

Licensed Customs Brokers, via their entry filings, are responsible for the assessment 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!

The October 23, 2024 CBLE (Customs Broker License Exam) resulted in a 24% pass rate prior to appeal decisions. Previous pass rate information is listed below. The exam and answer key will be posted on the CBP website.

Congratulations to all who passed! You are now eligible to go through the application process, background check, and fingerprinting to obtain your license. The process can be lengthy, so be patient.

Many brokers have needed more than one try, so don’t be discouraged if you came up short. If you want to challenge any of the questions here is the link explaining how to appeal.

https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal

Pass Rate Information

The October 23, 2024 CBLE resulted in a 24% pass rate prior to appeal decisions.

The May 1, 2024 CBLE resulted in a 13% pass rate prior to appeal decisions.

The October 25, 2023 CBLE resulted in a 34% pass rate prior to appeal decisions.

Always amazed how casually some importers handle HTS classifications. This is definitely customs business requiring a licensed broker if classifying beyond the 6 digit level.

To all who sat for the October 23rd CBLE (Customs Broker License Exam) you may now have your weekends back. I know from experience that you are feeling both relief that the exam is over and anxiety about your results. Here is some info from the CBP website about what happens next:

CBLE Score Notification Letters and Appeal Due Dates

The bi-annual Customs Broker License Exam (CBLE) is administered on the fourth Wednesday of April and October.  Exam Results Letters are emailed to examinees within two to three weeks from the date of the exam. First Appeals are due no later than 60 days from the date the Exam Results Letters were sent. Second Appeals are due no later than 60 days from the date the First Appeal Results Letters were sent.

Pass Rate Information

The May 1, 2024 CBLE resulted in a 13% pass rate prior to appeal decisions.

The October 25, 2023 CBLE resulted in a 34% pass rate prior to appeal decisions.

The April 26, 2023 CBLE resulted in a 5.5% pass rate prior to appeal decisions.

Here is a useful and user friendly guide to the HTS. Great tool for training and enhancing compliance skills.

https://learning.usitc.gov/hts-guide/index.html#

Canadian importers and Non-Resident Importers, ready or not CARM is coming.

https://www.cbsa-asfc.gc.ca/publications/cn-ad/cn24-29-eng.html

Customs Brokers are often asked for “quick classifications”. In fact, it may be possible to quickly find plausible codes for clients’ commodities; but that can be malpractice by the broker. Compliance adds value through attention to detail, established protocols, oversight, and documentation. HTS classification is the first step in both export and import compliance.

The reality is that most classifiers will shorten the process, especially if they are familiar with the commodities. The challenge is to consider changes to the tariff and make an effort to classify the commodity as if doing so for the first time.

Proper classification includes HTS lookup, GRI (General Rules of Interpretation) review, checking both chapter and additional notes, as well as CROSS (Customs Rulings Online Search System). For some commodities it may be necessary to consult with a subject matter expert in engineering, purchasing, or manufacturing for details about the item.

This is the procedural aspect of classification, but there is more. Most listings require interpretation of the tariff language based on experience. Finally, the process needs to be documented for future reference and parts lists updated.

Here is an example of an easy classification with no research or interpretation needed:

9506.69.2040 Baseballs

Here is one which is more challenging and time consuming:

8532.10.0000 Fixed capacitors designed for use in 50/60 Hz circuits and having a reactive power handling capacity of not less than 0.5 kvar (power capacitors).

For accurate classification help contact mitch@adhoclogistics.com.