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Category Archives: Nuts & Bolts
CBP Background Checks
As noted in a previous post, CBP conducts intensive background checks for applicants who have passed the CBLE (Customs Broker License Exam). Here is a relevant question from the October 2022 exam.
Under what circumstances may a Customs broker employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice (former broker)?
A) A Customs broker may not employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice under any circumstances.
B) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice under all circumstances.
C) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice after receiving written permission from the Assistant Commissioner upon appropriate notification or petition.
D) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice if the hiring Customs broker never asked about and is unaware of such status.
E) A Customs broker may employ a convicted felon or an individual who formerly was a broker whose license was cancelled with prejudice if five (5) years has passed since the felon was released from prison and/or parole or five (5) years has passed since the former broker’s license was cancelled with prejudice.
Answer: C
Character Counts
Congratulations to all who passed the October 2022 CBLE (Customs Broker License Exam). Now be prepared for a background investigation. From CBP regulations:
§ 111.14 Investigation of the license applicant.
Cross Reference
Link to an amendment published at 87 FR 63314, Oct. 18, 2022.
(a) Referral of application for investigation. The port director will immediately refer an application for an individual, partnership, association, or corporation license to the special agent in charge or other entity designated by Headquarters for investigation and report.
(b) Scope of investigation. An investigation under this section will ascertain facts relevant to the question of whether the applicant is qualified and will cover, but need not be limited to:
(1) The accuracy of the statements made in the application;
(2) The business integrity of the applicant; and
(3) When the applicant is an individual (including a member of a partnership or an officer of an association or corporation), the character and reputation of the applicant.
October CBLE Posted
The October 2022 CBLE (Customs Broker License Exam) and Answer Key have been posted to the CBP website. While recent pass rates have been a little higher, the exam remains quite challenging. If you have thought about sitting for the exam take a look at some previous versions:
https://www.cbp.gov/document/publications/past-customs-broker-license-examinations-answer-keys
Here is one of the easier questions from the October 2022 CBLE. What’s your answer?
39. Fish are caught by a Norwegian flagged vessel in international waters off the coast of Portugal. The fish are kept either whole or filleted on board. The fish is sent to Spain, where it is cut, seasoned, battered, pre-fried and frozen. The frozen fish is consolidated with other frozen foods into a container in Ireland and exported from the Port of Dublin to the US. What is the country of origin of the frozen fish?
A) Portugal
B) Spain
C) Norway
D) European Union
E) Ireland
LinkedIn Comment- Rate Shopping
Michael DeMarco 1st degree connection1stOwner and 3PL specializing in FTL | LTL | First and final Mile | Drayage | Project Cargo. With old fashioned customer service we help shippers and logistics companies keep their supply chains moving.
We have shippers telling us they send their quotes out to a min of 10 brokers but up to 20 pending what the need is. I personally find that crazy and a waste of their time. You need 3 good ones that is about it. We specialize in drayage, project cargo and other things that regular brokers don’t know how to handle. So with that said, find yourself a good LTL broker, a good FTL broker and a good project cargo or Intl freight handling broker and you are all set. We also do LTL and FTL really well but our niche is dray and project freight. Going out to 10-20 brokers is wasting your time and all of the brokers time just trying to find the cheapest cost. Cheap usually means bad service or slow service.
Shawn Varner – Financial AdvisorAuthorFinancial Advisor Guiding Logistics and Supply Chain Professionals Coast to Coast to the Retirement They Deserve | Former Freight Broker for 10+ yrs
Agree, a very fine line!
Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant
Good post Mike. Rate shop at your peril. There is always going to be a lower rate out there but don’t expect great service. Having said that, it is a good business practice to get a couple of quotes for large, complicated, or first time moves.
CBLE Notification
If you sat for the October 2022 CBLE (Customs Broker License Exam) you should be receiving your results any day now. Here is some info from the CBP website about appeals.
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 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.
https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal
Want a CBP Ruling?
HTSUS (Harmonized Tariff Schedule of the United States) classifications can be straightforward or not, as these two examples illustrate:
9506.62.4040 Footballs
9033.00.2000 Light-emitting diode (LED) backlights modules, the foregoing which are lighting sources that consist of one or more LEDs and one or more connectors and are mounted on a printed circuit or other similar substrate, and other passive components, whether or not combined with optical components or protective diodes, and used as backlights illumination for liquid crystal displays (LCDs)
A detailed classification includes HTS lookup, checking both chapter notes and GRI (General Rules of Interpretation), reviewing specs and/or other literature, and searching CROSS (Customs Rulings Online Search System). This is the procedural aspect of classification, but there is more. Most commodities require interpretation of the tariff language based on experience. In many cases subject matter experts need to be consulted. Finally, the process needs to be documented for future reference and parts lists updated.
I sometimes recommend a binding ruling to ensure accuracy in entries. Binding rulings provide uniformity across all ports of entry, and protect the importer from variations in interpretation from current and future CBP personnel. Rulings can be requested on valuation and country of origin as well as classification. The downside to obtaining a ruling is that you must follow it or be subject to penalties, although rulings can be appealed.
Rulings can be requested using the link shown here:
For help with binding rulings contact mitch@52.91.45.227.
‘Fess Up Exporters
A quick look at the BIS (Bureau of Industry and Security) Website shows that export enforcement activities have ramped up significantly. This means more fines and penalties for violations of the EAR.
Export compliance includes attention to detail, consistent procedures, up to date knowledge, and oversight. Due diligence is required for EEI filings, Schedule B and ECCN classification, Licensing entries, and Country of Origin determination. In spite of best efforts, mistakes will be made. In these cases a Voluntary Self-Disclosure is a smart move. Here is some info from the BIS website:
BIS encourages the submission of Voluntary Self Disclosures (VSDs) by parties who believe they may have violated the Export Administration Regulations (EAR). VSDs are an excellent indicator of a party’s intent to comply with U.S. export control requirements and may provide BIS important information on other ongoing violations. BIS carefully reviews VSDs received from disclosing parties to determine if violations of the EAR have occurred and to determine the appropriate corrective action when violations have taken place. Additional information regarding VSDs can be found in Part 764.5 of the EAR, or the enforcement section of our website www.bis.doc.gov.
Contact mitch@52.91.45.227 for assistance in submitting VSDs.
Partnering with Freight Forwarders
Freight forwarders are essential logistics service providers in international trade. The functions performed by forwarders make it possible for any business to export their products without a large staff. Forwarder selection criteria will vary according to the specific needs of the exporter. Among the most common factors are capacity, connections with airlines and ocean carriers, efficiency of local operations, customer service support, up to date technology, and of course, price. Obtaining rate quotes for large or first time moves is a valid practice. Rate shopping or basing transactions on price alone, however, makes it difficult to access necessary service factors. In recommending forwarders to clients I always emphasize the importance of maintaining a good business relationship with providers.
Forwarders can be a valuable partner in export compliance. It is important to note, however, that primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. Here is a link to BIS Freight Forwarder Guidance:
Contact mitch@52.91.45.227 for export assistance.
Stuck In Customs?
I often hear from frustrated exporters about shipments “stuck” in customs. The shipments may include critical parts needed for an equipment or plant shutdown, expensive high tech components not generally carried in inventory, or medical instruments for hospitals. Delayed orders also mean delayed payments, which gets everyone’s attention.
The data used in customs entries comes directly from the commercial invoice for the transaction. All countries have different, and sometimes obscure, customs regulations. It is true, however, that most delays are caused by a few commercial invoice errors or omissions.
Commodity descriptions should answer the questions: What is it? What is it made of? What is it used for? Use plain language which can be understood by anyone. Avoid trade names, brand names, or part numbers in the description. These can be added below the description or to the packing list if needed. If using a harmonized code enter only the first 6 digits which are universal. All countries apply their own last 4 or 6 digits.
Value for customs may appear to be too low for the commodity being shipped. The customs agencies in the destination country need to make sure that duty rates are accurate and will hold up the shipment if in doubt. Make sure that your commercial invoice reflects the correct transaction value.
Importer of record (IOR) contact info is often lacking on the commercial invoice. Customs in the importing country will not contact the exporter if they have questions or issues. If they are unable to contact the IOR the shipment will go into storage. Make sure you include recipient name, address, phone number, and e mail address on your CI.
Contact mitch@52.91.45.227 for immediate assistance.