Mitch Kostoulakos, LCB commented on this

Pete Mento•Commercial Director @ DSV | US Licensed Customs

Been a while since I poked the bear, but I’m fresh from a trip from DC and annoyed. We have a Customs Broker crisis. It’s only getting worse because of demographics. I’d like to challenge U.S. Customs and Border Protection to release some simple age statistics in tiers. What are the breakdown, by age of current license holders in the US? Assuming there are ACTUALLY around 13,000 still kicking around (I question the validity of that number), Then tell us how many are over 70, between 50 and 69, between 35 and 49 and under 34. You have that data since you have our SSNs. I’ll do some Good Will Hunting math with actuary tables and tell you, roughly how many are probably retiring and leaving this earthy plane (I love math and I have no life) Then I’ll make assumptions on the number not actually working on thier license (that number will disgust you). THEN – we look at how many take the test a year, pass it and pass the background check and get the ticket. I’m willing to bet it’s an upside down number. Want to fix it? It’s so easy…Apprenticship programs under the guidance of brokers and a system that requires time working in areas of the industry to learn the trade/Trade – then a test based more on practical knoweldge and less on repetitive questions. Being a Customs Broker is a financially and intellectually rewarding career. Stop making it so ridiculously hard to be one with your poorly conceived test. I’d also like to challenge our professional associations to help us bring more people into our tribe instead of looking for ways to monetize the new mandatory training hours. Unless we do something about this there won’t be anyone to train. Thanks for coming to my TED talk. I’ll be selling merch on your way out….#morebrokers…see more

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Excellent post Pete… I am in favor of continuing ed for LCBs. My thoughts on the CBLE:
1) Can anyone name another licensing exam with such low pass rates? I doubt it. Its is easier to pass the bar exam.
2) LCBs take a look at the April 2023 exam and see if you think you could pass it.

Here is one of the easier questions from the April 2023 CBLE (Customs Broker License Exam). What’s your answer?

52. Which of the following is a TRUE statement regarding the principles governing the
    classification of goods in the tariff schedule?
    A) For legal purposes, the Harmonized Tariff Schedule’s (HTS) table of contents,
    alphabetical index, and title of sections, chapters and sub-chapters are of equal
    weight to the terms of headings, relative section or chapter notes, and the General
    Rules of Interpretation in classifying goods under the tariff schedule.
    B) For legal purposes, under the governing principles for the classification of goods
    in the tariff schedule, the Harmonized Tariff Schedule (HTS) Explanatory Notes
    are required to be applied, unless the HTS headings or notes otherwise require.
    C) For legal purposes, the HTS General Rules of Interpretation (GRI) principles are
    applied in any sequence as long as all the GRIs are applied in classifying goods in
    the tariff schedule.
    D) For legal purposes, the classification of goods in the subheadings of a heading
    shall be determined according to the terms of those subheadings and any related
    subheading notes with the understanding that subheadings at any level are
    comparable.
    E) For legal purposes, classification is determined according to the terms of the
    headings and any relative section or chapter notes, while the table of contents,
    alphabetical index, and titles of sections, chapters and sub-chapters are provided
    for ease of reference.

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.

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.

Did you know? The dollar symbol, $, is used by more than 20 countries around the globe, including the United States, Australia, New Zealand, Canada, and Hong Kong.

Currency designation is required information on Commercial Invoices. If your transaction is in US dollars indicate USD on the CI. The dollar sign alone is not sufficient and will most likely cause a delay in customs.

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Rate shopping is not negotiating. It leads to inconsistent service, miscommunication, dissatisfied customers, and re-work. There will always be a lower rate out there. Practice due diligence in your meetings with LSPs and negotiate from a position of strength. However, it is a good business practice to obtain quotes for first time, large, or complicated moves. Use these quotes as a starting point with your current providers and possibly others.

Lizbeth Rodriguez-Johnson

Did you know that individuals who are admitted as refugees or granted asylum in the United States are U.S. persons under the ITAR? Following its issuance in April 2023 of guidance on how to avoid immigration-related discrimination when complying with export controls, DOJ continues its effort to enforce these legal requirements. This new case should serve as a reminder to ensure your company’s HR practices and export compliance program are in line with applicable legal requirements.

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Good reminder that compliance needs upper management oversight. A C-level compliance officer would mitigate the risks of separate HR and Export Compliance silos.

Announcements

The next CBLE will be on October 25, 2023. The registration period will be earlier than for previous CBLE exam administrations. For the October 25, 2023 CBLE, registration opens on August 14, 2023 and closes on September 12, 2023. Please review the information under the “Exam Registration” drop-down for additional information and changes to the CBLE registration process.

ALSO: The exam configuration has changed for the October 25, 2023 CBLE. Although the exam still consists of 80 multiple-choice questions, each question will now only have four (4) possible answer choices instead of five (5) answer choices.

CBP has contracted with PDRI to administer the October 2023 exam. PDRI is utilizing PSI resources as part of administering the CBLE.

https://www.cbp.gov/trade/programs-administration/customs-brokers/license-examination-notice-examination

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.

Here is where C-level leadership is important:

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 Plan) contact mitch@adhoclogistics.com

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Good advice from Kathy Fulton applying to all disasters and with hurricane season approaching…

Fulton also reiterated a request from many members of the non-profit relief community: Please don’t self-deploy to Maui or Big Island – and refrain from participating in product collection drives.
“Although the intention behind these efforts is good, they often create more challenges than they solve, including getting in the way of rescue efforts. So please don’t add to an already difficult situation,” she said. “If you truly wish to help, send funds. Cash donations allow non-profits to buy what they need, when and where they need it. And that will help survivors faster.”

Many of my clients are hard-working owners or operators of small businesses. They don’t have in-house compliance or logistics expertise, so must wear several hats. Day to day activities or unexpected issues take up most working hours. As a result, functions such as logistics planning and import/export compliance are often unmanaged or left entirely to LSPs (Logistics Service Providers).

Making sure that your business is in compliance with import and export regulations is good risk management as well as good business. Think of it as insurance. A few basic steps can make a big difference and can be implemented quickly.

Ad Hoc Logistics can provide step by step guidelines, train your employees, and set up sustainable procedures. Our copyrighted programs include:

Exporting for Smart People- Because You’re No Dummy
Red Flag Screening
A to Z of Managing Logistics

Contact mitch@adhoclogistics.com for info.