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.
CBLE Relief and Anxiety
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.
Interactive Guide to HTS
Here is a useful and user friendly guide to the HTS. Great tool for training and enhancing compliance skills.
CARM
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
Quick or Accurate Classifications?
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.
Countdown to Exam Day
If you are scheduled to sit for the CBLE (Customs Broker License Exam) on October 23rd your preparations have most likely included practice exams as well as a deep dive into the HTS tariff and customs regulations. Not to mention blood, sweat, and tears.
Let me suggest also reviewing the notifications on the CBP website so that you don’t have an unexpected complication on exam day. The notifications include details about Covid restrictions, reference materials allowed, and ID/Proof of Citizenship requirements. There are separate sections for remote and in-person test takers.
You will find the info under this link:
Look for the heading It’s Exam Day !
Best of luck on October 23rd.
Got Questions?
LCBs here is your chance to help write questions for future Customs Broker License Exams.
U.S. Customs and Border Protection has contracted with the Human Research Organization (HumRRO) to help modernize the Customs Broker License Examination (CBLE). HumRRO also seeks licensed customs brokers who are interested in participating in writing questions for future CBLE administrations. If you have any questions about this opportunity, please contact HumRRO at lcb_inquiry@humrro.org
Ready for CARM ?
If you are a Canadian importer or NRI (Non-Resident Importer) you will want to keep up to date on CARM . Many US exporters act as Non-Resident Importers in Canada. A Non-Resident Importer is a business located outside of Canada that ships goods to customers in Canada and assumes responsibility for customs clearance and other import-related requirements.
On October 21, 2024, CARM will become the official system of record for imposing or levying duties and taxes.
To register contact your Canadian Customs Broker or access the Client Portal on the CBSA website.
https://ccp-pcc.cbsa-asfc.cloud-nuage.canada.ca/en/auth/login
As a reminder, the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project is a multi-year digital initiative that will change how CBSA collects duties and taxes for goods imported into Canada. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.
CBLE Prep
With a little more than 60 days before the next CBLE (Customs Broker License Exam), candidates should be well into their prep. Thanks to Pete Mento here is a group of LCBs ready to help you: https://www.linkedin.com/groups/12862151/
The next CBLE will be administered on Wednesday, October 23, 2024. The registration period is now open and will close on Wednesday, September 11, 2024 at 4:30 pm (Eastern). No late registrations will be accepted.
Monitor this link for exam info:
Logistics and Finance
Logistics managers with operations backgrounds and responsibilities typically leave finance to the accountants. This is understandable given the full time need to stay on top of logistics details. However, some basic financial knowledge can help make sure that operations managers are “in the room” when strategic business decisions are made. Consider the 3 logistics flows of material, information, and financial. These different tracks often result in silos which are counterproductive. It has been said that accountants look back while managers must look forward. Here is some info from the text Global Logistics & Supply Chain Management published by John Wiley and Sons. This is common knowledge for accountants and finance professionals.
Balance Sheet- snapshot of assets and liabilities at a particular point in time.
Income Statement- profit and loss for a defined period of time.
Cash Flow- where the money comes from and where it goes.
Obvious implications for logistics are that time is money, so shortening the supply chain or eliminating delays results in greater profit. High working capital (inventory) reduces profit. Efficient resource utilization (labor, real estate, equipment) increases profit. Cash to cash cycle is key.
Debt financing can be described as gearing. Low gearing means little or no debt. High gearing means the firm has a large proportion of debt to assets. This presents high risk for investors. It also may preclude opportunities to expand or improve operations and debt service (interest) will constrain cash flow.
International logistics involves greater risk which may include uncertain demand, unstable infrastructure and services, political instability, or currency fluctuations. Cost accounting for logistics companies is not as straightforward as for manufacturers. Services are intangible, quality can be difficult to measure, they cannot be stored (perishable), and may involve more that one provider.
More Basics
Order Cycle- Short order cycle leads to reduced inventory; Long order cycle leads to increased inventory.
Cost of Lost Sales- High inventory results in lower lost sales; Lower inventory results in higher lost sales.
Transportation costs- similar tradeoffs as lost sales. Mode shifts from slower to faster (ground to air) can reduce inventory. Shifts from faster to slower (air to ocean) will increase inventory.
Commodity dollar value- High value commodities lead to high inventory, transportation, and packaging costs.
Density- High density commodities lead to reduced transportation and inventory (warehousing) costs.
Loss/Damage- commodities with high susceptibility to loss/damage result in higher costs of transportation and warehousing.
Location decision- Plant or distribution center proximity from materials sources or markets can mean relative advantage or disadvantage vs competitors. These are C- level decisions.