The Downside Of Using Multiple Customs Brokers
There is no question that the world is now a global marketplace. Canadian importers have access to vast amounts of products from multiple suppliers in countries around the world. There are a number of different modes of transportation and carriers available to move your goods, so it makes sense to use multiple Customs Brokers as well, right? On the surface that would seem to make sense but let's dig a little deeper to see why that is not a good option.
The Responsibility Of An Importer Of Record
In the eyes of Canada Border Services Agency (CBSA), each importer is one unique entity with a single importer number that identifies your company. Regardless of who the supplier is, what the goods are, how they are transported, which transportation company is used or which Customs Broker is used, all the information is linked to your unique importer number.
The Importer of Record (IOR) is solely responsible for complying with Customs regulations, and Customs requires complete and consistent accuracy on all Customs declarations with a specific focus on HS Classifications, valuation, country of origin, use of free trade certificates and terms of sale. CBSA monitors compliance through post entry audits which can be focused on one specific area such as country of origin or HS Classifications or it can be all encompassing such as a full verification audit. Errors that are found during an audit can be assessed a fine under the Administrative Monetary Penalty System (AMPS). Additional duties, taxes and interest may also be assessed and ultimately, import privileges can be revoked. The CBSA issues a Priority List in January and July of each year which identifies specific goods that are being targeted for audit however, an importer's records can be audited at any time whether they are on the priority list or not.
Things To Consider When Using Multiple Customs Brokers
- Using multiple Customs Brokers increases the risk of inconsistent Customs declarations as different Customs Brokers may apply different HS classifications to the same products.
- In addition, not all Customs Brokers have the same business practices. Courier brokers and freight forwarder brokers have a priority to move shipments as quickly and efficiently as possible which can result in less attention given to the integrity of the information on the Customs declaration.
The Best Thing An Importer Can Do
With the stringent requirements of the Customs regulations, and the implications of non-compliance, an importer's best option is to align themselves with one Customs Broker who maintains a focused priority on compliance. A Customs Broker who is an international trade professional will partner with an importer to ensure proper HS classifications are used consistently, and valuation and terms of sale are correct. In addition, country of origin declarations and proper use of free trade agreements are not only requirements of the Customs regulations, but can provide a cost savings to the importer in terms of duty relief. A compliance broker will also provide assistance with other government agency reporting requirements.
Establish a relationship with one Customs Broker who will partner with you on your international trade and you can successfully bring the global market to Canada. Speak with one of our Trade Advisors today to learn how Pacific Customs Brokers' trade advisory services can help your business. PCB specializes in Canadian Customs Brokerage, US Customs Brokerage and Freight Management. If you are importing or exporting goods into Canada or the US please contact us.