Trade Knowledge Essentials

[in Canada] Licensed by the Canada Border Services Agency (CBSA), a customs broker may act as an agent for commercial businesses importing product to Canada in order for a shipment to be released by Canada Customs and 9 participating government agencies (PGA’s), such as Canadian Food Inspection Agency, Health Canada or Transport Canada, all of which may require forms and documents to be supplied to them. A Harmonized System Tariff classification number must be applied to each product imported. This code determines the rate of duties and taxes that must be paid to CBSA.

[in U.S.] A customs broker is licensed by U.S. Customs and Border Protection (CBP) to conduct CBP business on behalf of importers who give the broker power of attorney to act as an agent for their commercial businesses importing product into the USA. This includes, but is not limited to, government agencies such as CBP, FDA, NHTSA, EPA, USDA and USFWS. All required documents and forms must be supplied to these agencies with a Harmonized System Tariff classification number for each product imported. This code determines the rate of duties and taxes that must be paid to the U.S. Treasury department through CBP.

With all the changing rules and regulations in cross-border transactions, it makes good business sense to use a customs broker

• Risk Management - A customs broker can help ensure that the importer is meeting all regulations governing the import and export of goods traveling across Canadian/U.S. borders.In Canada, the CBSA employs detailed post entry verifications as a way of monitoring importers compliance obligations relating to import and export regulations, USMCA/CUSMA or other free trade agreements, duty reductions, customs valuation and duty relief programs.Non-compliance can lead to significant penalties in both Canada and the U.S.. Customs brokers can assist you in managing your compliance and reducing the cost of non-compliance.
• A customs broker can assist the importer with the increased complexity of USMCA/CUSMA regulations, enabling them to take advantage of it and other free trade agreement opportunities that can have a significant impact on a company’s bottom line, through the reduction of import duties and taxes in the three USMCA/CUSMA eligible countries.
• A customs broker stays abreast of the growing number of rules, regulations, and conditions that allow the importer to qualify for Free Trade Agreements.
• A close relationship with a customs broker can help expedite the timely delivery of goods.
• Flexible staffing - Customs brokers alleviate the need for importers to have staff with specialized customs knowledge and so frees up the importer to concentrate on revenue-generating core competencies.
• Customs brokers manage peaks and valleys of importing volumes, creating automated entry documents from previously classified goods. This work requires knowledge of customs entry regulations.
• Customs brokers provide post-entry work that may take the form of a refund or other payment amendment request to the CBSA in Canada; or a post summary correction request to the CBP resulting in a refund or supplemental duty tender in the U.S.. Changes in information regarding the description, value, quantity or origin of the imported goods often requires further processing.
• Customs brokers provide shipping advice and monitoring and tracking of goods.
• Customs brokers provide IT support, Hardware, Software, Hardware/Software maintenance costs, personnel and associated overheads, required to report goods electronically to CBSA or CBP.
• Passive Control - New technology on the part of the customs broker gives importers the ability to gain control over importing information without taking on the function (e.g. web-based trade information management solutions).
• Brokerage Fees - Customs broker fees are usually only a small portion of your company's overall importing cost.

[in Canada] An individual can represent themself or a company employee can represent a company, without a signed Power of Attorney from that company, and then can complete Customs Declaration on behalf of themselves or the said company. By completing the Customs Declaration (B3 Entry), the individual is essentially declaring the entry is 100% correct. This would include import requirements being met by other governmental departments (i.e. The Canadian Food Inspection Agency), ensuring the correct HS Tariff Number(s) have been used, and all of the Customs coding information on the B3 Form is correct. Canada Border Services Agency (CBSA) often audit entries and confirms import requirements are compliant. If any information provided to CBSA is incorrect, AMPS Penalties can and will be issued.  Only a licensed customs broker can represent companies, other than their own firm, provided that a General Agency Agreement has been completed.

[in U.S.] You can import up to $2500.00 without the assistance of a customs broker however, it is always up to the discretion of the officer whether they accept your declaration or request that you obtain the services of a broker.

No, you are not required to have a customs broker to assist you in clearing your goods through Customs. You may choose to clear them on your own, but it will always be up to the discretion of the attending officer if he / she requires you to present a formal Customs entry.

A brokerage fee is usually determined by the total value of the shipment being imported or the amount of work required. In some cases, a set rate or fee is agreed upon between the broker and client.

Changing customs brokers to use the services of Cole International is fairly simple.  

You would have to forward Cole a completed and valid General Agency Agreement [in Canada] or valid Power of Attorney [in U.S.], an Account information Sheet, set up an account and make payment arrangements.   

The Account Representative at Cole International would assist in notifying carriers and the previous customs broker.

When importing to Canada either a Commercial Invoice or Canada Customs Invoice (CCI) is normally used. In the U.S. a Commercial Invoice can be used. The following information must be noted on either invoice; total value of goods, currency of purchase, country of origin (of manufacture), shipper and consignee full name and address as well as a piece count, weight and detailed description of the product(s). A USMCA/CUSMA or other free trade certificates are required to take advantage of preferential duty rates when applicable. All required forms necessary for importation and freight movement are provided on our website under Tools & Resources_Forms.

[in Canada] A multi-year initiative is currently underway at CBSA, that will transform the collection of tax and duty for goods imported into Canada, otherwise known as The CBSA Assessment and Revenue Management (CARM) project.

In May of 2021, the Canada Border Services Agency will introduce a new suite of online tools through CARM, to help streamline the process of importing commercial goods into Canada. Most of CARM’s features will be part of the new CARM Client Portal (CCP). 

Prior to June of 2022, all importers will be required to register for access to the portal and participate in managing their own customs activities and profiles in closer coordination with customs brokers and other service providers. This means importers will be responsible for making all payments for duty and taxes directly to CBSA.  

Payment will be facilitated via electronic funds transfer (EFT), electronic data interchange (EDI) payment, credit card, or pre-authorized debit (PAD). CBSA will be phasing out payment by cash or cheque. CBSA has advised that failure to apply for CCP access will prevent your goods from crossing the border. Visit our website for more information on CARM and how it will impact your business.

[in U.S.] Once credit has been established, an account is created for your company with a line of credit. Cole International can then pay U.S. Customs and Border Protection on your behalf for any monies owing related to the duties and taxes applicable to each shipment processed. Cole International will issue your company an invoice covering all duties, taxes and fees incurred for that shipment. All invoices are required to be paid in full, within 15 days of clearance. Importers are also required to obtain their own bond with US CBP through an authorized surety company. This process can be facilitated by the broker.

An Importer can also establish an ACH account with CBP that allows them to pay duties and taxes directly to the government.  They complete an ACH Application (CBP Form 400) and submit it to CBP with their banking information.  Once approved, CBP will issue the importer a Payer Unit Number that corresponds to the bank on the setup form.  The Payer Unit Number is similar to a PIN in that the broker can reference it when submitting the final entries summary confirmations, and CBP will automatically debit the funds directly from the importer’s bank account.  The broker will also send a copy of the ACH statement to the importer when it is processed so the importer can manage their cash-flow accordingly.

Choosing a logistics partner to clear your shipments through customs and keep them moving can be a daunting, often perplexing task. In your search for an experienced, highly competent logistics partner, keep the following considerations in mind:

Responsive support: We believe you deserve direct access to logistic specialists that are intimately familiar with your business. That's why we make this a key component of our service commitments.

Rapid response times: Look for companies that respond quickly to your inquiries. If they aren't responding quickly to a potential new customer, how will they perform when it comes to the day-to-day issues involved in clearing customs?

Effective document management: Clearing shipments through customs is all about managing information, documents and forms – commercial invoices, bills of lading, arrival notices and the like. Look for a customs broker who understands and espouses the need for precision and the importance of total compliance. When it comes to customs clearing, corner cutting is a disaster waiting to happen.

Top-shelf service for every customer: Cole International prides itself on delivering the same level of personalized service to small and medium enterprises as it does to the Fortune 500.

Here today... and still here tomorrow: The best logistic partners have a knack for attracting and retaining the industry's best practitioners, and their long-term loyalty translates into preeminent customer service and the satisfaction that comes from dealing with the same highly competent people over a long period.

Yes, the exporter out of Canada may be the "Importer of Record" for product entering the USA. A bond will be applied, and a Customs assigned number requested identifying the foreign-based company to CBP as doing business in the USA. The "Importer of Record" is liable and responsible for all declarations and penalties. As there are many rules and regulations that apply, it can become very tedious keeping track of all the necessary forms. It makes good business sense to have professionals like Cole International to handle this for you.

Yes, the exporter may become a Non-resident importer. This is a company with no physical presence in Canada that wishes to take responsibility with Canada Border Services Agency (CBSA) for all entry issues. This includes all fees, declarations and penalties. As there are many rules and regulations that apply, it can become complicated, keeping track of all the necessary forms. Cole International has a department dedicated to NRI programs.

This practice is definitely NOT recommended.  We recommend that a company only use a single customs broker and build a rapport with a client service representative who becomes familiar with your imported goods.  Using the services of more than one customs broker leaves a company exposed to potential errors and to a CBSA or CBP audit.  Customs Agencies view an importer as a single "account", and therefore all shipments regardless of the Port of Entry, mode of transportation, or carrier are applied to the account associated with the company's business.

In the US, not using the courier’s brokerage services almost always adds two or three days to the transit. It is best to use the courier unless you have a compliance sensitive product.

Cole International has offices in all major Canadian cities and at strategic locations along the border and throughout the United States, including locations that operate 24/7/365. Cole International has 39 branches offering customs brokerage and freight forwarding services – a breadth of locations and services few brokers can match. We offer nationwide services with Remote Location Filing (RLF) capabilities at all border crossings, airports, rail stations and ocean ports.

This practice is definitely NOT recommended. We recommend that a company only use a single customs broker and builds a rapport with an account representative who becomes familiar with your imported goods. Using the services of more than one customs broker can expose a company to potential errors.

[in Canada] Yes, there are many things to take into account. Canada Customs enforces all the regulations required by the nearly 60 other government agencies. Many different items can be prohibited from entering Canada if they do not meet the necessary criteria. A customs broker can provide the advice and information required to determine if your products can be allowed into the country and what is information or permits are needed.

[in U.S.] Yes, there are many things to take into account with CBP and Homeland Security enforcing regulations that are governed by all government agencies. Many different items can be prohibited from entering the USA if they do not meet the necessary criteria.

Cole’s experienced consulting staff can thoroughly review your previous customs entries and provide solutions and suggestions.  Of course, you will need to supply copies of your Canadian Customs invoices, or commercial invoices, as well as the supporting CBSA or CBP forms and the other customs broker's paperwork.

[in Canada] There could be serious consequences for applying the incorrect H.S. Tariff to your good, including a full customs audit, resulting in additional duties, interest and significant penalties (Administrative Monetary Penalty System) being issued by the Canada Border Services Agency (CBSA). In addition, your import privileges could be suspended by the Canada Border Services Agency if an importer has been grossly negligent with their imports. Cole International senior customs consultants can review your entries and ensure all steps have been taken to properly comply with CBSA regulations and tariff.

[in U.S.] Harmonized Tariff Classification is the ultimate responsibility of the Importer of Record, and it is expected by Customs that reasonable care will be used in this endeavor. There are potential consequences in reporting the incorrect tariff information to CBP, including overpayments or underpayments of duty, potential penalties and interest charges, further scrutiny and delays of your shipments, and the possibility of full Customs audits. Cole International senior customs brokers are pleased to assist you in the proper classification and reporting of your goods, with the necessary information given regarding the product, and our consulting division is willing and able to assist in correcting previous mistakes, including the filing of “Prior Disclosures” which can protect the importer from penalties.

Yes. Cole International can assist with the preparation of documentation and transportation when shipping out of Canada or the United States.

Cole works with many of our clients to assist in making import, export and domestic transportation arrangements for goods moving by truck, air, sea or rail. We employ a dedicated team of logistic coordinators to assist you in transporting your goods to meet both your required timelines and budget.

Cole International promotes internal and external training. Due to the complex nature of changes made by Customs and their potential financial implications, we recognize that our customers need up-to-date information. We offer a variety of in-house seminars to prepare our clients to manage compliance, import/export and freight issues.

Cole employs industry professionals in the various modes of transportation including: air, ocean, truck and rail. This industry experience allows us to have market and carrier knowledge, and to have volume purchasing strength that an individual shipper cannot often achieve.

Freight forwarders are non-asset-based service providers that receive client requests and customized services to satisfy the client. Cole will assist with the origin point loading and transport, destination on-forwarding insurance requirements and load consolidations - truly door-to-door solutions. Often at times, carriers are merely interested in building loads for pre-determined routes with company owned vehicles, not door-to-door solutions.

For large jobs that require the coordinated transport and customs clearance of over-dimensional, overweight and high-value project cargo – those moves that usually combine complex logistical challenges with project-critical timelines – Cole International’s Project Logistics team has the know-how and experience to get the job done…on time, on budget, anywhere in the world.

Good question!  Have a look at our blog article, “Providing clarity in International Trade” for more information or check out the individual terms HERE.