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Frequently Asked Questions (FAQ)
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Canadian Customs Brokerage FAQ
- What is a Customs Broker?
Licensed by Revenue Canada, 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 other government bodies, such as Agriculture Canada or the Ministry of Transportation, 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 Revenue Canada. With all the changing rules and regulations in cross-border transactions, it makes good business sense to use a customs broker.
- What is the advantage of using a customs broker?
- A customs broker will ensure that the importer is meeting the many new conditions under Canada Border Services Agency (CBSA) on-site compliance. The CBSA has embarked on a new and aggressive method of checking compliance - new on-site compliance will target all importers taking advantage of NAFTA, duty reductions, and other duty relief programs.
- A customs broker will assist the importer with the increased complexity of NAFTA regulations, enabling him to take advantage of NAFTA and other trade agreement opportunities that can have a significant impact on the firm's bottom line in reducing duties and taxes
- A customs broker stays abreast of the growing number of rules, regulations, and conditions that allow the importer to qualify for NAFTA.
- A customs broker provides the timely delivery of goods, which is critical for good client service.
- 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 is generally clerical in nature with some demand for 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. 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.
Decreases the importer's fixed costs
Customs brokers provide:
- IT support
- Hardware/Software maintenance costs
- Personnel and associated overheads
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).
Customs broker fees are usually only a small portion of your company's overall importing cost.
- Risk Management:
- Can we import our goods without the services of a customs broker?
With a signed Power of Attorney, an individual or a company representative can complete the Customs Declaration on behalf of the said company or a single importer. 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), 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 audits entries and confirms import requirements are compliant. If any information provided to CBSA is incorrect, AMPS Penalties can and will be issued.
- Do I need a customs broker for personal goods?
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.
- What does it cost to use a customs broker?
A brokerage fee is usually determined by the total value of the shipment being imported. In some cases, a set rate or fee is agreed upon between the broker and client.
- If our company uses the services of a competing customs broker, what steps are involved with switching to use ABC Customs Brokers?
Changing customs brokers to use the services of ABC Customs Brokers is fairly simple. You would have to forward ABC a completed and valid General Agency Agreement (Power of Attorney), an Account information Sheet, set up an account and make payment arrangements. The Client Service team at ABC Customs Brokers would assist in notifying carriers and the previous customs broker.
- What paperwork is required?
When importing to Canada a Commercial Invoice can be used. The following information must be noted on the 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 and detailed description of the product(s). A North American Free Trade Certificate (NAFTA) is required to take advantage of preferential duty rates when applicable. ABC Customs Brokers has developed an On-line Forms Management System called FORMLINK. All required forms necessary for importation and freight movement are supplied here. FORMLINK also provides the user with the ability to complete and submit the forms via the internet.
- How do I pay Duties and Taxes?
Once credit has been established, an account is created for your company with a line of credit. ABC Customs Brokers can then pay Canada Border Services Agency on your behalf for any monies owing related to the duties and taxes applicable to each shipment processed. ABC Customs Brokers 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.
- What makes ABC Customs Brokers stand above other customs brokers?
ABC Customs Brokers has assembled an experienced service-oriented staff who do not view working with the clients as an inconvenience. Our live reception team is always available to answer your phone calls. We understand that your shipment is a priority to your business.
- Should our company use several different customs brokers, depending on the mode of transportation or the location of the entry?
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 Canada Border Services Agency audit. CBSA views 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.
- Can a shipper / exporter to Canada take responsibility for all the fees associated when goods are imported into Canada?
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 Customs and Revenue Agency (CCRA) for all entry issues. This includes all fees, 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 ABC Customs Brokers Ltd. handle this for you.
- When shipping goods by courier, is it recommended that we use the customs brokerage services provided by that of a courier even though we use a different customs broker for our truck, air and sea freight shipments?
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 can expose a company to potential errors.
- At which customs ports can ABC Customs Brokers clear goods?
ABC can and does provide customs brokerage services at any Canadian or United States port of entry. In today's electronic world, local agents are rarely required; a central operations business model is more beneficial to a client.
- Are there restrictions on what items can be brought into 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.
- Can ABC Customs Brokers review my entries done by other customs brokers to ensure compliance?
ABC's experienced 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 forms and the other customs broker's paperwork.
- What if my current customs broker mis-classifies my goods?
There could be serious consequences for applying the incorrect H.S. Tariff to your good, including a full customs audit and severe penalties (Administrative Monetary Penalty System) under the Canada Border Services Agency (CBSA). In addition, your import privileges could be suspended by the Canada Border Services Agency. ABC Customs Brokers senior customs brokers will review your entries and ensure all steps have been taken to properly comply with CBSA regulations and tariff.
- Is ABC Customs Brokers able to assist with the exporting of goods out of Canada?
ABC Customs Brokers has the expertise on staff to assist with the preparation of documentation and transportation when shipping out of Canada.
- Can ABC assist in making transportation arrangements for our goods?
ABC 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 experts to assist you in transporting your goods to meet both your required timelines and budget.
- Can ABC Customs Brokers educate my staff and I on responsibilities, documentation requirements and regulations of customs procedures?
ABC Customs Brokers hosts regularly scheduled educational seminars and workshops on various Canadian and United States customs topics. In addition, ABC Customs Brokers can build individually tailored seminars and send a presentation team to your offices.