Who is a customs broker and what does he do?

An entrepreneur, who rarely or even for the first time encounters the need for customs clearance of cargo, goods or products may be confused. Issues of customs legislation and foreign economic activity have their own specifics, in which an uninformed person will not be able to understand quickly. And there is no need to do this. Much more effective in terms of efficiency, saving time and effort will turn to a specialist. 

A customs broker will take care of the paperwork of the shipment or receipt at customs, as well as the payment of the necessary fees and taxes. And he will do it in such a way that no legal and financial problems arise later on. 

Let’s find out what a customs broker does, what kind of business and why they need this specialist in the state, and who can resort to his services periodically. 

Professional Notes

Customs broker – a specialist who provides services to entrepreneurs to declare finished goods and raw materials imported or exported across the customs border of Ukraine. In fact, the customs broker acts as an intermediary between the client and the state customs authorities, acts on behalf of the customer (individual, entrepreneur, enterprise), representing his interests by proxy. 

Important: Customs brokerage is legally regulated by the Customs Code (Chapter 59). The activity of the specialists of this professional direction is possible after obtaining the Permit. The relevant document is issued by the State Customs Service of Ukraine. 

Customs declarant and customs broker: what is the difference?

A customs declarant is a legal or natural person who clears customs independently or on whose behalf an authorized representative fills out a declaration. A customs declarant is a taxpayer. 

A customs broker is a professional or a company that has a Permit to Practice. A broker provides customs transport services by representing the client under an agreement and power of attorney at the customs border of Ukraine. His activities aimed at rapid customs

clearance of exported or imported goods, he performs within the law and in the interests of the client. The declarant gets rid of the need to personally execute the declaration, pay the duty, to communicate with the inspector. 

Why go to a customs broker?

In Ukraine, new legislation is regularly issued in the segment of foreign economic activity. Such changes complicate the work of many companies, which have to deal with customs clearance on their own. And if you do not use the services of professionals in time, you can incur serious losses. 

Even a small mistake in the declaration can cause the delay of goods, and not being paid on time duty can lead to missed delivery dates, fines, penalties. But if experienced customs brokers take on the case, unpleasant surprises are excluded. So, in order for customs to give the “go-ahead”, you need to entrust the case to specialists. 

Interesting information: the customs broker may act as a single specialist or an entire company, which provides specialized services. You can resort to the help of a customs broker once, or you can conclude an agreement of support, in which all the customs issues as they arise will be solved by specialists. 

What does a customs broker do?

Let’s talk in more detail about what issues a customs broker will solve. This specialist takes care of the full business of the company, related to the customs shipment and receipt of goods from abroad, preparation of various certificates and permits, execution of supporting documentation, payment of duties and fees. That’s in a nutshell. And if we talk in more detail, he:

• advises the client on matters of customs clearance; 
• carries out a detailed declaration of goods, commodities, raw materials; 
• Fills in the customs declaration, prepares a package of supporting documents, including customs certificates (sanitary, environmental, etc.); 
• Calculates the cost of customs duties, charges
• Contacts with the customs authorities, providing the necessary information on request; 
• Gives the goods to the customs authorities for inspection (on demand);
• enters data into databases;
• communicates with representatives of government agencies as required by law.

In essence, it does not matter to the client how and what the broker does at customs. The main thing is that he solves all the tasks assigned to him. Customs clearance is completed by debiting payments and closing the declaration. After the necessary seals are affixed, the cargo is picked up by a representative from the shipping department. 

Interestingly, some customs agents provide comprehensive logistics services. This implies that the specialist:

• accompanies the transaction within the framework of foreign economic activity;
• Receives the cargo in the country of departure on behalf of the client;
• concludes a contract with the carrier, which will ensure the delivery of cargo;
• deals with quarantine clearance, customs accreditation of export/import;
• supervises transportation of the cargo to the client’s warehouse in the receiving country.

Interesting to know: Many members of this profession deal with highly specialized issues. They are thoroughly professional in one direction, for example, in drawing up customs certificates or filling out declarations. This is why it is more advantageous to go to a company that provides services in the field of customs brokerage, rather than just one specialist. In such firms, each employee has his own functions and responsibilities, and as a whole the department works as a single, coherent organism. 

What kind of difficulties can a cargo owner encounter at customs?

Customs clearance involves a number of steps – submission of documents, inspection at the terminal, payment of duties and fees. State customs authorities are vigilant in protecting the economic interests of the state, so it is not always possible to clear cargo quickly. Because of this, there is a risk of disruption of delivery dates, downtime of vehicles, sending goods to customs warehouses. Behind all this there are losses. To avoid this, a company should ask in advance who a customs broker is and what questions are best passed on to him.  

Rights of a customs broker

The rights and obligations of a customs broker are defined by law, as well as the contract he signs with the customer: 

• This professional may require truthful and accurate information about the goods and cargo from the customer. The broker may ask for transaction documents and other information that may be required for customs clearance. 
• The broker may act at his discretion at customs if the customer has not provided all the necessary data. But all of his actions must be aimed at protecting the interests of the customer. 
• Customs agents have the right to refuse to declare cargo if the customer does not provide him with a complete package of documents, or if it is found that the facts of falsification of data, the provision of untruthful information.  
• Customs broker is not obliged to issue permits, which are stipulated by the Law “About transport-forwarding activity”, if it is not stipulated in the contract. 

Important: In some countries international transportation is carried out only through customs brokers. Licensed specialists take responsibility for the preservation of commercial secrets and confidential data about the customer.

Specifics of a customs broker’s work

When the broker receives the documents from the FEA manager, he must thoroughly check the details. It is important to avoid inconsistencies. Filling out the declaration involves determining the commodity code, which affects the import duty. If the code is filled out incorrectly, the inspector may see this as an attempt to evade taxes. The cargo may be assessed as contraband. 

Therefore, it is important that the documents are received by the broker for examination well in advance. But the declaration is printed on the day of clearance, because the calculation of the duty is based on the exchange rate, which changes daily.

Who can become a customs broker?

If you seek the services of a specialist with a Permit, you should not doubt his professionalism. After all, it is not easy to obtain the relevant competencies. 

How to become a customs broker in Ukraine? The candidate needs to undergo training, collect a package of documents for the organization issuing the Permit. He must:

• Have a thorough knowledge of the Customs Code;
• Know how to identify goods codes;
• Competently prepare Customs declarations;
• calculate the sum of the Customs fee;
• keep records and financial reports on operations. 

Only in this case the applicant receives the rights, and his data is included in the register of customs brokers of Ukraine. 

An interesting fact: Many companies, which conduct foreign economic activities, send their employees for training, so that they can later interact with the customs independently. In some cases this is a justified decision. However, it should not be forgotten that a trained specialist can quit, become ill or be on vacation at a time when it will be necessary to deal with customs issues. Cooperation with a reliable company is another matter. Even if one employee will not be able to deal with your questions, you will reassign them to another specialist. 

What are the qualities of a customs broker?

A customs broker’s professional activity requires concentration and thoroughness. After all, he will have to fill out a number of documents and keep records. Regularly at the legislative level, new decrees and orders regulating the customs clearance procedure are adopted. The specialist must study the innovations in a timely manner and take them into account in his work. A customs representative is also required to be communicative, persuasive and capable of communicating with government representatives. In the case of difficulties, the broker will have to make decisions, find a way out of the situation. Therefore, a person with low concentration, with communication difficulties, unsure of himself will not be easy to cope with the duties.

What kind of specialists work in a company that provides customs brokerage services?

Let’s assume that a legal entity, a customs broker, practices highly specialized training of specialists. What kind of employees work in the department? 

• The declarant fills out the declaration and is responsible for filing the rest of the documents that may be required at customs. The declarant communicates with the inspector and provides additional information when requested.
• The logistician supervises the movement of cargo, communicating with the carrier. 
• The transit manager helps the declarant prepare the necessary paperwork, and sometimes speaks to the inspector on behalf of the client after the declarant has filled out all the paperwork. 
• A representative at the terminal is present when the goods are inspected by the inspector for correct labeling, conformity of valuation. 
• The analyst studies the legal regulations, the bases related to customs clearance. This specialist determines how to properly carry out the category of goods to the maximum benefit of the client, but within the limits of the law. 

Different companies do not always have the entire “set” of specialists. Duties of some employees are divided between the others. It all depends on the number of transactions conducted daily, as well as the range of goods with which the customs broker works.  

Important: Import/export customs clearance can be handled by a separate specialist within the company. But he or she can make mistakes and fail to meet deadlines. This leads to serious consequences for the business. Cooperating with a customs broker saves a business from having to train an employee or maintain an entire department. Professionals hone their skills and gain experience every day, so there is less chance of mistakes. In addition, experienced brokers who work within the law have a good reputation at customs, so the inspector is initially loyal.

Customs broker services for large companies

Even large companies often do not have a customs clearance specialist on staff, but use the services of customs brokers. What does a customs broker do for a firm? He draws up all the necessary documents, such as sanitary or veterinary certificates, radiological and quarantine certificates, registration certificates of the Ministry of Health. Specialists also take care of transportation and logistics issues, cargo declaration, payment of duties. In fact, the broker provides door-to-door cargo delivery across the border of Ukraine. 

Interesting: Many companies conclude long-term contracts for customs brokerage services, as it is much more profitable from the financial point of view for the business, which actively and constantly interacts with foreign counterparts. 

Customs services for private entrepreneurs

How does a customs broker work with private entrepreneurs? Specialist services are required if a businessman cooperates with foreign counterparties, receives cargo from them or sends them goods. A private entrepreneur who does not have a wide staff of different profiles, it is better to apply to a company that provides comprehensive transport and logistics services. In this case, the customer can count on a detailed consultation, as well as the organization of transport and logistics support for foreign trade transactions “turnkey”. 

How much do customs broker’s services cost?

Each company providing such services has its own price list. The cost for each client is determined individually and, as a rule, depends on the duration and volume of the work to be done.