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Customs Agents’ Crucial Role in International Trade

By Tim Moran

The U.S. Customs Service was established on July 31, 1789, to "regulate the Collection of the Duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandise imported into the United States."1 Today, U.S. Customs and Border Protection (CBP) and its customs agents enforce U.S. trade laws prior to merchandise arriving at U.S. ports of entry, once merchandise arrives in port, and even after it is released into the U.S. marketplace.2

What Does a Customs Agent Do?

 

Among other things, CBP customs agents are responsible for entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise.

 

To put into perspective the breadth and scope of what customs agents do, on a given day in 2018 CBP agents were involved in processing $7.7 billion worth of imported products; 95,890 entries of merchandise at U.S. air, land, and sea ports; and $144 million in taxes and other fees, including more than $133 million in import duties. Also that day, customs agents seized $290,411 in undeclared or illicit currency and $3.7 million worth of products with intellectual property rights violations.3

 

Customs Agents’ Priority Trade Issues

 

Customs agents are generally concerned with what are called PTIs—Priority Trade Issues. These represent high-risk areas that can cause significant revenue loss to U.S. businesses, harm the U.S. economy, or threaten the health and safety of the American people. Current PTIs include:

 

  • Agriculture and Quota
  • Antidumping and Countervailing Duty (AD/CVD)
  • Import Safety
  • Intellectual Property Rights
  • Revenue
  • Textiles/Wearing Apparel
  • Trade Agreements4

Beyond trade issues, customs agents are involved in:

 

  • Enforcing customs, immigration, and agricultural laws and regulations at U.S. ports of entry and preclearance locations worldwide;
  • Inspections, intelligence analysis, examination, and law enforcement regarding the arrival and departure at ports of entry of people, vehicles, and merchandise; and
  • Interacting with carriers, other agencies, and foreign entities to exchange information and provide guidance on admissibility and compliance.5

According to testimony in 2018 before the House Subcommittee on Border and Maritime Security, customs agents are the second largest source of revenue collection for the U.S. government. For example, in 2016 “CBP processed more than $2.2 trillion in imports and collected more than $44 billion in duties, taxes, and other fees.”6

 

Shortage of Customs Agents a Growing Problem

 

Despite the apparent importance of the job, customs agents and other CBP employees do not seem to be having it easy go of it these days. According to the House testimony, “the number one border security issue … is the critical staffing shortage at the ports of entry, and this staffing shortage is staggering. Understaffed ports lead to long delays in travel and cargo lanes and also create significant hardship and safety issues for frontline employees. Involuntary overtime and involuntary work assignments far from home disrupt … family life and destroy morale.”7

 

According to a recent Joint Economic Committee (JEC) report, “the 328 U.S. [points of entry (POEs)] are the gateways in and out of our country. They include international airports, cargo seaports, and land ports for trucks, cars, and trains. Every day, 1.1 million people and $5.9 billion in goods legally enter and exit the U.S. at these POEs.”8

 

The volume of commerce crossing U.S. borders has more than tripled in the past 25 years, and long wait times have led to delays and travel time uncertainty, which is not good for business—it can increase supply chain and transportation costs. “According to the Department of Commerce, border delays result in losses to output, wages, jobs and tax revenue due to decreases in spending by companies, suppliers and consumers.”9 The JEC report found that border delays can cost the U.S. economy up to $5.8 billion each year.

 

Customs Brokers Still Play a Role with Customs Agents

 

Import-export businesses will likely deal with CBP and customs agents at some point. Often, customs brokers and freight forwarders—if used—will be the ones working with customs agents. One of the roles of customs brokers is to alleviate the stress of dealing with customs officials and learning shipping regulations so clients can spend more time managing their core business. Customs brokers, therefore, can serve as translators, communicating with agencies and governments throughout the shipping process, to ensure that all of the proper procedures are followed.10

 

Nevertheless, the CBP emphasizes educating import-export businesses about dealing with customs agents, streamlining enforcement processes, leveraging enforcement partnerships with agencies abroad, and improving data collection. Still, many import-export businesses are concerned about the potential downsides of customs compliance processes and miscalculations regarding cross-border tariffs and taxes.11

 

Working with U.S. customs agents, of course, is something importers will have to do. Exporters, on the other hand, must understand that there are similar agencies and agents on the other side of the world. Take, for instance, the European Union (EU). The EU’s customs union works much like the U.S.’s—to ensure that goods imported into the EU circulate freely and that they are safe for people, for animals, and for the environment. It strives to make certain that the countries involved apply the same tariffs to goods imported into their territory from the rest of the world, and apply no tariffs internally.12

 

The
Takeaway:

Customs agents are an important part of the overall international shipping landscape. They are responsible for, among other things, entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise. Whether dealing with them personally or through a customs broker or freight forwarder, it’s important for import-export businesses to understand what they do, why they do it, and how that understanding can save businesses time and money.

Tim Moran - The Author

The Author

Tim Moran 

Tim Moran is a veteran business-technology journalist. He has most recently been involved in brand publishing startups, including creating CMO.com for Adobe.

Sources

1. “Happy Anniversary, CBP!” National Treasury Employees Union (NTEU); https://www.nteu.org/blog/2019/07/31/customs-anniversary
2. “Trade Statistics,” U.S. Customs and Border Protection (CBP); https://www.cbp.gov/newsroom/stats/trade
3. “On a Typical Day in Fiscal Year 2018, CBP...,” CBP; https://www.cbp.gov/newsroom/stats/typical-day-fy2018
4. “Priority Trade Issues,” CBP;https://www.cbp.gov/trade/priority-issues
5. “What We Do,” CBP; https://www.cbp.gov/careers/cbpo-what-we-do#
6. “On the Line: Border Security from an Agent and Office Perspective,” NTEU; https://www.nteu.org/legislative-action/congressional-testimony/border-security
7. Ibid.
8. Economic Impact of Understaffing U.S. Ports of Entry, Join Economic Committee; https://www.jec.senate.gov/public/_cache/files/88c66173-5dc9-4e5e-b144-6f9517443409/economic-impact-of-understaffing-u.s.-ports-of-entry.pdf
9. “On the Line: Border Security from an Agent and Office Perspective,” NTEU; https://www.nteu.org/legislative-action/congressional-testimony/border-security
10. “What is Customs Brokerage?” Farrow; http://www.farrow.com/article-what-is-customs-brokerage
11. “E-Commerce Commitment: Customs Agencies Promise to Speed up Processing for Import-Export Businesses, Amex;https://www.americanexpress.com/us/foreign-exchange/articles/customs-speed-up-processes-for-ecommerce-import-export-businesses/
12. “Customs,” European Union; https://publications.europa.eu/en/publication-detail/-/publication/645fede9-693d-11e8-ab9c-01aa75ed71a1/language-en/format-PDF

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