I have just finished reading an article in today’s Lloyds List Australia publication, which lands in my inbox daily with a feed of news for our industry. The article is entitled “OPINION: Customs puts the spotlight on brokers” and provides some commentary in relation to new legislation for customs brokers to comply with.
Without going into specific details of the new legislation, to summarise, customs brokers now have to attend regular training (delivered in a number of methods, via internet and “classroom” training) all with a points structure attached to the training sessions. These points are known as CPD points (Continuing Professional Development), Individual brokers are required to achieve a certain amount of points annually.
In conjunction with the CPD Points, customs have also been very vocal with their intention to assess the extent of ‘due diligence’ checks by licensed brokers on their clients. The article highlights the fact that for many importers the actual clearance of the goods through Australian borders is arranged by the freight forwarder shipping the goods from the originating country, rather than the importer engaging the service of a Customs Broker directly. In a number of transactions the Importer may never in fact even speak directly to the Customs Broker.
With all of this in mind, it really posed the question for me “who does your customs broker work for?” Is it the importer, is it the freight forwarder or is it customs?
Yes the importer pays the professional fees for the broker to make a declaration, but it is the freight forwarder who has engaged the brokers services. How many importers actually speak directly to the broker, or is all communication via your freight forwarder? Many importers may not realise they are being “spoken for”, and this can have some detrimental effects on an importers business. Is the correct duty rates being charged, is all applicable Tariff concessions being applied, I believe that some importers take for granted that all of the correct information is given to customs therefore there is little follow up done in these cases.
The unfortunate fact is that if customs (through the new legislations and follow up procedures) find that a broker is not carrying out due diligence and declared an import incorrectly, the department will not only follow through with penalties for them but you as the importer will be asked to pay any shortfall of duties and taxes as well as possible penalties.
I cannot tell you how many times we have been met with “Previous Brokers have never asked that question before”, like we are doing something wrong by ensuring that the importer is properly represented. If your Freight Forwarder is not asking questions and really getting to know your business and its products, then there is something wrong!!!