How do you monitor and verify the accuracy of your broker's entry declarations and classifications?

When selecting a customs broker, it's crucial to verify their adherence to standards (e.g., C-TPAT in US, AEO in EU, or other similar standards) as a measure of their reliability and compliance. Make sure this is not just a one-time activity. Continuous monitoring of your broker's performance and adherence to quality and regulatory standards is essential. Regularly review their certification status, performance metrics, and compliance with customs regulations to ensure ongoing reliability and efficiency in your trade operations.

-Internal Audits -Compare Against Commercial Invoices -Verify Classification Codes -Random Spot Checks -Use of Customs Audit Programs -Feedback and Communication -Performance Metrics -Third-Party Audits -Broker Training and Education -Encourage Feedback Culture -Continuous Monitoring

Ensure the customs broker is certified/licensed and has a deep understanding of the customs procedures, laws and regulations. Ensure you broker has experience in the industry you are operating and always check their compliance records.

Your broker's ability to file compliant and precise entries is directly linked to the quality of data you can provide. Maintaining accurate and compliant product information is crucial for smooth customs processing. To prevent the use of outdated information, it's advisable to maintain your product data yourself, rather than relying on your broker to keep a potentially outdated file. A broker management process can be managed in-house or with a specialized outsourcing partner. Using the right tools is key to ensuring that the data and instructions provided to your broker is correct, complete, and compliant. This ensures the accuracy and compliance of your shipments, minimizing risks of misclassification or customs delays.

To maintain accuracy in broker entries and classifications, instituting a system of spot checks and random audits can be effective. This ensures ongoing compliance and identifies any deviations promptly. Furthermore, employing specialized software or tools designed for classification verification can streamline the process and minimize errors. Regular training sessions for brokers on classification guidelines and updates also contribute to enhanced accuracy. Lastly, establishing clear communication channels between stakeholders facilitates swift resolution of any discrepancies that may arise.

Automate your process and electronically comunicate information to avoid any data entry errors. Provide clear instructions and ensure documentation, invoices, packing lists have been already checked and the customs broker has all the required information and if applicable licences and certificates. If the customs broker has clear instructions to follow they can understand your product and requirements. This will help improving accuracy and efficiency.

My recommendation to importers is to always provide the import and PGA data (FDA, USDA, etc.) to the broker yourself. Don't rely on the broker to classify or determine all the data. You know your products best and in greater detail, so you are in the best position to determine the data. Unfortunately, I see too often that brokers will classify an item in an "other" provision when a more specific HTS is available.

Always double check the entries, while still in the pre-lodged status so you can quickly make amendments; make sure the correct commodity code and value have been declared. A common error is not applying the method of payment correctly. This can’t be amended in post clearance therefore it’s important to check to avoid any delays. Look into how AI can help with validating the entry data and if this can be optimised and implemented to help you save time.

Taking full control of your broker management process and using the right tools for compiling correct, complete, and compliant instructions significantly enhances compliance and cost management. By preparing pre-entry shipment data in a system, you can automatically compare this against your broker's post-entry data. This same pre-entry data, aligned with the agreed brokerage rate table, enables you to verify that charges from your broker align with your agreement. Automating these processes not only increases the capture rate of compliance issues and mischarges but also streamlines the audit of your broker's entries, ensuring that duties, taxes, and fees are correctly assessed and paid.

1. Periodic audit as laid out in ISA and/or ECMP. Each broker should have a SOP with a database of the Client’s SKUs and classifications. Part of the audit should be to verify they are actually using the classifications and not their own, 2. Brokers’ scorecard to track performance. 3. AES reports regularly compared with brokers’ reports 4. Address any inconsistencies, PSC and protests.

A best practice it to perform a monthly, quarterly, or annual audit of your customs entries to check for errors. You can request a download of all your entry data from the broker or apply for an ACE account with CBP and run an entry summary report to obtain the data. Then run an analysis using pivot tables to look for risks and identify inaccuracies that need correction.

To further bolster accuracy, it's valuable to leverage technology for automated checks and verification processes. Implementing advanced software solutions can streamline auditing procedures and minimize human error. Encouraging transparency and accountability within broker-client relationships fosters a culture of compliance and integrity. Moreover, staying informed about evolving regulatory requirements ensures adaptability and readiness to address emerging challenges.

A solid customs broker management application gives you full control over your own customs data and archiving capabilities. Relying solely on your broker's archives means you need to retrieve data during audits, which in turn leads to delays, possible additional charges, and unwanted surprises. A dedicated management application puts you ahead instead of “walking behind the facts," as we say in Dutch :-) This level of organization not only streamlines compliance and audit readiness but also empowers you to quickly address discrepancies, inquiries, or disputes, safeguarding your operations against potential legal or financial repercussions.

1-Utilize automation to schedule regular document reviews, ensuring up-to-date compliance. 2-Implement user-friendly digital tools for efficient data management. 3-Stay ahead by integrating technology, and aligning your import process with evolving business landscapes.

Staying updated on AI advancements in customs regulations facilitates proactive adaptation to evolving standards. Seeking insights from AI-driven analytics tools and collaborating with industry experts enriches decision-making processes. Embracing AI as a tool for continuous learning fosters a culture of innovation and excellence within import operations.

Schedule an annual meeting and performance review with your broker to discuss any past or ongoing clearance issues, new regulations or customs processes, and review expectations. Look at a few key performance metrics such as time to CBP or PGA clearance, number of holds, length of hold, and time to resolution and release. Ask the broker to prepare some statistical data as well such as the volume, value, and duty due for the entries during the review period.

To maintain the accuracy of broker entry declarations and classifications, it's imperative to institute regular performance evaluations. Utilizing clear, measurable criteria ensures a comprehensive assessment of their effectiveness. Seeking input from stakeholders, including internal teams and clients, provides diverse perspectives on service quality. Additionally, comparing performance against industry benchmarks highlights areas for enhancement and optimization. Recognizing and incentivizing excellence fosters a culture of continuous growth and improvement within the brokerage process.

To monitor and verify the accuracy of your broker's entry declarations and classifications: 1. **Regular Audits**: Conduct periodic audits of entry declarations and classifications. 2. **Automated Systems**: Use automated systems to cross-check data against regulatory requirements. 3. **Spot Checks**: Perform random spot checks on submitted entries. 4. **Compliance Reviews**: Regularly review brokers' procedures for compliance with industry standards. 5. **Training**: Ensure brokers receive ongoing training on the latest regulations and classification practices. 6. **Feedback Loop**: Establish a feedback mechanism to address and correct errors promptly.