CUSTOMS AND INTERNATIONAL TRADE

Broker-Importer Relations

BROKER AND FORWARDER COMMON MISTAKE
08/01

In the Summer 2001 NCBFAA Bulletin, there was a lengthy article summarizing the customs broker's obligations in the event of service of a summons, subpoena, or search warrant. One important point not clearly made is the obligation of the customs broker and freight forwarder to let the customer know if records are requested by Customs or any other government agency. The one exception is where the requesting agency specifically instructs the service provider not to do so.

Brokers and forwarders commonly want to appear cooperative with the requesting agency and simply turn over the records sought without demanding a summons, subpoena or search warrant. In so acting, the service provider is voluntarily turning over records and information. If that action later causes problems for the customer, the broker or forwarder could find itself on the receiving end of a messy lawsuit for breaching its duties to its customer under their principal-agency relationship.

IMPORTER/EXPORTER QUESTIONNAIRE©

This questionnaire is a preliminary draft. It is being provided as an example of the sorts of inquiries importers and exporters should come to expect from their customs brokers or freight forwarders.

Responses to these questions should be prepared on additional sheets of paper, as needed:

GENERAL INFORMATION

1. Please state the full legal name of the Company.

2. What is the current business address and telephone number of the principal office.

3. If there are branch offices, please state the address and telephone number of each such office.

4. Please state whether the Company is a corporation, limited liability Company, partnership or sole proprietorship.

5. If the Company is a corporation or limited liability Company, when did it incorporate? In what state? Please list the names of its officers and directors.

6. If the Company is a partnership, please list the names and home addresses, telephone and fax numbers of the general partners.

7. If the Company is a sole proprietorship, what is the name and home address, telephone and fax number of the owner of the Company?

8. When did the Company begin importing into the U.S.?

9. What are the principal products in the product line? Are there plans to import different products in the future? If so, please also list those additional products and when you expect to start importing them.

10. From what country or countries do you import? Are there plans to import from elsewhere in the future? If so, when and from where?

11. Does the Company have binding rulings from U.S. Customs for any of its products? If so, please provide copies of all such rulings.

12. Has the Company applied for/completed a Pre-Importation Review Program with Customs? If so, please provide copies of the results.

13. How many marking notices has the Company received from Customs in the last five years? Please provide copies of each and explain how each was resolved.

14. How many times, if at all, in the last five years has Customs seized the Company's goods? Please provide copies of the notices, petitions and all other documents which reflect the specifics of each case and its final outcome.

15. How many times in the last five years has Customs imposed penalties on the Company? Please provide copies of the notices, petitions and all other documents which reflect the specifics of each case and its final outcome.

16. Has the Company or any of its past or present officers, directors, employees or agents ever been the subject of a criminal prosecution by U.S. Customs or by any other governmental agency? If so, please provide copies of pertinent documents which reflect the specifics of each case and its final outcome.


17. In valuing its goods, does Company incur any of the following costs or services: [Please check only those which apply]

a. Buying or selling agents' commissions
b. Export packing costs not otherwise included in the cost of goods as invoiced
c. Royalties or licensing fees
d. Currency adjustments
e. Proceeds that it pays its suppliers but the cost is not included on the commercial invoice which is given to U.S. Customs at time of entry
f. Quota charges
g. Inspection fees
h. Quality control charges

If any of these costs or services are incurred by the Company and not already included as part of the price shown on the commercial invoice(s) given to U.S. Customs at time of entry, please explain in detail the nature of the cost or service incurred and how the Company pays for it.

18. Does the Company provide anything to its suppliers to assist in the making of its goods? For example, patterns, dies, molds, tooling, design work, software, machinery, product specifications or samples. This list of examples is not intended to be all inclusive. If so, please explain in detail the nature of the assistance and how the Company is paid, if at all, by the supplier for it.

19. Does the Company have any protests pending with Customs? If so, please provide examples of the issue(s) pending.

20. Does the Company have any cases pending regarding the import and/or export of its goods before the Court of International Trade, U.S. Court of Appeals for the Federal Circuit or the U.S. Supreme Court? If so, please provide examples of the issue(s) pending.

21. Who is the individual within the Company in charge of Customs issues? Please state his/her name, title and direct dial telephone number.

22. Does the Company have a separate department that deals with Customs issues? If so, what is it called?

23. Is the Company currently paying duty to Customs through the Automated Clearing House (ACH) procedure? If not, are you familiar with ACH? If applicable, please advise why you are not using it.

24. Is Company currently using the services of a Customs consultant? If so, please provide his/her name, firm name, address and telephone and fax numbers.

25. Is Company currently using the services of a Customs attorney? If so, please provide his/her name, firm name, address and telephone and fax numbers.

26. How often does Customs inspect Company’s goods?

27. Does Company import goods bearing its own trade name or logo. If so, please describe the trade name and/or logo or provide examples.

28. Does Company import goods which bear the trade name, logo, copyright, trademark and/or trade dress of a different Company. If so, please describe. Do you have written permission from the other Company to import goods bearing its mark(s)? If so, please provide copies of the pertinent approvals.

29. Has anyone from Company recently attended any training sessions or seminars offered by U.S. Customs? If so, please provide details.

30. Has anyone from Company recently attended any training sessions or seminars offered by trade organizations or other providers dealing with Customs and/or exporting issues? If so, please provide details.

31. What records does the Company maintain (for example, entry summaries, invoices, statements, correspondence, purchase orders, inventory receiving records, proof of payment to supplier(s), letters of credit, currency adjustment payments, accounts receivable, accounts payable; not an all inclusive list) which support its import entries? Please also describe the Company’s record retention policy and who should be contacted about record keeping.

32. Who is your current customs broker?

33. Who is your current freight forwarder?

34. How do you ship your goods - air? ocean? rail? truck?

35. Do you use consolidation services? If so - air? ocean? both?

36. Are you a member of a shippers association? Yes or No. If so, which association(s)?

37. Are you a signatory to an ocean service contract? Yes or No. If so, with which carrier(s)? Please provide a copy of your service contract(s).

38. Which air carriers transport the majority of your goods?

39. Which ocean carriers transport the majority of your goods?

40. Why are you interested in changing brokers?

41. Why are you interested in changing forwarders?

42. Do you expect us to provide credit terms? If so, what terms?

43. What firm(s) do you use to truck your cargo to destination once it arrives at its final port or airport?

44. What firm(s) do you use to rail your cargo to destination once it arrives at its final port or airport?

45. Does Company have insurance coverage for its cargo? If so, does it cover the cargo while it is en route or only once it arrives at your facility or the destination you direct?

46. Will Company require us to provide insurance coverage for its shipments? Yes or No. If so, what sort of coverage does Company require?

47. Do Company's products require any special license(s) in order to be exported (e.g. BXA, State)? If so, will Company handle the licensing formalities or will it expect us to do so? If you expect us to do so, please provide details about the license(s) involved.

48. Has Company or any of its vendors or buyers been the subject of enforcement action by any federal licensing agency? If so, please provide details.

49. Do Company's goods qualify as hazardous for air, ocean, truck or rail transportation purposes? If so, which mode and are any of Company’s personnel trained regarding hazardous cargo handling and/or documentation?

50. Does Company have any cargo security programs it generally employs for the shipment of its goods?

51. Do Company’s transactions involve negotiation of letters of credit? If so, will we be expected to negotiate letters of credit for Company? Yes or No. If so, with which banks does Company normally negotiate its letter(s) of credit?

SELECT FROM THE FOLLOWING PAGES
FOR ONLY THOSE GOODS WHICH COMPANY
IMPORTS OR EXPORTS

TEXTILE IMPORTATIONS

52. What records does Company maintain to show that the textile goods it imports are not manufactured with the use of child or prison labor? Please provide a complete list. Does Company have current photographs, videotape or similar video evidence in support of its position?

53. Has someone on Company’s behalf visited the factory/factories which manufacture Company’s goods? If so, when was the last visit during which Company’s representative inspected and checked about the factory's use of prison or child labor?

54. Does Company’s supplier own the quota used to authorize the importation of Company’s goods into the U.S.? If not, from whom is quota purchased?

55. Whether or not Company’s supplier owns the quota, has Company encountered any difficulty in obtaining quota for its goods? If so, please describe the circumstances and how often obtaining quota is a problem.

56. What, if any, enforcement inquiries (i.e. Notices to Redeliver, Visas) has Customs made about Company’s garments in the past? Please detail the nature of any inquiry and the date(s).

57. Has Customs made any inquiries about the classification of Company’s goods. For example, if you import t-shirts, is there a question of whether or not they qualify as t-shirts under the HTS? If you import jackets, has Customs looked at the garments to confirm they are jackets not coats?

58. Have there been situations where Company has imported goods with a counterfeit visa? If so, please describe the circumstances and the final outcome.

59. Have there been situations where Company imported goods with a valid visa but U.S. Customs demanded a new visa with a different category number? If so, please describe the circumstances and the final outcome.

ELECTRONICS IMPORTATIONS

60. Are any of Company’s imported goods subject to registration with the Federal Communications Commission (FCC)? If so, please identify which products.

61. For those imported goods subject to FCC jurisdiction, does Company have equipment authorizations? If not, please explain why. If so, please provide copies of all such authorizations.

62. If Company’s imported goods are subject to FCC jurisdiction but are claimed as exempt, please provide details and supporting documents for the exemption claim(s).

63. If Company imports components for electronic products, please identify those components and how they are marked with their country of origin.

64. If Company imports electronic products which are not finished, please identify those products and explain the steps taken to finish those products in the U.S.

65. If Company imports finished electronic products (e.g. monitors), please explain what procedures Company has to insure that these imported electronic products comply with the federal radiation control requirements enforced by FDA.

66. Has Company been subject to any government audit for radiation related issues? Yes or No. If yes, please provide examples of the issues involved.

67. Has Company been subject to any civil penalties resulting from noncompliance with the federal radiation control regulations? Yes or No. If yes, please provide examples of the issues involved.

NAFTA SHIPMENTS

68. Does Company import or export claiming NAFTA benefits? Yes or No. If yes, is importing or exporting done from Canada? Mexico? Both?

69. What products does Company import claiming NAFTA benefits?

70. Does Company source NAFTA products from related parties? unrelated parties? both? select whichever applies.

71. Does Company claim NAFTA benefits based upon tariff shift? regional value content? both? select whichever applies.

72. On attached sheets, if Company qualifies for NAFTA through tariff shift, please describe the products involved and how tariff shift is documented in Company's records.

73. On attached sheets, if Company qualifies for NAFTA through regional value content, please describe the products involved, whether Company relies on net cost or transaction value and how regional value content is documented in Company's records.

74. Who maintains the certificates of origin which support Company's NAFTA claims? Where are the originals maintained?

75. Does Company use blanket certificates of origin in supporting its NAFTA claims? If so, how often are these certificates updated?

76. How often, if at all, has Company been asked to submit its NAFTA Certificate(s) of Origin to the customs service of one of the NAFTA countries, please also indicate which country/countries?

77. Has Company been the subject of a NAFTA verification audit? If so, by which country? What were the results? If any of Company's products were disqualified from NAFTA, please indicate which ones and the reasons therefore; also please provide a copy of any NAFTA denial letters.

78. Have any of Company's vendors been the subject of a NAFTA verification audit? If so, by which country? What were the results? If any of Company's products were disqualified from NAFTA, please indicate which ones and the reasons therefore; also please provide a copy of any NAFTA denial letters.