Choosing a customs broker: what to check before you sign the authorisation

Key points

• The authorisation you sign decides who carries the customs debt, and you only notice that years later on an audit.
• Always ask which authorisations the provider holds actively, because AEO and fiscal representation are two separate things.
• A low price per declaration says little while the surcharges for corrections, inspections and urgency are still off the table.
• Response speed is a cost line: a container standing still runs up demurrage and detention.
• Check whether the broker tests the commodity code or simply copies it off your supplier.

Most importers pick their customs broker on two things: the price per declaration and how fast somebody answers the phone. Both are relevant, and both tell you very little about the moment it actually becomes about money.

That moment usually arrives two years later, when customs announces an audit over a run of declarations. What surfaces then is whatever sat in the authorisation you once signed in five minutes. Whose name is on the declaration as declarant, who set the commodity code, and who kept the supporting evidence.

These are the six things we would ask about ourselves.

What does a customs broker actually do for you?

He files the declaration with customs and gets the shipment released. In practice that means setting the commodity code, establishing the customs value, checking the authorisations and certificates, submitting the declaration, and responding when an inspection or a correction request comes in.

The role and its legal basis are set out at more length in our piece on what a customs broker is. What counts here is the difference between providers who only press the button and providers who test the data before they do.

You will not see that difference in the quote. You see it in the questions they ask you before the first shipment runs.

Which authorisations should you check?

Ask which authorisations the provider holds actively, and ask per authorisation. They get lumped together while they sit with different authorities.

• AEO, with customs, giving lower guarantees and fewer physical inspections
• fiscal representation, with the tax administration, for the VAT side
• a comprehensive guarantee, needed for warehousing and for customs transit
• a customs warehouse authorisation, if you want to store goods without importing them

An AEO certified broker hands you a benefit you do not have to earn yourself. And watch the distinction that causes the most surprises: a broker does not automatically handle your VAT. What that separate role covers is set out in our piece on fiscal representation.

Direct or indirect representation?

This is the most important question on the whole list and it is almost never asked.

Under direct representation the declaration is in your name. You are the declarant and you carry the customs debt. Under indirect representation the declaration is in the broker’s name, he is the debtor and you are jointly liable. The full explanation sits in our article on direct and indirect representation.

Our advice to European importers is nearly always direct representation. You then do not pay for a risk you already carry, and you build a customs history of your own that counts if you later apply for an authorisation yourself. So ask explicitly which form is used, and have it recorded per form rather than as an open mandate covering everything.

What does the price tell you, and what does it not?

A rate per declaration is a starting point, not a total. Push on what comes on top of it:

• a surcharge per extra item line above a set number
• charges when a document check or a physical inspection happens
• the rate for a correction or a supplementary declaration afterwards
• the out of hours rate, and what counts as urgent
• whether fronting the duty and VAT is charged separately

A sharp price per declaration with expensive corrections can work out dearer than a higher base rate at a provider who has to correct less often. That is not a sales line but arithmetic: ask for the correction rate over the past twelve months.

How fast should a broker respond?

Fast enough that your container does not stand still. That sounds vague, so make it concrete: agree a maximum response time on a message from customs and on a question from you, and agree what happens outside office hours.

The bill for standing still is easy to work out. Carriers charge per container per day once the free days are gone, and the daily rate climbs the longer it runs. What demurrage and detention are and how fast they mount up is set out in that piece.

What we see in practice is that delay rarely sits with customs. Usually a document is missing that could have been requested a fortnight earlier.

Five questions to ask before you sign

• Which form of representation do you declare in, and does the authorisation say so?
• Which authorisations do you hold actively, and may I see the numbers?
• Who sets the commodity code, and who keeps the evidence behind it?
• What are the surcharges for corrections, inspections and urgency?
• What happens if customs announces an audit in two years?

That last question is the sharpest. A provider with a concrete answer has been through it. A provider who goes vague has probably never had to defend the declarations.

Frequently asked questions

Q: What does a customs broker cost on average?

Ans: It depends on the number of item lines, the complexity and the volume, and an average tells you little. Ask for the base rate plus every surcharge for corrections, inspections and urgency, and run that against your own shipment profile from last year.

Q: Can I declare myself instead of using a broker?

Ans: You may, but you need an EORI number, a connection to the customs declaration systems and real knowledge of classification and valuation. For companies with a handful of shipments a year those costs rarely weigh up against outsourcing.

Q: Does my broker have to be AEO certified?

Ans: It is not compulsory, but it saves on guarantees and on the odds of a physical inspection. What matters more is that the certification is genuinely active and that you can verify it yourself. A logo on a website is not evidence.

Q: Can I switch to a different broker?

Ans: Yes. You withdraw the old authorisation and sign a new one. Do request your declaration history before you leave, because you need it for an audit covering earlier years and the old provider is not obliged to keep it forever.

Q: Who is liable when the broker makes a mistake?

Ans: That depends on the form of representation. Under direct representation you are the declarant and therefore the debtor, although the broker can become a co-debtor where he knew or should have known the data were incorrect. Under indirect representation he is the debtor himself and you are jointly liable.

Want to know how your declarations stand right now, or what your current authorisation actually records? We read it from the declaration data and tell you honestly whether there is anything to improve. After that we take over the customs handling, AEO certified and with a direct connection to Dutch Customs and Portbase.