Customs Broker Examination flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Customs broker license

A license issued by the port director authorizing a person to transact customs business for others for compensation, after passing the broker exam and a background check.

Broker exam passing score

The written customs broker exam requires a score of at least 75 percent to pass; it is administered by CBP and covers classification, valuation, entry, and regulations.

National permit

A permit issued by the port director where the broker keeps records, allowing the broker to transact customs business at all ports; additional port permits are required for other locations.

Triennial report

A report brokers must file with the port director every three years updating license and permit data; failure to file can lead to suspension or revocation proceedings.

Broker record retention

Brokers must keep records for five years from the date of entry or record creation, whichever is later, and make them available to CBP upon request.

Power of attorney

A written authorization a broker must obtain from a client before transacting customs business; the POA must be retained and available for CBP inspection.

GRI 3(a)

The General Rule of Interpretation providing that when goods are classifiable under two or more headings, the heading providing the most specific description prevails over more general headings.

Transaction value

The price actually paid or payable for goods sold for export to the U.S., plus packing, selling commissions, assists, royalties related to the goods, and proceeds of resale.

Assists

Goods or services supplied free or at reduced cost by the buyer to the producer, such as materials, tools, dies, molds, and engineering/design work done outside the U.S.; added to transaction value.

Deductive value

A secondary valuation method based on the resale price of the imported goods in the U.S., minus commissions, profits, transportation, and other expenses; used after identical and similar merchandise values.

HTSUS structure

The tariff schedule organized into Sections, Chapters, four-digit Headings, six-digit Subheadings (internationally harmonized), and eight- to ten-digit statistical suffixes.

Royalties dutiability

Royalties and license fees are dutiable if related to the imported merchandise and a condition of sale for export to the U.S.; post-importation U.S. activities are excluded.

Section 321 de minimis

Shipments valued at $800 or less per person per day are duty-free and may enter without formal entry; used for low-value e-commerce imports.

Entry filing deadline

Formal entry must be filed within 15 calendar days of the date of arrival of the importing vessel or aircraft; entry summary follows within 10 working days.

Importer of record

The owner or purchaser of imported merchandise, or a licensed customs broker acting under power of attorney; a non-resident IOR must appoint a resident agent for service of process.

Immediate delivery

A procedure using CBP Form 3461 allowing release of perishable or time-sensitive goods before entry summary is filed; entry summary must follow within 10 working days.

Immediate transportation

A procedure using CBP Form 7512 that moves goods in bond from the port of arrival to another port for entry; the bond must cover value plus duties.

ISF 10+2

The Importer Security Filing must be filed 24 hours before cargo is loaded on a vessel destined for the U.S.; vessel stow plans and container status messages are carrier obligations.

Merchandise Processing Fee

A fee of 0.3464% of entered value with annual minimum and maximum caps; it does not apply to informal entries under $2,500 or certain goods.

Harbor Maintenance Fee

A fee of 0.125% of commercial cargo value for vessel imports; it does not apply to air, rail, or truck imports.

Protest

A formal challenge filed on CBP Form 19 within 180 days of liquidation or the protested decision; CBP has 30 days to review and may deny or allow it.

Liquidation

The final computation of duties on an entry, normally within 314 days of entry; notice is posted and the importer has 180 days to protest.

Post-summary correction

A filing made within 300 days of entry summary to correct errors in the entry and avoid penalties; used for voluntary corrections of classification, value, or origin.

Drawback

A refund of up to 99% of duties, taxes, and fees paid on imported merchandise that is later exported or destroyed; claims must be filed within 5 years of importation.

USMCA certificate of origin

A document certifying goods meet USMCA rules of origin; it need not be filed with CBP but must be in the importer's possession and retained for 5 years.

USMCA de minimis

Goods with less than 10% non-originating content by value may still qualify as originating under USMCA for most goods; textiles and apparel follow different rules.

Section 301 tariffs

Additional duties imposed on Chinese-origin goods under specified HTSUS subheadings; exclusions may apply and must be claimed by the importer.

Section 232 tariffs

National security-based duties (e.g., steel 25%, aluminum 10%); quota or tariff-rate quota alternatives may apply and exclusions require BIS approval.

First sale rule

Allows the importer to use the price paid in an earlier bona fide sale for export to the U.S. as transaction value if the sale is arm's-length and goods are clearly destined for export.

Section 592 penalties

Civil penalties for false statements: negligence - lesser of 2× lost revenue or 20% of dutiable value; gross negligence - lesser of 4× lost revenue or 40%; fraud - domestic value.

Prior disclosure

A written disclosure of a violation made before CBP begins an investigation; limits penalties to interest on lost duties (fraud) or the duties themselves (negligence/gross negligence).

Reasonable care

The standard requiring importers to ensure entry documents are accurate and complete; it is a key defense against negligence penalties under Section 592.