Customs Broker Examination key terms

A person licensed by U.S. Customs and Border Protection to transact customs business on behalf of others, including preparing and filing entry documents and paying duties owed on imported merchandise.

Activities involving transactions with CBP concerning the entry and admissibility of merchandise, its classification and valuation, and the payment of duties, taxes, or other charges assessed or collected by CBP.

An individual who has passed the broker licensing exam, met the regulatory requirements, and received a license from CBP to conduct customs business; the license is personal to the holder and may not be transferred.

A CBP-issued authorization allowing a licensed broker to conduct customs business at a specific customs port, separate from the national license itself and issued for the district where the broker maintains an office.

A written authorization from an importer granting a broker authority to act on the importer's behalf in customs matters; it must be executed and kept on file by the broker before transacting business.

A report a licensed broker must file with CBP every three years to confirm continued eligibility, current contact information, and compliance with licensing requirements; failure to file can result in license suspension or revocation.

The legal standard requiring importers and their brokers to exercise diligence in classifying, valuing, and documenting merchandise, using reliable information and exercising sound judgment rather than acting carelessly.

The party legally responsible for ensuring imported merchandise is entered correctly, that duties are paid, and that all entry requirements are met; typically the owner, purchaser, or a consignee with financial interest.

The U.S. tariff nomenclature assigning a classification number and duty rate to every imported good, organized by chapters, headings, and subheadings based on the international Harmonized System.

The six legally binding rules applied in sequence to determine the correct tariff classification of merchandise, moving from heading text and section notes to comparative provisions when goods are prima facie classifiable under multiple headings.

The process of assigning imported merchandise to the correct subheading of the tariff schedule, which determines the applicable duty rate, eligibility for trade programs, and statistical reporting obligations.

The factor used under GRI 3(b) to classify goods put up in sets for retail sale, determined by the nature of the component, its bulk, quantity, weight, or value, or its role relative to the others.

The primary customs valuation method, equal to the price actually paid or payable for the merchandise when sold for export to the United States, plus certain statutory additions such as packing costs and selling commissions.

The value of imported merchandise determined under the valuation statute, used as the base for calculating ad valorem duties and for statistical purposes; it is not necessarily the invoice price alone.

Items supplied free or at reduced cost by the buyer to the seller for use in producing the imported merchandise, such as materials, tools, dies, molds, or engineering services, which must be added to the price paid or payable.

A payment related to the imported merchandise that the buyer must pay as a condition of sale, which is added to transaction value; royalties unrelated to the goods or not a condition of sale are excluded.

The formal process of presenting imported merchandise to CBP for clearance, consisting of documentation, estimated duties, and evidence of admissibility, after which CBP releases or examines the goods.

The document filed after entry that provides the classification, value, duty computation, and other required data for merchandise, and on which duties are deposited; generally due within ten working days of release.

A seller's document describing the merchandise, its price, terms of sale, and parties, which serves as the primary basis for valuation and must contain the data elements required by CBP regulations.

A financial guarantee filed with CBP ensuring payment of duties, taxes, and penalties and compliance with customs laws; continuous and single-transaction bonds are the two main forms.

CBP's final determination of the duties owed on an entry, typically occurring 314 days after entry; it fixes the amount owed and starts the clock for protest rights.

A formal administrative challenge filed by an importer or broker contesting CBP's decision on classification, valuation, duty rate, or liquidation; it must generally be filed within 180 days of liquidation.

The percentage or specific amount applied to the customs value of imported merchandise under its tariff classification, which may be ad valorem, specific, or compound depending on the provision.

A threshold under which low-value shipments may enter free of duty and with reduced formalities; under U.S. law, the current threshold for eligible shipments is 800 dollars per person per day.

A statutory provision allowing duty-free admission of shipments valued at or below the de minimis threshold, subject to conditions on the shipper, consignee, and documentation.

A treaty between countries eliminating or reducing tariffs and other barriers on goods meeting agreed origin rules; importers must claim preferential treatment and support it with documentation such as a certification of origin.

The criteria in a trade agreement or statute determining whether a good qualifies as originating in a party country, often based on tariff shift, regional value content, or specific production processes.

A document or certification attesting that goods meet the origin requirements of a trade preference program, which the importer must possess and retain to support a preference claim.

A reduced or zero duty rate granted to qualifying goods under a trade agreement or special program, which must be claimed at entry and can be denied if origin is unsupported.

A designated site within the United States where merchandise may be admitted, stored, manipulated, or manufactured without formal customs entry or duty payment until it enters the domestic commerce.

A refund of duties, taxes, or fees paid on imported merchandise that is later exported or destroyed, or on substituted merchandise, intended to promote U.S. exports and competitiveness.

A voluntary written report to CBP of a violation of customs law, such as an incorrect entry, made before CBP begins an investigation; it can reduce or eliminate penalties if done properly.

A monetary or other sanction imposed for violating customs laws, such as negligence or fraud in entry filings, with amounts varying by statute and degree of culpability.

CBP's taking custody of merchandise for violation of law, such as prohibited goods or undeclared currency; it may lead to forfeiture, return, or other disposition after administrative proceedings.

A written decision by CBP on the classification, valuation, or other treatment of specific merchandise, which binds CBP for the described transactions and can be requested in advance of importation.

An additional duty imposed on imported merchandise sold in the United States below fair value, intended to offset the injury to domestic industry; it is separate from normal tariff duties.

An additional duty imposed to offset foreign government subsidies that benefit imported merchandise, determined through administrative proceedings and collected in addition to ordinary customs duties.

An authorization allowing a licensed broker to conduct customs business at all ports nationwide rather than only at the port where the broker is permitted, subject to CBP requirements.