What is Customs Broker?
A customs broker is a person or company authorised by a customs administration to transact customs business on behalf of others: preparing and filing entries, classifying and valuing goods, paying duties and handling post-entry matters such as corrections and protests. In the US, 19 U.S.C. 1641 prohibits conducting customs business for another party without a broker's licence, and 19 CFR Part 111 sets the rules on licensing, responsible supervision, recordkeeping and conduct. Individuals qualify by passing the Customs Broker License Exam, companies need at least one licensed officer, and since 19 December 2022 brokers operate under a single national permit instead of district permits. The EU has no single broker licence; a customs representative acts either in direct representation, in the client's name, or in indirect representation, in its own name and jointly liable for the import customs debt. Many forwarders hold broker licences or work with partner brokers to offer door-to-door service.
Why it matters for forwarders
The broker carries legal exposure that forwarders often underestimate: it signs the declaration and can be penalised for failures of responsible supervision even when the faulty data came from the client. US brokers must keep entry records for at least 5 years and, under the 2024 rule, complete 36 continuing education credits per triennial period, reduced to 20 for the first period ending 31 January 2027. Typical errors are misclassification, incomplete valuation (missing assists or royalties), wrong country of origin and overlooked partner agency requirements, which lead to penalties, additional duty bills after liquidation and held shipments. Obtain a valid power of attorney before filing and send complete commercial invoices, packing lists and product data before arrival so the entry can be filed early. In the EU, acting as indirect representative increases the forwarder's own liability for duty and should be priced and secured accordingly.