Thursday, August 03, 2006

Broker Exam Tips

Anyone conducting customs business on behalf of another person needs to have a customhouse brokers license. To get that license, the applicant has to pass a written exam and a background check. The exam has a notoriously low passing rate; but, there seem to be lots of reasons for that. The test is hard. Plus, I've heard a lot of people take it cold in the hope that they pass because the credential can lead to job advancement.

If you fail, you can take it again. If you fail and you are not the kind of person to admit defeat, you can sue the United States in the Court of International Trade. That is what Mr. Harak did. He challenged Customs and Border Protection's answers to nine of the questions.

Tip 1: Don't think too hard. These are not trick questions.

For example, the first disputed questions was:

8. What is the correct CLASSIFICATION for assembled multifunctional all-in-one office equipment consisting of a copier, facsimile, scanner, and laser printer--including a media transport, control and print mechanism--that is capable of no more than 20 black and white pages per minute?
A. 8471.60.51
B. 8471.60.52
C. 8471.60.62
D. 8471.60.61
E. 9008.40.00
The right anser is B. The only difficult thing here is knowing that a multifunction unit like this is a printer, not a fax machine, copier or other device. But, in the provided answers, Customs basically said so by limiting the realistic options to 8471.60. You know it is fully assembled, has a laser print engine, and can print no more than 20 pages per minute. That means it is 8471.60.52. It can't be .51 because it is too slow. It can't be .62 or .61 because the question says it is fully assembled and the "other" category including .62 and .61 is for unassembled units.

The plaintiff, apparently, knew too much. There is a court decision on multifunction machines that classified them in 8471.60.62. The problem for him is that the facts differ. In that case, which was Brother Int'l Corp. v. United States, the machines were unassembled. In apparent reliance on that decision, he argued for answer C, and lost.

By the way, 9008 is for optical projectors and is there just to take up space.

One more example will suffice.

15. Goods arrive at the port of Philadelphia and are entered temporarily into the U.S. under Chapter 98, Subchapter XIII of the Harmonized Tariff Schedule of the United States. Nine months later, the goods are in Los Angeles and the importer wants them to remain in the U.S. for four more months. What action should the importer take?
A. File a consumption entry
B. File a written application for an extension on Customs Form 3173 with the Commissioner of Customs
C. File a written application for an extension on Customs Form 3173 with the director of the port of Philadelphia
D. File a written application for an extension on Customs Form 3173 with the director of the port of Los Angeles
E. Do nothing, because a Temporary Importation Bond already covers the goods.
What you need to know here is that goods can remain in the U.S. under a temporary importation bond for a year. You also need to know that nine months plus four months is more than a year. That makes E the wrong answer. Since the importer apparently only wants the goods to be in the U.S. for four more months (one should not assume it is willing to accept a permanent importation), A is wrong.

So, the only real question is where does one submit the request for an extension? The answer is clear in 19 CFR 10.37. The Port Director at the port of entry may grant an extension. Thus, C is the right answer.

Plaintiff did not select C because the answer did not include a reference to certain exceptions from the extension regulation. But, nothing in the facts implicates the exceptions.

Again, the plaintiff thought to hard. The best answer is the one that fits the facts given in the question, not the assumptions one can make about them.

Tip 2: If you fail, don't sue the government. You will almost certainly lose.

The standards in these cases mean the deck is stacked against you getting your license this way. There are no facts in dispute in these cases, just the answers. If there were a fact question involved, Customs' determination would be upheld unless it is unsupported by substantial evidence on the record. With respect to the legal questions (which is what is really at issue here), Customs will win as long as its answer is not "arbitrary, capricious, an abuse of discrention, or otherwise not in accordance with law." For any lawyer, that is a tough row to hoe. For a pro se litigant (and these cases often are pro se), it is even tougher.

Tip 3: Study hard for the next test.

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