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.


Comments

Post a Comment

Popular posts from this blog

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl
Read more

Ninestar and UFLPA Exhaustion

Image
Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance topic. So, let's
Read more

Precious Tritium

Image
One thing I have learned as a customs lawyer who does a lot of classification work is that there are millions of odd items moving in international trade the existence of which I am completely ignorant. Such is the case of the gaseous tritium light sources used in, among other things, firearm sights. These things use tritium sealed in a glass that has been coated in phosphor. The radioactive tritium decays, releasing beta particles, which interact with the phosphor causing it to emit light. In other words, it creates light with no external power source. Pretty cool.  Tritium is, of course, a real thing. It is an isotope of hydrogen. We know this from the excellent documentary "Spider-Man." This comes up in relation to the Court of International Trade decision in Trijicon, Inc. v. United States  in which the importer challenged the tariff classification of several versions of the gaseous tritium light sources ("GTLS"). The plaintiff uses them to make gun sights. The
Read more