Cross-Border Shipping: Navigating Differences of Mexican and U.S. Customs
Mexico and the United States share both a maritime border and a land border, but each has distinct laws and regulations, including unique customs compliance laws. Successful shipping into either of the countries starts by recognizing these differences and preparing for them.
What it Takes to be a Customs Broker in Each Country
Both Mexico and the U.S. require licensed customs brokers to handle the importation of goods. However, each country has a unique view about who can become a customs broker.
U.S. Customs Brokers
To become a licensed customs broker in the United States, an individual must meet certain criteria, including but not limited to:
● Be a citizen over the age of 21.
● Submit an application to U.S. Customs and Border Protection (CBP).
● Take and pass an exam.
● Satisfy the results of a background check.
Today, there are 14,000+ U.S. customs brokers according to the CBP, and they are not limited to a certain geographic region or point of entry. The CBP’s automated broker interface allows customs brokers to submit remote filings at any point of entry.
Mexican Customs Brokers
There are an estimated 800 active customs brokers in Mexico today. Traditionally, brokers passed licenses from one generation to the next. While this has started to change in recent years, there is still the expectation that a small group of individuals are responsible for all of Mexico’s imports and exports.
Unlike U.S. customs brokers, brokers in Mexico can only submit filings at up to four principal ports. Importers into Mexico that use multiple ports of entry may need to rely on several customs brokers to clear on their behalf.
Similarities in U.S. and Mexican Customs Brokers
On both sides of the border, licensed customs brokers specialize by commodity type.
Varying Ideas about Who is Responsible for Compliance
At every step of a shipment’s journey, someone is responsible for what happens to the freight. The same is true for clearing customs, but the United States and Mexico have slightly different views on the responsible party for this step. U.S. customs brokers cannot enter goods into Mexico and the same holds true for Mexico brokers being unable to submit entries for the United States.
Responsibility for Customs Compliance in the U.S.
In the United States, customs compliance is a shared responsibility. While customs brokers must conduct their due diligence on all U.S. entries, the importer of record (IOR) can also be liable for inaccuracies. Filing errors can mean penalties for both the IOR and broker.
Responsibility for Customs Compliance in Mexico
In Mexico, the accuracy of a customs entry falls solely on the customs broker. The government holds them liable for any errors or omissions. While they are private citizens, all licensed customs brokers in Mexico have a fiduciary responsibility to collect the correct amount of tax on imported goods. This is a considerable obligation for the Mexican brokers.
Penalties against Customs Brokers
Both countries penalize brokers for errors/omissions similarly. Whether in Mexico or the United States, grievous mistakes can cause a licensed customs broker to lose his or her license, be required to pay costly fines, or face jail time.
Requirements for IORs
Whether an individual or entity, an IOR must ensure that imported goods comply with the law.
U.S. Requirements for IORs
The U.S. government allows for foreign IORs. These are individuals or organizations without a presence in the United States that wish to import goods into the country. Often, a U.S. customs broker is necessary to secure an assigned IOR number and a customs bond.
When it comes to U.S. customs, every IOR—both domestic and foreign—must maintain a customs bond. The bond amount is generally 10% of the duties and taxes an IOR expects to pay for the year.
Mexican Requirements for IORs
Mexico’s government does not recognize foreign importers. An entity outside of Mexico looking to import goods into Mexico cannot hire a customs broker in Mexico and they cannot pay taxes on the shipment. Instead, they must work with registered Mexican companies or individuals to participate in international trade. This is Mexico’s way of more easily tracking down liable parties for noncompliance issues.
Customs Brokerage Isn't a Commodity
It’s a service. One that requires clear communication and continuous guidance as laws and regulations change. In both Mexico and the United States, a licensed customs broker that acts as an extension of an importer’s team and brings deep expertise is critical to faster, meaningful improvements.
Ben Bidwell is director of U.S. customs with C.H. Robinson, a third party logistics and supply chain management provider.
