Anybody familiar with the import/export racket?

[forindooruseonly]

Hey everyone, I'm trying to import a few things and have run into a problem with arranging to clear customs; I'm hoping someone can give some advice. The stuff isn't for resale, it's for private ownership.

Apparently I need a single-entry bond to ensure the duties/fees are paid because the value is over a nominal amount, and it seems like a racket of the worst sort. The duty rate is about 3%, which is fine because I expected that. My issue is that the bond required is about 4.5% of total value of the goods and is non-refundable - there is no drawback once customs is cleared, it's just sheer profit for the surety companies. I've spoke to a number of brokers and they claim that is just the way it is.

Needless to say, I'm pretty appalled by the practice. Is this normal? Can I negotiate the bonds, or is it always done through the broker that I am using to clear customs? Is there anyone you recommend as a broker even?

I'm disgusted that for 300 dollars worth of duties I'm paying an additional 450 to an insurance company for the privilege, plus the fees of the brokers and all the rest of the nonsense.

 

[Muss Muggins]

I'll go first. I know nothing of which you speak, but I'm gonna comment anyway. It seems to me like this situation is ripe for an escrow account. You put the $300 in the exporter's escrow account, the stuff comes in, you pay $300 to Customs, the shipper credits you $300 on your bill for the escrow money, maybe minus a small fee. You don't pay customs, the exporter pays your $300, charges you a larger fee for having to pay the duty, your stuff gets released from Customs.

Problem solved . . .

 

[glenwolde]

They are required if the goods are arriving by sea or air. You're stuck with it. Why?

It's just not possible to get duties paid at the moment of importation. Goods are received into a bonded warehouse and the transaction proceeds from there. Somebody's got to pay for the receiving, the warehouse, paying the duties and arranging final shipping.

It's not like it's practical for you to show up at the dock with cash to pay your duties and escort them through customs. Foreign trade would grind to a giant screeching halt.

 

[forindooruseonly]

I didn't say just showing up on the docks, I get the need for brokerages and duties and arranging all of it, including some type of method to pay duties quickly.

What annoys me is that I think the bond does not go towards the duties. It would be fine if I was paying a surety a 4.5% bond, and then they pay the 3% duty and they keep the 1.5% as a service fee. But, as I understand it, I'm paying a 4.5% bond to guarantee the duties if they aren't paid, and am still required to pay the 3% duty. Then, after it's cleared, the surety just gets to keep the 4.5% for the insurance?

I could be wrong, which is why I asked, but it seems like racket to me.

 

[Trooperdan]

I'm waiting to hear expert advice on this, it certainly does not make sense nor seem legal.

 

[skipnsb]

I don't know the answer. Posting cash bond in Florida civil courts works like Mr. Muggins suggested, once you get past the clerk's "I've never seen $90,000" remark. Then they hit you with a "cash handling fee". I would expect there to be a process like that for imports but I would also expect its hard to find, and whoever is holding the escrow will probably want as much for their trouble as the surety fee. I too am interested in knowing if there is a legal work around. Maybe there is a surety that, by holding your cash, would give you a break since their risk is 0, my guess is that if you were a big player you get breaks, but for $450, probably not.

 

[oddshooter]

I lost a bet to a buddy and had to go through an English liquor distributor to get his Kentucky bourbon, Blanton's Gold. There was none in the US for sale.
I think I paid 5 different export/import fees, VAR, and taxes. Also like you, handling and shipping problems.

You want to dance, you pay the piper.


Prescut

 

[Old TexMex]

CBP licenses customs brokers. It’s a business, and brokers are protected by the U.S. government. If your broker is genuine, he isn’t going to risk the penalties that come with violating his trust. Other words, brokers charge what the market will bear, and the customer pays it.

Can you think of anything else the government authorizes that involves an organization being paid more than you think is fair....at your expense?

That said, no customs broker is going to go for an escrow account such as Muss suggested (makes too much sense and not enough money).

Like Ships Pilots, even if the Captain of the ship is perfectly familiar with the port, a pilot still has to be on the bridge, and the ship must pay him, ‘cause the government and underwriters say so.

 

[BC38]

Is it something that can be shipped through UPS? From what I understand they run one of the biggest and most efficient customs brokerages in the country. Not sure what their fees are, but it seems likely they would be less than the (combined) 7.5% you're describing.
Just a thought.

 

[CAJUNLAWYER]

I know a guy that can get it in without bothering with customs......

 

[old bear]

I know a guy that can get it in without bothering with customs......

But, what are the chances of the "goods" being delivered to the man who payed for them?

 

[CAJUNLAWYER]

But, what are the chances of the "goods" being delivered to the man who payed for them?

Meh.............

 

[Hugh WW]

First time importer?

May we assume you are a first time importer? Single entry bonds are normal for first time importers. You did not mention the country of origin of the goods. UPS to my knowledge is the largest customs house brokerage in the U.S. At least they were prior to my retirement. It seems like the new guy, trying to go it alone, gets the worst deal! Most brokerages all charge about the same, its a very competitive business. This is probably not what anyone wants to hear, but Customs law and the import business can get real complicated.

 

[ditrina]

I know a guy that can get it in without bothering with customs......

YOU TOO??

 

[challer61]

It's the way it is. You can try without a customs broker but you'll be at if for a very long time. Done it both ways. The 4.5% will seem small soon enough.

 

[THE PILGRIM]

A few ago I did a squirrelly deal with some folks.
Got 80 Black Powder Rifles which were in a Bonded Warehouse in VA.
I guess they must have already been Customs Cleared.
The uncleared payment was the warehouse charges and the shipping to Albuquerque.
I paid that.