Customs
The Role of Customs
Customs is a term that is frequently used by travelers and traders alike. It’s a ubiquitous term when it comes to discussing the U.S. border and any international entry port. But what exactly do people mean when they refer to customs? At Scarbrough, we recognize the complexities of navigating customs regulations. And with numerous Licensed Customs Brokers across North America, we are committed to providing the clarity and support you need to succeed in the global marketplace.
U.S. Customs & Border Protection (CBP) has many roles, but at its core it is in place to protect the country’s borders and revenue. As a group, they handle everything from counterterrorism to travel, trade and revenue. However, their top three fields of focus are border security, trade, and travel. The border security and travel oversight portions are relatively straightforward - CBP patrols all borders and points of entry into the country, protecting against illegal travelers and goods that attempt to enter our country.
The trade side of their business, as we know, can be a little more complex. CBP’s role in trade has multiple layers to it. CBP not only facilitates the entry and clearance of imports into the U.S. but also ensures that goods entering the country are ethically sourced and free of involvement with any illicit activity throughout the supply chain. On top of that, they are responsible for collecting all relevant duties and tariffs on imported goods.
A History of Customs
Customs in the United States traces all the way back to the late 1700s. With the country facing massive debt from the Revolutionary War and rising costs associated with running a new and growing government, Alexander Hamilton advocated for the need for a federal agency focused on collecting revenue for the nation. Thus, the first customs agency in our country’s history was born. Back then it was called the U.S. Customs Service, and it was originally created to collect duties and taxes on imported goods and protect the revenue of the country. Unlike its current state, the original U.S. Customs Service served under the Treasury Department. The money the service collected in its early years helped pay for land purchases and expansions that shaped the nation we know today.
Over the years, the responsibilities of customs officials continued to grow as our country and economy have grown. Since Customs has always been located at the borders, it was only natural that it would take on job duties related to imports, immigration, and other border security measures. Over the years, this growth led to the formation of new agencies that sprouted off the Customs Service, such as immigrations inspectors under the Office of the Superintendent in 1891 and the formation of the Border Patrol under the Immigration Bureau in 1924.
U.S. Customs and Border Protection (CBP), as we know it today, wasn’t established until 2003. Following the terror attacks of 9/11, the U.S. government worked to revamp the country’s border protection and anti-terrorism protocols. As part of this effort, on March 1, 2003, the U.S. Customs Service merged with the U.S. Border Patrol, Federal Emergency Management Agency, the Transportation Security Administration, the Coast Guard, and the Secret Service to create what is now known as CBP, which operates as part of the Department of Homeland Security.
Differences in Different Countries
While the general process of clearing customs is similar across the globe, each country has its own unique regulations and procedures. Much of the uniformity comes from international organizations like the World Customs Organization (WCO) that help facilitate trade through overarching guidelines and best practices. With more than 180 members, the WCO helps govern most of the world’s trading practices. The WCO oversees things like the Harmonized System (HS), which establishes a uniform naming system to classify goods and facilitate trade.
However, rules & regulations can vary from country to country, sometimes very significantly. What is legal to enter into one country could be illegal in the next. Situations like this highlight the importance of having a customs broker who can help you understand the different rules and remain compliant with each country’s regulations. On top of that, regulations are liable to change at any minute. It is a broker’s job to monitor these changes across multiple countries, ensuring they provide the most up-to-date guidance to their customers.
For example, one of the major differences between the U.S. and Mexico relates to the liability for imported goods and paperwork when working with a customs broker. In both countries the broker handles all paperwork and submits declarations of the goods to the appropriate border authority. However, in the U.S., the liability for any mistakes or issues still falls on the importer. In Mexico, the broker takes on the liability for these matters instead of the importer. Due in part to this difference, customs brokers are responsible for physically checking any shipments before they cross into Mexico. When importing into the U.S., brokers generally don’t inspect goods before the clear customs.
Canada, meanwhile, has a brand-new system of record for imports. In late 2024, the Canada Border Services Agency (CBSA) officially unveiled the CBSA Assessment & Revenue Management (CARM) system. CARM was a multi-year project designed to streamline the duty payment and collection process in Canada. It digitizes the process and provides importers with a personalized dashboard to access all relevant documents. New changes are continuing to come out as CBSA works to make the system more efficient, including new financial guidelines.
The European Union also has its own guidelines governed by the EU Customs Union. The union creates a single trading area where goods can travel freely among all members of the union without duties or tariffs. Anything entering the union from outside the EU may be subject to duties upon entering, but once inside the EU there are no further restrictions.
Common Mistakes Scarbrough Sees When Working with Customs
As a Licensed Customs Broker in Mexico, Canada, and the United States, Scarbrough has a wealth of experience dealing with imports and exports across North America. We understand how complex the system can be, especially for someone who isn’t overly familiar with or confident with the process. Mistakes happen every day, but they can be costly or time-consuming when trying to clear a shipment. Below, our experts highlight some of the most common mistakes businesses make when importing or exporting across North America—and how to avoid them.