What Is a Customs Broker and What Are Their Functions?

If you're just starting out in the Importers Registry, you'll quickly realize the overwhelming amount of information, regulations, and procedures involved. For someone new to the field, it can be intimidating to navigate such a complex system. However, there are ways to make your transition into this new world of customs easier—one of them is by working with a customs broker.

Every professional field is complex and requires a trained expert with extensive knowledge to streamline processes and achieve the best possible outcomes.

What Is a Customs Broker in Mexico?

According to Mexico’s Customs Law, Article 159, a customs broker is defined as:

"An individual authorized by the Tax Administration Service (SAT), through a license, to promote the clearance of goods on behalf of third parties under the different customs regimes established by this law."

In simple terms, a customs broker is a licensed individual who specializes in managing customs procedures. They are highly knowledgeable about the required steps and regulations since, by law, they must have at least five years of experience in the field.

One crucial factor for a customs broker to perform their job is obtaining certifications and permits, known as a Patente (license), which legally authorizes them to represent third parties before Mexico’s Tax Administration Service (SAT). This license is similar to a professional certification, allowing them to operate independently.

Currently, there are approximately 814 licensed customs brokers operating through customs agencies in Mexico.

Because customs brokers are backed by customs agencies, they are a great solution for individuals or businesses looking to import or export goods. Their experience and expertise help expedite the entire customs process by ensuring compliance with regulations and streamlining the necessary administrative procedures.

With the support of a customs broker, businesses can efficiently and safely engage in international trade, allowing new companies to expand globally with confidence and speed.

What Are Their Functions?

A customs broker's primary role is to advise clients on legal procedures based on their specific needs. However, their duties go beyond simple guidance.

Their skills and responsibilities vary depending on the client's unique requirements, but some of their key functions include managing the following tasks and documentation:

Value Declaration

This document is a sworn statement provided to tax authorities, declaring the true monetary value of the traded goods, including quantities and operational costs related to importation or exportation.

Customs Entry (Pedimento Aduanal)

This document contains detailed information about the imported or exported goods, validating their legal status and the identity of the importer. It helps determine:

• The type and origin of the goods
• The type of operation
• Compliance with current regulations

Tariff Classification

This process involves classifying goods to determine applicable taxes, policies, obligations, and rights.

Customs Regime

This refers to the final destination of the goods abroad. The applicable legal procedures are determined based on the regulations of the destination country.

Certificates of Origin

This document is crucial for international trade, as it certifies the country of manufacture of the goods. It allows businesses to obtain approval and benefit from preferential tariffs.

Additionally, a customs broker must ensure that the importer's information is accurate and up to date throughout the process. This is especially important in case of a customs inspection—if the customs traffic light system triggers a red light, having everything in order will help expedite inspections and approvals, avoiding issues such as a Preventive Administrative Procedure (PAMA).

Differences Between a Customs Broker and a Customs Manager

Deciding between hiring a Customs Broker or a Customs Manager isn't always easy. However, based on our years of experience in Mexican imports, we recommend choosing a service that ensures a smooth import process with minimal risks.

Here are the main differences between the two:

Customs Brokers in Mexico in 2024

There are currently more than 900 customs brokers in Mexico. The Confederation of Customs Brokers Associations of the Mexican Republic (CAAAREM) represents over 800 customs brokers through 38 Customs Brokers Associations.

New Customs Brokers in 2024

On November 22, 2023, the National Customs Agency of Mexico (ANAM) opened a call for applications to obtain a customs broker license. The registration window was initially open for only two days, closing on November 23 at 11:59 PM.

Due to high demand, the registration period was extended until 6:00 AM on November 24, 2023.

This initiative is part of the Mexican government’s plan to issue new customs broker licenses in 2024—something that hadn't been done since 1997. ANAM reopened the registration process for a very limited time, and 430 applicants initially registered in hopes of becoming customs brokers.

This process is crucial to maintaining the efficiency and transparency of the country’s customs operations.

Advantages and Disadvantages of a Customs Broker

Advantages

• Legal Expertise – They are highly trained in customs law and international trade.
• Regulatory Compliance – They ensure all operations comply with the latest customs regulations.
• Efficiency – Their knowledge speeds up import and export processes, reducing delays.
• Risk Reduction – They minimize the chances of customs infractions and penalties.

Disadvantages

• Cost – Hiring a customs broker can represent an additional expense for businesses.
• Dependency – Companies that fully rely on brokers may lack in-house expertise in customs procedures.

Customs Brokers: Experts in Trade Tax Compliance

To summarize: A customs broker is a licensed legal representative, but they are also experts in handling customs procedures. Through customs agencies, businesses can hire their services to simplify the import and export process.

Their main responsibilities include providing legal guidance and managing customs paperwork, requiring attention to detail, knowledge, and experience. By working with a customs broker, businesses can expedite procedures, reduce errors, and significantly streamline international trade operations.

If you're interested in expanding into international trade, keep in mind that 90% of import/export operations in Mexico are handled through customs brokers. Partnering with a customs broker and their affiliated agency could be a great opportunity for you!