However, those applying for a broker’s license as a corporation, partnership, or association do not take an examination. Their applications are forwarded by the Collector to the Supervising Customs Agent, who conducts an investigation and then makes a report and recommendation. The agents verify the correctness of the statements made in the applications and the qualifications of the person or persons who will actually handle the customs business. The government requires that each broker keep current records reflecting his financial transactions as a broker, and these records must be available for government inspection at any time.
The Customs Service has no part in fixing the fees charged by customs brokers for their services. However, if a complaint is made against an individual broker or a brokerage house, then the complaint is investigated by Customs Service agents and if the fees charged by the broker are found to be excessive or “unconscionable,” then action is taken by the Service to correct the situation. In cases where investigation discloses irregularities, the Secretary of the Treasury has the authority to suspend or revoke the license of a broker. Such action is taken, however, only after a quasi-judicial hearing in which the accused broker has the right of cross-examining witnesses. If the decision goes against him, then the broker may, if he wishes, appeal his case to a U.S. Circuit Court of Appeals.
The broker plays a prominent role as the middle man in the import-export business, but this does not mean that an importer must necessarily seek the services of a broker in bringing merchandise into the country. Under the law, any citizen may act as his own agent in clearing his own imports through Customs and no license is required.
* * * * *
One of the ancient devices to aid the importer is known as the “drawback” privilege. “Drawback” is a word which is found in customs language through the centuries, and it is another word for “refund.”
In brief, the drawback works in this fashion: an importer brings merchandise into the United States to be used in the manufacture of certain articles. At the time of importation, he pays the normal duty. After the articles are manufactured, they are exported to another country. It is then that the manufacturer is entitled to a refund on that part of the imports which he shipped back out of the country.
The drawback plays an important part in the manufacturing operations of all nations. It enables manufacturers to meet competition in the export market. For example, an automobile manufacturer in the United States imports a large amount of steel to be used in the manufacturing of his automobiles. Ten per cent of this steel is used in cars which are shipped overseas. Thus the manufacturer is entitled to a drawback or refund of 10 per cent of the duties he paid on the imported steel.
Congress has liberalized the drawback provisions so that a manufacturer does not necessarily have to use the imported materials in his exports in order to qualify for a refund of duties. An automobile manufacturer may export automobiles made entirely of domestic steel. But if the steel he used in the exports is of “the same kind and quality” as the imported steel, then he is allowed to obtain a refund on that quantity of steel used in the exported automobiles.
Virtually every manufacturer who is in the export business takes advantage of this drawback material, and its value to the manufacturing industry in the United States is realized when it is noted that the refunds paid in recent years have been running about $9 million annually.
Oddly enough, there are some American manufacturers who do not even know that they have the privilege of a duty refund. They have been importing materials for years, paying duties, and then exporting the finished products without making any claim for a refund of duties on the materials shipped back overseas. One midwestern manufacturer in recent years discovered that he had paid the government in excess of $1,500,000 in duties—and he was entitled to a refund of the entire amount.