Thursday, March 5, 2009

The Customs Broker Examination, CH 3, Part 1: Acquiring Source Materials

The following is an excerpt of The Customs Broker Examination, by Scott Warren Taylor and Andrew Moxon. This book is a part of the Customs Broker Exam Preparation Course from Boskage Commerce Publications. We'll be posting a large excerpt here, with new posts every Tuesday and Thursday morning. Click here if you want to read the whole book right away.

Chapter 3: Methods of Study

Part 1: Acquiring Source Materials

Developing an Overview
This book is written for students who have a singular interest in research of Title 19 CFR, Chapter I, Parts 0-199, otherwise known as the CBP Regulations (often referred to as the “Regulations”, or “19 CFR”) and the Harmonized Tariff Schedule of the United States (HTSUS) for the purpose of passing the Customs Brokers Examination (CBE). Preparation for the CBE should not be confused with the task of mastering the law and putting it into practice in the field of international trade. The latter effort involves different knowledge, different skills, and a different – perhaps never-ending – period of development. Having the necessary knowledge and skill to pass the test is not the same as having the necessary knowledge and skill to serve as a licensed customs broker.

Nor are the skills that help you excel in the field of customs brokerage necessarily the same ones that will help you pass the examination. While actual experience is helpful, the key to success is a thorough knowledge of the regulations.

The information in this chapter will help you begin your study of the resource materials required to pass; it will help you modify resource materials; it will help you design a study plan that is right for you; and it will help you execute your study plan with confidence. It is just as crucial for the experienced student to follow the techniques presented in this course as it is for the inexperienced student who has no knowledge of the field.

Acquiring Source Materials
The goal is to achieve a score of 75 percent or greater on the CBE. To do this requires understanding, memorization, and familiarity with the examination resources. The most crucial publications are the CBP Regulations and the Harmonized Tariff of the United States (HTSUS), but by no means are they the only resources available for use while studying for the CBE. The first step in the process is to develop a list of the resources required, and then obtain the information itself.

The CBE is based upon a handful of trade and tariff acts from which the CBP Regulations and the HTSUS are written. Obtaining the acts themselves can be helpful, but is not necessary. The Regulations and the HTSUS (along with certain selected directives from CBP) contain all the requisite information, and the official Notice of Examination will list all required resources for each examination.

It is important to remember that to be effective, your study will be systematic and disciplined. The basic principles of preparation are presented here. You should follow those principles to achieve your goal, modifying them to fit your own time requirements and ability. Hopefully, you will not deviate far from the principles themselves. First, acquire all resource information material, and then, using the information provided here, dissect the resource material and eliminate unnecessary sections. For example, certain parts of the CBP Regulations are rarely tested and will not need to be studied in depth.

Before beginning this course, you should obtain your own editions of the HTSUS and the CBP Regulations. Make sure you use the correct editions specified in the Notice of Examination – incorrect editions could result in your not being able to find the correct answers. Do not use an office copy that must be returned each day or someone else’s copy that cannot be modified. You will be referring to the editions constantly as you study. The copies you use to prepare for the CBE should be yours and yours only. In the course of your studies you will mark the pages, make notations, summaries, and cross-references as you study and re-study their contents. Many students index and rearrange them for the sake of convenience; but to be successful, you must become as familiar with them as possible and using the same edition from beginning to end can help.

Government editions are preferable to privately published editions. The quickest way to obtain a copy and to make certain that updates and revisions are received in a timely manner, and that you are advised when new editions are available, is to contact:

Government Subscriptions:
Boskage Commerce Publications Ltd
P.O. Box 337
Allegan, MI 49010
(888) 880-4088
(269) 673-7242
FAX (269) 673-5901

19 CFR, Parts 0-199
19 CFR is the most studied text for preparation and the most referred to after your license has been obtained. It is the section of United States Regulations that specifically addresses the regulations under enforcement by CBP. A codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government, the Code of Federal Regulations is divided into Titles that represent broad areas subject to Federal regulation. Each Title is divided into chapters that usually bear the name of the issuing agency. You will be studying from the first chapter of Title 19.

Each title is further subdivided into Parts covering specific regulation areas. 19 CFR is published in two versions. The first is in two paperback volumes and not updated. It is published annually, although the release date varies from summer to late fall. The second edition is looseleaf, unbound, 8-1/2 x 11", and drilled for inclusion in a standard three-ring notebook.

Although there are advantages to both editions (e.g., the bound edition is more compact and easy to carry), the looseleaf subscription edition is preferable because it is not only easier to handle during your course of study – larger format and capable of lying flat, – it also is purchased as a “subscription,” insuring that as 19 CFR is updated and revised as a result of the various agencies and legislative bodies of the government, the updated supplements or changes are sent to the holder of the subscription and are the surest method of remaining current.

The looseleaf edition of 19 CFR also allows tabbing and reorganization of the text. Most students find it preferable to move more essential Parts of the Regulations to the front where they can be found quickly, for instance.

The only way to update the paperback edition is through the Federal Register. But if the purchaser of the single, bound copy of 19 CFR does not subscribe to the Federal Register to receive changes in the Regulations, the edition quickly becomes outdated.

Source Material Note: Historically, only Chapter I of 19 CFR (covering parts 1-199) has been used as a source material for the CBE. Recently, however, Customs and Border Protection has announced that a number of other source documents will be used as potential sources for CBE questions.

Currently, selected sections of the CATAIR (user instructions for the Automated Broker Interface), the revised instructions for the new form CBP 7501 and several other selected directives may be tested on the Customs Broker Exam. However, for each examination, the only authoritative resource list will be found in the official Notice of Examination.

Obviously, the minor sources are very specific in scope. All should be studied in case a question on their respective subjects should arise, at which point the student should easily be able to research the correct answer.

Maintained by the USITC, the HTSUS is published pursuant to the 1988 Omnibus Trade and Competitiveness Act of 1988 and is the product-by-product listing of all the rates of duty for goods entering the U.S., as well as the source for statistical nomenclature for reporting statistical information required on importation documentation. The HTSUS also contains certain rules governing such specific duty treatments as the Generalized System of Preferences(GSP), the Automotive Products Trade Act, the North American Free Trade Agreement (NAFTA), the Caribbean Basin Economic Recovery Act (CBERA), the US-Israel Trade Agreement, the US-Australia Trade Agreement, and the Andean Trade Preference Act (ATPA).

The HTSUS is in a constant state of change, continually revised, updated, corrected, and supplemented throughout the year to document changes in (or as a result of) tariff rate revisions, changes in product descriptions, quotas, Presidential Proclamations and legislative activities.

Like 19 CFR, the HTSUS can be purchased as a subscription, giving the subscription holder the most current edition available. Updates and supplements are sent to the address of the subscription holder as they are published.

This concludes today's excerpt from The Customs Broker Examination.

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