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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 117375
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I'm doing a trading agency in NY and hope to ask you a

Customer Question

I'm doing a trading agency in NY and hope to ask you a question to set up a new transaction.
"A" is a company in Korea and making business with a US customer("B"). A is manufacturing the goods out of USA and ship to B. And, B requires A to do the orders with LDP price terms which means A should arrange the customs clearance and the domestic transportation after the shipped goods are arrived at US until the goods are delivered to B's warehouse in US.
However, A doesn't have any capability/facility in US to arrange/manage customs clearance and the local transportion to deliver the goods in USA, A is now asking me to handle this on behalf of A - after the goods are arrived at US port, make customs under my company's name and arrange the local trucking to deliver the cargo to the B's warehouse.
Then, B will pay me, and I just need to deduct the actual costs - customs dury and all the costs for the local delivery(trucking charge, etc) and my commission, and just wire the balance amount to A.
Now..what is confusing this case,
1.May this kind of transaction be set up as "trading agency"?
2.What number should I report for the sales value? - 1)the whole amount I receive from B? or, 2) the difference of B's payment and the wired amount to A (= paid customs duty + trucking cost + my commission) or, 3) just my commission only?
Thanks for your kind attention and hope to get an advice from you soon. with warm regards, Kenneth.
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

You would have to set yourself up as a customs broker, since that is the function you are serving as. You are conducting import business, so you would be a customs broker. As far as the sales value, the amount would be the total value of the sale, you would receive commissions off of the total sales value. The income of your business would be what you receive after paying A and paying duty/trucking fees, so it would be only your commissions.