1. 7. CUSTOMS HOUSE AGENT PLAYS A VITAL ROLE IN IMPORT- DISCUSS IN DETAIL
A Custom’s House Agent, or CHA, is hired by a company to act on the company’s behalf in
importing and/or exporting goods. This releases the company from having to tangle with the often
stringent and complicated laws of importing and exporting.
The CHA is given legal authority to make decisions regarding the company’s goods that go through
customs. Although a company is not required to hire a CHA, this person is helpful in dealing with the
customs process
CHA is an individual or firm licensed to enter and clear goods through Customs.
The services rendered by the custom house agent are not merely limited to the clearing of the import
and export consignment. The CHA also renders the service of loading/unloading of import or
export goods from/at the premises of the exporter/importer, the packing, weighment,
measurement of the export goods, the transportation of the export goods to the customs
station or the import goods from the custom station to the importers premises, carrying out
of various statutory and other formalities such as payment of expenses on account of octroi,
terminal handling, fumigation, drawback/DEEC processing, survey /amendment fees, dock
fees, repairing and examination charges, landing and container charges, statutory labor
charges, testing fees, drug control formalities, sorting /marking/stamping/sealing on behalf
of the exporter/ importer. The custom house agent incur various other expenses such as crane/fork
lift charges, taxi charges, Photostat and fax charges, bank collection charges, courier service charges,
and miscellaneous other expenses on account of the importer /exporter. For all the above charges, the
CHA is ordinarily reimbursed by the importer/ exporter for whom the above services are rendered.

2. Apart from the above charges, the CHA also charges the client for his services under the head
/nomenclature of “agency and attendance charges “ or similar kind of heads which is purported to be
his service charge in respect of the services rendered in relation to the import/export goods.
The Custom House Agents (CHA) plays a very important role in the logistics procedure. The main
responsibilities of the CHA are:
1) Get the Essential Certificate (EC) from the DGH for the tools which are brought without duty
under the contract.
2) They are responsible for the inspections of tools when they land in the Indian Territory and get
the formalities of custom clearance done in defined time.
3) They are responsible for getting the EC cleared when the use of the tools brought under EC is
over and send them back. Hence, CHA commands a very important position and relationship
with them must be handled in a proper manner because:
1) They have the power to blackmail and demand for bribery.
2) If they don’t do their task well and the time limit for custom clearance gets overshoot
then the company will have to pay the demurrage Thus, the contract signed with them must be
very clear; specifying clearly the responsibility of each side at each stage so there is no scope of
ambiguity or any loop hole on which they can leverage. The logistic department of Weatherford
takes care of all these things. They follow the following procedure for selecting the CHA.
1) As required by the QHSSE department, the CHA are made to fill the
questionnaire as shown in the Appendix F. This questionnaire basically consists of 5 forms
C1-C5. C1-C3forms are filled by the CHA persons and C4-C5 forms are required to be filled by
the company. As per the FCPA rule of US, these agents have to go through the Due Diligence
test. As they are the sub-contractor of the company and represents the companies in front
of government bodies like PSU, DGH.

3. 2) They are also made to go through On-Line training, which makes them aware about the
rules against corruption, bribery, the rules and legal procedures to which they need to abide
by.
3) The company has contract with 3 CHA agents. This is because, if they have only one CHA,
than the CHA will have an upper hand and will try to practice their monopoly. Hence to
avoid this, the company has contracts with 3 CHA, which are selected by undergoing the
above procedure.
4) The company floats the tender for the bid from these 3 CHA, the one having the lowest
price wins. However, L1 is not the criteria always. At times, they also take into
consideration the proficiency of a particular CHA in the given situation for awarding the
contract.