How I got “GOT” by a Customs Broker – How to Avoid Such a Painful Experience

HOW  I GOT “GOT”

 

No matter how smart we think we are or how planned out we think everything is every now and again we get “GOT.” It just happens to the best of us. A part of life unpleasant yet unavoidable.

 

Its been seven years since I was last taken to the cleaners then being by the Wall Street Bankers fiasco of 2008 which was to say the least, HUGE. What it did to the Costa Rican market and any one involved in it, as we were, was pretty devastating to anyone trying to swim through that Tsunami. That one was monumental hence many of us are still licking our wounds and find it rather fresh in the memory even seven years later.

 

Even though I have written about how to watch out for Tico professionals or what I usually call the un-professionals and what they can do to “GET” you I thought by this time I was fairly immune. Wrong! This year I have had the displeasure of finding another category that can indeed dish out rather severe pain. To say the least my opinion of lawyers is not very good but even their lowly record in my books has been beaten hands down by a new addition to my list, Customs Brokers. The journey into this realm started out about eight years ago over a simple matter of bringing a Golden Retriever into the country by Michael’s ex-wife. It was small potatoes but the blatant Gringo rip off was not exactly hard to sniff out. Instead of the broker trying to make your life easier this jerk was doing everything to make it slower and more painful than what was even normal for Customs. Which is saying quite a bit since Customs is one of the biggest bureaucratic pains in the ass in most countries, Costa Rica certainly being no exception. This jerk went out of his way to make it as difficult as possible, fabricate as much BS paperwork as possible in order to try to justify and extract as high of a fee as possible. He had the fee racked up to over $500 prior to my intervention that was far from polite. It was sad to see how this predator was handling a new kid on the block in both process and language barrier of course which he was fully using to his advantage.

 

That was but the first example after which it has only gone from bad to worse with but one exception. Out of seven experiences there has been but one good one the rest going from poor to horrific being the latest one this article is all about.   All in all this 14% success rate is considerably worse than even my 35% rate with lawyers. To make this situation even more ridiculous is the fact that importing has steadily grown in importance to the success of our home building ventures. Worse yet everything we import is viewed as weird to Ticos which is of course why we are doing it in the first place. I sure as hell am not doing it because I want to learn the Customs game or enjoy battling with a group of anals.   Let’s just say that I already know way more than I ever wanted to know and what I do know only came about unwillingly and unwittingly. Three reasons we even started down this path are: what we demand to do a world class job usually is not considered of any importance or needed by typical importers, they want to charge an arm and a leg and living in a small country just is not a good environment in which to find specialty items.

If I could only count the number of times I have been at a supplier’s place asking for something I consider quite normal and /or logical and getting that deer in the headlights look of “What the hell is that and why would you ever want that?” It is a pretty frequent occurrence hence I learned long ago tis much easier just to go get it myself than to rely on others who may or may not get it in time and right and at a reasonable price.

 

The long and the short of it that makes this story up, is I had a 40 foot container of panels and MgO board from China that arrived in Costa Rica on Dec. 4, 2014. It came into my hands July 20, 2015.   I don’t even have nightmares that are remotely close to being this bad!!!!!!

 

The broker I had used on the previous container was efficient in delivering the container to us but refused to go after the warehouse that caused a large amount of damage from simply really bad/stupid handling. He refused to understand what the bonded part of bonded warehouse was all about therefore he went down the road. Hence I went off in search of another “better” solution and contacted my oldest Tico friend Oscar to hook me up with the broker he was using to import fish. Hence I thought I had my normally proven methods lined up to bring about better level of success. Oh how wrong I was!

 

First thing the new broker does, with absolutely zero input from me, is he misclassifies the panels as a natural product to get a 14% tax rate. Yeh right natural, even though I am remiss at ever remembering seeing a panel growing on a tree versus coming out of the tail end of a multi-million dollar manufacturing plant.   What Customs does to keep brokers honest in paying what they deem to be the right amount of taxes is they apply a 200% fine to the amount of taxes being evaded as a way to try to keep everyone honest. In our case that was roughly a $2,250 difference hence was carrying both the tax difference as well as a $4,500 penalty.   None of the above was I aware of or really cared to know, after all that was why a broker was hired in the first place, so I did not need to know or deal with this pain in the ass in the first place.

 

However so much for theory as this container should have left the bonded warehouse prior to Christmas yet nothing was happening at all. To further compound the situation a second container arrived on Dec. 17th, 2014. On Christmas Eve I have a brain fart as this whole situation was not smelling good at all so I went looking for the one and only logistics guy who had ever done this job efficiently, timely and at a fixed and known cost upfront. How I had found this was I had brought in materials (wire and electrical boxes) from Home Depot and a bunch of tools through a middle man. In the process of handling the pallets I had found out where the warehouse was and who was actually the brains behind it. In the ensuing period prior to this last year I had used two others that were never timely and NEVER had reasonable charges or even ones known upfront. I kept shaking my head saying to myself how the hell do you run a business like this. These were relatively small shipments of several hundred to just over a thousand dollars so nothing that was earth shattering but definitely all were in the pain in the ass category just the same.

 

I took this container situation to David and in a couple of hours he told me more than I really wanted to know including all the errors that had been committed and how this problem could have been avoided. However that is kind of like getting directions to how to find the condom machine while you are standing in the maternity ward. This is when I freaked when he told me about the fines and the processes to solve this and the wonderful fact that the agent had caused such a fuss with Aduanas (Customs) over all of this that the container was now elevated to the category of famous. Which means no way we could get the decision reversed nor could we buy our way out of this now that we were actually infamous.

 

From there the fool went about trying to prove our material was what it was not and sent half a panel to a lab who on April 20th basically told him you are screwed.   Customs is correct by the book as to the tax being 29% not 14%. This however is only the beginning of the trip into the land of incompetent, unconcerned and STUPID! David had told me the normal warehouse fee was about $250 a month hence I was not too concerned with that and felt is within the realm of reason. However after I get this good news I then ask, so what is the new bill and I get this total of $3,500 for taxes and a fine. I was a tad baffled as in my mind I did nothing wrong here so why the hell should I be paying a fine. Kind of like you get in a taxi that runs a red light and they give you the client the traffic ticket. At any rate I am getting hit with a $1,000 fine even though it is actually the agency that gets fined not the owner of the goods as it should be. However the agent is not exactly forthcoming with that info. Long and short of it I deposit payment for this bill on May 8th, 2015. Thinking of course well this should come to an end shortly as I was a month away from needing those panels to start building with. I also ask for the bill for the warehousing expecting it to be like $2,000 for the two containers.   I get the bill a few days later and discovered why the moron was not exactly forthcoming with the bills as I am getting royally raped and plundered by the warehouse he had selected.

 

Yes I am name calling which I think I have earned right, as you will soon see. Here we have been arguing with the government over a tax difference of $2,500 when the monthly warehouse charge is an astronomical $1,900. Remember this clown is the one who selected the warehouse so would it not there go that he knew what the charges actually were and might have been just a teeny tiny bit responsible to advise the owner of the goods that you can’t spend much time arguing with Customs with a bill like this each and every month. DAH! Don’t exactly need an MBA to figure out that as really bad math.

 

So this merry go round goes around and around with no panels forthcoming and only a conversation whinning about another $6,000 in fines being levied when I have already paid $1,000 more than I felt was my responsibility.   Constant phone calls, emails and texts with 90% of them ignored. Meanwhile the clock is ticking until the day soon coming that this gets critical, yet nothing happens. Hence I have to shut down the job and come back to San Jose/ Caldera to royally kick ass. I very quickly realized this agent was the problem not the solution. Worse yet I contacted four other agencies to see if anyone would help me but 3 ignored me and the 4th just said we don’t inherit the problems and liability with Customs over someone else’s errors. The only reason I even got the last one to talk to us was because my best friend Giancarlo knew the owner who ordered employees to talk to us. This is one of the largest brokers in the country but as is often the case biggest does not mean best and the agent we were handed to was useless and slower than the second coming at doing anything.

 

We had one meeting at Puntarenas with the problem broker and his father who assured us all would be settled the next day meanwhile blaming all the problems on bad Customs employees. Well nothing happened until 6 days later we went directly to Customs and found out absolutely nothing had transacted on the file since January when in essence this container had been black listed for being a bad boy. Meanwhile our job is shut down Ian and Corynne’s home cannot progress and my employees are out of work and I am left in the middle hemorrhaging.   I am not one happy camper in the first place but when I find out that seven weeks after I have paid this tax and fine this jackass has done absolutely nothing to get this container released. Even the government employees at Customs in Puntarenas are feeling sorry for me as 7 months to process a container is shall we say a tad unusual!!! I never did find a reason for this I can nail down so I can only surmise they had used my money for something else hence were purposely sabotaging the release of the container to buy time to replace those funds. Needless to say their bond was and is at risk for what happened.

 

Once we took control of the situation and pushed things through Customs as well as constantly hounding the broker’s father, who had taken over the case, Giancarlo got this document, the DUA (official record for each container/shipment), finally released on July 9th.  When at father’s brokerage office paying the last of their miscellaneous fees and getting our famous stamp on this DUA there was an amusing exchange.  He was trying to talk Giancarlo into letting them complete the transaction of the second container.  Just exactly how clueless does one have to be after this whole performance to think that I would ever give anyone a second change after this kind of monumental screw up, blatant errors and gross negligence in advancing any part of the process in a timely manner.   Seven months does not exactly cut the measure of timely!

 

From that point it was time to do battle with the thieving bodega this clown had put my containers in. Now during this period of their dicking around after I had paid the tax and fine they had racked up an additional almost $4,000 so our total bill was now at $12,500. All over a screw up of the broker that had caused a $2,500 tax hike.   Talk about stupid math. We then spent a week fighting with the warehouse to try to get them to come into reality however once your material is in their jail they appear to feel it is their god given right to rape a plunder whoever has the misfortune to use their services.

 

This last part of this trip into the land of insanity was to say the least greatly aided by David who got all of this out of the Four Seasons of warehouses, half of it moved up to Guanacaste and the balance moved onto a bonded warehouse near the airport that has a fee slightly less than 1/3 of what I was charged by these banditos. I still don’t get this but I smell that the agent was getting a cut of the excessive warehouse charges otherwise why would you leave a container in a warehouse with a known astronomical charge? David who handles over 5,000 containers a year stated he has never seen such a screwed up situation that had gone on for this length of time.

 

I am relatively calm now as compared to when I was in the eye of the storm but I cannot just forgive and forget this kind of behavior especially one that has easily cost our business $22,000. The only good news to this whole story other than obviously getting our containers out of the insane zone is that it forced me to go find David. He was not just a lifesaver but also demonstrated he knew what was going on and how to resolve but better yet avoid any such problems in the future. The other good news with him is he is a small business so I deal with him directly not an employee. I tried the alternative with the large broker who provided miserable results and that was with Giancarlo knowing the owner. Now even though he is small in employee numbers he does a pile of business so has the resources to back up his clients if and when a problem arises which is critical knowing what I know now. I saw this when I tried to find another agency to solve this to only get treated like a leper. Once a container has a problem with Customs no one else will come to your rescue as a rule. This took extremely bad luck to end up to my ass in alligators and yet extremely good luck to find a way out of the swamp without loosing vital parts. Had I left it up to the fools who created the problem I have no doubt that I would still be waiting for my material.

 

 

All in all one really ugly experience but as I said good results in the end by finding someone critical to our operation who is now in charge of all future imports where ever they are from. This disaster hurt a number of clients especially Ian and Corynne whose home was delayed but at least we will never have to repeat this most expensive and painful learning curve. Now we are working on several containers; roof tiles from Toronto, Insulation from Miami, equipment from Seattle and of course our China containers. They also bring in a near to weekly consolidated container from Miami that accepts all size of packages up to pallet orders. To say the least a critical link in our chain that will never allow the repeat of this disaster.

 

Regards,

 

Trevor

About Trevor

I have lived in Costa Rica for 14 years and have been active in real estate development over that period and construction in general. I am a qualified Journeyman carpenter and cabinetmaker from Canada. My current focus project is building custom green homes and housing packages all built out of Magnesium Oxide SIPs.

Comments

How I got “GOT” by a Customs Broker – How to Avoid Such a Painful Experience — 5 Comments

  1. Hello Trevor,
    Thanks for sharing this unfortunate information. I will admit that I find lawyers and realtors in Costa Rica scary, which is why I chose to have you build our new home, and not buying a home and possibly have issues which the lawyer failed to discover. We are looking forward to having you build our home sometime in 2016.
    Keep up the good work. John Newton

  2. So for those of us who are planning on moving to CR, can you share the contact info for this David fellow? Seems like he would be good to work with when bringing down stuff from our home to our new place in CR.

    • Tim,
      Yes there is no doubt anyone moving their personal belongings down to put in their new home could well face the same kind of challenges and most certainly you want someone at the top of their game when doing battle with Customs on used goods. At first blush I was not sure I wanted to put this out publicly but having thought about it after the huge life saver David was in finally resolving both containers I see no reason not to give out that information even to readers we may well never have anything to do with. David Gardella – PCA Logistica 6050-0625 gardella@pcalogistica

  3. Beginning my move to Costa Rica…read the article and would like to use Mr. Gardella”s services. Do you know if his firm has english speakers?

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