CBP Proposes Information Collection Requirement on Customs Brokers
On August 12, 2019, the U.S. Customs and Border Protection (CBP) published in the Federal Register a notice of proposed rulemaking (NPRM) that would amend CBP regulations to require customs brokers to collect certain information from importers to enable the customs brokers to verify the identity of importers. This would include nonresident importers. CBP proposed these amendments pursuant to section 116 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). This Act directs CBP to promulgate regulations to require customs brokers to verify the identity of the importers who are their customers. All public comments must be received by October 15, 2019.
Customs brokers serve many functions when acting on behalf of their clients, which include resident and nonresident importers. Customs brokers file information about their clients’ merchandise and transactions with CBP. Customs brokers also track shipments, pay duties and fees to CBP, and keep current documents and records about the business they conduct on behalf of their clients. However, before a customs brokers may transact customs business on behalf of a client, the customs broker must obtain a valid power of attorney (POA).
A valid POA requires the principal to provide only limited information, including:
- A statement from the principal authorizing the customs broker to act as the principal’s agent and for the customs broker to file entry/entry summary in the principal’s name for a shipment.
- The name of the individual or the authorized representative of the sole proprietorship, partnership, or corporation executing the POA.
- The name and address of the individual or business on whose behalf the POA is being executed.
While only a limited amount of information is required for a valid POA, most customs brokers currently require additional information when a POA is obtained from an importer, which is used by the broker to verify the importer’s existence and identity. Customs brokers require this additional information and have initiated processes and procedures to validate an importer’s identity in order to protect the customs broker’s business interests, reduce identity theft, and help to prevent the use of shell or shelf companies to further a business fraud scheme. Additional information that a customs broker might request includes, but is not limited to, the registration of the importer’s business with a state government and the Articles of Incorporation under which that business is formed.
Under this NPRM, CBP is proposing to require a customs broker to collect at a minimum, the following information from the client, if applicable:
- The clients name;
- For a client who is an individual, the clients date of birth;
- For a client that is a partnership, corporation, or association, the grantor’s date of birth;
- For a client that is a partnership, corporation, or association, the client’s trade or fictitious names;
- The address of the client’s physical location (for a client that is a partnership, corporation, or association, the physical location would be the client’s headquarters) and telephone number;
- The client’s email address and business website;
- A copy of the grantor’s unexpired government-issued photo identification;
- The client’s Internal Revenue Service (IRS) number, employer identification number (EIN), or importer of record (IOR) number;
- The client’s publicly available business identification number (e.g., Data Universal Numbering System (DUNS) number, etc.);
- A recent credit report;
- A copy of the client’s business registration and license with state authorities; and
- The grantor’s authorization to execute power of attorney on behalf of client.
TIA’s International Logistics Conference will examine these proposed requirements and decide if TIA should take an active role in this rulemaking or not. If you have any questions, please contact firstname.lastname@example.org or 703.299.5700).