International Trade Law News

An unusual criminal case involving a customs broker illustrates the need for U.S. importers to be vigilant in exercising oversight over the activity of their customs brokers.

Earlier this week a New York-based customs broker was sentenced to 24 months in prison, three years of supervised release and ordered to pay nearly $1.2 million in restitution for defrauding an importer of medical equipment by submitting false customs documents that indicated that the importer owed customs duties on goods that were actually duty free.

According to the Justice Department, the customs broker, who had served as the importer's broker since 1980, continued to invoice the importer for customs duties over a seven year period even though the U.S. duty rate had decreased on  imported medical equipment from 5.5% to duty free.

To show that the invoices were legitimate, the customs broker sent the importer falsified customs forms that indicated the amount of duty owed on the medical equipment. As a result, the importer reimbursed the customs broker for duties that the broker never paid, in amounts ranging from $1,000 to $9,000 per customs entry. By the time the importer discovered the problem seven years later the broker had defrauded the importer out of almost $1.2 million.

Under U.S. law, a conviction of a customs broker of a crime involving the importation of merchandise or arising out of the conduct of customs business is grounds for revocation of a customs broker license. As a result, assuming that this case is not overturned on appeal, the defendant's customs broker's license will be revoked by U.S. Customs and Border Protection.

While this type of activity by a customs broker is extremely rare (customs brokers must undergo an extensive background check before they receive their broker's license), this situation could have been easily avoided had the importer audited the customs entries to verify that the amount of duties and fees shown on the invoices and documents provided by the broker was consistent with the applicable duty rate shown on the Harmonized Tariff Schedule of the United States.

Labels: CBP; Marking, Customs, Customs Brokers

Because we have received so many search requests looking for the answers to the October 6, 2008 Customs Broker Examination, exam takers should be aware that legal publisher Boskage has published a preliminary and unofficial list of possible answers and related regulations where the answers were found. As you will see from the various comments posted there are already several questions that appear to be problematic and therefore ripe for protest.

The page containing the answers and comments can be found here. Good luck!

Labels: Customs Brokers

U.S. Customs and Border Protection (CBP) has announced that the next Customs Broker License Examination will be held on Monday, October 6, 2008.

All exam applications and exam fees ($200) must be received and accepted by CBP at the service port where the applicant intends to take the examination on or before the close of business on Friday, September 5, 2008 to be considered.

To obtain a copy of the examination application form, click on the form number CBP 3124E (CBP Form 3124E - Application for Customs Broker License Exam ) or contact your local service port.

Labels: CBP, Customs Brokers

U.S. Customs and Border Protection (CBP) has posted the results of the April 7, 2008 Customs Broker License Examination. The examination and answer key are posted below:

• April 2008 Examination

• April 2008 Answer Key

According to reports, the April 2008 examination had a pass rate of 20.5%, which is unusually high. CBP is expected to send the results to the exam takers this week.

Anyone who took the examination and did not achieve a passing score may appeal questions on that examination. Any appeal must be submitted within 60 days of the date of the letter notifying the applicant of his or her score. Instructions for submitting an appeal can be found here.

Labels: Customs Brokers

U.S. Customs and Border Protection (CBP) has announced that the next Customs Broker License Examination will be held on Monday, April 7, 2008. The exam application and fee must be submitted to CBP by March 7, 2008.

Labels: Customs Brokers

U.S. Customs and Border Protection (CBP) has announced that it will hold a free conference in Atlanta, GA (ACE Exchange VII) from October 15-17, 2007 where importers and other persons involved in importing activities can learn about the current and future functionality of the Automated Commercial Environment (ACE).

ACE Functionality Available Now Includes:

• National View of Company’s Transactions
• Paying Duties and Fees on a Monthly Statement
• Reporting Tool with Transactional, Financial and Compliance Data Mandatory Submission of Electronic Manifest for Trucks

New ACE Capabilities Include:

• Creating CBP Form 5106 Online (Importer Identification Number Information)
• Participation of Other Government Agencies (OGAs)
  
• Ability for Brokers, Cartmen, Lightermen and Facility Operators to meet CBP Regulatory Requirements

The program will also include a session on upcoming changes to the Customs and Trade Automated Interface Requirements (CATAIR) and how customs brokers should prepare for these changes to the Automated Broker Interface.

More information on ACE Exchange VII, including the agenda and registration information, can be found at the following link.

Labels: ACE, Customs Brokers

U.S. Customs and Border Protection (CBP) has announced that the next Customs Broker License Examination will be conducted on on October 1, 2007. Applications to take the exam must be received by CBP by August 31, 2007. Further details on the Customs Broker License Examination, including the application form and relevant reference materials, can be found here.

Let's hope that CBP issues the results of the October exam faster than they did with the April 2, 2007 exam. As previously reported, CBP announced in early May that the exam results would be delayed "due to extenuating circumstances" and finally issued the results in mid-June. CBP never disclosed the reason for the delay.

Labels: Customs Brokers