Bankruptcy Bill to Benefit Customs Brokers and Sureties Introduced in House
On January 8, 2009, Representative Cuellar (D) introduced the Customs Business Fairness Act of 2009 (Act, H.R. 313) to amend the U.S. bankruptcy law (Title 11, U.S. Code) to establish a priority for the payment of certain claims for import duties, etc. paid to the U.S. by licensed Customs brokers and sureties on behalf of a debtor.
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H.R. 313 would add an eleventh type of claim (which would also be eleventh in order of priority under 11 USC Section 507(a))1 covering allowed unsecured claims of Customs brokers and sureties for duties, taxes, or other charges paid to U.S. Customs and Border Protection on behalf of the debtor arising out of the importation of merchandise entered for consumption within one year before the date of the filing of a petition.
The addition of this eleventh type of claim would be effective on the date of enactment and would only apply to bankruptcy cases commenced under Title 11 on or after the date of enactment of the Act.
Sources have previously stated that although 19 CFR 141.1(c) states that a Customs broker is entitled to assume CBP's priority status under 11 USC 507(a)(7) for duties paid on behalf of an importer that files for bankruptcy protection to the extent that the broker pays such duties, bankruptcy courts frequently have refused to recognize CBP's authority to assign its priority status to brokers under this regulation.
111 USC Section 507(a) establishes the order of priority for the payment of ten types of expenses and claims under the U.S. bankruptcy law.
H.R. 313 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h313ih.txt.pdf.
BP Notes
The Customs Business Fairness Act was previously introduced in the 107th, 108th, and 109th Congresses, but was never enacted into law.
One trade source opined that the chances for passage of H.R. 313 in the current Congress are more favorable than in previous Congresses as this Congress is likely to examine changes to the bankruptcy laws.