Proper Authorization Allows Unlicensed Freight Forwarder to Sign Customs Bonds, CBP Says
A freight forwarder with the proper authorization may sign a continuous customs bond, which CBP considers to be "customs business," for an importer, that agency said in a Sept. 26 ruling. The ruling request came from the Miami Field Office following a broker compliance audit that found a foreign importer to be using a continuous customs bond singed by its freight forwarder, CBP said in HQ H251059. Actions constituting "customs business" typically require a valid broker license and district permit.
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Shandong Longtai Fruits and Vegetables, a Chinese corporation, granted a customs power of attorney to RDD Freight International in 2011. An "attorney in fact" for RDD, Wilson Jin, subsequently signed a Customs Form 301 for Shandong and the CBP Miami Field Office sought input from headquarters on whether "signing a continuous customs bond on behalf of a foreign importer is considered customs business." While "in general, signing a customs bond constitutes customs business," there are exceptions to the rules, CBP said. CBP "has explained that customs business does not cover situations in which the person is explicitly allowed by statute or regulation to perform as an authorized agent," it said.
CBP's regulations specify that authorized agents can sign customs bonds on behalf of others, the agency said. "As Wilson Jin signed the bond as attorney in fact for RDD, and Shandong Longtai appointed RDD as its attorney in fact, the bond’s execution meets the requirements," CBP said.
CBP also explored whether Shandong properly conferred the POA to RDD because Shandong issued a similar POA to NCHB, a licensed customs broker. While past CBP rulings say a single POA should authorize one broker to act as an agent for customs business, Shandong "permissibly entered into two separate agency relationships with its customs broker, NCHB, and its freight forwarder, RDD," CBP said. In this case, "the concern that multiple brokers could conduct customs business on behalf of the importer principal does not exist," it said.
Shandong "has only entered into one agency relationship that enables an agent to conduct customs business on its behalf -- the relationship between Shandong Longtai and NCHB. Accordingly, the POAs issued by Shandong Longtai conform to the requirements of broker management and entry and the intent of those regulations." Still, "to the extent that Shandong Longtai authorized both RDD and NCHB through separate POAs to conduct non-customs business activities, per agency law principles, it is incumbent upon both agents to act in the principal’s best interests and use care when acting on the principal’s behalf," CBP said. "The constrictions of agency law require that RDD and NCHB act in such a manner to avoid overlapping activities that could result in Shandong Longtai’s detriment, e.g., filing multiple in-bond entries on the same transaction."