Customs Law Advisory - US Customs Warns Against Unlicensed Persons Conducting “Customs Business”

US Customs Warns Against Unlicensed Persons Conducting “Customs Business”
Earlier this month, US Customs and Border Protection (“CBP”) issued a warning regarding persons conducting “customs business” without a proper license.  The warning focused on unlawful use of a customs broker’s license by an unlicensed person or unlicensed corporation and recounted the $10,000 penalty that may apply to each violation.  CBP’s warning is a useful reminder to importing businesses that centralize customs compliance responsibilities in a single person or office.  The Customs Regulations explicitly permit related companies to adopt such centralization.  However, employees of one company or business entity may not conduct any “customs business” on behalf of another company or business entity, including any document preparation or filing at CBP.

Under the Regulations, “customs business” generally means activities and paperwork preparation involving actual transactions with CBP concerning the entry and admissibility of merchandise, its classification and valuation and the payment of any duties, taxes, or other charges.  US law generally restricts the right to conduct "customs business" on behalf of another company to licensed customs brokers.  However, the Regulations also explain that "corporate compliance activity" is not "customs business" and therefore is not subject to the licensing requirements.  The Regulations define "corporate compliance activity" as assistance “to ensure that documents for a related entity or entities are prepared and filed with CBP using 'reasonable care', but such activity does not extend to the actual preparation or filing” of the documents.

In the past, CBP has described certain situations in which a corporate compliance employee generally should not act on behalf of another company that is not his or her actual employer.  Examples include responding to Customs Form 28 Requests for Information or Customs Form 29 Notices of Action and preparing or filing Post Entry Amendments, Supplementary Information Letters, documents relating to compliance audits or assessments and/or certificates of origin.

In general, a centralized customs compliance employee can and should provide guidance and assistance to related companies in making their own decisions regarding their "reasonable care" responsibilities under US customs law.  Customs compliance employees may assist in gathering and organizing data that will be used by the actual company at issue in a filing or transaction with CBP.  However, the recent warning notice is a useful reminder that communication with CBP by a company or business entity should generally be made by an officer or employee of that company, or by a licensed customs broker or attorney on behalf of that company or business entity.

If you have any questions regarding your US Customs compliance procedures, please contact Greg McCue  at 202-429-6421.