19 U.S.C. § 1641 — Customs brokers
submitted 96 years ago by ch. 497 to r/title-19-CUSTOMS-DUTIES · 3,276 words · no verdicts yet
This section regulates customs brokers. It covers licenses, permits, supervision, prohibited conduct, discipline, appeals, recordkeeping, periodic reports, fees, and importer-identity checks.
(a) Definitions. “Customs broker” means a person licensed by the Secretary under subsection (b). “Customs business” means work with U.S. Customs and Border Protection about merchandise entry and admissibility, classification, value, duties, taxes, charges, refunds, rebates, drawbacks, and preparing or electronically filing related documents; it does not include merely forwarding data received for transmission. “Secretary” means the Treasury Secretary. (b) Licenses. (1) No person may conduct customs business for another without a valid license. (2) The Secretary may license an individual only if the individual is a United States citizen. The applicant may have to show good character and qualification, and may be examined on customs law, related laws and procedures, bookkeeping, accounting, and other appropriate subjects. (3) A corporation, association, or partnership organized under United States State law may be licensed if at least one officer or partner has an individual license. (4) A broker must responsibly supervise and control its customs business. (5) If a corporate, association, or partnership licensee lacks a properly licensed officer or partner for 120 continuous days, its license automatically ends, in addition to other sanctions. (6) Intentionally conducting customs business for another without a license creates a penalty to the United States of up to $10,000 for each transaction and each other violation, assessed under subsection (d)(2)(A). (c) Permits. (1) Each licensee receives, under regulations, a national permit, a district permit for each district where it works and regularly employs a licensed individual, or both. (2) The Secretary may waive the district employee requirement if the broker regularly employs a licensed individual in the region and has sufficient procedures for supervision in the district. (3) A permit ends automatically if the broker lacks a licensed individual in the district or applicable region for 180 continuous days, in addition to other sanctions. (4) After the specified automation program is implemented, a licensed broker may appoint another licensed broker with a district permit as a subagent for electronically permitted filings. The appointing broker remains liable for bonds, duties, taxes, fees, and all other legal liabilities and may not delegate them. (d) Discipline. (1) Except for the specified infractions, the Secretary may impose a monetary penalty or revoke or suspend a license or permit if the broker submitted a materially false or misleading statement or omitted a required material fact; was convicted after applying of a felony or misdemeanor involving import or export, customs business, or the listed dishonesty offenses; violated a Customs-enforced law or rule; knowingly helped another’s violation; knowingly employed a person convicted of a felony without written approval; intentionally deceived, misled, or threatened a client to defraud; or was convicted of terrorism or conspiracy to commit it under 18 U.S.C. 2332b. (2)(A) Unless paragraph (B) applies, a customs officer must give written notice to show cause against a penalty of up to $30,000 total, describe the allegations, and allow 30 days for a written response. The officer must consider the response and issue a written decision. The broker may seek remission or mitigation under section 1618; after that proceeding the officer must give the final determination and factual and legal findings. (B) For good and sufficient reason, Customs may give written notice to show cause against suspension or revocation, state the grounds, and allow 30 days to respond. If no response is filed or the sanction remains warranted, Customs must notify the broker of a hearing within 30 days, or later for a good-cause extension. An administrative law judge conducts it. If the hearing is waived or the broker does not appear, the judge decides from the record. At the hearing the broker may have counsel; testimony is under oath and both sides may cross-examine. A transcript must be made and given to Customs and the broker, who may file a post-hearing brief. The judge sends the record, findings, and recommendations to the Secretary. The Secretary decides in writing from the record and may impose the noticed sanction or a lesser authorized sanction, including a penalty up to $30,000. (3) The Secretary may settle or compromise a disciplinary proceeding on agreed terms, including replacing a proposed suspension or revocation with a penalty. (4) A proceeding must begin by written notice within five years after the violation, except that for fraud the period begins when the fraud is discovered. (e) Judicial appeal. (1) A broker, applicant, or directly affected person may petition the Court of International Trade within 60 days to change or set aside a decision denying, revoking, or suspending a license or permit, or imposing a penalty under subsection (d)(2)(B). The clerk sends the petition to the Secretary. In suspension, revocation, or substitute-penalty cases, the Secretary files the decision record. (2) The court will not consider an objection not raised before the hearing officer unless there was a reasonable reason for not raising it. (3) Supported factual findings are conclusive. (4) If material additional evidence could not reasonably have been presented earlier, the court may order it taken before the hearing officer. The Secretary may change the findings and must file new or changed findings, which are conclusive if supported, with any recommendation about the original decision. (5) Filing the appeal stays the decision unless the court orders otherwise, but not a license or permit denial. (6) If no timely appeal is filed, the decision is final and conclusive. An unpaid penalty imposed under (d)(2)(B) after 60 days automatically suspends the license until paid. (f) Regulations. The Secretary may issue needed rules about brokers, licensing, permits, books, accounts, records, documents, correspondence, and information supplied to Customs, to protect importers and United States revenue and enforce this section. The rules may not forbid brokers from limiting their liability to others. Required records may be stored on microfilm, optical disc, magnetic media, video files, or another electronic medium and converted after the transaction, with centralized retention allowed under the broker’s system. (g) Triennial reports. On February 1, 1985, and every third February 1 after that, each licensee must report whether it is actively operating and the name and address of the business. Missing the report by March 1 suspends the license. The Secretary must notify the licensee by March 31; filing within 60 days reinstates the license; otherwise it is revoked without prejudice to a new application. (h) Fees. The Secretary may charge reasonable fees to cover Customs costs, including license and examination fees, but not separate fees for an individual audit or disciplinary proceeding. (i) Importer identification. The Secretary must regulate minimum identity standards for brokers and importers, including nonresident importers. The rules must state what identity information the importer gives and broker collects, reasonable authenticity checks, and recordkeeping. A broker that fails to collect required information may face up to $10,000 per violation and license or permit discipline under subsection (d), with the subsection (d)(2)(A) procedure. “Importer” means a party qualifying as importer of record under section 1484(a)(2)(B). “Nonresident importer” means an individual who is neither a United States citizen nor a lawful permanent resident, or a partnership, corporation, or other commercial entity not organized under the laws of the United States customs territory or the United States Virgin Islands.
As used in this section:
The term “customs broker” means any person granted a customs broker’s license by the Secretary under subsection (b).
The term “customs business” means those activities involving transactions with U.S. Customs and Border Protection concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges assessed or collected by U.S. Customs and Border Protection upon merchandise by reason of its importation, or the refund, rebate, or drawback thereof. It also includes the preparation of documents or forms in any format and the electronic transmission* of documents, invoices, bills, or parts thereof, intended to be filed with U.S. Customs and Border Protection in furtherance of such activities, whether or not signed or filed by the preparer, or activities relating to such preparation, but does not include the mere electronic transmission of data received for transmission to Customs.
The term “Secretary” means the Secretary of the Treasury.
No person may conduct customs business (other than solely on behalf of that person) unless that person holds a valid customs broker’s license issued by the Secretary under paragraph (2) or (3).
The Secretary may grant an individual a customs broker’s license only if that individual is a citizen of the United States. Before granting the license, the Secretary may require an applicant to show any facts deemed necessary to establish that the applicant is of good moral character and qualified to render valuable service to others in the conduct of customs business. In assessing the qualifications of an applicant, the Secretary may conduct an examination to determine the applicant’s knowledge of customs and related laws, regulations and procedures, bookkeeping, accounting, and all other appropriate matters.
The Secretary may grant a customs broker’s license to any corporation, association, or partnership that is organized or existing under the laws of any of the several States of the United States if at least one officer of the corporation or association, or one member of the partnership, holds a valid customs broker’s license granted under paragraph (2).
A customs broker shall exercise responsible supervision and control over the customs business that it conducts.
The failure of a customs broker that is licensed as a corporation, association, or partnership under paragraph (3) to have, for any continuous period of 120 days, at least one officer of the corporation or association, or at least one member of the partnership, validly licensed under paragraph (2) shall, in addition to causing the broker to be subject to any other sanction under this section (including paragraph (6)), result in the revocation by operation of law of its license.
Any person who intentionally transacts customs business, other than solely on the behalf of that person, without holding a valid customs broker’s license granted to that person under this subsection shall be liable to the United States for a monetary penalty not to exceed $10,000 for each such transaction as well as for each violation of any other provision of this section. This penalty shall be assessed in the same manner and under the same procedures as the monetary penalties provided for in subsection (d)(2)(A).
Each person granted a customs broker’s license under subsection (b) shall be issued, in accordance with such regulations as the Secretary shall prescribe, either or both of the following:
A national permit for the conduct of such customs business as the Secretary prescribes by regulation.
A permit for each customs district in which that person conducts customs business and, except as provided in paragraph (2), regularly employs at least 1 individual who is licensed under subsection (b)(2) to exercise responsible supervision and control over the customs business conducted by that person in that district.
If a person granted a customs broker’s license under subsection (b) can demonstrate to the satisfaction of the Secretary that—
he regularly employs in the region in which that district is located at least one individual who is licensed under subsection (b)(2), and
that sufficient procedures exist within the company for the person employed in that region to exercise responsible supervision and control over the customs business conducted by that person in that district,
the Secretary may waive the requirement in paragraph (1)(B).
The failure of a customs broker granted a permit under paragraph (1) to employ, for any continuous period of 180 days, at least one individual who is licensed under subsection (b)(2) within the district or region (if paragraph (2) applies) for which a permit was issued shall, in addition to causing the broker to be subject to any other sanction under this section (including any in subsection (d)), result in the revocation by operation of law of the permit.
Notwithstanding subsection (c)(1), upon the implementation by the Secretary under section 1413(b)(2) of this title of the component of the National Customs Automation Program* referred to in section 1411(a)(2)(B) of this title, a licensed broker may appoint another licensed broker holding a permit in a customs district to act on its behalf as its subagent in that district if such activity relates to the filing of information that is permitted by law or regulation to be filed electronically. A licensed broker appointing a subagent pursuant to this paragraph shall remain liable for any and all obligations arising under bond and any and all duties, taxes, and fees, as well as any other liabilities imposed by law, and shall be precluded from delegating to a subagent such liability.
The Secretary may impose a monetary penalty in all cases with the exception of the infractions described in clause (iii) of subparagraph (B) of this subsection, or revoke or suspend a license or permit of any customs broker, if it is shown that the broker—
has made or caused to be made in any application for any license or permit under this section, or report filed with U.S. Customs and Border Protection, any statement which was, at the time and in light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which was required to be stated therein;
has been convicted at any time after the filing of an application for license under subsection (b) of any felony or misdemeanor which the Secretary finds—
involved the importation or exportation of merchandise;
arose out of the conduct of its customs business; or
involved larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds;
has violated any provision of any law enforced by U.S. Customs and Border Protection or the rules or regulations issued under any such provision;
has counseled, commanded, induced, procured, or knowingly aided or abetted the violations by any other person of any provision of any law enforced by U.S. Customs and Border Protection, or the rules or regulations issued under any such provision;
has knowingly employed, or continues to employ, any person who has been convicted of a felony, without written approval of such employment from the Secretary;
has, in the course of its customs business, with intent to defraud, in any manner willfully and knowingly deceived, misled or threatened any client or prospective client; or
has been convicted of committing or conspiring to commit an act of terrorism described in section 2332b of title 18.
Unless action has been taken under subparagraph (B), the appropriate customs officer shall serve notice in writing upon any customs broker to show cause why the broker should not be subject to a monetary penalty not to exceed $30,000 in total for a violation or violations of this section. The notice shall advise the customs broker of the allegations or complaints against him and shall explain that the broker has a right to respond to the allegations or complaints in writing within 30 days of the date of the notice. Before imposing a monetary penalty, the customs officer shall consider the allegations or complaints and any timely response made by the customs broker and issue a written decision. A customs broker against whom a monetary penalty has been issued under this section shall have a reasonable opportunity under section 1618 of this title to make representations seeking remission or mitigation of the monetary penalty. Following the conclusion of any proceeding under section 1618 of this title, the appropriate customs officer shall provide to the customs broker a written statement which sets forth the final determination and the findings of fact and conclusions of law on which such determination is based.
U.S. Customs and Border Protection may, for good and sufficient reason, serve notice in writing upon any customs broker to show cause why a license or permit issued under this section should not be revoked or suspended. The notice shall be in the form of a statement specifically setting forth the grounds of the complaint, and shall allow the customs broker 30 days to respond. If no response is filed, or U.S. Customs and Border Protection determines that the revocation or suspension is still warranted, it shall notify the customs broker in writing of a hearing to be held within 30 days, or at a later date if the broker requests an extension and shows good cause therefor, before an administrative law judge appointed pursuant to section 3105 of title 5 who shall serve as the hearing officer. If the customs broker waives the hearing, or the broker or his designated representative fails to appear at the appointed time and place, the hearing officer shall make findings and recommendations based on the record submitted by the parties. At the hearing, the customs broker may be represented by counsel, and all proceedings, including the proof of the charges and the response thereto shall be presented with testimony taken under oath and the right of cross-examination accorded to both parties. A transcript of the hearing shall be made and a copy will be provided to U.S. Customs and Border Protection and the customs broker; which shall thereafter be provided reasonable opportunity to file a post-hearing brief. Following the conclusion of the hearing, the hearing officer shall transmit promptly the record of the hearing along with the findings of fact and recommendations to the Secretary for decision. The Secretary will issue a written decision, based solely on the record, setting forth the findings of fact and the reasons for the decision. Such decision may provide for the sanction contained in the notice to show cause or any lesser sanction authorized by this subsection, including a monetary penalty not to exceed $30,000, than was contained in the notice to show cause.
The Secretary may settle and compromise any disciplinary proceeding which has been instituted under this subsection according to the terms and conditions agreed to by the parties, including but not limited to the reduction of any proposed suspension or revocation to a monetary penalty.
Notwithstanding section 1621 of this title, no proceeding under this subsection or subsection (b)(6) shall be commenced unless such proceeding is instituted by the appropriate service of written notice within 5 years from the date the alleged violation was committed; except that if the alleged violation consists of fraud, the 5-year period of limitation shall commence running from the time such alleged violation was discovered.
A customs broker, applicant, or other person directly affected may appeal any decision of the Secretary denying or revoking a license or permit under subsection (b) or (c), or revoking or suspending a license or permit or imposing a monetary penalty in lieu thereof under subsection (d)(2)(B), by filing in the Court of International Trade, within 60 days after the issuance of the decision or order, a written petition requesting that the decision or order be modified or set aside in whole or in part. A copy of the petition shall be transmitted promptly by the clerk of the court to the Secretary or his designee. In cases involving revocation or suspension of a license or permit or imposition of a monetary penalty in lieu thereof under subsection (d)(2)(B), after receipt of the petition, the Secretary shall file in court the record upon which the decision or order complained of was entered, as provided in section 2635(d) of title 28.
The court shall not consider any objection to the decision or order of the Secretary, or to the introduction of evidence or testimony, unless that objection was raised before the hearing officer in suspension or revocation proceedings unless there were reasonable grounds for failure to do so.
The findings of the Secretary as to the facts, if supported by substantial evidence, shall be conclusive.
If any party applies to the court for leave to present additional evidence and the court is satisfied that the additional evidence is material and that reasonable grounds existed for the failure to present the evidence in the proceedings before the hearing officer, the court may order the additional evidence to be taken before the hearing officer and to be presented in a manner and upon the terms and conditions prescribed by the court. The Secretary may modify the findings of facts on the basis of the additional evidence presented. The Secretary shall then file with the court any new or modified findings of fact which shall be conclusive if supported by substantial evidence, together with a recommendation, if any, for the modification or setting aside of the original decision or order.
The commencement of proceedings under this subsection shall, unless specifically ordered by the court, operate as a stay of the decision of the Secretary except in the case of a denial of a license or permit.
If an appeal is not filed within the time limits specified in this section, the decision by the Secretary shall be final and conclusive. In the case of a monetary penalty imposed under subsection (d)(2)(B) of this section, if the amount is not tendered within 60 days after the decision becomes final, the license shall automatically be suspended until payment is made to U.S. Customs and Border Protection.
The Secretary may prescribe such rules and regulations relating to the customs business of customs brokers as the Secretary considers necessary to protect importers and the revenue of the United States, and to carry out the provisions of this section, including rules and regulations governing the licensing of or issuance of permits to customs brokers, the keeping of books, accounts, and records by customs brokers, and documents and correspondence, and the furnishing by customs brokers of any other information relating to their customs business to any duly accredited officer or employee of U.S. Customs and Border Protection. The Secretary may not prohibit customs brokers from limiting their liability to other persons in the conduct of customs business. For purposes of this subsection or any other provision of this chapter pertaining to recordkeeping, all data required to be retained by a customs broker may be kept on microfilm, optical disc, magnetic tapes, disks or drums, video files or any other electrically generated medium. Pursuant to such regulations as the Secretary shall prescribe, the conversion of data to such storage medium may be accomplished at any time subsequent to the relevant customs transaction and the data may be retained in a centralized basis according to such broker’s business system.
On February 1, 1985, and on February 1 of each third year thereafter, each person who is licensed under subsection (b) shall file with the Secretary of the Treasury a report as to—
whether such person is actively engaged in business as a customs broker; and
the name under, and the address at, which such business is being transacted.
If a person licensed under subsection (b) fails to file the required report by March 1 of the reporting year, the license is suspended, and may be thereafter revoked subject to the following procedures:
The Secretary shall transmit written notice of suspension to the licensee no later than March 31 of the reporting year.
If the licensee files the required report within 60 days of receipt of the notice under subparagraph (A), the license shall be reinstated.
In the event the required report is not filed within the 60-day period, the license shall be revoked without prejudice to the filing of an application for a new license.
The Secretary may prescribe reasonable fees and charges to defray the costs of U.S. Customs and Border Protection in carrying out the provisions of this section, including, but not limited to, a fee for licenses issued under subsection (b) and fees for any test administered by him or under his direction; except that no separate fees shall be imposed to defray the costs of an individual audit or of individual disciplinary proceedings of any nature.
The Secretary shall prescribe regulations setting forth the minimum standards for customs brokers and importers, including nonresident importers, regarding the identity of the importer that shall apply in connection with the importation of merchandise into the United States.
The regulations required under paragraph (1) shall, at a minimum—
identify the information that an importer, including a nonresident importer, is required to submit to a broker and that a broker is required to collect in order to verify the identity of the importer;
identify reasonable procedures that a broker is required to follow in order to verify the authenticity of information collected from an importer; and
require a broker to maintain records of the information collected by the broker to verify the identity of an importer.
Any customs broker who fails to collect information required under the regulations prescribed under this subsection shall be liable to the United States, at the discretion of the Secretary, for a monetary penalty not to exceed $10,000 for each violation of those regulations and shall be subject to revocation or suspension of a license or permit of the customs broker pursuant to the procedures set forth in subsection (d). This penalty shall be assessed in the same manner and under the same procedures as the monetary penalties provided for in subsection (d)(2)(A).
In this subsection:
The term “importer” means one of the parties qualifying as an importer of record under section 1484(a)(2)(B) of this title.
The term “nonresident importer” means an importer who is—
an individual who is not a citizen of the United States or an alien lawfully admitted for permanent residence in the United States; or
a partnership, corporation, or other commercial entity that is not organized under the laws of a jurisdiction within the customs territory of the United States (as such term is defined in General Note 2 of the Harmonized Tariff Schedule of the United States) or in the Virgin Islands of the United States.
Source credit: (June 17, 1930, ch. 497, title IV, § 641, 46 Stat. 759; Aug. 26, 1935, ch. 689, §§ 3–5, 49 Stat. 864, 865; Pub. L. 85–791, § 8, Aug. 28, 1958, 72 Stat. 945; Pub. L. 91–271, title III, § 301(jj), June 2, 1970, 84 Stat. 291; Pub. L. 95–410, title I, § 113, Oct. 3, 1978, 92 Stat. 898; Pub. L. 96–417, title VI, § 611, Oct. 10, 1980, 94 Stat. 1746; Pub. L. 98–573, title II, § 212(a), Oct. 30, 1984, 98 Stat. 2978; Pub. L. 99–514, title XVIII, § 1888(8), Oct. 22, 1986, 100 Stat. 2925; Pub. L. 103–182, title VI, § 648, Dec. 8, 1993, 107 Stat. 2207; Pub. L. 104–295, § 21(e)(11), Oct. 11, 1996, 110 Stat. 3531; Pub. L. 105–258, title III, § 302(b), Oct. 14, 1998, 112 Stat. 1916; Pub. L. 114–125, title I, § 116(a), title IX, § 903, Feb. 24, 2016, 130 Stat. 144, 223.)
- 1930Enacted · Act of June 17, 1930, ch. 497 · 46 Stat. 759
- 1935Amended · Act of Aug. 26, 1935, ch. 689 · 49 Stat. 864, 865
- 1958Amended · Pub. L. 85-791 · 72 Stat. 945
- 1970Amended · Pub. L. 91-271 · 84 Stat. 291
- 1978Amended · Pub. L. 95-410 · 92 Stat. 898
- 1980Amended · Pub. L. 96-417 · 94 Stat. 1746
- 1984Amended · Pub. L. 98-573 · 98 Stat. 2978
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2925
- 1993Amended · Pub. L. 103-182 · 107 Stat. 2207
- 1996Amended · Pub. L. 104-295 · 110 Stat. 3531
- 1998Amended · Pub. L. 105-258 · 112 Stat. 1916
- 2016Amended · Pub. L. 114-125 · 130 Stat. 144, 223
A history note hasn’t been published yet. The record shows enactment by ch. 497 on 1930-06-17.
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