CBP Issues Guidance on Broker Separation from Client [GDLSK-FILEROOM.FID667237] - Sobel Network Shipping Co., Inc.

CBP Issues Guidance on Broker Separation from Client [GDLSK-FILEROOM.FID667237]

On the 19th of March, CBP issued a fact sheet regarding 19 C.F.R. §111.32, a regulation that obligates customs brokers to report to CBP if they discontinue representation of a client who is attempting to intentionally defraud or commit any criminal act against the U.S. Government through the broker. The fact sheet contains examples of reportable offenses, instructions on how to report them, and the necessary information that must be reported to CBP. The examples given by CBP are also included below for your convenience.

It is worth noting that CBP distinguishes these scenarios from situations where the broker provides the client with a corrective action plan, which is followed, and the broker determines that there is no need to separate from the client. CBP assures that it will protect the broker’s identity to the extent possible. Additionally, the regulation covers any fraud or criminal act against the U.S Government, not just CBP, and it is not limited to customs offenses.

Importantly, the broker’s decision to separate from a client for business reasons not related to a fraud on the U.S. Government does not have to be reported to CBP under the regulation. However, the broker is prohibited from submitting any false or misleading information to the U.S. Government.