Professional Ethics and Conduct Flashcards

A customs broker is asked to prepare a prior disclosure on behalf of a client. The broker discovers the client intentionally directed the broker to file false entries. How does this affect the prior disclosure?

Answer: Prior disclosure may be ineffective if fraud is involved, as it does not protect against fraud penalties

Prior disclosure reduces penalties for negligence or gross negligence but does not protect against fraud findings under 19 USC 1592.

Under what circumstances may a broker ethically represent two competing importers in the same industry?

Answer: When both clients provide informed written consent after full disclosure of the conflict

Representing competing clients is permissible only if both parties are fully informed of the conflict and provide written consent.

A broker is audited by CBP and found to have systematically failed to retain entry records for the required period. Under 19 CFR 111.23, the required retention period for broker records is:

Answer: Five years from the date of entry

19 CFR 111.23 requires brokers to retain records relating to customs transactions for five years from the date of entry.

A broker receives a CBP Form 28 (Request for Information) on a client's entry. The broker cannot reach the client despite multiple attempts. The broker should:

Answer: Notify CBP of the difficulty reaching the client and request an extension of time

When unable to obtain client input, a broker should promptly notify CBP and request additional time rather than letting the deadline pass without response.

Which act by a broker would most likely be considered 'negligence' warranting a monetary penalty under 19 USC 1641?

Answer: Repeatedly filing entries with obvious errors that a competent broker should have caught

Repeated filing of entries with errors that a reasonably competent broker would have identified constitutes negligence under the broker penalty statutes.

A broker signs a power of attorney that authorizes the broker to transact all customs business for an importer of record. This POA is valid for:

Answer: Until it is revoked by the grantor or the broker's license lapses

A properly executed CBP power of attorney remains valid until revoked by the grantor or otherwise terminated by operation of law such as license revocation.

A broker who prepares and files an entry based solely on information provided by the importer without independently verifying readily verifiable facts may be found:

Answer: Potentially liable if the error could have been discovered through reasonable inquiry

Brokers have a duty of reasonable inquiry and cannot shield themselves from liability by relying on importer data when basic verification was feasible.