CBLE Professional Ethics and Conduct 2 — Questions and Answers
Question 1: A customs broker discovers that a client has been systematically undervaluing imports for years. What is the broker's primary obligation?
- Continue representing the client but document the issue internally
- Advise the client to correct the violations and consider withdrawing if they refuse (Correct answer)
- Report the client directly to CBP without informing the client first
- Ignore past violations and ensure future entries are compliant
Correct answer: Advise the client to correct the violations and consider withdrawing if they refuse
A broker must counsel the client to remediate the violations and may withdraw representation if the client refuses to correct the unlawful conduct.
Question 2: Under 19 CFR Part 111, which action would constitute a violation of a broker's duty of diligence?
- Filing an entry with a minor clerical error that was promptly corrected
- Failing to respond to a CBP CF-28 within a reasonable timeframe (Correct answer)
- Requesting a binding ruling before filing an entry
- Advising a client to use a different carrier to reduce costs
Correct answer: Failing to respond to a CBP CF-28 within a reasonable timeframe
Failure to respond to CBP requests for information such as a CF-28 within a reasonable time constitutes a lack of diligence under Part 111.
Question 3: A broker's employee signs a power of attorney on behalf of the broker without authorization. What is the broker's liability?
- No liability because the employee acted without authority
- Full liability because brokers are responsible for acts of their employees (Correct answer)
- Shared liability between the broker and the employee equally
- Liability only if CBP can prove the broker knew about the signing
Correct answer: Full liability because brokers are responsible for acts of their employees
Under 19 CFR 111.36, a broker is responsible for the acts of their employees performed in connection with customs business.
Question 4: When a licensed broker operates under a partnership, which statement about license requirements is correct?
- Only one partner needs a broker license regardless of how many handle customs business
- Each individual who exercises responsible supervision must be a licensed broker (Correct answer)
- The partnership itself holds the license and no individual license is needed
- Partners who only handle billing are exempt from licensing requirements
Correct answer: Each individual who exercises responsible supervision must be a licensed broker
Each individual who exercises responsible supervision and control of the customs business must hold a valid broker's license.
Question 5: A client instructs a broker to classify goods under a heading that the broker believes is incorrect in order to obtain a lower duty rate. The broker should:
- File using the client's preferred classification to maintain the business relationship
- File the entry using the correct classification and explain the legal requirement to the client (Correct answer)
- File under the client's classification but add a disclosure note in the entry
- Request an informal ruling from CBP before filing and delay the entry indefinitely
Correct answer: File the entry using the correct classification and explain the legal requirement to the client
A broker must file accurate entries and cannot follow client instructions to misclassify goods, as doing so would violate CBP regulations and the broker's ethical obligations.
Question 6: Which circumstance would most likely require a customs broker to disclose a conflict of interest to both clients?
- Representing two importers of non-competing goods in different industries
- Representing both an importer and a foreign exporter on the same shipment (Correct answer)
- Filing entries for multiple clients in the same month
- Advising two clients who use different ports of entry
Correct answer: Representing both an importer and a foreign exporter on the same shipment
Representing adverse parties on the same transaction creates a direct conflict requiring full disclosure and consent from both clients.
Question 7: A suspended customs broker may NOT:
- Seek legal counsel to appeal the suspension decision
- Transact any customs business during the period of suspension (Correct answer)
- Continue employment in a non-customs role at a brokerage firm
- Request a hearing before the Commissioner of CBP
Correct answer: Transact any customs business during the period of suspension
A suspended broker is prohibited from transacting customs business for the duration of the suspension.
CBLE Professional Ethics and Conduct 2
A customs broker discovers that a client has been systematically undervaluing imports for years.
What is the broker's primary obligation?