CBLE Regulatory Compliance 3 — Questions and Answers
Question 1: Under 19 CFR 163, customs brokers are required to retain entry records for a minimum of how many years?
- 3 years from date of entry
- 5 years from date of entry (Correct answer)
- 7 years from date of entry
- 10 years from date of entry
Correct answer: 5 years from date of entry
19 CFR 163.4 requires customs brokers to retain records relating to entry for five years from the date of entry.
Question 2: Which of the following actions by a customs broker would constitute a violation of 19 CFR 111.29 regarding diligence in correspondence?
- Responding to a CBP inquiry within 30 days
- Failing to respond to CBP correspondence within the prescribed time (Correct answer)
- Submitting a power of attorney after entry is filed
- Charging fees before completing the entry
Correct answer: Failing to respond to CBP correspondence within the prescribed time
19 CFR 111.29 requires brokers to respond to CBP correspondence promptly; failure to do so is a regulatory violation.
Question 3: A customs broker files an entry with an incorrect HTS classification, causing a substantial underpayment of duties. Under 19 USC 1592, what level of culpability applies if the broker made no attempt to verify the classification?
- Fraud
- Gross negligence (Correct answer)
- Negligence
- Strict liability
Correct answer: Gross negligence
Failure to take reasonable steps to verify a classification when the means were available constitutes gross negligence under 19 USC 1592.
Question 4: What is the purpose of CBP's Focused Assessment (FA) program?
- To conduct random physical inspections of cargo
- To perform risk-based compliance assessments of importer trade practices (Correct answer)
- To audit customs broker recordkeeping practices
- To evaluate Foreign Trade Zones for compliance
Correct answer: To perform risk-based compliance assessments of importer trade practices
The Focused Assessment program uses risk-based criteria to evaluate an importer's trade compliance systems and internal controls.
Question 5: Under the Importer Security Filing (ISF) regulations, which party is responsible for submitting the ISF for ocean cargo?
- The ocean carrier
- The importer or its agent (Correct answer)
- The foreign exporter
- The port director
Correct answer: The importer or its agent
Under 19 CFR 149, the importer of record, or its agent such as a customs broker, is responsible for submitting the ISF.
Question 6: Which CBP program provides importers with binding advance rulings on tariff classification, country of origin, or valuation?
- Automated Commercial Environment (ACE)
- Customs-Trade Partnership Against Terrorism (C-TPAT)
- Binding Ruling Program under 19 CFR Part 177 (Correct answer)
- Trusted Trader Program
Correct answer: Binding Ruling Program under 19 CFR Part 177
CBP's Binding Ruling Program under 19 CFR Part 177 allows importers and brokers to obtain advance decisions on classification, valuation, and origin.
Question 7: Under 19 CFR 111.36, what must a customs broker do before transacting business on behalf of a client for the first time?
- Obtain a power of attorney from the client (Correct answer)
- Register the client in ACE as a known importer
- Submit a CBP Form 5106 on the client's behalf
- Obtain the client's IRS Employer Identification Number
Correct answer: Obtain a power of attorney from the client
19 CFR 111.36 requires brokers to have a valid power of attorney before transacting customs business on a client's behalf.
CBLE Regulatory Compliance 3
Under 19 CFR 163, customs brokers are required to retain entry records for a minimum of how many years?