BRO-4-02/4-01-CO:R:C:E 225375 AJS
District Director of Customs
U.S. Customs Service
10 Causeway Street, Suite 603
Boston, MA 02222-1059
Attn: Ms. Anna Simons
RE: Internal Advice; appointment by freight forwarder of customs
broker for importer; 19 CFR 141.31(a); 19 CFR 141.43; C.S.D. 79-
111; 19 U.S.C. 1641(a)(2); Section 648, NAFTA Implementation Act.
Dear Ms. Simons:
This is in reply to your correspondence dated May 2, 1994,
concerning freight forwarders. We are treating your correspondence
as a request for internal advice under 19 CFR 177.11(a).
FACTS:
A freight forwarder receives a power of attorney from an
importer. The power of attorney appears to use the same language
as Customs Form (CF) 5291 but also includes language permitting the
freight forwarder "to authorize other Customs Brokers to act as
grantor's agent". The freight forwarder desires to use this power
of attorney to issue, on the importer's behalf, another power of
attorney to a Customs broker so that this broker may file entry
documents for the importer.
ISSUE:
Whether the freight forwarder may use the subject power of
attorney in the described manner.
LAW AND ANALYSIS:
19 CFR 141.31(a) provides that a power of attorney may be
executed for the transaction by an agent or attorney of a specified
part or all the business of the principal. The subject power of
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attorney allows the authorization of "other Customs Brokers" by the
agent to act as the grantor's (i.e., the importer) agent. The
plain language of the power of attorney would permit the freight
forwarder to act on behalf of the importer to appoint a licensed
broker as the importer's agent.
19 CFR 141.43 states that except as otherwise provided for in
paragraph (c) of this section, the holder of a power of attorney
for a resident principal cannot appoint a subagent except for the
purpose of executing shippers' export declarations. In Customs
Service Decision (C.S.D.) 79-111, Customs addressed the issue of
whether an importer may issue a power of attorney to one broker
(broker A) that would empower that broker to issue, on the
importer's behalf, powers of attorney to other brokers in other
ports. Under this arrangement, the broker appointed by broker A
would not be a subagent of broker A but, rather, would be
considered an agent of the principal (i.e., the importer) because
the importer's power of attorney to broker A would specifically
authorize broker A to appoint another broker and because that
broker, once appointed, would act solely on account of the importer
and have no agency relationship to broker A. Customs determined
that this arrangement is permissible under the Customs Regulations
and that section 141.43 was inapplicable.
19 U.S.C. 1641(b)(1) states that no person may conduct customs
business (other than solely on behalf of that person) unless that
person holds a valid customs broker's license. See also 19 CFR
111.1(b). 19 U.S.C. 1641(a)(2) states that the term "customs
business" means those activities involving transactions with the
Customs Service concerning the entry and admissibility of
merchandise, its classification and valuation, the payment of
duties, taxes, or other charges assessed or collected by the
Customs Service upon merchandise by reason of its importation, or
the refund, rebate, or drawback thereof. This provision was
amended by section 648 of the North American Free Trade Agreement
(NAFTA) Implementation Act to provide that the term "customs
business" 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 the Customs
Service 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. See Pub. L. No. 103-182, 107
Stat. 2057, 2207 (December 8, 1993). The activity of the freight
forwarder in signing, for the importer, the power of attorney does
not encompass customs business within the meaning of section
1641(a)(2). Therefore, this activity would be permissible without
a customs broker's license.
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HOLDING:
A freight forwarder acting under an importer's power of
attorney may sign for the importer another power of attorney which
appoints a licensed customhouse broker as the importer's agent.
The Office of Regulations and Rulings will take steps to make
this decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette Subscription
Service, Freedom of Information Act and other public access
channels 60 days from the date of this decision.
Sincerely,
John Durant, Director
Commercial rulings Division