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Reminder: Oct. 14 Comment Deadline on Importer Identity Verification Proposal

Friday, October 11, 2019
Sandler, Travis & Rosenberg Trade Report

Oct. 14 is the deadline to submit comments to U.S. Customs and Border Protection on a proposal to require customs brokers to collect certain information from importers (including non-resident importers) to enable the customs brokers to verify the identity of the importers.

Before it may transact customs business on behalf of a client a customs broker must obtain a valid power of attorney. CBP notes that while only a limited amount of information is required for a valid POA, most brokers currently require additional information when a POA is obtained from an importer, which they use to verify the importer’s existence and identity.

However, since the collection and verification of additional information from importers is voluntary, CBP claims that an atmosphere of “broker shopping” has been created where importers might refuse to provide the additional information to one broker in the hopes that another broker will not ask for it. If the second broker does not request the additional information, CBP states, it will transact customs business on the importer’s behalf with minimal information about the importer, leading to the possible use of shell or shelf companies, revenue loss, increased security risks relating to imported goods, and an uneven playing field for brokers.

CBP is therefore proposing to amend its regulations to standardize the process by which customs brokers verify the identity of their importer and nonresident importer clients. Specifically, brokers would be required to collect at least the following information from the client at the time the POA is obtained.

- client name

- date of birth of a client who is an individual

- for a client that is a partnership, corporation, or association, the grantor’s date of birth and the client’s trade or fictitious names

- address of the client’s physical location and telephone number

- client’s email address and business website

- copy of the grantor’s unexpired government-issued photo identification

- client’s Internal Revenue Service number, employer identification number, or importer of record number

- client’s publicly available business identification number (e.g., Data Universal Numbering System number)

- recent credit report

- copy of the client’s business registration and license with state authorities

- grantor’s authorization to execute the POA on behalf of client

CBP states that brokers would have to collect all such information applicable to each client. For example, a small business might not have a business website, or a client who is an individual would not have a business registration and license with state authorities, or a particular foreign jurisdiction might not provide credit reports.

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