One Licensed Broker, Eleven Entry Writers, and an $18,400 Underpayment
Northline Customs Brokers, Inc. holds a national permit and lists one individually licensed broker, Dana, as its qualifying officer. It employs 11 entry writers who are not licensed. During a focused assessment, CBP reviews 25 entries filed over four months. In each, an unlicensed entry writer selected the HTSUS subheading using an online tariff tool; Dana reviewed only entries with entered value above $50,000. Nine of the 25 entries were below that threshold and contained classification errors, producing an underpayment of $18,400. Separately, Northline opened a second office 60 miles away in March and did not notify CBP; it also let a college intern sign a customs power of attorney on the company's behalf. Dana argues that she trained the staff, that unlicensed employees may perform customs business, and that the errors were isolated. CBP is considering action against Northline and Dana.
1. Did Northline and Dana meet the responsible supervision and control standard? Analyze the facts against the regulatory factors and identify the most serious deficiency.
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The governing standard is 19 CFR 111.28, which requires a broker to exercise responsible supervision and control over its customs business. The regulation lists factors including training, supervision, the adequacy of the number of licensed brokers, the volume of business, the power to hire and fire, and the maintenance of records.
Delegation to unlicensed employees is permitted, but delegation does not transfer responsibility. Classification is a core customs-business judgment, not clerical data entry. Dana's $50,000 review threshold is arbitrary and left the nine erroneous entries unreviewed. One licensed broker overseeing 11 entry writers, plus a second office, is thin supervision on these facts. Training alone cannot cure a review system that screens out low-value entries; most classification risk often sits in high-volume, lower-value shipments.
The most serious deficiency is the absence of meaningful licensed review of classification decisions and the reliance on an online tool without verification against the HTSUS, chapter notes, and rulings. The qualifying officer remains accountable for the firm's supervision system. On these facts, Northline has not met 19 CFR 111.28.
2. What notifications and authorizations were required for the new office and the power of attorney? Did the intern's signature create a valid POA?
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Two separate compliance failures are present.
First, 19 CFR 111.30 requires a broker to notify CBP in writing within 10 days of specified changes, including a change in business address or the establishment of an additional office. A national permit does not eliminate that notification obligation. Northline's March opening should have been reported to CBP, and the failure is itself a regulatory violation.
Second, 19 CFR 141.31 and 141.32 govern customs powers of attorney. A POA must be in writing and signed by the principal or by a person with actual authority to bind the principal. A college intern ordinarily has no such authority unless the company has expressly delegated it in writing. An intern's signature does not create a valid POA merely because the intern works at the company.
Sierra-style reliance on an invalid POA is not a harmless technicality because the broker's authority to file entry derives from it. The broker should have obtained a signed POA from an authorized corporate officer, verified the signer's authority, retained the document, and refreshed it when the old coordinator left. Filing without valid authority exposes the entry to challenge and the broker to sanctions.
3. What civil penalty and licensing exposure do Northline and Dana face, and what mitigation is realistic?
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The importer faces exposure under 19 USC 1592 if it failed to exercise reasonable care. For negligence, the maximum penalty is the lesser of two times the loss of duties or 20% of the value of the merchandise; for gross negligence, four times the loss or 40% of value. The $18,400 duty loss therefore supports a theoretical negligence penalty of up to $36,800, subject to the value cap.
The broker and Dana face separate exposure. CBP may pursue monetary penalties against a customs broker under 19 USC 1641 and may initiate suspension or revocation proceedings under Part 111. The same facts that show a supervision failure support a finding that the broker failed to exercise responsible supervision and control.
Mitigation is realistic but not automatic. Cooperation, a full internal review, hiring additional licensed brokers, correcting the entries, and tendering the duty loss are meaningful. The claim that the errors were "isolated" is weak because the review policy itself excluded the entries from licensed review. A voluntary self-report before CBP expands its review may reduce exposure, but any prior-disclosure strategy must be evaluated carefully because CBP is already examining the entries.