Broker Course exam CFR 19 Part 111 Customs Broker

Customs Brokers – An Overview of 19 CFR 111

What is a Customs Broker?
• A highly knowledgeable professional licensed by the
Department of Homeland Security in order to conduct
“Customs Business”.
• As such, a broker must comply with all relevant Customs
laws and regulations.
• A broker is also an agent to importers for which it holds a
valid power of attorney.
• As an agent, any representations made by the broker to
Customs will be held to its principal, i.e. the importer.
• A broker can often be “stuck between a rock and a hard
place,” keeping its clients happy and ensuring compliance
with Customs regulations.
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Conducting Customs Business
• 19 CFR 111.1 & 19 USC 1641 define “customs business” as those
activities involving transactions with Customs:
• concerning the entry and admissibility of merchandise
• Its classification, valuation, payment of duties, taxes, or other charges
collected by Customs
• Drawback of duties, taxes, or other charges
• Preparation, activities relating to the preparation of documents in any
format, and electronic transmission of documents and parts of documents
intended to be filed with Customs in furtherance of any other customs
business activity whether or not signed or filed by the preparer.
• DOES NOT include the “mere electronic transmission of data received
for transmission to Customs.”
• DOES NOT include a corporate compliance activity.

Conducting Customs Business
• Any person conducting “customs business” for another
person without a license is subject to monetary penalties
• License is not required where an importer is transacting
customs business on his own behalf.
• Employees of licensed brokers can conduct customs
business on the employer’s behalf if the broker has
authorized the employee to sign documents and issued a
valid power of attorney for that purpose.
• Broker must exercise sufficient supervision of the employee
to ensure proper conduct and will be held strictly
responsible for the acts/omissions of the employee within
the scope of his employment.

How to become a Customs Broker
• Achieve a passing score on the Broker License Exam
(given twice a year, April and October)
• Be a U.S. citizen
• Be 21 years old (can take exam at 18)
• Establish a good moral character and business
integrity – will be subject to a background check by
CBP.
• Pay the various fees, approximately $420

19 CFR 111 – The “Broker
Regulations”
• These regulations govern the conduct of customs
brokers.
• Brokers must also ensure that they comply with
other regulations
• Regulations address the license/permit
requirements, duties and responsibilities of
brokers, grounds for license
suspension/cancellation and monetary penalties.
• Note: 19 CFR 111 was significantly updated in
December 2022.

19 CFR 111.1 – Important New
Definitions
• Continuing Education - an individual broker's obligation to complete a
certain number of continuing education credits of qualifying continuing
broker education.
• Qualifying continuing broker education. “Qualifying
continuing broker education” means any training or educational activity
that is eligible or, if required, has been approved for continuing
education credit.
• Processing Center. “Processing Center” means the broker management
operations of a Center of Excellence and Expertise (Center) that process
applications for a broker's license under § 111.12(a), applications for a
national permit under § 111.19(b) for an individual, partnership,
association, or corporation, as well as submissions required in this part
for an already-licensed broker.

111.2 – License & Permit Required
• License required to transact customs business as a broker.
• 111.2(a)(2) Exceptions:
• Importer or exporter transacting customs business solely on his own
account and not on account of another, is not required to be licensed, nor
are the authorized regular employees who act only in the transaction of his
business.
• As employee of broker – An employee of a broker, acting solely for his
employer, is not required to be licensed where:
• Authorized to sign documents - the broker has authorized the
employee to sign document pertaining to customs business on his
behalf, and has executed a power of attorney for that purpose.
• Authorized to transact other business – the broker has filed with the
port director a statement identifying the employee as authorized to
transact customs business on behalf. However, no statement will be
necessary when the broker is transacting customs business under an
exception to the district permit rule.

111.2, continued
• Where an employee has been given authority
under (a)(2)(ii), the broker must exercise sufficient
supervision of the employee to ensure proper
conduct on the part of the employee. The broker
will be held strictly responsible for the acts or
omissions of the employee which through exercise
of reasonable care and diligence, the broker should
have foreseen.

111.2, exceptions, cont.
• Marine transactions – a person transacting business in connection with
entry or clearance of vessels or other regulation of vessels under
navigation laws is not required to be licensed as a broker.
• Transportation in bond – any carrier bringing merchandise to the port of
arrival or any bonded carrier transporting merchandise for another may
make entry for that merchandise for transportation in bond without
being a broker.
• Noncommercial shipments – an individual entering noncommercial
merchandise for another party is not required to be a broker, provided
that the requirements of 19 CFR 141.33 are met. (written authority
granted)
• Foreign trade zone activities – a foreign trade zone operator or user
need not be licensed as a broker in order to engage in activities within a
zone that do not involve the transfer of merchandise to the customs
territory of the U.S.

111.2(b) – National Permits
• A national permit issued to a broker under § 111.19 will
constitute sufficient permit authority for the broker to
conduct customs business within the customs territory of
the United States as defined in § 101.1 of this chapter.
• Note: This replaces the previous district permit
requirement.
• 101.1 -Customs territory of the United States. “Customs
territory of the United States” includes only the States, the
District of Columbia, and Puerto Rico.

19 CFR 111.3 – Customs Business
• (a) Location. Customs business must be conducted within
the customs territory of the United States as defined in § 101.1 of this
chapter.
• (b) Point of contact. A licensed customs broker, or partnership,
association, or corporation, conducting customs business under a
national permit must designate a knowledgeable point of contact to be
available to CBP during and outside of normal operating hours to
respond to customs business issues. The licensed customs broker,
or partnership, association, or corporation, must maintain accurate and
current point of contact information in a CBP-authorized electronic data
interchange (EDI) system. If a CBP-authorized EDI system is not
available, then the information must be provided in writing to
the processing Center.

111.4 & 111.5
• 111.4 – any person who intentionally transacts customs
business without a valid broker’s license will be liable for a
monetary penalty for each such transaction – assessed
under subpart E of 19 CFR 111.
• 111.5 – a broker who represents a client in the importation
or exportation of merchandise may represent the client
before any the Department of Homeland Security or any
representative of the DHS on any matter concerning the
merchandise. To represent a client before any other agency
not within DHS, the broker must comply with any
regulations of that agency prior to representation.

111.11 – License Requirements
• Individual – requirements:
• Be a citizen of the US on date of submission of the
application and not an officer or employee of the US
government.
• Attain the age of 21 prior to date of submission of
application.
• Be of good moral character and
• Has established by attaining a passing (75% or higher)
grade on a written exam taken within the 3 year period
before submission of the application.

111.11 Requirements, cont.
• Partnership – one member of the partnership must
be a licensed broker in order for the partnership to
qualify for a license.
• Association or corporation - must be empowered
under its articles of association or articles of
incorporation to transact customs business as a
broker and have at least one officer who is a broker.

111.12- Application
• (a) Submission of application and fee. An application for a broker's license must be timely
submitted to the processing Center after the applicant attains a passing grade on the
examination. The application must be executed on CBP Form 3124. The application must
be accompanied by the application fee prescribed in § 111.96(a) and one copy of the
appropriate attachment required by the application form (Articles of Agreement or an
affidavit signed by all partners, Articles of Agreement of the association, or the Articles of
Incorporation). If the applicant proposes to operate under a trade or fictitious name in one
or more States, evidence of the applicant's authority to use the name in each of those
States must accompany the application. The application, application fee and any additional
documentation as required above may be submitted to a CBP-authorized electronic data
interchange (EDI) system. If a CBP-authorized EDI system is not available, then the
information must be submitted in writing to the processing Center. An application for
an individual license must be submitted within the 3-year period after the applicant took
and passed the examination referred to in §§ 111.11(a)(4) and 111.13. The processing
Center may require an individual applicant to provide a copy of the notification that the
applicant passed the examination (see § 111.13(e)) and will require the applicant to
submit fingerprints at the time of the interview. The processing Center may reject an
application as improperly filed if the application is incomplete or, if on its face, the
application demonstrates that one or more of the basic requirements set forth in §
111.11 has not been met at the time of filing; in either case the application and fee will be
returned to the filer without further action.

111.14 – 111.18
• 111.14 – investigation of the license applicant –
port director will immediately refer applications to
the special agent in charge for background
investigation. Scope includes the following:
• Accuracy of statements made in application
• Business integrity of applicant.
• When applicant is individual, the character and
reputation of the applicant.

111.14-111.18, cont.
• 111.15 – Issuance of license.
• 111.16 – Denial of license.
• 111.17 – Review of denial of license (by Assistant
Commissioner, Secretary of Homeland Security,
Court of International Trade)
• 111.18 – Reapplication for license.

111.19 – National Permit
• (b) Application for a national permit. An applicant who obtains a
passing grade on the examination for an individual broker's license may
apply for a national permit. The applicant will exercise responsible
supervision and control (as described in § 111.28) over the activities
conducted under that national permit. The national permit application
may be submitted concurrently with or after the submission of an
application for a broker's license. An applicant applying for a
national permit on behalf of a partnership, association, or
corporation must be a licensed broker employed by the partnership,
association, or corporation. An application for a national permit under
this paragraph must be submitted in the form of a letter to
the processing Center or to a CBP-authorized electronic data
interchange (EDI) system. The application must set forth or attach the
following:

Permit Application Requirements
• (1) The applicant's broker license number and date of issuance if available;
• (2) If the applicant is applying for a national permit on behalf of a partnership,
association, or corporation: the name of the partnership, association, or
corporation and the title held by the applicant within the partnership,
association, or corporation;
association, or corporation: a copy of the documentation issued by a State, or
local government that establishes the legal status and reserves the business
name of the partnership, association, or corporation;
• (4) The address, telephone number, and email address of the office designated
by the applicant as the office of record as defined in § 111.1. The office will be
noted in the national permit when issued;
• (5) The name, telephone number, and email address of the point of contact
described in § 111.3(b) to be available to CBP to respond to issues related to the
transaction of customs business;

Permit Requirements, cont.
association, or corporation: the name, broker license number, office address,
telephone number, and email address of each individual broker employed by
the partnership, association, or corporation;
• (7) A list of all employees together with the specific employee information
prescribed in § 111.28 for each employee;
• (8) A supervision plan describing how responsible supervision and control will
be exercised over the customs business conducted under the national permit,
including compliance with § 111.28;
• (9) The location where records will be retained (see § 111.23);
• (10) The name, telephone number, and email address of the
knowledgeable employee responsible for broker-wide records maintenance and
financial recordkeeping requirements (see § 111.21(d)); and
• (11) A receipt or other evidence showing that the fees specified in § 111.96(b)
and (c) have been paid in accordance with paragraph (b) of this section.

111.21– Record of Transaction
• (a) Each broker must keep current in a correct, orderly, and itemized
manner records of account reflecting all his financial transactions as a broker. He
must keep and maintain on file copies of all his correspondence and
other records relating to his customs business.
• (b) Each broker must provide notification to the CBP Office of Information
Technology Security Operations Center (CBP SOC) of any known breach of
electronic or physical records relating to the broker's customs business.
Notification must be electronically provided (cbpsoc@cbp.dhs.gov) within 72
hours of the discovery of the breach, including any known
compromised importer identification numbers (see 19 CFR 24.5). Within ten
(10) business days of the notification, a broker must electronically provide an
updated list of any additional known compromised importer identification
numbers. To the extent that additional information is subsequently discovered,
the broker must electronically provide that information within 72 hours of
discovery. Brokers may also call CBP SOC at a telephone number posted on
CBP.gov with questions as to the reporting of the breach, if any guidance is
needed.

111.21- Records of Transactions
• 111.21 – Each broker must keep current in correct,
orderly and itemized manner records of account
reflecting all his financial transactions as a broker.
Must keep & maintain on file copies of all his
correspondence and other records relating to his
customs business. (Must also comply with 19 CFR
163) Must also designate a knowledgeable
employee to be the contact for Customs for
brokerwide customs business and financial
recordkeeping requirements.

111.23 – Recordkeeping
• (a) Place of retention. A licensed customs broker must maintain
originals of the records referred to in this part, including
any records stored in electronic formats, within the customs territory of
the United States and in accordance with the provisions of this part
and part 163 of this chapter.
• (b) Period of retention. The records described in this section, other than
powers of attorney, must be retained for at least 5 years after the date
of entry. Powers of attorney must be retained until revoked, and
revoked powers of attorney and letters of revocation must be retained
for 5 years after the date of revocation or for 5 years after the date the
client ceases to be an “active client” as defined in § 111.29(b)(2)(ii),
whichever period is later. When merchandise is withdrawn from a
bonded warehouse, records relating to the withdrawal must be retained
for 5 years from the date of withdrawal of the last merchandise
withdrawn under the entry.

19 CFR 111.28 – Responsible
Supervision & Control
• (a) General. Every individual broker operating as a sole proprietor, every
licensed member of a partnership that is a broker, and every
licensed officer of an association or corporation that is a broker must
exercise responsible supervision and control (see § 111.1) over the
transaction of the customs business of the sole
proprietorship, partnership, association, or corporation. A sole
proprietorship, partnership, association, or corporation must employ a
sufficient number of licensed brokers relative to the job complexity,
similarity of subordinate tasks, physical proximity of subordinates,
abilities and skills of employees, and abilities and skills of the managers.
While the determination of what is necessary to perform and
maintain responsible supervision and control will vary depending upon
the circumstances in each instance, factors which CBP may consider in
its discretion and to the extent any are relevant include, but are not
limited to, the following:

Responsible Supervision and
Control Factors:
• (1) The training provided to broker employees;
• (2) The issuance of instructions and guidelines to broker employees;
• (3) The volume and type of business conducted by the broker;
• (4) The reject rate for the various customs transactions relative to overall
volume;
• (5) The level of access broker employees have to current editions of CBP
regulations, the Harmonized Tariff Schedule of the United States, and CBP
• (6) The availability of a sufficient number of individually
licensed brokers for necessary consultation with employees of the broker;
• (7) The frequency of supervisory visits of an individually licensed broker to
another office of the broker that does not have an individually

Responsible Supervision and
Control
• (8) The frequency of audits and reviews by an individually licensed broker of
the customs transactions handled by employees of the broker;
• (9) The extent to which the individually licensed broker who qualifies the permit is
involved in the operation of the brokerage and communications between CBP and the
brokerage;
• (10) Any circumstances which indicate that an individually licensed broker has a real
interest in the operations of a brokerage;
• (11) The timeliness of processing entries and payment of duty, tax, or other debt or
obligation owing to the Government for which the broker is responsible, or for which
the broker has received payment from a client;
• (12) Communications between CBP and the broker, and the broker's responsiveness and
action to communications, direction, and notices from CBP;
• (13) Communications between the broker and its officer(s) or member(s), and the broker's
responsiveness and action to communications and direction from its officer(s) or
member(s).

111.28
• Employee information – Each national permit holder must submit to
the processing Center a list of the names of persons currently employed by
the broker. The list of employees must be submitted prior to issuance of a
national permit under § 111.19 and before the broker begins to
transact customs business
• Social security number
• Date & place of birth
• Current home address & last prior home address
• After the initial submission, an updated list must be submitted to a CBP-authorized
electronic data interchange (EDI) system if any of the information required by this
paragraph changes. If a CBP-authorized EDI system is not available, then the
information must be provided in writing to the processing Center. The update must
be submitted within thirty (30) calendar days of the change.

111.28
• New employees –Within thirty (30) calendar days of the start of employment
of a new employee(s), the broker must submit a list of new employee(s) with
the information required under paragraph (b)(1) of this section to a CBP-
authorized EDI system. The broker may submit a list of the new employee(s) or
an updated list of all employees, specifically noting the new employee(s).
• Terminated employees - Within thirty (30) calendar days after the termination
of employment of an employee, the broker must submit a list of terminated
employee(s) to a CBP-authorized EDI system. The broker may submit a list of the
terminated employee(s) or an updated list of all employees, specifically noting
the terminated employee(s).
• Termination of qualifying member or officer – if an individual broker
who is the qualifying licenseholder for partnership or corporation
terminates employment with the firm, the individual broker must
immediately provide written notice to appropriate Executive Director, Office
of Trade, when his employment as a qualifying member or officer terminates
and must send a copy of the written notice to the processing Center.

111.28, cont.
• Change in ownership – if ownership of a broker changes and
ownership shares are not publicly traded, the broker must
immediately provide written notice of that fact to the
Executive Director, Office of Trade and send a copy to the
processing center.
• If change results in a new principal, CBP reserves the right to
conduct a background investigation on the new principal
and also has the right to reject the new principal (port
director will notify if rejected). Broker will be given
reasonable time to remedy situation.
• “Principal” means any person having at least a 5% capital,
beneficiary, or other direct or indirect interest in the business of the
broker.

111.29 - Diligence
• Brokers must exercise due diligence in making financial settlements,
answering correspondence, and preparing/filing records related to
customs business.
• Payment of duty, tax or other debt owing to the Government for which
the broker has received payment from a client must be made before the
date the payment is due.
• Payments received by a broker from a client after the due date must be
transmitted to the Government within 5 working days from receipt by
the broker.
• Each broker must provide a written statement to a client accounting for
funds received for the client from the Government or received from a
client where no payment has been made, or received from a client in
excess of the Governmental or other charges properly payable as part of
the client’s customs business within 60 calendar days of receipt. No
written statement is required if there is actual payment of funds by a
broker.

111.29, cont.
• Notice to client of method of payment – all brokers
must provide their clients with the following
written notice:
• If you are the importer of record, payment to the broker
will not relieve you of liability for customs charges in the
event the charges are not paid by the broker. Therefore,
if you pay by check, customs charges may be paid with a
separate check payable to the “US Customs & Border
Protection” which will be delivered to CBP by the broker.

111.29, cont.
• This notice must be provided by broker as follows:
• On or attached to any power of attorney executed by
the broker to a client for a client on or after Sept. 27,
1982.
• To each active client no later than Feb. 28, 1983, and at
least once at any time within each 12-month period
after that date.
• “Active client” – client from whom broker has received
power of attorney and for whom broker has transacted
customs business on at least two occasions within the
12-month period preceding notification

111.30-Notification of changes
• Change in address –A broker is responsible for providing CBP with the broker's current
addresses, which include the broker's office of record address as defined in § 111.1, an
email address, and, if the broker is not actively engaged in transacting business as a broker,
the broker's non-business address. If a broker does not receive mail at the broker's office
of record or non-business address, the broker must also provide CBP with a valid address
at which he or she receives mail. When address information (the broker's office of
record address, mailing address, email address) changes, or the broker is no longer
actively engaged in transacting business as a broker, he or she must update his or her
address information within ten (10) calendar days through a CBP-authorized electronic
data interchange (EDI) system
• Change in organization –A partnership, association, or corporation broker must update
within ten (10) calendar days in writing to the processing Center any of the followin:
• The date on which a licensed member/officer ceases to be the qualifying
member/officer and the name of broker who will succeed as qualifying
member/officer
• Any change in Articles of Agreement, Charter, Articles of Incorporation relating to the
transaction of customs business or any other change in the legal nature of the
organization.

111.30, cont.
• Each broker must file a triennial status report with CBP on
February 1 of each third year after 1985. The report must be
filed through a CBP-authorized EDI system and will not be
considered received by CBP until payment of the triennial
status report fee prescribed in § 111.96(d) is received. A
report received during the month of February will be
considered filed timely.

111.30 – Requirements
• (2) Individual. Each individual broker must state in the report required under paragraph
(d)(1) of this section whether he or she is actively engaged in transacting business as
a broker.
• (i) If the individual broker is actively engaged in transacting business as a broker,
the individual broker must also:
• (A) State the name under which, and the address at which, the broker's business is
conducted if he or she is a sole proprietor, and an email address;
• (B) State the name and address of his or her employer if he or she is employed by
another broker, unless his or her employer is a partnership, association or
corporation broker for which he or she is a qualifying member or officer for purposes of §
111.11(b) or (c)(2);
• (C) State whether or not he or she still meets the applicable requirements of §§
111.11 and 111.19 and has not engaged in any conduct that could constitute grounds for
suspension or revocation under § 111.53; and
• (D) Report and certify the broker's compliance with the continuing broker education
requirement as set forth in § 111.102.

111.30 – Requirements
• (ii) If the individual broker is not actively engaged in transacting business as a broker,
the individual broker must also:
• (A) State the broker's current mailing address and email address;
• (B) State whether or not he or she still meets the applicable requirements of §§
111.11 and 111.19 and has not engaged in any conduct that could constitute
under § 111.53; and
• (C) Report and certify the broker's compliance with the continuing broker education
requirement as set forth in § 111.102.
• (3) Partnership, association, or corporation. (i) Each partnership, association, or
corporation broker must state in the report required under paragraph (d)(1) of this section the name
under which its business as a broker is being transacted, the broker's office of record (see § 111.1), the
name, address and email address of each licensed member of the partnership or licensed officer of the
association or corporation, including the license qualifier under § 111.11(b) or (c)(2) and the name of
the licensed employee who is the national permit qualifier under § 111.19(a), and whether
the partnership, association, or corporation is actively engaged in transacting business as a broker. The
report must be signed by a licensed member or officer.
• (ii) A partnership, association, or corporation broker must state whether or not the partnership,
association, or corporation broker still meets the applicable requirements of §§ 111.11 and 111.19 and
has not engaged in any conduct that could constitute grounds for suspension or revocation under §
111.53.

111.30, cont.
4) Failure to file timely. If a broker fails to file the report required under paragraph
(d)(1) of this section by March 1 of the reporting year, the broker's license is
suspended by operation of law on that date. By March 31 of the reporting year,
CBP will transmit written notice of the suspension to the broker by certified mail,
return receipt requested, at the address reflected in CBP records. If the broker files
the required report and pays the required fee within 60 calendar days of the date
of the notice of suspension, the license will be reinstated. If the broker does not
file the required report and pay the required fee within that 60-day period,
the broker's license is revoked by operation of law without prejudice to the filing
of an application for a new license. Notice of the revocation will be published in
the FEDERAL REGISTER.

111.31 – conflicts of interest
• Broker who is former officer/employee in US government
service may not represent client before DHS in any matter
to which broker gave personal knowledge or gained
knowledge of facts while government employee.
• Broker cannot knowingly assist, accept assistance from, or
share fees with a person employed by a client in a matter
pending before DHS to which that person gave personal
consideration or gained personal knowledge of that matter
while employed by the government.
• A broker who is an importer himself must not act as a
broker for an importer who imports merchandise of the
same general character as that imported by the broker
unless the client has full knowledge of the facts. The same
restriction will apply if a broker's employee is an importer.

111.32 – False Information
• A broker must not file or procure or assist in the filing of any claim, or of
any document, affidavit, or other papers, known by such broker to be
false. In addition, a broker must not give, or solicit or procure the giving
of, any information or testimony that the broker knew or should have
known was false or misleading in any matter pending before
the Department of Homeland Security or to any representative of
the Department of Homeland Security. A broker also must document
and report to CBP when the broker separates from or cancels
representation of a client as a result of determining the client is
intentionally attempting to use the broker to defraud the U.S.
Government or commit any criminal act against the U.S. Government.
The report to CBP must include the client name, date of separation or
cancellation, and reason for the separation or cancellation.

111.34 – Undue Influence
• A broker must not influence or attempt to influence the
conduct of any representative of the Department of
Homeland Security in any matter pending before
the Department of Homeland Security or any
representative of the Department of Homeland
Security by the use of duress or a threat or false
accusation, or by the offer of any special inducement or
promise of advantage, or by bestowing any gift or favor or
other thing of value.

111.35 – acceptance of fees
• With respect to customs transactions, a broker
must not demand or accept from any attorney on
account of any case litigated in any court of law or
on account of any other legal service rendered by
an attorney any fee or remuneration in excess of an
amount measured by or commensurate with the
time, effort and skill expended by the broker in
performing his services.

111.36 – Relations with Unlicensed
Persons
• Employment by unlicensed person other than
importer – when a broker is employed for the
transaction of customs business by an unlicensed
person who is not the actual importer, the broker
must transmit to the actual importer either a copy
of his bill for services rendered or a copy of the
entry, unless the merchandise was purchased on a
delivered, duty-paid basis or unless the importer
has in writing waived transmittal of the copy of the
entry of bill for services rendered.

111.36, cont.
• Service to others not to benefit unlicensed person – except as discussed below,
a broker must not enter into any agreement with an unlicensed person to
transact customs business for others in such a manner that the fees resulting
from the services go to the benefit of the unlicensed person.
• Relations with a freight forwarder – broker may compensate a forwarder for
referring brokerage business subject to the following conditions:
• The importer is notified in advance by the forwarder or broker of the name
of the broker selected by the forwarder for the handling of his Customs
transactions;
• The broker transmits directly to the importer:
• A true copy of his brokerage charges if fees & charges are to be
collected by or through the forwarder unless this is waived in writing
by importer
• A statement of his brokerage charges and an itemized list of any
charges to be collected for the account of the forwarder if the fees &
charges are to be collected through the broker

111.36 – cont.
• (3) The broker must execute a customs power of attorney directly with
the importer of record or drawback claimant, and not via a freight
forwarder or other third party, to transact customs business for
that importer of record or drawback claimant. No part of the agreement
of compensation between the broker and the forwarder, nor any action
taken pursuant to the agreement, can forbid or prevent direct
communication between the importer of record, drawback claimant, or
other party in interest and the broker; and
• (4) In making the agreement and in all actions taken pursuant to the
agreement, the broker remains subject to all other provisions of this
part.

111.39 – Advice to Client
• (a) Withheld or false information. A broker must not withhold information
from a client relative to any customs business it conducts on behalf of a
information. The broker must not knowingly impart to a client false
business.
• (b) Due diligence. A broker must exercise due diligence to ascertain the
correctness of any information which the broker imparts to a client,
the proper payment of any duty, tax, or other debt or obligation owing to
• (c) Error or omission by client. If a broker knows that a client has not
complied with the law or has made an error in, or omission from, any
record which the law requires the client to execute, he must advise the
noncompliance, error, or omission. The broker must advise the client on
required and retain a record of the broker's communication with the client
111.21 and 111.23.

111.42 – Relations with person who
is notoriously disreputable
• Except as discussed below, a broker must not knowingly and directly or
indirectly:
• Accept employment to effect a Customs transaction as associate,
correspondent, officer, employee, agent, or subagent from any person who
is notoriously disreputable or whose broker license was revoked for any
cause or is under suspension or was cancelled with prejudice.
• Assist in the furtherance of any customs business or transactions of any
person described above.
• Employ or accept assistance in the furtherance of any customs business or
transactions from, any person described above without approval of the
Assistant Commissioner
• Share fees with any person described above
• Permit any such person to participate whether through ownership or
otherwise in promotion or control of business of broker.
• CLIENT EXCEPTION – Broker is not prohibited from transacting customs
business on behalf of a bona fide importer or exporter who may be
notoriously disreputable or whose whose broker license is under suspension or was
cancelled “with prejudice” or revoked.

111.45 – Revocation by operation of
law
• If a broker that is a partnership, association, or corporation fails to have, during any
continuous period of 120 days, at least one member of the partnership, association or
corporation who holds a valid individual broker’s license, the license and any national
permit will be revoked by operation of law. Assistant Commissioner or designee will
notify the broker in writing of impending revocation 30 calendar days in advance of
revocation.
• If a broker that is a partnership, association, or corporation fails to employ, during any
continuous period of 180 days, a licensed customs broker who is the
national permit qualifier for the broker, that failure will, in addition to any other sanction
that may be imposed under this part, result in the revocation by operation of law of the
national permit issued to the partnership, association, or corporation.
• CBP will notify the broker in writing of an impending revocation by operation of law
under this section thirty (30) calendar days before the revocation is due to occur, if
the broker has provided advance notice to CBP of the underlying events that could cause
a revocation by operation of law under this section. If the license or permit of
a partnership, association, or corporation is revoked by operation of law, CBP will notify
the organization of the revocation.
• (b) Annual broker permit fee. If a broker fails to pay the annual permit user fee pursuant
to § 111.96(c), the permit is revoked by operation of law. The processing Center will
notify the broker in writing of the failure to pay and the revocation of the permit.
• In addition to revocation, additional sanctions including penalties for failure to exercise
reasonable supervision and control over conduct of business can be assessed.

111.51 – Cancellation of license or
permit
• Assistant Commissioner may cancel a broker’s
license or permit “without prejudice” upon written
application by broker if determined that the
application was not made in order to avoid
proceedings for suspension or revocation.
• Assistant Commissioner may cancel a broker’s
license or permit “with prejudice” when requested
by broker. Effect of “with prejudice” is the same as
if license or permit had been revoked for cause
except that it will not give rise to appeal.

111.52 – Voluntary Suspension
• Voluntary suspension of license or permit.
• The appropriate Executive Director, Office of Trade, may
accept a broker's written voluntary offer of suspension of
the broker's license or permit for a specific period of time
under any terms and conditions to which the parties may
agree.

111.53-Grounds for suspension or
revocation of license/permit
• Appropriate Customs official can initiate proceedings for suspension/revocation for any of
the following reasons:
• Broker, in license/permit application has made false or misleading statements with
respect to any material fact or omitted to state in application a material fact that was
required,
• Broker has been convicted at any time after filing application of any felony or
misdemeanor which
• Involve the importation or exportation of merchandise
• Arose out of the conduct of customs business or
• Involved larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent
concealment, embezzlement, fraudulent conversion or misappropriation of
funds;
• Has violated any provision of any law, regulation or rule enforced by Customs
• Has counseled, commanded, induced, procured or knowingly aided or abetted
the violations by another person of any provision of law, regulations enforced
by CBP.
• Has knowingly employed person convicted of a felony without permission from
Assistant Commissioner.
• Has willfully and knowingly deceived, misled or threatened a client or
prospective client.
• No longer meets the requirements of 111.11 and 111.19.

111.55 – 111.59
• These sections cover the procedures to be followed when a
complaint or charge is brought against a broker.
• 111.55 – complaint/charge forwarded to special agent.
• 111.56- port director reviews report, makes recommendation and
forwards to the Assistant Commissioner.
• 111.57 – Assistant Commissioner will make determination on
whether to go forward with charges.
• 111.58 – Statement of charges must include sanction being
proposed (license/permit revocation)
• 111.59 – Port director will advise broker of opportunity to
participate in preliminary proceedings.

111.60-111.75
• These sections cover the specific procedures that
the government must follow when bringing formal
charges against a broker.
• Includes contents of notice of charges, service of
notice, hearing procedures, appeal mechanism
(Court of International Trade)

111.76-111.81
• 111.76 – allow broker to petition Assistant Comissioner to reopen case if
important new evidence is found that wasn’t available at original
hearing.
• 111.77 – Notice to vacate suspension/revocation will be published in
Federal Register & Customs Bulletin.
• 111.78 – CBP(HQ or port director) can issue a written reprimand if a
broker fails to observe & fulfill duties and responsibilities of a broker but
not sufficiently serious to warrant suspension or revocation.
• 111.79 – Five years after revocation or cancellation of a license, ex-
broker may petition Assistant Commissioner for authorization to assist
or accept employment with a broker.
• 111.81- Assistant Commissioner has authority to settle and compromise
any disciplinary proceeding which also can include assessment of a
penalty in lieu of revocation or suspension of license

Broker Penalties
• 19 CFR 111.91 – A broker can be issued a penalty
not to exceed an aggregate of $30,000 for one or
more of the reasons set forth in 111.53(a) through
(f) other than those listed in 111.53(b)(3) and
provided no license or permit suspension or
revocation has been started against the broker.
• A non-broker can be issued a penalty in an amount
not to exceed $10,000 for each transaction or
violation referred to in 111.4 and not to exceed an
aggregate of $30,000 for all of those transactions.

What else do I need to know about
penalties?
• 19 CFR 171 Appendix C provides specifics and
mitigation guidelines for broker penalties.
• Although some penalty amounts that can be
assessed make seem “minimal”, remember, if you
pay it, you have admitted to the violation and your
record will reflect that admission.
• If fraud is suspected, Customs can proceed to
initiate penalties under 19 USC 1592 which can be
substantially higher than those assessed under 19
USC 1641

111.96 - Fees
• Individual license fee - $300 (also fingerprinting fee – CBP advises)
• Corporate license fee - $500
• Exam Fee - $390
• Annual Permit Fee – Set out in 19 CFR 24.22(h) (also paid with national
permit application) currently $138 – to be paid to the processing center
through which the license was delivered.
• Triennial Report Fee - $100

111.101 – Continuing Education
• This subpart sets forth regulations providing for a continuing education
requirement for individual brokers and the framework for administering
this requirement. The continuing broker education requirement is
for individual brokers, in order to maintain sufficient knowledge
of customs and related laws, regulations, and procedures, bookkeeping,
accounting, and all other appropriate matters necessary to render
valuable service to importers and drawback
claimants. Individual brokers will be required to certify completion of
the continuing broker education requirement with the filing of their
2027 status report, required under § 111.30(d), and every status report
thereafter, in accordance with the provisions of this subpart.

111.102
• (a) Continuing broker education requirement. All individual brokers must
complete qualifying continuing broker education as defined in § 111.103(a), except:
• (1) During a period of voluntary suspension as described in § 111.52; or
• (2) When individual brokers have not held their license for an entire triennial period at the
time of the submission of the status report as required under § 111.30(d).
• (b) Required minimum number of continuing education
credits. All individual brokers who are subject to the continuing broker education
requirement must complete at least 36 continuing education credits of qualifying
continuing broker education each triennial period, except upon the reinstatement of a
license following a period of voluntary suspension as described in § 111.52. Upon the
reinstatement of a license following a period of voluntary suspension as described in §
111.52, the number of continuing education credits that an individual broker must
complete by the end of the triennial period during which the reinstatement of the license
occurred will be calculated on a prorated basis of one continuing education credit for each
complete remaining month until the end of the triennial period.

• (c) Reporting requirements. Individual brokers who are subject to the continuing broker education
requirement must report and certify their compliance upon submission of the status report required
under § 111.30(d).
• (d) Recordkeeping requirements—(1) General. Individual brokers who are subject to the continuing
broker education requirement must retain the following information and documentation pertaining to
the qualifying education completed during a triennial period for a period of three years following the
submission of the status report required under § 111.30(d):
• (i) The title of the qualifying continuing broker education attended;
• (ii) The name of the provider or host of the qualifying continuing broker education;
• (iii) The date(s) attended;
• (iv) The number of continuing education credits accrued;
• (v) The location of the qualifying continuing broker education; and
• (vi) Any documentation received from the provider or host of the qualifying continuing broker
education that evidences the individual broker's registration for, attendance at, completion of, or other
activity bearing upon the individual broker's participation in and completion of the qualifying
continuing broker education.

• (2) Availability of records. In order to ensure that
the individual broker has met the continuing broker
education requirement, upon CBP's request,
the individual broker must make available to CBP the
information and documentation described in paragraph
(d)(1) of this section on or before 30 calendar days from the
date of receipt of CBP's request. CBP can request that the
information and documentation be made available for in-
person inspection or be delivered to CBP by either hard-
copy or electronic means, or any combination thereof.

111.103 – Accreditation of Qualifying
Education
• (a) Qualifying continuing broker education. In order for a training or educational activity to be
considered qualifying continuing broker education, it must meet the following two requirements:
• (1) Providers of qualifying continuing broker education. The training or educational activity must be
offered by one of the following providers:
• (i) Government agencies. Qualifying continuing broker education constitutes any training or
educational activity offered by CBP, whether online or in-person, and training or educational activity
offered by another U.S. government agency, whether online or in-person, but only if the content is
relevant to customs business as identified by CBP in coordination with the appropriate U.S. government
agency when applicable. Accreditation is not required for trainings or educational activities offered by
U.S. government agencies.
• (ii) Other providers requiring accreditation. Any other training or educational activity not offered by a
U.S. government agency, whether online or in-person, will not be considered a qualifying continuing
broker education, unless the training or educational activity has been approved for continuing
education credit by a CBP-selected accreditor before the training or educational activity is provided.

Education
• (2) Recognized trainings or educational activities. The training or educational activity
must constitute one of the following:
• (i) A seminar, webinar, or a workshop, whether online or in-person, whether
experienced live or recorded, that is conducted by an instructor, discussion leader, or
• (ii) A symposium or convention, with the exception of the attendance at a meeting
conducted in accordance with the provisions of the Federal Advisory Committee Act,
whether online or in-person;
• (iii) Online coursework, a workshop, or a module, conducted as self-guided education,
culminating in a retention test;
• (iv) The preparation of a subject matter for presentation as an instructor, discussion
leader, or speaker at a training or educational activity described in paragraph (a)(2)(i)
subject to the requirements set forth in paragraph (b) of this section; and
• (v) The presentation of a subject matter as an instructor, discussion leader, or speaker
at a training or educational activity described in paragraph (a)(2)(i) or (a)(2)(ii) of this
requirements set forth in paragraph (b) of this section.

Education
• (b) Special allowance for instructors, discussion leaders, and speakers.
• (1) Contingent upon the approval by a CBP-selected accreditor,
an individual broker may claim half of one continuing education credit for each full 30
• (i) Presenting subject matter as an instructor, discussion leader, or speaker at a
training or educational activity described in paragraph (a)(2)(i) or (ii) of this section; or
• (ii) Preparing subject matter for presentation as an instructor, discussion leader, or
speaker at a training or educational activity described in paragraph (a)(2)(i) or (ii) of
• (2) The special allowance for instructors, discussion leaders, and speakers is subject
to the following limitations:
• (i) For any session of presentation given at one time, regardless of the duration of that
session, an individual broker may claim, at a maximum, one continuing education
subject matter for that presentation pursuant to paragraph (b)(1)(ii) of this section.
• (ii) Per triennial period, an individual broker may claim, at a maximum, a combined
total of 12 continuing education credits earned in accordance with paragraphs (b)(1)(i)

Education
• (3) Regardless of whether the training or educational activity is offered by a U.S.
government agency or another provider, any instructor, discussion leader, or speaker
education credit in accordance with paragraph (b)(1) of this section must obtain the
accreditor.
• (c) Selection of accreditors. The Office of Trade will select accreditors based on a
Request for Information (RFI) and a Request for Proposal (RFP) announced through the
Management (SAM) or any other electronic system for award management approved
Administration, in accordance with the Federal Acquisition Regulation (48 CFR
of award, subject to renewal. The Executive Assistant Commissioner, Office of Trade,
notices in the FEDERAL REGISTER announcing the criteria that CBP will use to select an
which CBP will accept applications by potential accreditors, and the period of award

Education
• (d) Responsibilities of CBP-selected accreditors. CBP-selected accreditors
administer the accreditation of trainings or educational activities other than
those described in paragraph (a)(1) of this section for the purpose of
the continuing broker education requirement by reviewing and approving or
denying such educational content for continuing education credit. A CBP-
selected accreditor's approval of a training or educational activity for continuing
education credit is valid for one year, and the accreditation may be renewed
through any CBP-selected accreditor. CBP-selected accreditors will not deny
review or approval of a training or educational activity for continuing education
credit solely because it was previously denied by the CBP-selected accreditor or
any other CBP-selected accreditor.
• (e) Prohibition of self-certification by an accreditor. CBP-selected accreditors
may not approve their own trainings or educational activities for continuing
education credit.

111.104 – Failure to Report and
Certify
• (a) Notification by CBP. If an individual broker is subject to the continuing broker education
requirement pursuant to § 111.102 and submits a status report as required under §
111.30(d)(2) but fails to report and certify compliance with the continuing broker education
requirement as part of the submission of the status report, then CBP will notify
the individual broker of the broker's failure to report and certify compliance in accordance with §
111.30(d). The notification will be sent to the address reflected in CBP's records or transmitted
electronically pursuant to any electronic means authorized by CBP for that purpose.
• (b) Required response to notice. Upon the issuance of such notification, the individual broker must
on or before 30 calendar days:
• (1) Submit a corrected status report that, in accordance with § 111.30(d), reflects
the individual broker's compliance with the continuing broker education requirement, if
the individual broker completed the required number of continuing education credits but failed to
report and certify compliance with the requirement as part of the submission of the status report;
or
• (2) Complete the required number of continuing education credits of qualifying continuing broker
education and submit a corrected status report that, in accordance with § 111.30(d), reflects
the individual broker's compliance with the continuing broker education requirement, if
the individual broker had not completed the required number of continuing education credits at
the time the status report was due.

111.104 – Failure to Report and
Certify
• (c) Suspension of license. Unless the individual broker takes the corrective
actions described in paragraph (b)(1) or (b)(2) of this section on or before 30
calendar days from the issuance date of the notification described
in paragraph (a) of this section, CBP will take actions to suspend
the individual broker's license in accordance with subpart D of this part.
• (d) Revocation of license. If the individual broker's license has been
suspended pursuant to paragraph (c) of this section and
the individual broker fails to take the corrective actions described in
paragraph (b)(1) or (b)(2) of this section on or before 120 calendar days from
the issuance date of the order of suspension, CBP will take actions to revoke
the individual broker's license without prejudice to the filing of an
application for a new license in accordance with subpart D of this part.

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