Responsible Supervision Over Employees of Customs Brokers

The Customs Brokers regulations under 19 CFR §111.28 provides for the exercise of responsible supervision by brokers over the transaction of customs business within such business entity or sole proprietorship.

Under the statute, 19 USC §1641(b)(4), responsible supervision and control means that degree of supervision and control necessary to ensure the proper transaction of the customs business of a broker, including actions necessary to ensure that an employee of a broker provides substantially the same quality of service in handling customs transactions that the broker is required to provide.

Factors US Customs looks at in order to gauge whether or not responsible supervision and control had been exercised by a broker lays in its evaluation of certain factors including:

1.      The training required of employees of the broker;

2.      the issuance of written instructions and guidelines to employees of the broker;

3.      the volume and type of business of the broker;

4.      the reject rate for the various customs transactions;

5.      the maintenance of current editions of the Customs Regulations,  the Harmonized Tariff Schedule of the United States, and Customs issuances;

6.      the availability of an individually licensed broker 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 a resident individually licensed broker;

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 district permit is involved in the operation of the brokerage; and

10.   any circumstance which indicates that an individually licensed broker has a real interest in the operations of a broker.

These factors are required to be considered by US Customs when imposing a monetary penalty upon a broker for a lack of responsible supervision and control. [US v. UPS, 686 F. Supp.2d 1337 (2010)]

Therefore, it would be prudent to ensure that oversight of employees with respect to these factors remains high.

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