CBP Issues FAQ on Trade Names and Corporations for Licensed Customs Brokers

CBP's document answers five frequently asked questions, as follows:

Individual license transfer to corp. I have an individual Customs Broker license, and I want to start a corporation that will engage in "Customs business." May I transfer my individual license for purposes of engaging in "Customs business" as a corporation?

No. Customs Broker licenses are issued to individuals, associations, corporations, or partnerships. These licenses are not transferable from one business entity to another. For example, an individual license may not use his/her license for the purpose of a corporation to engage in "Customs business." The corporation would need to obtain its own Customs Broker license. However, the licensed individual, if an officer of the corporation, could qualify the corporation to engage in "Customs business."

Name changes, fictitious names. I'm a licensed individual who wishes to operate under the name of "Quick Imports." I have approval from a State authority, but what is the next step?

Per 19 CFR 111.30(c), a broker who changes his name, or proposes to operate under a trade or fictitious name must obtain approval from CBP prior to its use. Moreover, the broker must affix his own name in conjunction with the approved trade name when signing customs documents.

License of qualifying broker revoked. My individual license was revoked for failure to file the status report, and I'm the licensed qualifying broker for the corporation. Should my employer be worried?

Yes. An individual licensed qualifier for a corporation, association, or partnership, who loses his/her license, subjects the corporation, association, or partnership's license to possible revocation. If the corporation, association, or partnership brokerage firm fails to have during any continuous period of 120 days at least once officer who holds a valid individual broker's license, the business entity that was qualified by the licensed individual will result in revocation by law. See 19 CFR 111.45(a).

Being incorporated. I'm a licensed broker, and based on the advice of my tax consultant I've incorporated. Should I notify CBP of my incorporation?

If the corporation engages in "Customs business" without satisfying the regulatory requirements (i.e., 19 CFR 111.11(c)), the corporation will be subject to 19 USC 1641(B)(6), which states that the maximum penalty for any one incident of conducting "Custom business" without a license is $10,000.

If the broker outsources ancillary services to the corporation, the corporation may have no access to, or involvement in, the actual customs business work of the licensed broker, and provided that the records of the clients of the broker, and the information contained in those records, are not disclosed to the corporation. See 19 CFR 111.24.

Filer code for corporate license. I've engaged in "Customs business" with my individual license for the last three years. Recently, my corporate Customs Broker license was received. Do I need to obtain a filer code for my corporation or can I merely use my filer code that I have had for the past three years while conducting "Customs business" as an individual?

No. Filer codes, which are unique and dedicated, are assigned to individuals, corporations, partnerships, or associations. An individual who later obtains a corporate license to engage in "Customs business" and intends to conduct "Customs business" as a corporation would need to obtain a corporate filer code.

FAQs (posted 07/23/09) available at http://www.cbp.gov/xp/cgov/trade/trade_programs/broker/faq_tradenames.xml