A customs broker receives payment for duties from a client after the due date. The payment did not include payment for the broker's services. What must the broker do?
How to get there
19 CFR 111.29(a): Due diligence by broker… Payment of duty, tax, or other debt … for which the broker has received payment from a client, must be made to the Government on or before the date that 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. …
The client's duty money belongs to the Government. The unpaid brokerage fee is a separate matter between broker and client. The answer is C.
Why the other choices are wrong
A) Return it and complain to CBP: the broker must pass the payment on, not return it. No complaint process applies.
B) Hold the duty until fees are paid: using duty money as leverage violates the 5-working-day rule.
D) Deduct the fee and send the rest: duty money can't be used to cover the broker's charges. The full duty payment goes to CBP.
Tip
Broker money rules: pay on time if paid on time; pass on late client payments within 5 working days; account in writing for refunds and excess funds within 60 calendar days; and give clients the annual “method of payment” notice (§ 111.29(b)).
Source: 19 CFR 111.29 (eCFR).
CBP answer key: Answer C · 19 CFR 111.29(a)Source: CBP past exams ↗