Baltimore Quick Printers is an active client of Fast Broker LLC with a power of attorney executed on May 1, 2020. Please refer to the provided broker's invoice for the "NOTICE TO CLIENT OF METHOD OF PAYMENT" (Notice) language. If the invoice did not contain this Notice, which of the statement(s) is/are correct regarding the broker's obligation to provide active clients this language? I. The notice is not required by Customs regulations. II. The notice is required on every broker invoice to active clients under the Customs regulations. III. The notice is required on or attached to the power of attorney between the broker and the client under the Customs regulations. IV. The notice is required in writing at least once per 12-month period under the Customs regulations.
How to get there
19 CFR 111.29(b)(2)The written notification set forth in paragraph (b)(1) of this section must be provided by brokers as follows: (i) On, or attached to, any power of attorney provided by the broker to a client for execution on or after September 27, 1982; and (ii) To each active client no later than February 28, 1983, and at least once at any time within each 12-month period after that date. An active client means a client from whom a broker has obtained a power of attorney and for whom the broker has transacted customs business on at least two occasions within the 12-month period preceding notification.
Two delivery duties exist: on or with the power of attorney (statement III), and at least once every 12 months to active clients (statement IV). The answer is D.
Why the other choices are wrong
A) I: not required by regulation: § 111.29(b)(1) says "All brokers must provide their clients" this notice.
B) II: required on every invoice: the exhibit broker invoice includes it, which is a common way to satisfy the annual duty, but no rule requires it on every invoice.
C) II and IV: includes the incorrect statement II.
TipPOA + every 12 months. The notice tells importers that paying the broker doesn't release them from liability to CBP.
Sources: 19 CFR 111.29(b) (eCFR); exam exhibit p. 13.
