Checks issued for payment of duties as customs documents.

HQ H223977 May 28, 2013 OT:RR:CTF:ER H223977 MES T. James Min II, Esq. Vice President, International Trade Law Legal Department – DHL Americas 236 Wendell H. Ford Boulevard Mail Stop 1306 Erlanger, KY 41018 Re:     Checks issued for payment of duties as customs documents. Dear Mr. Min: This is in response to your request for a ruling filed with U.S. Customs and Border Protection (“CBP”) Headquarters, on behalf of Radix Group International, Inc. (“Radix”), an Ohio Corporation doing business as DHL Global Forwarding (“DGF”), dated June 22, 2012. You request a ruling regarding whether a broker using a check to pay duties on behalf of a client is required to affix both the broker’s own name and trade name when submitting the check to CBP, as is required when submitting “customs documents” to CBP under 19 CFR § 111.30(c). FACTS: In your June 22, 2012 letter, you ask if checks used by customs brokers for the payment of duties on behalf of clients are “customs documents” within the meaning of 19 CFR § 111.30(c) and therefore, would require both the broker’s own name and the broker’s trade or fictitious name (“trade name”) when signing the checks. In your letter, you state that Radix sought approval, which CBP granted, to conduct operations under the DGF trade name. You argue that checks issued on behalf of clients for the payment of duties are negotiable instruments and not “customs documents” within the meaning of 19 CFR § 111.30(c). As such, you argue that there is no requirement to include both the broker name and trade name when issuing checks for payment of duties on behalf of clients. ISSUE: Whether a broker using a check to pay duties on behalf of a client is required to affix both the broker’s own name and trade name when submitting the check to CBP. LAW AND ANALYSIS: Section 111.30(c) requires brokers to sign their own name in conjunction with each signature of their trade or fictitious name when signing customs documents. As explained below, checks submitted to CBP for the payment of duties are not customs documents within the meaning of § 111.30(c). As such, checks used by brokers to pay duties on behalf of clients are not required to be signed using both the broker’s own name and trade name. Transactions involving the payment of duties fall within the definition of customs business. See 19 U.S.C. § 1641(a)(2). As such, paying customs duties on behalf of another may only be done by a licensed customs broker. Section 641(f) of the Tariff Act of 1930, as amended (19 U.S.C. § 1641(f)), provides in pertinent part, that the Secretary may prescribe: [S]uch rules and regulations relating to the customs business of customs brokers as the Secretary considers necessary to protect importers and the revenue of the United States, and to carry out the provisions of this section, including rules and regulations governing the licensing of or issuance of permits to customs brokers, the keeping of books, accounts, and records by customs brokers, and documents and correspondence, and the furnishing by customs brokers of any other information relating to their customs business to and duly accredited officer or employee of the Customs Service. Pursuant to the above, brokers are subject to certain requirements, which are set forth in Part 111 of CBP’s Regulations (19 CFR Part 111). Of these requirements, 19 CFR § 111.30(c), “Change in name,” arises in situations where a broker either changes his name or operates under a trade name and it reads as follows: A broker who changes his name, or who proposes to operate under a trade or fictitious name in one or more States within the district in which he has been granted a permit and is authorized by State law to do so, must submit to the Office of International Trade, U.S. Customs and Border Protection, Washington, DC 20229, evidence of his authority to use that name. The name must not be used until the approval of Headquarters has been received. In the case of a trade or fictitious name, the broker must affix his own name in conjunction with each signature of the trade or fictitious name when signing customs documents. Therefore, if a check issued on behalf of a client to pay customs duties is a customs document, then the broker must affix both his own name and that of the trade name on the check. In previous rulings, we have provided guidance regarding which documents are to be considered customs documents for purposes of § 111.30(c). In HQ 225071, dated March 31, 1994, we held that the broker must include the approved trade or fictitious name along with the broker’s legal name on all customs documents relating to preparing, filing, or invoicing customs entries following approval of the use of the trade or fictitious name. In that case, a customs broker inquired whether it would be permissible to prepare, file, and invoice customs entries and other related functions utilizing only the legal name of his brokerage while excluding the approved trade name. Subsequently, in HQ 115013, dated September 6, 2000, we held that a broker must sign both the broker’s own name and the approved trade or fictitious name on customs documents signed following the approval of the use of the trade or fictitious name. In that case, a licensed broker asked for permission to operate under a trade name and asked whether they could execute new powers of attorney without referencing a trade name. Therefore, CBP has held that documents used to prepare, file, and invoice customs entries, and documents pertaining to related functions, are customs documents requiring both the broker’s own name and trade name to be affixed. In the instant case, the documents in question are checks used to pay customs duties on behalf of a client. Checks used for the payment of duties are not documents used to prepare, file, or invoice customs entries. Additionally, checks used to pay customs duties on behalf of a client are not documents pertaining to related functions. Powers of attorney, such as those at issue in HQ 115013, are documents pertaining to related functions in that they evidence the authority of the broker to perform tasks on behalf of a client, such as the preparation, filing, or invoicing of customs entries. Checks do not pertain to a related function; they are negotiable instruments used for the payment of duties. Despite the fact that the act of paying duties is customs business, able to be performed on behalf of another only by a licensed customs broker, this does not make the payment itself a customs document. For example, U.S. currency or coin shall be accepted for the payment of duties. See 19 CFR § 24.1(a)(1). However, using cash for the payment of duties would not make it a customs document. Moreover, 19 CFR § 24.1, entitled “Collection of Customs duties, taxes, fees, interest, and other charges,” contains specific guidance regarding the payment of duties by check and there is no requirement that both the broker’s own name and trade or fictitious name be signed on checks used to pay duties on behalf of clients. As such, checks used for the payment of duties on behalf of a client are not customs documents within the meaning of § 111.30(c). HOLDING: A broker using a check to pay duties on behalf of a client is not required to affix both the broker’s own name and trade name when submitting the check to CBP. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division