Important Changes to Requirements for Powers of Attorney!
There are some important changes that will be occurring as a result of the Modernization of the Customs Broker Regulations Final Rule announced late this fall. These changes pertain to your current and future powers of attorney (“POA”) and may have an impact on your day-to-day shipping transactions.
According to the Final Rule and U.S. Customs and Border Protection’s Cargo Systems Messaging Service(“CSMS”) notification number 54194146, as of December 19, 2022, customs brokers must have an executed power of attorney DIRECTLY with an importer of record or drawback claimant. Customs brokers are now required to directly communicate with the importer of record or drawback claimant regarding the POA and are not permitted to communicate and/or receive the POA through a freight forwarder or other (unlicensed) third party. Customs brokers who have POAs that were not received as a result of direct communication with the importer or drawback claimant and were issued prior to December 19, 2022, have an extension until February 17,2023 to receive updated POAs in compliance with the Final Rule.
What Does Direct Communication Mean?
CSMS notification number54194146 stated that, for purposes of these updated regulations, the term“direct communication” means that customs brokers are dealing directly (i.e.,“directly communicating”) with the importer or drawback claimant and are not relying on a freight forwarder or other unlicensed person or entity to discuss and obtain the POA. For example, if you are dealing with the account manager for a large freight forwarder that also provides customs brokerage services, you cannot provide the POA to that account manager unless they are an employee of the customs brokerage entity. If you already have a POA on file with your customs broker(s) that you provided to a freight forwarder or other unlicensed entity such as an account manager from the “corporate” office of the service provider, you will probably be asked to sign a new POA before February 17, 2023.
How Else Do These Changes Change Impact Me?
Now is the time to review and reevaluate the current POA you have with your customs broker(s) as most standard POAs have language that is solely directed at protecting the customs broker and is not in your organization’s best interest. For example:
• Provisions regarding the customs broker’s ability to cash refund checks on your behalf.
• Authorization for the customs broker to share your personal contact name, address, telephone number, revenue and customs entry data with other entities.
• Acknowledgments that by signing the POA, you are subject to the customs broker’s Terms and Conditions, including the limitations of liability and general lien on freight.
Our law firm can assist you in the review of your customs broker’s standard POAs and provide you with language that is tailored to protect your organization rather than your customs broker.
Finally, these updates present your organization with an opportunity to perform an overall evaluation of all your current customs brokers to determine if you want to continue to work with them. As an example, perhaps your supplier’s freight forwarded contacted you for a POA to give to their selected customs broker and you have been working with them ever since. You may not feel this customs broker provides you the best services, however, believe that you are “stuck” with them based upon the POA you signed for that single transaction. This is your chance to review all your customs brokers and only work with those that are the best fit for you.
The Law Offices of Michael A. Capuzzi, P.A. has years of experience assisting clients with customs broker and service provider management at all levels. If you have any questions regarding these new regulations and how they may affect your business, do not hesitate to give us a call.