Broker Compliance: practice questions · page 3

51.Which of the following customs transactions is NOT required to be performed by a licensed customs broker?

52.For which company below will the customs broker be required to obtain documentation establishing the authority of the grantor to execute a power of attorney?

53.Forty-two days ago, a customs broker knowingly hired a person convicted of a felony. At no point has the customs broker sought approval for this hire from CBP. Additionally, CBP is not aware of this hire. As of today, what is the heaviest single maximum penalty that can be assessed by CBP against this broker for not seeking approval from the appropriate Executive Director, Office of Trade for the felon's continued employment?

54.Which of the following statements is legally TRUE regarding a customs broker conducting "customs business?”

55.John and Fred Smith each had a 25% ownership share of a general partnership, JJF, with their father, Jack Smith, owning the other 50%. Three weeks ago, JJF had sent ABC Customhouse Brokers (ABC) a copy of the bill of lading, a commercial invoice, and a packing list for their incoming shipment. JJF, a longtime client of ABC, had executed a new customs power of attorney (POA) signed by Jack Smith one month ago. However, John Smith advised ABC that his father, Jack Smith, died last week, with JJF changing by operation of law into Smith & Smith, a new partnership that inherited JJF’s legal rights and responsibilities. ABC states that they cannot proceed with the customs clearance on Smith & Smith’s behalf without a newly executed POA. Which regulation explains why the existing POA is no longer valid ?

56.Under what section of the Code of Federal Regulations (CFR) would you find the fee associated with an application filed by a carrier or freight forwarder to be authorized to receive bonded merchandise for transportation in bond?

57.Who must exercise responsible supervision and control over the transaction of customs business of an association or corporation that is a broker?

58.While preparing the entry documents for a shipment on behalf of its client Angel Industries (Angel), Shady CHB (Shady) sees that the insurance value for the shipment is significantly lower than the commercial invoice value. In response to Shady's inquiry concerning the differences, Angel explains that there are two commercial invoices for the shipment. The first commercial invoice is the real invoice from the shipper which shows the lower amount that is used for insurance purposes. The second commercial invoice is created by Angel at a higher amount and is used as the invoice for calculating Customs value and upon which it pays the duties, taxes, and fees. Angel explains that it uses the two invoice system in its accounting records to reduce its reportable profit for income tax purposes. Shady's attorney advises Shady to terminate its relationship with Angel because the “double invoice scheme” is fraudulent. Of the choices below, what is Shady's best next step?

59.Which ONE of the following four scenarios best demonstrates proper compliance with a record examination request? Assume that duly accredited representatives of the U.S. Department of Homeland Security (DHS) made each of the requests below.

60.Andrew Balder, an employee of PM Morris Customs Brokerage (MCB), has decided to import dual color lapel men’s dress jackets to take advantage of their exploding popularity. One of MCB's clients regularly imports comparable dress jackets and has a record number of sales. Which of the following statements is CORRECT?

61.Which ONE of the following is NOT included in 19 CFR 111.91(a) as grounds for the imposition of a monetary penalty?

62.Which ONE of the four choices below correctly identifies how long a customs broker must retain the speficied type of record?

63.How many characters is the unique filer code assigned by CBP to qualified licensed Customs brokers and self-filing importers?

64.Suzy Smith is a licensed customs broker, and her license is overseen by the Processing Center located in Miami, Florida. Ms. Smith seeks to obtain a national permit in her individual capacity to transact customs business throughout the customs territory of the United States. Ms. Smith's application included the following information: (1) the applicant's broker license number and date of issuance; (2) the address, telephone number, and email address of the office designated by the applicant as the office of record; (3) the name, telephone number, and email address of the point of contact to be available to CBP to respond to issues related to the transaction of customs business; (4) a list of all employees together with the specific employee information prescribed in 19 CFR 111.28 for each employee; (5) the location where records will be retained; (6) the name, telephone number, and email address of the knowledgeable employee responsible for broker-wide records maintenance and financial recordkeeping requirements; (7) and a receipt showing that the fees specified in 19 CFR 111.96(b) and (c) have been paid. What additional materials must Ms. Smith provide to complete her application for a national permit?

65.A broker has failed to file their triennial status report within the required timeframe. They have received written notice of their license being suspended from CBP. What action must the broker take to get their license reinstated?

66.Sam Sly's customs broker license was revoked by operation of law for failure to file a triennial status report and pay the fee. Sam thought that his employer ABC Brokerage (ABC) filed his report and paid the fee on his behalf, so he ignored the warning letter from CBP. In addition to his work at ABC, Sam completes freelance jobs classifying merchandise and filling out entry documents, but not filing them with CBP, for clients he obtains from a website that brings service providers together with businesses who buy freelance services. CBP discovers Sam's side business, determines that Sam is advertising publicly that he is a licensed customs broker, and discovers that he has conducted customs business for five importers of commercial goods after his license was revoked. CBP sends a penalty notice to Sam for conducting customs business without a license for $10,000.00. This is Sam's first penalty, and he has the ability to pay the fine, but he has requested mitigation claiming that he did not know his license was revoked. Based upon the guidelines in Appendix C to 19 CFR Part 171, will CBP mitigate and, if so, to what amount?

67.Customs & Border Protection (CBP) requires each broker to submit, in writing, to the director of each port, a list of names of persons currently employed by the broker at that port. In the case of a new employee, the broker must submit the written information within ______________ after the new employee has been employed by the broker for 30 consecutive days.

68.Which of the following is a violation of 19 CFR 111.41? A non-resident importer has executed a Special Address Notification per 19 CFR 24.36 authorizing the mailing of refunds, bills, or notices of liquidation to its broker.

69.Smith Logistics LLC ("Smith Logistics") is a freight forwarder and licensed customs broker. Smith Logistics has executed a valid power of attorney to authorize its unlicensed employee, Erin Johnson, to sign documents pertaining to customs business on its behalf. Which ONE of the following statements is TRUE for this scenario?

70.Torres & Sons, a partnership, executed a power of attorney (POA) with Kent Customs Brokers (KCB) on May 1, 2024. Torres and Sons ended its business relationship with KCB on April 20, 2026, and wishes to also end KCB's POA. Any of the following measures would terminate the POA between Torres and Sons and KCB EXCEPT:

71.A freight forwarder is referring an import client to a customs broker with an expectation of receiving a referral fee. Which ONE of the following statements is legally TRUE with respect to their relationship?

72.All records pertaining to bonded merchandise must be retained by the proprietor of the bonded facility for __________ after the date of the final withdrawal?

73.Which of the following is a TRUE statement regarding decisions to remit or mitigate a penalty or cancel a claim for liquidated damages upon payment of a lesser amount?

74.Which of the following parties is required to maintain records and render them for examination and inspection by CBP?

75.Under which scenario can a broker bill a freight forwarder (FF) for Customs duties without sending a copy to the importer?