                        TITLE 19--CUSTOMS DUTIES
 
                      CHAPTER 4--TARIFF ACT OF 1930
 
                 SUBTITLE III--ADMINISTRATIVE PROVISIONS
 
                    Part VI--Miscellaneous Provisions
 
Sec. 1641. Customs brokers


(a) Definitions

    As used in this section:
        (1) The term ``customs broker'' means any person granted a 
    customs broker's license by the Secretary under subsection (b) of 
    this section.
        (2) The term ``customs business'' means those activities 
    involving transactions with the Customs Service concerning the entry 
    and admissibility of merchandise, its classification and valuation, 
    the payment of duties, taxes, or other charges assessed or collected 
    by the Customs Service upon merchandise by reason of its 
    importation, or the refund, rebate, or drawback thereof. It also 
    includes the preparation of documents or forms in any format and the 
    electronic transmission of documents, invoices, bills, or parts 
    thereof, intended to be filed with the Customs Service in 
    furtherance of such activities, whether or not signed or filed by 
    the preparer, or activities relating to such preparation, but does 
    not include the mere electronic transmission of data received for 
    transmission to Customs.
        (3) The term ``Secretary'' means the Secretary of the Treasury.

(b) Customs broker's licenses

                           (1) In general

        No person may conduct customs business (other than solely on 
    behalf of that person) unless that person holds a valid customs 
    broker's license issued by the Secretary under paragraph (2) or (3).

                    (2) Licenses for individuals

        The Secretary may grant an individual a customs broker's license 
    only if that individual is a citizen of the United States. Before 
    granting the license, the Secretary may require an applicant to show 
    any facts deemed necessary to establish that the applicant is of 
    good moral character and qualified to render valuable service to 
    others in the conduct of customs business. In assessing the 
    qualifications of an applicant, the Secretary may conduct an 
    examination to determine the applicant's knowledge of customs and 
    related laws, regulations and procedures, bookkeeping, accounting, 
    and all other appropriate matters.

                 (3) Licenses for corporations, etc.

        The Secretary may grant a customs broker's license to any 
    corporation, association, or partnership that is organized or 
    existing under the laws of any of the several States of the United 
    States if at least one officer of the corporation or association, or 
    one member of the partnership, holds a valid customs broker's 
    license granted under paragraph (2).

                             (4) Duties

        A customs broker shall exercise responsible supervision and 
    control over the customs business that it conducts.

                        (5) Lapse of license

        The failure of a customs broker that is licensed as a 
    corporation, association, or partnership under paragraph (3) to 
    have, for any continuous period of 120 days, at least one officer of 
    the corporation or association, or at least one member of the 
    partnership, validly licensed under paragraph (2) shall, in addition 
    to causing the broker to be subject to any other sanction under this 
    section (including paragraph (6)), result in the revocation by 
    operation of law of its license.

                         (6) Prohibited acts

        Any person who intentionally transacts customs business, other 
    than solely on the behalf of that person, without holding a valid 
    customs broker's license granted to that person under this 
    subsection shall be liable to the United States for a monetary 
    penalty not to exceed $10,000 for each such transaction as well as 
    for each violation of any other provision of this section. This 
    penalty shall be assessed in the same manner and under the same 
    procedures as the monetary penalties provided for in subsection 
    (d)(2)(A) of this section.

(c) Customs broker's permits

                           (1) In general

        Each person granted a customs broker's license under subsection 
    (b) of this section shall be issued, in accordance with such 
    regulations as the Secretary shall prescribe, either or both of the 
    following:
            (A) A national permit for the conduct of such customs 
        business as the Secretary prescribes by regulation.
            (B) A permit for each customs district in which that person 
        conducts customs business and, except as provided in paragraph 
        (2), regularly employs at least 1 individual who is licensed 
        under subsection (b)(2) of this section to exercise responsible 
        supervision and control over the customs business conducted by 
        that person in that district.

                            (2) Exception

        If a person granted a customs broker's license under subsection 
    (b) of this section can demonstrate to the satisfaction of the 
    Secretary that--
            (A) he regularly employs in the region in which that 
        district is located at least one individual who is licensed 
        under subsection (b)(2) of this section, and
            (B) that sufficient procedures exist within the company for 
        the person employed in that region to exercise responsible 
        supervision and control over the customs business conducted by 
        that person in that district,

    the Secretary may waive the requirement in paragraph (1)(B).

                         (3) Lapse of permit

        The failure of a customs broker granted a permit under paragraph 
    (1) to employ, for any continuous period of 180 days, at least one 
    individual who is licensed under subsection (b)(2) of this section 
    within the district or region (if paragraph (2) applies) for which a 
    permit was issued shall, in addition to causing the broker to be 
    subject to any other sanction under this section (including any in 
    subsection (d) of this section), result in the revocation by 
    operation of law of the permit.

                    (4) Appointment of subagents

        Notwithstanding subsection (c)(1) of this section, upon the 
    implementation by the Secretary under section 1413(b)(2) of this 
    title of the component of the National Customs Automation Program 
    referred to in section 1411(a)(2)(B) of this title, a licensed 
    broker may appoint another licensed broker holding a permit in a 
    customs district to act on its behalf as its subagent in that 
    district if such activity relates to the filing of information that 
    is permitted by law or regulation to be filed electronically. A 
    licensed broker appointing a subagent pursuant to this paragraph 
    shall remain liable for any and all obligations arising under bond 
    and any and all duties, taxes, and fees, as well as any other 
    liabilities imposed by law, and shall be precluded from delegating 
    to a subagent such liability.

(d) Disciplinary proceedings

                          (1) General rule

        The Secretary may impose a monetary penalty in all cases with 
    the exception of the infractions described in clause (iii) of 
    subparagraph (B) of this subsection, or revoke or suspend a license 
    or permit of any customs broker, if it is shown that the broker--
            (A) has made or caused to be made in any application for any 
        license or permit under this section, or report filed with the 
        Customs Service, any statement which was, at the time and in 
        light of the circumstances under which it was made, false or 
        misleading with respect to any material fact, or has omitted to 
        state in any such application or report any material fact which 
        was required to be stated therein;
            (B) has been convicted at any time after the filing of an 
        application for license under subsection (b) of this section of 
        any felony or misdemeanor which the Secretary finds--
                (i) involved the importation or exportation of 
            merchandise;
                (ii) arose out of the conduct of its customs business; 
            or
                (iii) involved larceny, theft, robbery, extortion, 
            forgery, counterfeiting, fraudulent concealment, 
            embezzlement, fraudulent conversion, or misappropriation of 
            funds;

            (C) has violated any provision of any law enforced by the 
        Customs Service or the rules or regulations issued under any 
        such provision;
            (D) has counseled, commanded, induced, procured, or 
        knowingly aided or abetted the violations by any other person of 
        any provision of any law enforced by the Customs Service, or the 
        rules or regulations issued under any such provision;
            (E) has knowingly employed, or continues to employ, any 
        person who has been convicted of a felony, without written 
        approval of such employment from the Secretary; or
            (F) has, in the course of its customs business, with intent 
        to defraud, in any manner willfully and knowingly deceived, 
        misled or threatened any client or prospective client.

                           (2) Procedures

        (A) Monetary penalty

            Unless action has been taken under subparagraph (B), the 
        appropriate customs officer shall serve notice in writing upon 
        any customs broker to show cause why the broker should not be 
        subject to a monetary penalty not to exceed $30,000 in total for 
        a violation or violations of this section. The notice shall 
        advise the customs broker of the allegations or complaints 
        against him and shall explain that the broker has a right to 
        respond to the allegations or complaints in writing within 30 
        days of the date of the notice. Before imposing a monetary 
        penalty, the customs officer shall consider the allegations or 
        complaints and any timely response made by the customs broker 
        and issue a written decision. A customs broker against whom a 
        monetary penalty has been issued under this section shall have a 
        reasonable opportunity under section 1618 of this title to make 
        representations seeking remission or mitigation of the monetary 
        penalty. Following the conclusion of any proceeding under 
        section 1618 of this title, the appropriate customs officer 
        shall provide to the customs broker a written statement which 
        sets forth the final determination and the findings of fact and 
        conclusions of law on which such determination is based.

        (B) Revocation or suspension

            The Customs Service may, for good and sufficient reason, 
        serve notice in writing upon any customs broker to show cause 
        why a license or permit issued under this section should not be 
        revoked or suspended. The notice shall be in the form of a 
        statement specifically setting forth the grounds of the 
        complaint, and shall allow the customs broker 30 days to 
        respond. If no response is filed, or the Customs Service 
        determines that the revocation or suspension is still warranted, 
        it shall notify the customs broker in writing of a hearing to be 
        held within 30 days, or at a later date if the broker requests 
        an extension and shows good cause therefor, before an 
        administrative law judge appointed pursuant to section 3105 of 
        title 5 who shall serve as the hearing officer. If the customs 
        broker waives the hearing, or the broker or his designated 
        representative fails to appear at the appointed time and place, 
        the hearing officer shall make findings and recommendations 
        based on the record submitted by the parties. At the hearing, 
        the customs broker may be represented by counsel, and all 
        proceedings, including the proof of the charges and the response 
        thereto shall be presented with testimony taken under oath and 
        the right of cross-examination accorded to both parties. A 
        transcript of the hearing shall be made and a copy will be 
        provided to the Customs Service and the customs broker; which 
        shall thereafter be provided reasonable opportunity to file a 
        post-hearing brief. Following the conclusion of the hearing, the 
        hearing officer shall transmit promptly the record of the 
        hearing along with the findings of fact and recommendations to 
        the Secretary for decision. The Secretary will issue a written 
        decision, based solely on the record, setting forth the findings 
        of fact and the reasons for the decision. Such decision may 
        provide for the sanction contained in the notice to show cause 
        or any lesser sanction authorized by this subsection, including 
        a monetary penalty not to exceed $30,000, than was contained in 
        the notice to show cause.

                    (3) Settlement and compromise

        The Secretary may settle and compromise any disciplinary 
    proceeding which has been instituted under this subsection according 
    to the terms and conditions agreed to by the parties, including but 
    not limited to the reduction of any proposed suspension or 
    revocation to a monetary penalty.

                      (4) Limitation of actions

        Notwithstanding section 1621 of this title, no proceeding under 
    this subsection or subsection (b)(6) of this section shall be 
    commenced unless such proceeding is instituted by the appropriate 
    service of written notice within 5 years from the date the alleged 
    violation was committed; except that if the alleged violation 
    consists of fraud, the 5-year period of limitation shall commence 
    running from the time such alleged violation was discovered.

(e) Judicial appeal

                           (1) In general

        A customs broker, applicant, or other person directly affected 
    may appeal any decision of the Secretary denying or revoking a 
    license or permit under subsection (b) or (c) of this section, or 
    revoking or suspending a license or permit or imposing a monetary 
    penalty in lieu thereof under subsection (d)(2)(B) of this section, 
    by filing in the Court of International Trade, within 60 days after 
    the issuance of the decision or order, a written petition requesting 
    that the decision or order be modified or set aside in whole or in 
    part. A copy of the petition shall be transmitted promptly by the 
    clerk of the court to the Secretary or his designee. In cases 
    involving revocation or suspension of a license or permit or 
    imposition of a monetary penalty in lieu thereof under subsection 
    (d)(2)(B) of this section, after receipt of the petition, the 
    Secretary shall file in court the record upon which the decision or 
    order complained of was entered, as provided in section 2635(d) of 
    title 28.

                   (2) Consideration of objections

        The court shall not consider any objection to the decision or 
    order of the Secretary, or to the introduction of evidence or 
    testimony, unless that objection was raised before the hearing 
    officer in suspension or revocation proceedings unless there were 
    reasonable grounds for failure to do so.

                   (3) Conclusiveness of findings

        The findings of the Secretary as to the facts, if supported by 
    substantial evidence, shall be conclusive.

                       (4) Additional evidence

        If any party applies to the court for leave to present 
    additional evidence and the court is satisfied that the additional 
    evidence is material and that reasonable grounds existed for the 
    failure to present the evidence in the proceedings before the 
    hearing officer, the court may order the additional evidence to be 
    taken before the hearing officer and to be presented in a manner and 
    upon the terms and conditions prescribed by the court. The Secretary 
    may modify the findings of facts on the basis of the additional 
    evidence presented. The Secretary shall then file with the court any 
    new or modified findings of fact which shall be conclusive if 
    supported by substantial evidence, together with a recommendation, 
    if any, for the modification or setting aside of the original 
    decision or order.

                      (5) Effect of proceedings

        The commencement of proceedings under this subsection shall, 
    unless specifically ordered by the court, operate as a stay of the 
    decision of the Secretary except in the case of a denial of a 
    license or permit.

                        (6) Failure to appeal

        If an appeal is not filed within the time limits specified in 
    this section, the decision by the Secretary shall be final and 
    conclusive. In the case of a monetary penalty imposed under 
    subsection (d)(2)(B) of this section, if the amount is not tendered 
    within 60 days after the decision becomes final, the license shall 
    automatically be suspended until payment is made to the Customs 
    Service.

(f) Regulations by the Secretary

    The Secretary may prescribe such 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 any duly 
accredited officer or employee of the Customs Service. The Secretary may 
not prohibit customs brokers from limiting their liability to other 
persons in the conduct of customs business. For purposes of this 
subsection or any other provision of this chapter pertaining to 
recordkeeping, all data required to be retained by a customs broker may 
be kept on microfilm, optical disc, magnetic tapes, disks or drums, 
video files or any other electrically generated medium. Pursuant to such 
regulations as the Secretary shall prescribe, the conversion of data to 
such storage medium may be accomplished at any time subsequent to the 
relevant customs transaction and the data may be retained in a 
centralized basis according to such broker's business system.

(g) Triennial reports by customs brokers

                           (1) In general

        On February 1, 1985, and on February 1 of each third year 
    thereafter, each person who is licensed under subsection (b) of this 
    section shall file with the Secretary of the Treasury a report as 
    to--
            (A) whether such person is actively engaged in business as a 
        customs broker; and
            (B) the name under, and the address at, which such business 
        is being transacted.

                    (2) Suspension and revocation

        If a person licensed under subsection (b) of this section fails 
    to file the required report by March 1 of the reporting year, the 
    license is suspended, and may be thereafter revoked subject to the 
    following procedures:
            (A) The Secretary shall transmit written notice of 
        suspension to the licensee no later than March 31 of the 
        reporting year.
            (B) If the licensee files the required report within 60 days 
        of receipt of the Secretary's notice, the license shall be 
        reinstated.
            (C) In the event the required report is not filed within the 
        60-day period, the license shall be revoked without prejudice to 
        the filing of an application for a new license.

(h) Fees and charges

    The Secretary may prescribe reasonable fees and charges to defray 
the costs of the Customs Service in carrying out the provisions of this 
section, including, but not limited to, a fee for licenses issued under 
subsection (b) of this section and fees for any test administered by him 
or under his direction; except that no separate fees shall be imposed to 
defray the costs of an individual audit or of individual disciplinary 
proceedings of any nature.

(June 17, 1930, ch. 497, title IV, Sec. 641, 46 Stat. 759; Aug. 26, 
1935, ch. 689, Secs. 3-5, 49 Stat. 864, 865; Pub. L. 85-791, Sec. 8, 
Aug. 28, 1958, 72 Stat. 945; Pub. L. 91-271, title III, Sec. 301(jj), 
June 2, 1970, 84 Stat. 291; Pub. L. 95-410, title I, Sec. 113, Oct. 3, 
1978, 92 Stat. 898; Pub. L. 96-417, title VI, Sec. 611, Oct. 10, 1980, 
94 Stat. 1746; Pub. L. 98-573, title II, Sec. 212(a), Oct. 30, 1984, 98 
Stat. 2978; Pub. L. 99-514, title XVIII, Sec. 1888(8), Oct. 22, 1986, 
100 Stat. 2925; Pub. L. 103-182, title VI, Sec. 648, Dec. 8, 1993, 107 
Stat. 2207; Pub. L. 104-295, Sec. 21(e)(11), Oct. 11, 1996, 110 Stat. 
3531; Pub. L. 105-258, title III, Sec. 302(b), Oct. 14, 1998, 112 Stat. 
1916.)


                            Prior Provisions

    This section relates to the same subject matter as act June 10, 
1910, ch. 283, Secs. 1-5, 36 Stat. 464, 465 (incorporated into the Code 
as former sections 415 to 419 of this title); and those sections were 
expressly repealed by paragraph (e) of this section which read as 
follows: ``(e) Licenses under Act of June 10, 1910.--The Act entitled 
`An Act to license customhouse brokers,' approved June 10, 1910, is 
hereby repealed, except that any license issued under such Act shall 
continue in force and effect, subject to suspension and revocation in 
the same manner and upon the same conditions as licenses issued pursuant 
to subdivision (a) of this section.''
    Act June 10, 1910, ch. 283, Sec. 1, 36 Stat. 464, prior to its 
incorporation into the Code, referred to the collector or chief officer 
of the customs ``at any port of entry or delivery.'' Ports of delivery, 
not specifically mentioned as ports of entry, were abolished in the 
reorganization of the customs service by the President (see notes to 
section 1 of this title).
    Act June 10, 1910, ch. 283, Sec. 3, 36 Stat. 465, prior to its 
incorporation into the Code, referred to the United States Circuit Court 
instead of the District Court. Section 291 of the act of Mar. 3, 1911, 
provided that any reference, in any law not embraced in that act, to the 
Circuit Courts, or any power or duty conferred upon them, should be 
deemed to refer to, and to confer such power and duty upon, the District 
Courts.


                               Amendments

    1998--Subsec. (i). Pub. L. 105-258 struck out subsec. (i) which 
prohibited conference or group of two or more ocean common carriers from 
denying any member the right to take independent action on any level of 
compensation paid to an ocean freight forwarder who was also a customs 
broker, and from agreeing to limit payment to such a forwarder to less 
than 1.25 percent of aggregate of tariff rates and charges, and set out 
provisions relating to administration of provisions, remedies for 
violations, and definitions.
    1996--Subsec. (d)(2)(B). Pub. L. 104-295 substituted ``the findings 
of fact'' for ``his findings of fact'' in penultimate sentence.
    1993--Subsec. (a)(2). Pub. L. 103-182, Sec. 648(1), inserted at end 
``It also includes the preparation of documents or forms in any format 
and the electronic transmission of documents, invoices, bills, or parts 
thereof, intended to be filed with the Customs Service in furtherance of 
such activities, whether or not signed or filed by the preparer, or 
activities relating to such preparation, but does not include the mere 
electronic transmission of data received for transmission to Customs.''
    Subsec. (c)(1). Pub. L. 103-182, Sec. 648(2), amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``Each person 
granted a customs broker's license under subsection (b) of this section 
shall--
        ``(A) be issued a permit, in accordance with regulations 
    prescribed under this section, for each customs district in which 
    that person conducts customs business; and
        ``(B) except as provided in paragraph (2), regularly employ in 
    each customs district for which a permit is so issued at least one 
    individual who is licensed under subsection (b)(2) of this section 
    to exercise responsible supervision and control over the customs 
    business conducted by that person in that district.''
    Subsec. (c)(4). Pub. L. 103-182, Sec. 648(3), added par. (4).
    Subsec. (d)(2)(B). Pub. L. 103-182, Sec. 648(4), in first sentence, 
substituted ``Customs Service'' for ``appropriate customs officer'', in 
third sentence, substituted ``Customs Service'' for ``appropriate 
customs officer'', ``it shall notify'' for ``he shall notify'', and 
``30'' for ``15'', in sixth sentence, substituted ``the Customs Service 
and the customs broker; which'' for ``the appropriate customs officer 
and the customs broker; they'', in the seventh sentence, substituted 
``the findings of fact'' for ``his findings of fact'', and in the eighth 
sentence, substituted ``for the decision'' for ``for his decision''.
    Subsec. (f). Pub. L. 103-182, Sec. 648(5), substituted ``Customs 
Service. The Secretary may not prohibit customs brokers from limiting 
their liability to other persons in the conduct of customs business. For 
purposes of this subsection or any other provision of this Act 
pertaining to recordkeeping, all data required to be retained by a 
customs broker may be kept on microfilm, optical disc, magnetic tapes, 
disks or drums, video files or any other electrically generated medium. 
Pursuant to such regulations as the Secretary shall prescribe, the 
conversion of data to such storage medium may be accomplished at any 
time subsequent to the relevant customs transaction and the data may be 
retained in a centralized basis according to such broker's business 
system.'' for ``United States Customs Service.''
    1986--Subsec. (i). Pub. L. 99-514 added subsec. (i).
    1984--Pub. L. 98-573 amended section generally, substituting 
provisions relating to customs broker's licenses and permits for 
provisions relating to licensing of customhouse brokers.
    1980--Subsec. (b). Pub. L. 96-417, in second par., substituted in 
second sentence ``filing, in the Court of International Trade'' for 
``filing, in the circuit court of appeals of the United States within 
any circuit wherein such person resides or has his principal place of 
business, or in the United States Court of Appeals for the District of 
Columbia'' and struck out penultimate sentence which read as follows: 
``The judgment and decree of the court affirming, modifying, or setting 
aside, in whole or in part, any such order of the Secretary of the 
Treasury shall be final, subject to review by the Supreme Court of the 
United States upon certiorari or certification as provided in 1254 of 
title 28.''
    1978--Subsec. (e). Pub. L. 95-410 added subsec. (e).
    1970--Subsec. (b). Pub. L. 91-271 substituted references to 
appropriate officer of the customs for references to collector or chief 
officer of customs wherever appearing.
    1958--Subsec. (b). Pub. L. 85-791 in third sentence of second par., 
substituted ``transmitted by the clerk of the court to'' for ``served 
upon'', struck out ``upon'' before ``any officer'', ``certify and'' 
before ``file in the court'', ``a transcript of'' before ``the record 
upon'' and inserted ``as provided in section 2112 of title 28'', and in 
fourth sentence of second par., substituted ``petition'' for 
``transcript''.
    1935--Subsec. (a). Act Aug. 26, 1935, Sec. 3, substituted ``(c)'' 
for ``(e)'' in last sentence.
    Subsecs. (b) to (d). Act Aug. 26, 1935, Sec. 4, amended subsecs. (b) 
to (d) generally.
    Subsec. (e). Act Aug. 26, 1935, Sec. 5, repealed subsec. (e) which 
related to licenses under the act of June 10, 1910.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-258 effective May 1, 1999, except as 
otherwise provided, see section 2 of Pub. L. 105-258, set out as a note 
under section 1701 of Title 46, Appendix, Shipping.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-573 effective on close of 180th day 
following Oct. 30, 1984, with certain exceptions, except that subsec. 
(c)(1)(B), (2) of this section shall take effect three years after Oct. 
30, 1984, see section 214(d) of Pub. L. 98-573, set out as a note under 
section 1304 of this title.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-417 applicable with respect to civil actions 
commenced on or after Nov. 1, 1980, see section 701(b)(2) of Pub. L. 96-
417, set out as a note under section 251 of Title 28, Judiciary and 
Judicial Procedure.


                    Effective Date of 1970 Amendment

    For effective date of amendment by Pub. L. 91-271, see section 203 
of Pub. L. 91-271, set out as a note under section 1500 of this title.


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1801-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of Title 26, 
Internal Revenue Code.

                  Section Referred to in Other Sections

    This section is referred to in sections 58c, 1484, 1509 of this 
title; title 28 sections 1581, 2631, 2636, 2640, 2643.
