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There are many forms of POA granting authority for a variety of reasons in our daily lives, but the one that we commonly deal with in our industry is the one that grants authority from the grantor (typically an importer) to the grantee (typically the Customs House Broker). This properly executed and granted document is the sole authority under which a Customs Broker transacts business before Customs on behalf of his customer, the principle. There may be other documents concerning the relationship, such as a performance contract, but it is only the POA that the law requires a Broker to have on file. While the POA is often granted on a form, the CBP 5291, the actual POA can have any format as long as it contains the language required by the Customs Regulations.
Many bad things can happen if the POA is defective such as penalties from Customs to the Broker (ouch!) but also a surety can deny a claim under bond if the POA is defective. We strongly suggest that both the Principle and Agent make the execution of the POA a top priority as it is possible and in some cases easy to make an error in this most important document. Here are some suggestions to consider…and oh, by the way, none of us are lawyers, so you might also be well advised to consult counsel if you think you have a larger or more insidious problem with this. I once performed an audit where every POA the Broker had was invalid because they had been using an old form..no kidding.
Make sure the form used is current and contains all the language required as it pertains to the agreement between parties. However, if the importer wants to limit the relationship to make entry, but not protest, for example, the POA can be so modified.
Make sure the full legal name is used in all places. Abbreviations should not be used.
Name changes can in some cases mean a new POA required. This is often overlooked.
Be sure the POA is signed and dated. Keep in mind generally, only an officer of the grantors firm can legally sign the POA. I have actually seen a POA signed by an “assistance maintenance engineer”. Yes…a janitor….no kidding.
If the corporate structure undergoes a change, most likely a new POA will be needed.
A fax copy or an imaged copy of a POA is generally accepted, but we hold a long standing belief that an originally signed POA carries the burden of evidence better. The author is not aware of any penalty ever being issued for holding only a fax copy, but the author here is also well aware what happens when we “assume”.
Subagent POAs, Nonresident POAs, Broker mergers and consolidations, centralized recordkeeping, revocation procedures, business with freight forwarders are all subjects of great interest and should be reviewed carefully with knowledgeable parties. A Customs house Broker or Attorney who specializes in trade matters would be the best source of specific information and should be consulted when any of these or more complex issues arise.
Contributed by: Ronald E Jacobsen of Northstar Drawback Consultants
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