Ability to Transfer Broker Clients Through Blanket POA Depends on Successorship Provisions, CBP Says

A customs brokerage that is ending operations can transfer clients to a new broker through a "single blanket power of attorney" only if the original POA includes specific successorship provisions, CBP said in a Jan. 23 ruling (here). The ruling was in response to a request from the National Customs Brokers & Forwarders Association of America, which inquired as to whether a blanket POA would suffice for the transfer. "NCBFAA states that customs brokerage entities concluding a corporate transaction such as a merger or sale must transfer clients from the entity ceasing to legally exist, to the new entity acting as its replacement," CBP said.

The use of a separate POA for each of the numerous clients would result in a "time consuming and inefficient" process for the transfer, the NCBFAA said. The trade group argued that the original broker should be able to execute a single POA to authorize another broker to act on behalf of the first broker's clients, CBP said. The NCBFAA requested a ruling "finding the execution of a single blanket" POA "permissible to transfer clients in corporate transactions" where the original broker "holds a POA authorizing it to issue new POAs on behalf of its principals."

Such transfers of clients are permissible through blanket POA only when the client's POA with the broker includes a successorship provision, CBP said. "The requirement of executing one POA for a single broker and principal is excused in the corporate transaction context only if 'the power of attorney granted to the predecessor broker specifically provides that it is transferable to Customs broker which is the predecessor broker’s legal successor in interest,'" the agency ruled. A POA designating the new broker as the replacement agent for each client would be required in cases that lacked a successorship provision, CBP said. "In recognition of the time and resource intensive process required to transfer clients absent a legal successorship provision with Broker A’s POAs with its clients, brokers are granted thirty (30) days from the date of their merger or similar transaction to execute new powers of attorney," the agency said.