Employment by Customs Brokerage and Freight Forwarder Simultaneously OK in Some Cases, CBP Says

A customs broker can be employed by a brokerage and a freight forwarding company simultaneously as long as the freight forwarder isn't involved in customs business, CBP said in a Feb. 7 ruling (here). The ruling came at the request of Jesse Weisman, CEO of JW Customs Brokers (JWCB) and JW Transport (JWT), a freight forwarding company. Weisman sought CBP's input on "whether a conflict arises from a customs broker’s simultaneous employment with a brokerage and freight forwarding entity, and whether a customs broker so employed may receive a salary from both entities," CBP said.

A past CBP ruling found that "a customs broker may conduct non-customs business for the benefit a freight forwarder." Similarly, "we find that no conflict arises from your proposed arrangement of simultaneously receiving a salary from a customs brokerage and freight forwarding entity, for work performed simultaneously," CBP said. That's true as long as "you draw a fixed salary from JWT for performing freight forwarding services, conduct customs business without participation from JWT, and issue clients an itemized bill clearly identifying the brokerage services you provided, from which JWT will receive no profit," the agency said.

CBP also considered some possible issues involving Tracie Thomas, the "second corporate officer" at JWCB and a broker with an individual license. "As the sole proprietor of JWCB you are required to exercise responsible supervision and control over its customs business regardless of your simultaneous obligations to JWT," CBP said to Weisman. Because "at least one licensed officer must" be involved in the daily operations, "either you or Ms. Thomas must be involved in managing the daily operations of JWCB," CBP said.

There also are some information-sharing issues involved, CBP said. The brokerage would violate regulations on disclosures of confidential information if it shares client information with the freight forwarder, unless the brokerage obtains client consent to do so, CBP said. There's no violation if the freight forwarder shares client information with JWCB because the regulations don't "apply to circumstances in which information is disclosed by an entity other than a customs broker," CBP said. Also, "if JWT will refer clients to JWCB in exchange for compensation, the compensation should not take the form of a commission or other method enabling the sharing of a profit derived directly from a particular customs business transaction," the agency said.