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Customs brokers in the U.S. have always maintained an integral position in the import duty payment process. Companies offering brokerage services are often expected to advance the payment of duties and taxes on behalf of the importer or to guarantee payment to the U.S. government via their automated clearing house accounts.  Essentially, the customs broker is a conduit for the collecting and payment of duties and taxes and this role is recognized as a standard business protocol.

In the event that an importing client files for bankruptcy, the trustee or debtor may take action to recover payments made to or through the broker to Customs & Border Protection by the importer in the 90 day period prior to the filing of the bankruptcy petition.   Under Bankruptcy Code, this ability is designed to avoid preferential treatment to any specific creditor seeking compensatory funds. A direct attempt in the past by Customs & Border Protection to give priority status to customs brokers under the Bankruptcy Code was not recognized due to specific legal authority by CBP.

Under a new proposed bill named “The Customs Business Fairness Act,” (H.R. 4657) there would be a technical revision within the Bankruptcy Code allowing relief relative to subrogation rights for customs broker or surety companies who have remitted duties and taxes on behalf of a bankrupt importer.

Customs brokers are encouraged to contact their Congressional representatives for their strong support of this bill.

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