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HQ 113794

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February 4, 1997

BRO-4-02-RR:IT:EC 113794 GEV

CATEGORY: ENTRY

Bedros Odian, Esq.
309 Grover Cleveland Highway
Buffalo, New York 14226

RE: Customs Broker; Power of Attorney; Customs Duty Refund Checks; 19 CFR ?? 141.32, 141.46; 19 U.S.C. ? 1641

Dear Mr. Odian:

This is in response to your letter dated September 14, 1996, to the Compliance Branch, Regulatory Audit Division, U.S. Customs Service Headquarters in Washington, D.C. By letter dated November 26, 1996, you subsequently forwarded a copy of the aforementioned correspondence to the Office of the Assistant Chief Counsel, Financial Management Services Center, Indianapolis, Indiana, which in turn forwarded it to this office for response. Our position regarding your inquiry is set forth below.

FACTS:

You state that there is a view in some quarters of Customs that a customs broker may not endorse and deposit in its own account a customs refund check in the following circumstances:

(1) The check is made payable to an importer, care of the customs broker.

(2) The importer has given a power of attorney "to receive, endorse and collect checks issued for Customs duty refunds in grantor's [Importer's] name drawn on the Treasurer of the United States."

(3) The importer has a running account with the customs broker with a current balance owing to the customs broker.

(4) The customs broker endorses the importer payee's name upon the check below which the customs broker endorses its own name.

(5) The customs broker credits the importer's account in the monetary amount of the check.

(6) The customs broker deposits the check in its own account.

ISSUE:

Whether, in the above circumstances, a customs broker may endorse and deposit in its own account a customs refund check.

LAW AND ANALYSIS:

Before transacting Customs business in the name of his principal, a customs broker is required to obtain a valid power of attorney. (19 CFR ? 141.46) The Customs Form (CF) 5291 may be used for granting a power of attorney to transact Customs business. (19 CFR ? 141.32) If a Customs power of attorney is not on a CF 5291, it shall either be a general power of attorney with unlimited authority or a limited power of attorney as explicit in its terms and executed in the same manner as a CF 5291. (19 CFR ? 141.32)

With respect to the endorsement of checks by a customs broker, ? 111.41, Customs Regulations (19 CFR ? 111.41), provides that "[a] broker shall not endorse or accept without authority of his client any Government draft, check, or warrant drawn to the order of such client."
In regard to the issue under consideration, we note that in ruling letter 724090, dated March 6, 1984, we addressed the addition of language as part of a Customs power of attorney allowing for the negotiation by a customs broker of Treasury checks issued for Customs duty refunds. We stated that to accomplish that objective, the following language would be acceptable:

To receive, endorse, and collect checks issued for Customs Duty refunds in its (grantor's) name drawn on the Treasurer of the
United States.

(See also Customs ruling letter 224201, dated October 13, 1992, which provided, inter alia, a reaffirmation of our position regarding the above language as set forth in ruling letter 724090.)

We further note, as you point out on page 1 of your letter of September 14, 1996, that the legal definition of the word "collect" is as follows:

To gather together; to bring scattered things (assets, accounts, articles of property) into one mass or fund; to assemble. To receive payment. Black's Law Dictionary, 5th Edition, p. 238.

Accordingly, in view of the foregoing, we concur with your position that a customs broker in the circumstances enumerated in your inquiry, who has obtained a valid power of attorney containing the additional language discussed above providing for the negotiation of Treasury checks issued for customs refunds, does in fact possess the requisite authority to endorse and deposit in its own account a customs refund check.

HOLDING:

A customs broker, in the above circumstances, may endorse and deposit in its own account a customs refund check.

Sincerely,

Jerry Laderberg

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