October 2019 — Question 4
Andrew Balder, an employee of PM Morris Customs Brokerage (MCB), decides to import dual color lapel men’s dress jackets to take advantage of the exploding popularity. One of the clients of MCB regularly imports comparable dress jackets and has outstanding sales. Which of the following statements is CORRECT?
- AAndrew Balder may not import items similar to that of clients of MCB because it would be a conflict of interest.
- BAn employee of a broker may not also be an importer.
- CAndrew Balder must notify the port director for permission to import such articles.
- DAndrew Balder must apply for a waiver from the Commissioner.
- EAndrew Balder must notify the client of MCB that they are also going to import dual color lapel men’s dress jackets.✓ CBP's answer
Why this answer
Under the edition tested, 19 CFR 111.31(c) provided that a broker who is an importer must not act as broker for an importer of merchandise of the same general character unless the client has full knowledge of the facts, and the rule extends to importations by a broker's employees. Applied here, Andrew Balder's plan to import jackets comparable to a client's line means the client must be informed, so E is correct. A is the tempting reversal: the regulation does not forbid the importation outright, it conditions the continued brokerage relationship on disclosure, and no port director permission or Commissioner waiver plays any role. Watch for: Assuming the conflict rule bans the importation instead of merely requiring client disclosure.
Original CBLE Simulator explanation — the question and key above are CBP's; this analysis is ours. Verify against the current edition before relying on it in practice.
CBP's cited authority
Answer and citations as published in CBP's official answer key for the October 2019 examination.
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