CustomsBrokerLicenseExam

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October 2026, question 13

Broker Compliance · Broker licensing and duties

Kristine Cheng received her individual customs broker license in September 2025. In November 2025, Ms. Cheng received her national permit and filer code and began conducting customs business from her office in Los Angeles, California. In December 2025, she hired Michael Yu, and in January 2026, she hired John Xiao. Neither Mr. Yu nor Mr. Xiao was licensed as a customs broker, but they both prepared, entered, and transmitted entries on behalf of Ms. Cheng. Ms. Cheng executed a power of attorney that authorized Mr. Yu to sign customs documents, but Ms. Cheng did not file the power of attorney with CBP. She did not execute a customs power of attorney with Mr. Xiao but filed a statement with the processing Center that identified him as an employee authorized to transact customs business on her behalf. In April 2026, Mr. Yu moved to Toronto, Canada. He worked remotely for Ms. Cheng until she found a new employee in May 2026. Upon Mr. Yu's departure from the business, Ms. Cheng promptly notified the processing Center of the change in employee information. Of the four choices below, which ONE of Ms. Cheng’s actions violated CBP regulations?

  1. Ms. Cheng allowed unlicensed employees to conduct customs business on her behalf.
  2. Ms. Cheng failed to file Mr. Yu’s power of attorney with CBP.
  3. Ms. Cheng allowed Mr. Xiao to work for her without having executed a power of attorney that authorized him to conduct customs business on her behalf.
  4. Ms. Cheng allowed Mr. Yu to work remotely in Toronto, Canada.
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CBP's answer: D. D: Ms. Cheng allowed Mr. Yu to work remotely in Toronto, Canada.

Section 111.3(a) requires customs business to be conducted within the customs territory of the United States, so Mr. Yu working remotely from Toronto violated the rule, and D is right. An employee of a broker need not be licensed when the broker authorizes the employee to sign by power of attorney (not filed with CBP) or files a statement with the processing Center (111.2(a)(2)(ii)(A)), so A, B and C describe permitted conduct.

Customs business must be conducted within the customs territory of the United States as defined in § 101.1 of this chapter. 19 CFR 111.3(a)
The broker is not required to file the power of attorney with CBP, but must provide proof of its existence to CBP upon request 19 CFR 111.2(a)(2)(ii)(A)(1)

Search for: Customs business must be conducted within the customs territory of the United States

CBP's key cites: 19 CFR 111.2(a)(2)(ii); 19 CFR 111.3(a)

Question and key from CBP's October 2026 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).