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111.37 Misuse of license.
A broker shall not permit his license or his name to be used by or for any unlicensed person, other than his own employees authorized to act for him, or by or for any broker whose license is under suspension in the solicitation, promotion or performance of any Customs business or transaction.
111.38 False representation to procure employment.
A broker shall not knowingly use false or misleading representations to procure employment in any Customs matter, nor shall he represent to a client or prospective client that he can obtain any favors from the Treasury Department or any representative thereof.
111.39 Advice to client.
(a) Withholding or false information. A broker shall not withhold information relative to any Customs business from a client who is entitled to the information. He shall exercise due diligence to ascertain the correctness of any information which he imparts to a client, and he shall not knowingly impart to a client false information relative to any Customs business.
(b) Error or omission by client. A broker who knows that a client has not complied with the law or has made an error in, or omission from, any document, affidavit, or other paper which the law requires such client to execute, shall advise his client promptly of the fact of such non-compliance, error, or omission. (c) Illegal plans. A broker shall not suggest to a client or a prospective client a plan known to be illegal for evading payment of any duty, tax, or other debt or obligation owing to the Government.
A broker shall not act in behalf of any person, or attempt to represent any TD 70-181. person, in respect of any protest, unless he shall previously have been authorized to do so in accordance with section 174.3 of this chapter.
111.41 Endorsement of checks.
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.
111.42 Relations with person who is notoriously disreputable or whose license has been suspended, canceled "with prejudice," or revoked.
A broker shall not knowingly and directly or indirectly:
(a) Accept employment to effect a Customs transaction as associate, correspondent, officer, employee, agent, or subagent from any person who is notoriously disreputable or whose license as broker shall have been revoked for any cause, or whose license is under suspension, or who has had his license canceled "with prejudice;"
(b) Assist the furtherance of any Customs business or transactions of such person;
(c) Employ, or accept such assistance from, any such person, without the approval of the Commissioner (see sec. 111.79);
(d) Share fees with any such person, or
(e) Permit any such person directly or indirectly to participate, whether through ownership or otherwise, in the promotion, control, or direction of the business of the broker. Nothing herein shall be deemed to prohibit any broker from acting as a broker for any bona fide importer or exporter, notwithstanding such importer or exporter may have had his license as a customhouse broker revoked or suspended, or may be notoriously disreputable.
111.43 Display of license.
Each broker shall display his license in the principal office within the district so that it may be seen by anyone transacting business in the office. Photocopies of the license shall likewise be posted in each branch office within the district.
111.44 Limitation of liability
A broker may not limit his liability to a client with respect to a claim by the client arising out of the wrongful or negligent action of the broker in connection with a matter handled by him as a broker. Further, no broker shall enter into a contract which purports to so limit his liability.
Subpart D--CANCELLATION, SUSPENSION OR REVOCATION OF LICENSE
111.51 Cancellation of license.
(a) Without prejudice. The Commissioner may cancel a broker's license "without prejudice" upon written application by the broker if the Commissioner determines that the application for cancellation was not made in order to avoid proceedings for the suspension or revocation of the license. If he determines that the application for cancellation was made in order to avoid such proceedings, the Commissioner may cancel the license "without prejudice" if authorized by the Secretary of the Treasury.
(b) With prejudice. The Commissioner may cancel a broker's license "with prejudice" when specifically requested to do so by the broker. The effect of a cancellation "with prejudice" is in all respects the same as if the license had been revoked for cause by the Secretary.
111.52 Revocation by operation of law.
A license granted to a partnership, association, a partnership, association, or corporation shall be deemed revoked by operation of law, in accordance with the provisions of section 641(a), Tariff Act of 1930, as amended (19 U.S.C. 1641(a)), if for any continuous period of more than 60 days there are not at least two members of such partnership or two officers of such association or corporation who are licensed to transact business as a customhouse broker. When a license is revoked by operation of law, the Commissioner will notify the partnership, association, or corporation of the revocation. A copy of such notice will be sent to the district director.
111.53 Grounds for suspension or revocation.
Failure or refusal to comply with the duties, responsibilities, or requirements specified in Subpart C or elsewhere in this part relating to brokers may be deemed grounds for suspension or revocation of the license of a broker. Such duties, responsibilities, or requirements are not to be considered as exclusive. Conduct not within the purview of any specification of this part may be deemed to be conduct warranting the suspension or revocation of a license under the authority of section 641(b), Tariff Act of 1930, as amended (19 U.S.C. 1641(b)).
111.54 Appropriate officer of the Customs.
Unless otherwise indicated in this part, the district director shall be the appropriate officer of the Customs within the scope of section 641(b) of the Tariff Act of 1930, as amended (19 U.S.C. 1641(b)). In the case of sickness or absence of the district director, the assistant district director designated by the district director shall be the appropriate officer of the Customs. If the office of district director is vacant or the district director is unable to designate an assistant district director as appropriate officer of the Customs, the Commissioner shall designate one of the assistant district directors to be the appropriate officer of the Customs.
111.55 Investigation of complaints.
Every complaint or charge against a broker which may be the basis for disciplinary action shall be forwarded for investigation to the special agent in charge of the area in which the broker is located. The special agent in charge shall submit a report on the investigation to the director of the appropriate district and send a copy of it to the Commissioner.
111.56 Review of report on investigation.
The district director shall review the report of investigation to determine if there is sufficient basis to recommend that charges be preferred against the broker. He shall then submit his recommendation with supporting reasons to the Commissioner for final determination together with a proposed statement of charges when recommending that charges be preferred.
111.57 Determination by Commissioner.
(a) Determination not to prefer charges. If the Commissioner determines that charges will not be preferred, he shall notify the district director of his decision. (b) Determination to prefer charges. If the Commissioner determines that charges will be preferred, he may also determine that the complaint or charge, supported by the agent's report of investigation, is of so serious a nature that formal proceedings for suspension or revocation of the license shall be instituted immediately without following the preliminary proceedings prescribed in section 111.59. The Commissioner shall notify the district director of his determinations and instruct him to prepare a proposed statement of charges for review by the Commissioner if not previously submitted.
111.58 Content of statement of charges.
The statement of charges shall give a plain and concise, but not necessarily detailed, description of the facts claimed to constitute grounds for suspension or revocation of the license. A statement of charges which fairly informs the accused of the charges against him so that he is able to prepare his defense shall be deemed sufficient. Different means by which a purpose might have been accomplished or different intents with which acts might have been done so as to constitute grounds for suspension or revocation of license may be alleged in the statement of charges in a single count in the alternative. If the Commissioner has determined that the preliminary proceedings prescribed in section 111.59 shall not be followed, the statement of charges shall recite the Commissioner's determination.
111.59 Preliminary proceedings.
(a) Opportunity to participate. Unless the Commissioner, under section 111.57, has determined that the preliminary proceedings shall not be followed, the district director shall advise the broker of his opportunity to participate in preliminary proceedings with an opportunity to avoid formal proceedings against his license.
(b) Notice of preliminary proceedings. The district director shall serve upon the broker, as set forth in section 111.63, a notice in writing that:
(1) Transmits a copy of the proposed statement of charges;
(2) Informs him that 5 U.S.C. 554 and 558 will be applicable if formal proceedings are necessary;
(3) Invites him to show cause, if he so desires, why the formal proceedings should not be instituted;
(4) Informs him that he may make submissions and demonstrations of the character contemplated by the cited statutory provisions;
(5) Invites any negotiation for settlement of the complaint or charge that
the broker deems it desirable to enter into;
(6) Advises him of his right to be represented by counsel; and
(7) Specifies the place where and a reasonable time within which the broker may respond in writing and/or orally.
111.60 Request for additional information.
If, in order to prepare his defense, the broker desires additional information as to the time and place of the alleged misconduct, or the means by which it was committed, or any other more specific information concerning the alleged misconduct, he may request such information in writing. He shall set forth in his request in what respect the proposed statement of charges leaves him in doubt and describe the particular language of the proposed statement of charges as to which additional information is needed. If in the opinion of the district director such information is reasonably necessary to enable the broker to prepare his defense, he shall furnish the broker with such information.
111.61 Decision on preliminary proceedings.
The district director shall prepare a summary of any oral presentations made by the broker or his attorney and forward it to the Commissioner together with a copy of each paper filed by the broker. The district director shall also give to the Commissioner his recommendation on action to be taken as a result of the preliminary proceedings. If the Commissioner determines that the broker has satisfactorily responded to the proposed charges, and that further proceedings are not warranted he shall so inform the district director who shall notify the broker. If the Commissioner determines that the broker has not satisfactorily responded to the proposed charges, he shall so advise the district director and instruct him to prepare, sign, and serve a notice of charges and the statement of charges. If one or more of the charges in the proposed statement of charges was satisfactorily answered by the broker, the Commissioner shall instruct the district director to omit those charges from the statement of charges.
111.62 Contents of notice of charges.
The notice of charges shall inform the broker that:
(a) Sections 554 and 558, Title 5, United States Code, are applicable to the
(b) He may be represented by counsel;
(c) He will have the right to cross-examine witnesses;
(d) He will be notified within 10 days after service of this notice of the
time and place of a hearing on the charges; and
(e) Prior to the hearing on the charges, he may file, in duplicate with the
district director, a verified answer to the charges.
111.63 Service of notice and statement of charges.
(a) Individual lincensee. The district director shall serve the notice of charges and the statement of charges against an individual licensee as follows: (1) By delivery to the broker personally;
(2) By certified mail, with demand for a return card signed solely by the addressee;
(3) By any other means which the broker may have authorized in a written communication to the district director; or
(4) If attempts to serve the broker by the above methods are unsuccessful, the district director may serve the notice and statement by leaving them with the person in charge of the broker's office.
(b) Partnership, association or corporation. The district director shall serve the notice of charges and the statement of charges against a partnership, association, or corporation as follows:
(1) By delivery to any member of the partnership personally or to any officer of the association or corporation personally;
(2) By certified mail addressed to any such member or officer with demand for a return card signed by the addressee;
(3) By any other means which the broker may have authorized in a written communication to the district director; or
(4) If attempts to serve the broker by the above methods are unsuccesful, the district director may serve the notice and statement by leaving them with the person in charge of the broker's office.
(c) Certified mail; evidence of service. When the service is by certified mail, the receipt of the return card duly signed shall be satisfactory evidence of service.
111.64 Service of notice of hearing and other papers.
(a) Notice of hearing. Within 10 days after service of the notice and statement of charges, the district director shall serve upon the broker or his attorney, by one of the methods enumerated in section 111.63 or by ordinary mail, a written notice of the time and place of the hearing. The hearing shall be scheduled to take place within 5 days after service of the notice of hearing.
(b) Other papers. Other papers relating to the hearing may be served by ordinary mail or by one of the methods set forth in section 111.63 or upon the broker's attorney.
If the broker or his attorney requests in writing a delay in the hearing on the TD 75-58. ground that additional time is necessary to prepare a defense, the hearing officer designated pursuant to section 111.67(a) may reschedule the hearing, notifying the broker or his attorney in writing of the extension and the new time for which the hearing has been scheduled.
When an accused broker or his attorney fails to appear for a scheduled hear- TD 75-58. ing, the hearing officer designated pursuant to section 111.67(a) shall proceed with the hearing as scheduled, and shall hear evidence submitted on behalf of the Government. The regulations of this part shall apply as though the broker were present, and the Secretary of the Treasury may issue an order of suspension or revocation if he finds it to be in order.
(a) Government representatives. The Commissioner shall designate as hear- TD 75-58. ing officer an appropriate officer of the Customs other than a Customs officer of the district for which the license was issued. The hearing officer shall provide a competent reporter to make a record of the hearing. The Commissioner shall designate one or more persons to represent the Government at the hearing. The hearing officer may designate one or more persons to assist in the proceedings.
(b) Rights of the accused. The broker or his attorney shall have the right to examine all exhibits offered at the hearing and shall have the right to crossexamine witnesses and to present witnesses who shall be subject to crossexamination by the Government representatives.
(c) Interrogatories. Upon the written request of either party, the hearing offi- TD 75–58. cer may permit deposition upon oral or written interrogatories to be taken before any officer duly authorized to administer oaths for general purposes or in Customs matters. The other party to the hearing shall be given a reasonable time in which to prepare cross-interrogatories and, if the deposition is oral, shall be permitted to cross-examine the witness. The deposition shall become part of the hearing record.
(d) Transcript of record. When the record of the hearing has been transcribed TD 75-58. by the reporter, the hearing officer shall deliver a copy to the broker and the Government's representative without charge.
The hearing officer shall allow the parties a reasonable period of time after TD 75-58. delivery of the transcript of record in which to submit proposed findings and conclusions and supporting reasons therefor as contemplated by 5 U.S.C. 557(c).
111.69 Recommended decision by hearing officer.
After review of the proposed findings and conclusions submitted by the parties TD 75-58. pursuant to section 111.68, the hearing officer shall make his recommended decision in the case and certify the entire record to the Secretary of the Treasury. The hearing officer's recommended decision shall conform with the requirements of 5 U.S.C. 557.
111.70 Additional submittals.
Upon receipt of the record, the Secretary of the Treasury will afford the parties a reasonable opportunity to make such additional submittals as required by 5 U.S.C. 557(c) and by the circumstances of the case.
The Secretary of the Treasury will disregard an immaterial misnomer of a third person, an immaterial mistake in the description of any person, thing, or place, or the ownership of any property, any other immaterial mistake in the statement of charges or a failure to prove immaterial allegations in the description of the accused's conduct.