FROM NCBFAA – In Headquarters Ruling Letter H297978, issued July 16, Customs and Border Protection (CBP) responded to the NCBFAA’s inquiry regarding the validity of an electronically signed customs brokers power of attorney (POA) for CBP purposes.
In reviewing the ruling, NCBFAA Customs Counsel Lenny Feldman cautioned that while the ruling clearly opens the door for electronic signatures on POAs, CBP’s finding requires further clarification as to whether the agency may invalidate POAs based on the applicable state’s law governing POAs.
In the ruling, CBP provided that, “neither statute nor regulations prohibit the use of an electronic signature on a customs broker POA provided that is otherwise constitutes a valid POA between the broker and client and is capable of production upon CBP request.” CBP, however, explained that whether electronic signatures are permitted for use on a customs broker POA is determined by the applicable state’s law governing the execution of POAs. CBP explained that neither its, “statutes or regulations cover the binding of two parties through an agency relationship.”
Research conducted by NCBFAA’s Customs Counsel team confirmed that the 2000 Electronic Signatures in Global and National Commerce Act (ESIGN Act) legitimized signing contracts and documents online, particularly with respect to any transaction in or affecting interstate or foreign commerce, which arguably applies to a customs broker power of attorney.
In addition to the ESIGN Act, in 1999 the Uniform Law Commission published the Uniform Electronic Transactions Act (UETA) granting electronic signatures the same legal effect as traditional handwritten signatures.
Every state adopted the UETA, except for New York, the District of Columbia, Puerto Rico, and the Virgin Islands. New York enacted its own law, the Electronic Signature and Records Act (ESRA), the reading of which appears to nullify the use of electronic signatures for POAs. Additionally, 29 states enacted the Uniform Power of Attorney Act (UPOAA) providing that signatures on POAs are presumed genuine if the principal acknowledges the signature before a notary public or other individual authorized by law to take acknowledgements — noting that notarization is not required but its acknowledgement strengthens the validity of the POA.
Accordingly, while in most states an electronic signature should be permitted, some states, such as New York and possibly Minnesota, have some restrictions. We encourage customs brokers to ensure their POAs, electronic or “wet,” meet the requirements for the applicable state law.
NCBFAA intends to seek clarification from CBP as to whether it will invalidate otherwise legally sufficient POAs based on the application of state law; or simply leave that issue to the transacting parties should it arise, again recognizing that neither CBP laws nor regulations cover the binding of two parties through an agency relationship.
FCBF will continue to support this effort and keep members apprised of any actionable items arising from this issue.