CBLE Official CBP exam (May 2024) question: individual customs broker license and a National Permit

CBLEOfficial CBP exam (May 2024)

John Rose has an individual customs broker license and a National Permit. Shady is importing eighteen (18) unmounted 1-carat diamonds worth $2,500.00 each for a total of $45,000.00 in his luggage. Shady is arriving from London, England, via private airplane. Shady intends to put the diamonds in rings to sell from his U.S.-based jewelry store. Rose obtains a power of attorney from Shady to be Shady’s broker, and Rose advises Shady that the diamonds do not need to be declared because the diamonds are absolutely duty free. Which statement below is TRUE with respect to any penalty that may be imposed under these circumstances?

A A $45,000.00 penalty may be assessed against the client under 19 USC 1497, but no penalty will be assessed against the broker as only one penalty may be assessed.
B A $45,000.00 penalty may be assessed against the broker under 19 USC 1641(d)(1)(D), and a $45,000.00 penalty may be assessed against the client under 19 USC 1497.
C A $30,000.00 penalty may be assessed against the broker under 19 USC 1641(d)(1)(D), and a $45,000.00 penalty may be assessed against the client under 19 USC 1497.
D A $30,000.00 penalty under 19 USC 1641 may be assessed against the broker and the client jointly, because penalties against a broker may not exceed $30,000.00.

Show the answer and explanation

Answer: C. A $30,000.00 penalty may be assessed against the broker under 19 USC 1641(d)(1)(D), and a $45,000.00 penalty may be assessed against the client under 19 USC 1497.

$30,000 against the broker and $45,000 against the client. Part 171 Appendix C, section VI(D)(1), gives this example: a broker who counsels a client that gemstones are duty free and need not be declared may be penalized $30,000, the client incurs a personal penalty of $45,000 under 19 U.S.C. 1497 (the value of the undeclared articles), and the broker penalty cannot exceed $30,000. Section VI(B)-(C) caps the broker's counseling penalty at $30,000 and allows it in addition to other penalties, so a single penalty, a $45,000 broker penalty, or a joint $30,000 penalty are all wrong. Source: 19 CFR Part 171, Appendix C, section VI(B)-(D)(1); 19 CFR 148.18(a) (2023 ed., rev. 1 Apr 2023; unchanged in 2024 ed. and in eCFR as at 12 Oct 2026). CBP answer key: C. CBP's citation: 19 CFR 171, Apx C Section VI(D)(1).

Common mistake

Matching the broker penalty to the client's $45,000 ignores the $30,000 ceiling on 1641 penalties.

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Original study material mapped to the public CBP exam categories; not a real test question.Independent. Not affiliated with or endorsed by U.S. Customs and Border Protection (CBP). Verify figures and rules against current guidance before relying on them.