What is a Power of Attorney (POA)?
A Power of Attorney (POA ), also known as a “Letter of Empowerment,” is a legal document used in the shipping industry to grant the customs broker you have appointed the legal authority to process customs clearance on your behalf.
When is a POA Needed?
If you are delegating responsibility to another party, a signed POA is mandatory. With the help of this document, the customs broker has the power to clear your shipment through the customs authorities. A signed POA is needed in order to clear your goods through US Customs.
The involved parties must complete all the formalities of the POA before the consignment is shipped. This will ensure that the appointed agent is the sole point of contact for all the communication-related aspects to documentation and filing.
Why is a POA Important?
As stated earlier, in shipping, a POA is a legal document used to authorize a third party to clear your shipment by complying with the established procedure. However, its application goes beyond customs brokerage as it can be beneficial in numerous other contexts, such as personal finance or medical emergencies. Regardless of the situation, all the POAs operate on the same principle - it provides the holder of the POA, the legal authority to act on your behalf in any capacity that you may decide.
In the shipping industry, POA is required when the importer decides to use the services of a customs broker to clear the goods. They can authorize the customs broker to act on their behalf, regardless of whether they are resident or non-resident, an individual entity, or a business. When an importer decides to legally work with a customs broker for importing goods into the US, he/she must give the agent the POA to authorize and act on the importer’s behalf.
Once POA is established, the customs broker can:-
- Endorse, sign, or declare requests for delivery, entry, or withdrawal of goods
- Process any declaration, certificate, protest.
- He/she can also process Bill Of Lading [Learn how to fill a BOL] or affidavit
- Collect drawback and duty refunds
- Act as a grantor of any bond required for importing
What does a POA Include?
__A POA generally includes the following:- __
- The name of the business of the importer
- The entire address of the importer
- The Internal Revenue Service (IRS) number of the business
- A declaration stating that the nominated forwarder can act on behalf of the importer
- The witnessed signature of the importer/exporter
Please note that the POA holder does not operate as a contract between an importer, exporter, or the freight forwarder. In fact, the individual or business is merely in charge of the legal powers given to them by the involved party.
Also, the freight forwarder or customs broker should have no trouble acting on your behalf as the POA document is clear and unambiguous. The POA document is vital to complete all the formalities related to your shipment. Hence it is essential to select a reputed and trustworthy freight forwarder or broker as they will have the legal authority to handle and clear your cargo.
Who can sign a POA?
A senior and responsible officer of the company involved in the manufacturing of the shipment is allowed to sign the POA. In short, the POA can be signed by only the President, Vice-President, Secretary, Treasurer, or those with equivalent titles and roles like the Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer that may substitute as the authorized person.
However, sometimes, the authority to sign a POA also depends on the company’s hierarchical structure and can vary from an individual, corporation, LLC, etc. For instance, according to the laws established, a POA issued by the European Union-based companies importing into the US must have a secondary witness signature from another officer in the company.
How can you get a POA?
Getting a POA is not too difficult. Any reputed and knowledgeable freight forwarder or customs broker can explain this process to you.
If you planning on appointing a POA your U.S. bound imports you will need the following information:-
- An IRS, social security, or importer ID number
- Grantor's full name and the name under which the business is registered
- The jurisdiction in which the company operates
- An authorized signature
The POA document must be signed by an officer of the company making the shipment.Since not everyone in the company can legally give a POA to a third party, only those authorized to sign a POA can sign on the agreement for the document to be termed valid and legal.
The POA holder must be a US resident.
How much does a POA Cost?
The price of a POA varies from one freight forwarder/customs broker to another. However, in most cases, the cost of preparing a POA document is less than US 200$.
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