Power of Attorney (POA) is written verification of the authority given by an importer/exporter (grantor or principal) to an agent (grantee) for the purpose of providing clear authorization to perform specified duties. The current valid Customs form is CF 5291 (Revised May 1997).

Today, with a higher bar for meeting the business rules of good corporate governance backed by the legal requirements of The Sarbanes-Oxley Act (Sarbanes-Oxley), higher priority must be assigned to the accurate and complete execution of POAs. There are significant rulings relating to errors and omissions where surety companies have denied a claim under bond because of issuance of a "defective" Power of Attorney. Therefore from both a legal and business standpoint, it is in the best interest of an importer/exporter to complete the form properly (both sides) and to have it signed by the proper authority within the organization. POAs require a signature of an officer of the corporation.

Consider the following touch points, when reviewing or amending the POA process within your organization:

   * How is a request for a new POA handled by your corporation?

   * How is a revocation handled?

   * Who within your organization has the authority to sign a POA?
   * How often are your POAs reviewed with respect to re-issuance

        and revocation?
   * How many POAs has your company issued, to whom, and are

        they all still necessary?
   * Has your company recently undergone a change in structure;

        change of IRS number(s)?
   * Do you have a complete record of all sub-POAs that have

        been issued on behalf of your organization?
   * Are exiting POAs signed by an officer who is no longer with

        your organization?

Common errors, which may result in a POA which is legally invalid, or if valid, possibly questionable:

   * Misspelling of grantor's or broker's name

   * Incorrect abbreviation or punctuation

   * Failing to date and sign

   * Failing to check all boxes

   * Designating a division of the corporation as grantor

   * Signed by an employee or officer other than the president,

        vice-president, secretary or treasurer

Ownership of the authority to sign POAs, and how often those POAs are re-issued and revoked, has become particularly important. In 2002, Congress enacted Sarbanes-Oxley to strengthen corporate governance of publicly traded companies following recent accounting fraud scandals. Sarbanes-Oxley demands that officers and directors tighten internal control processes, and have a high level of knowledge about, and disclose, all liabilities and risks that may threaten company assets. This risk includes any potential liabilities generated by those agents acting on behalf of the company. Penalties for violations of this law are severe.

It is important that only a few, highly-placed people within a publicly traded corporation authorize POAs. The fewer the number of persons issuing POAs, the lower the risks to the company:
* The company can be assured that the number of existing POAs is kept to the minimum necessary for doing business.
* The knowledge of an agent's activities, and any potential risks, are available to the highest, decision-making levels within the company. In turn, this knowledge assures that financial statements and reports accurately and completely reflect the financial position of the company to its shareholders, in compliance with Sarbanes-Oxley standards.

For more information about the protocols of Power of Attorney, contact BDP Trade and Security Compliance, 215-629-8924 or mford@bdpnet.com.



The information contained in this BDP trade advisory is provided as a service to the customers and affiliates of BDP, and does not constitute legal advice. We try to provide quality information, but we make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in these publications. As legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided herein should be used as a substitute for the advice of competent counsel.