Broker Exam Challenge

Judicial challenges to the grading of the customs brokers license exam are not very common, but they happen. Usually, I have not been super supportive of the plaintiffs. See my maybe too mean-spirited post from 2006. On the other hand, I have gained a lot of respect for Mr. Byungmin Chae, who has been fighting with Customs over his score since taking the April 2018 exam.

As background, broker license applicants who fail to pass the 80-question CBLE with a score of 75% or more may ask Customs to reconsider the grading on questions for which applicants believe they should have received credit. 19 CFR § 111.13(f). If Customs does not change the grade, applicant may seek further review by the Executive Director of the Office of Trade. Any applicant that is not satisfied with the results of that review may sue the United States and ask the Court of International Trade to review the exam scoring. 

Photo by Museums Victoria on Unsplash

Mr. Chae missed passing the exam by eight questions, which is not bad given that the pass rate on this exam is suspiciously low. The un-appealed results for the April 2023 exam show a 5.5% pass rate. That, in and of itself, is problematic and calls into question the validity of the test design. 

In his first-level administrative appeal, Mr. Chae earned credit for two additional correct answers. On further review, Customs awarded him three additional correct answers. Think about what that means. We have to assume Customs' thinks that its test questions are unambiguous and that there is one clearly most correct answer. Despite that, this applicant demonstrated to Customs satisfaction that five of its questions were ambiguous enough to allow there to be at least one additional "most correct" answer. After that process, he was still down two correct answers to pass.

In Court, he had to first get past a jurisdictional hurdle that I covered in this 2021 post. After the first round of judicial review, he received one additional correct answer.

That left Mr. Chae to appeal to the U.S. Court of Appeals for the Federal Circuit, in which he sought review of three questions. If he were to receive credit on two, he would earn his broker's license. Mr. Chae was not represented by counsel in his appeal. 

Question 5

Which of the following customs transactions is NOT required to be performed by a licensed customs broker?

The answer Customs expected is "Transportation in bond." The answer Mr. Chae selected was "Foreign Trade Zone Entry."

Customs argued in support of its answer by citing 19 CFR §111.2(a)(1), which states that a license is not required for listed transactions including "Transportation in bond." Note, however, that the same section exempts "Foreign trade zone activities." Mr. Chae argued that a reasonable reading of his selected answer would be that it refers to the admission of merchandise into a zone, which is activity apparently with in the zone activities exception. Customs position is that Mr. Chae's selected answer refers to the transaction of entering merchandise into the commerce of the United States from a foreign trade zone. The Court of Appeals agreed with Mr. Chae that the question was ambiguous as to whether it referred to entry into or entry from as zone. That earned him one additional point and made him just one point short.

Question 27

Which of the following mail articles are not subject to examination or inspection by Customs?

The answer Customs designated as correct is "Diplomatic pouches bearing the official seal of France and certified as only containing documents." Mr. Chae selected the answer "Mail packages addressed to officials of the U.S. Government containing merchandise." The correct answer can be derived from 19 CFR §§ 145.37 and 145.38. The firsts section specifies the treatment of articles imported for the U.S. government. Subsection (c) of that regulation states:

(c) Official Government documents. Other mail articles addressed to offices or officials of the U.S. Government, believed to contain only official documents, shall be passed free of duty without issuing an entry. Such mail articles, when believed to contain merchandise, shall be treated in the same manner as other mail articles of merchandise so addressed.

On its face, the last sentence in the regulation seems to require that mail addressed to the U.S. Government be subject to normal entry procedures, including examination or inspection, when believed to contain merchandise. Mr. Chae pointed out, however, that nothing in the question indicates that the origin of the shipment is outside the United States. Because Customs has no authority to inspect domestic mail, he reasoned, this is an equally correct answer. 

Given the context that this was a CBLE, although the Court did not explicitly say so, it appears to have accepted that it was unreasonable to presume the fact that the mail may be of domestic origin. Second, the regulation requires that government mail containing merchandise is subject to inspection. Thus, the Court did not award additional credit.

Question 33

Mr. Chae's final hope is a classification question involving "current-production wall art" mechanically printed on paper. Mr. Chae's answer was in Heading 9702, covering "Original engravings, prints and lithographs." The remaining answers are all in Heading 4911, which covers "Other printed matter, including printed pictures and photographs." The problem with classifying this merchandise in Chapter 97 is Chapter Note 3, which reads:

For the purposes of heading 9702, the expression "original engravings, prints and lithographs" means impressions produced directly, in black and white or in color, of one or of several plates wholly executed by hand by the artist, irrespective of the process or of the material employed by him, but not including any mechanical or photomechanical process.

This explicitly removes mechanically-printed lithographs. That leaves some debate about the correct subheading to choose among the remaining options, but Mr. Chae was out of luck on this one.

Although he did not receive sufficient credit to earn a passing grade, Mr. Chae, who (again) had no lawyer for his appeal, did an admirable job of making his case.

Here's hoping he has taken or will take the exam again. Good luck to him.