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Agents Fraud

ACORD 25 COI Verification, Customs Duty Controls & Broker Audits

Third-party purchasing agents, freight intermediaries, and subcontractors routinely sit between corporate treasury and the underlying carrier or government authority. Standardise direct-source verification so forged PDFs cannot mask uninsured or unpaid exposure.

CHAPTER 03 // BROKER & COI AUDITRun Controller Checklist
Overhead view of stacked intermodal shipping containers illustrating procurement and customs audit controls

1. Four-Step Direct Verification of ACORD 25 Certificates of Insurance

PROC-01 // ACORD 25 COI
  1. Require the ACORD 25 PDF to be emailed directly from the licensed insurance producer corporate domain, never forwarded as an editable attachment from the subcontractor.
  2. Cross-check the NAIC number of each listed insurer on the NAIC Consumer Insurance Search (content.naic.org) or APRA register of general insurers in Australia.
  3. Remember that an ACORD 25 certificate states on its face that it is issued "as a matter of information only"; request copies of the actual Additional Insured and Primary/Non-Contributory policy endorsements.
  4. For high-risk construction, logistics, or staffing contracts, call the insurer policy-verification desk directly using the carrier published phone number to confirm active status and limits.

2. Preventing Customs & Freight Broker Duty Diversion

PROC-02 // 19 CFR 111.29
  1. Under U.S. Customs regulations (19 CFR 111.29(b)), paying duty funds to a customs broker does NOT relieve the importer of record of liability if the broker fails to remit those funds to U.S. Customs and Border Protection.
  2. Enrol directly in government customs debit portals (such as CBP Periodic Monthly Statement ACH in the US or Department of Home Affairs EFT in Australia) so tariff payments never pass through intermediary operating accounts.
  3. Reconcile official customs entry summaries (Form 7501 / Nature 10 import declarations) line-by-line against broker disbursements monthly.

3. Detecting Undisclosed Buying-Agent Markups & Split Invoicing

PROC-03 // KICKBACK AUDIT
  1. Audit consecutive purchase orders clustered just below executive approval thresholds (for example multiple $24,500 invoices under a $25,000 CFO threshold).
  2. Compare vendor registered directors, corporate formation dates, and bank branch routing prefixes against internal procurement staff and external buying agents.
  3. Enforce annual right-to-audit clauses in all third-party sourcing and freight-forwarding representation contracts.

Reviewed by Marcus Vance, Corporate Controls & Treasury Risk Editor

Reviews trade-compliance payment controls and subcontractor insurance audit procedures.

Last reviewed:

Reviewed every 6 months

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