An ongoing project being conducted by U.S. Customs and Border Protection could yield significant changes for customs brokers.
CBP states that the key concept of its Role of the Broker Initiative is to meaningfully transform the relationship between the agency and brokers by recognizing their role as a communicator and force multiplier to increase compliance, especially for small and medium-sized importers.
There are two major projects underway as part of this initiative: redesigning the customs broker regulations in 19 CFR Part 111, and allowing brokers to pre-certify applicants for the Importer Self-Assessment program.
Broker Regulations Rewrite
CBP states that its broker regulations have not kept up with advancements in technology and its own trade facilitation goals. The agency is attempting to address this deficiency through regulatory amendments that will (a) clarify brokers’ responsibilities related to importer validation and provide greater visibility of importers, (b) modernize the regulations to align with current electronic capabilities and business practices, (c) reinforce the broker’s responsibility to exercise due diligence in conducting business and (d) “professionalize” the customs broker by introducing a continuing education requirement. CBP officials have said the updated regulations will also include provisions on due process proceedings for brokers, including penalties and suspension and revocation of licenses; establishing bona fides and broker relationships with unlicensed parties; and business model alignment between the trade and CBP, including conducting customs business within the geographic bounds of the U.S. and rethinking the district permitting requirements.
Over the next few months CBP will conduct nine webinars to gather input from importers and brokers on the specific changes that should be made. CBP is looking especially to receive comments regarding (a) relations with unlicensed parties and the use of powers of attorney to assign and clarify responsibility for customs transactions, (b) the development and administration of a continuing education requirement, and (c) how to allow for maximum flexibility in broker operations to take advantage of modern business practices and information technology while protecting U.S. revenue and deterring commercial fraud. Once this information gathering process is complete CBP will begin drafting an advance notice of proposed rulemaking, although officials have given no indication of when that process might be completed.
CBP is pursuing other related changes as well. In February 2012 the agency launched the automation of the broker exam application process, which has streamlined and accelerated the process, improved accuracy, and increased the security of personally identifiable information. In May 2011 CBP begin a test in New York and Chicago of a streamlined broker licensing process that has reduced processing time from 9-12 months to three months. CBP anticipates expanding this program to Long Beach, Atlanta, Miami, Detroit, Houston and Dallas by the end of 2012.
Under a pilot program expected to be initiated later this summer, customs brokers who apply and are accepted into the Importer Self -Assessment Pre-Certification Program will perform the comprehensive review of the ISA applicant’s package and evaluate the applicant’s readiness to self-govern and participate in the ISA program. The accredited broker will draft a final report on the applicant’s ISA readiness and submit it to CBP for processing and validation. If there are no anomalies, the report will be scheduled for ISA Review Board approval and certification. CBP states that this process will allow eligible ISA applicants to be approved in 90-120 days rather than 9-18 months.
While the full details of the ICA-PC program will be included in a forthcoming Federal Register notice, CBP states that the initial requirements for broker participants will be to (1) have been C-TPAT certified for at least three years, (2) have operated as a licensed customs broker representing importers as a filer for at least five years, (3) maintain written internal control procedures designed to ensure compliance with CBP-related activities, and (4) have a history of compliance (i.e., no substantial penalties).
Following the pilot CBP will evaluate its success and make adjustments as necessary. At that time CBP would also like to reconsider allowing non entry-filing participants and explore the possibility of certifying other customs professionals, such as consultants and academics. A subcommittee of the Advisory Committee on Commercial Operations of CBP (COAC) has expressed support for this latter objective but cautioned that if such an expansion is approved CBP should establish “uniformity and standardization within the pre-certification process” to “ensure that pre-certification evaluations are consistent across the myriad of providers authorized to conduct those services.”
Source: STR Trade Report