CBP Workgroup Still Proposes Continuing Ed, Drops Apprenticeship for Brokers

The CBP-NCBFAA "Role of the Broker-Broker Regulatory Revision Workgroup" has updated its proposed options for revising the role of licensed customs brokers and the Part 111 regulations. The Workgroup continues to propose a continuing education requirement to maintain an “active” broker's license¹ and that Customs business be conducted within the U.S. Customs Territory. It is also proposing that broker status reports be submitted every six months via the ACE Portal, that a web-based exam application process be implemented, and that a review of the broker penalty regime occur. It is no longer proposing an apprenticeship prerequisite to licensing.

(The Workgroup's update is dated October 4, and was posted one day before the October 4 COAC meeting, and at the same time as a September 16 version of its recommendations were posted. The Workgroup was established in January 2011 by U.S. Customs and Border Protection in partnership with the National Cusotms Brokers and Forwarders Association of America. Its goal is to develop solutions to meet the challenges of the 21st Century with respect to broker responsibilities, 19 CFR Part 111 modernization, professionalism, penalty regime/disciplinary actions, and the facilitation of C-TPAT participation, and submit its recommendations to CBP Commissioner Bersin in October 2011. A COAC Broker Subcommittee is also examining these areas of reform.)

The CBP-NCBFAA Workgroup lists the following as highlights of its October 4 proposed options for licensed brokers:

1. Expanded Broker Role

• Allow “pre-certification” of C-TPAT applicants,” which could include CBP fast tracking of these importer applications
• Allow "pre-application" support for ISA applicants, which could also provide potential for ongoing importer assistance

2. New Broker Responsibilities

• Establish requirement for importers to present bona fides to broker
• Require broker to obtain evidence of such bona fides
• Broker must receive POA directly from importer or another broker to perform importer's customs business
• Customs business is to be conducted within the U.S. Customs Territory

3. Professionalism Requirements

• Continuing education requirement to maintain active license, which would increase its value

4. Modernization of Reporting to CBP

• Revamp status reporting -- replace manual triennial reporting with bi-annual (every six months) reporting via ACE Portal
• Provide for continuing education reporting via ACE Portal
• Allow at-will upload of employee data into ACE Portal, to ease broker's administrative burden
• Modernize the permit framework to allow alternative permit qualification acquisition, and reduce reliance on waiver process
• Web-based CHB exam application process that would allow applicants to apply for the exam and self-schedule via web application
• Annual CHB exam, in order to decrease the cost to CBP

5. Penalty Regime Review

• Propose statutory language to allow for immediate suspension of license (threats to national security), pending review of case, with a due process provision

COAC Subcommittee Wants Continuing Ed & Practical Experience, No Splitting of License Structure, Etc.

Many of the COAC "Role of the Broker" Subcommittee's final list of recommendations (for the full COAC to consider) are in line with the Workgroup's proposals for licensed brokers, including recommending that Customs business be conducted solely in the territory of the U.S., requiring continuing education, and allowing brokers to pre-certify C-TPAT and ISA applicants.

In addition, the Subcommittee recommends stemming the problems of foreign-based forwarders; encouraging the U.S. education system to provide training in trade, compliance, and Customs matters; and implementing some type of practical experience requirement prior to the issuance of a permit to conduct business on behalf of the public.

The Subcommittee states it is opposed to splitting the existing license structure to recognize licensed Customs brokers who do not wish to conduct Customs business on behalf of others, from those who are permitted to do so.

They also emphasized that the broker licensing law (19 USC 1641) is well crafted and that while broker fraud must be aggressively deterred, it is equally important to ensure "due process" and preserve the legal rights of individuals and companies engaged in trade.

(CBP posted these COAC Subcommittee's summary recommendations on October 3, in advance of the October 4 COAC meeting, along with 17 other documents, including the Workgroup's proposed Role of Broker options. See ITT's Online Archives 11100411 for BP summary.)

¹ While the October 4 version no longer recommends establishing new definitions of “active” and “inactive” status (as the Sept 16 version did), the definitions could still be needed.

(See ITT's Online Archives 11100410 for summary of CBP Workgroup proposal and draft COAC recommendations on simplified entry, entry summary and financial processes (two of the 17 posted documents).)

(See ITT's Online Archive 11090211, for BP summary that some non-CHB licensees argue that "broker ed" and "work rules" are best suited for permits. See ITT's Online Archives or 11082510, for BP summary stating that broker reform could include more rigor for importers. See ITT's Online Archives 11041523 for BP summary of CBP laying out scope of project to amend regs, "evolve' brokers.)

Workgroup's October 4 version of its proposals available here.

Workgroup's September 16 version of its proposals available here.

COAC Subcommittee's October 4 version of its proposals available here.