Customs Brokers Largely Dodge New Regulation in Transportation Bill
The Congressional approval June 29 for HR-4348, which would extend funding for surface transportation programs for two years, means some new regulations for domestic transport brokers but largely exempts brokers dealing with international trade, said a top lobbyist who worked on the legislation for customs brokers. The National Customs Brokers and Freight Forwarders Association of America (NCBFAA) and other trade groups were able to mitigate the legislative language and effect on customs brokers, said Jon Kent, a lobbyist with Kent & O'Connor who works on the behalf of NCBFAA, in an interview. President Obama is expected to sign the bill.
(Under the legislation, freight forwarders and brokers can only provide interstate brokerage services if they are registered with the Department of Transportation (DOT) and has filed a surety bond of at least $75,000, up from the previous minimum of $10,000.)
Exemptions for Customs Brokers
The bill includes several exemptions from the registration and bond requirements. Exempted are:
- a customs broker licensed in accordance with section CFR 19 Part 111.2 of title 19, only to the extent that the customs broker is engaging in a movement under a customs bond or in a transaction involving customs business, as defined by CFR 19 Part 111.1
- non-vessel-operating common carrier or an ocean freight forwarder when arranging for inland transportation as part of an international through movement involving ocean transportation between the United States and a foreign port;
- an indirect air carrier holding a Standard Security Program approved by the Transportation Security Administration, only to the extent that the indirect air carrier is engaging in the activities as an air carrier
Essentially, broker involvement in the international movement of goods to the final U.S. destination is exempt. NCBFAA business that wouldn't fall within the exemption is general minimal and done on an "adjunct" basis, said Kent. Such business that isn't exempt is often done for existing customers mostly as a helpful courtesy rather than a major money maker, he said. Still, the $75,000 bond requirement will likely make such business cost prohibitive for customs brokers.
"Customs broker escaped substantial regulation and the amount of regulation that remains is very limited," said Kent. “We lobbied hard on this in House and Senate." A number of the local customs broker associations, including New York, and Florida, were also instrumental in garnering congressional support. Sen. Chuck Schumer (D-N.Y) and Rep. John Mica (R-Fla.) were among legislators Kent said he met with to discuss the bill. Kent said he "considers this a nice victory.”
(See ITT's Online Archives 12070241 for summary of the bill's approval in Congress.)
Text of the legislation is (here).