House Customs Reauthorization Bill Would Set Importer Info Standard for Brokers, Raise De Minimis Level

The legislation introduced Dec. 7 by House Ways and Means Trade Subcommittee Chairman Kevin Brady (R-Texas) to modernize CBP and other customs-related agencies would set a minimum standard for the amount of information customs brokers would be required to collect about an importer.

Customs Broker Identification of Importers

Brady's legislation would require the DHS Secretary to develop regulations setting forth the minimum standards for customs brokers and importers, including nonresident importers, regarding the identity of the importer that shall apply in connection with the importation of merchandise into the U.S. After getting "adequate notice," brokers will be required to implement procedures for :

• collecting the identity of importers, including nonresident importers, seeking to import merchandise into the U.S. to the extent reasonable and practicable
• maintaining records of the information used to substantiate a person’s identity, including name, address, and other identifying information

Brokers who fail to comply with the requirements would be liable up to $10,000 for each violation and would be subject to revocation or suspension of the broker license.

The bill would also require CBP to submit a report to Congress outlining its recommendations for acquiring customs information. The report, which would be due 180 days after the bill's passage, would include recommendations for:

• determining the most timely and effective way to require foreign nationals to provide customs brokers with appropriate and accurate information, comparable to that which is required of U.S. nationals, concerning the identity, address, and other related information relating to such foreign nationals necessary to enable customs brokers to comply with the requirements of section 641(i) of the Tariff Act of 1930.
• establishing a system for customs brokers to review information maintained by relevant Federal agencies for purposes of verifying the identities of importers, including nonresident importers, seeking to import merchandise into the U.S.

Importer of Record Program

Not later than 180 days after the date of the enactment, the DHS Secretary would be required to establish an importer of record program to assign and maintain importer of record numbers. The DHS Secretary would be required to ensure that, as part of that program, CBP:

• develops criteria that importers must meet in order to obtain an importer of record number;
• provides a process by which importers are assigned importer of record numbers;
• maintains a centralized database of importer of record numbers, including a history of importer of record numbers associated with each importer;
• evaluates the accuracy of the database; and
• takes measures to ensure that duplicate importer of record numbers are not issued.
• Not later than one year after the date of the enactment, the DHS Secretary would be required to submit to the Senate Finance and House Ways and Means Committees a report on the new importer of record program.

The term "number," with respect to an importer of record, means a filing identification number described in 19 CFR 24.5 of (as in effect on the day before the date of the enactment of this Act).

New Importer Program

HR-6642 would also have the CBP Commissioner create a new importer program that directs CBP to adjust bond amounts for new importers to protect revenue of the Federal Government. The bond amounts would be based on risk levels assessed by CBP.

The bill would require CBP to:

• develop risk assessment guidelines for new importers to determine the bond amounts for new importers and the level of screening for new importers
• develop procedures to ensure increased oversight of imported products from new importers related to the enforcement of CBP's priority trade issues
• develop procedures to ensure increased oversight of new importers by the Centers of Excellence and Expertise
• establish a centralized database of new importers to ensure accuracy of information that is required to be provided by new importers to CBP.

Requirements for Non-resident Importers

The bill would also create new requirements for importers that aren't U.S. citizens, lawfully permitted alien U.S. residents, or a commercial entity not organized within the U.S. Such importers would be required to designate a resident agent within the U.S. That designated agent would be required to:

• be authorized to accept service of process against the non-resident importer in connection with the importation of merchandise.
• accept liability for the payment of duties and penalties or other fines issued by the DHS Secretary or CBP Commissioner if unable to collect such duties and penalties or other fines from such non-resident importer in connection with the importation of merchandise.
• establish a power of attorney with the non-resident importer in connection with the importation of merchandise

The Treasury Secretary may also require the resident agent to secure a bond or other security in connections with the importation of merchandise to protect revenue or assure compliance with any provision of law, regulation or instruction. The requirements would not apply to non-resident importers who are validated Tier 2 or 3 participants in the Customs-Trade Partnership Against Terrorism (C-TPAT) program. Each violations would result in $50,000 civil penalties and any other customs or trade law penalties, including seizure and forfeiture.

Certified Importer Committee

Brady's bill would also direct the creation of an interagency committee chaired by the CBP commissioner that includes representatives of each covered Federal agency. The covered Federal agencies refers to a Federal department or agency that requires documentation for clearing or licensing the importation or exportation of cargo.The committee would be directed to establish a certified importer program by the end 2014. The new certified importer program would be meant to:

• authorize the release of cargo imported by a certified importer on an expedited basis that is subject to documentation for clearing or licensing the importation or exportation of such cargo by one or more covered Federal agencies.
• release of cargo shall include clearance through the Automated Commercial Environment (ACE) computer system

Certified importers would be required to be validated Tier 2 or 3 C-TPAT participants, in good standing with CBP's importer self-assessment program and, if applicable, in good standing with one or more programs maintained by the covered Federal agencies.

De Minimis Per Person Statutory Minimum Would be Raised to $800

The bill would amend USC 1321(a)(2)(C) to authorize the Treasury Secretary to issue regulations to allow certain articles (i.e., other than certain bona fide gifts and personal/household articles accompanying travelers) to be imported free of duty and tax by one person on one day in an amount not exceeding that specified by regulation, but not less than $800 (increased from the current limit of $200).

Informal Entry Limit Would be Raised to $2,500

The statutory limit applicable to informal entries in 19 USC 1498 would be amended to require the Treasury Secretary to prescribe rules and regulations for the declaration and entry of merchandise if the aggregate value of the shipment of merchandise does not exceed $2,500.

Penalties for Customs Brokers Convicted of Terrorism

HR-6642 would amend 19 USC 1641(d)(1) (Customs broker disciplinary proceedings) by allowing the DHS Secretary to impose a monetary penalty or revoke or suspend a customs broker's license or permit if it is shown that the broker has been convicted of committing or conspiring to commit an act of terrorism described in 18 USC 2332b (acts of terrorism transcending national boundaries).

The bill also makes a few technical amendments to 16 USC 1641.

(See ITT's Online Archives 12120728 for news of introduction of the legislation. See ITT's Online Archives 12121023 for summary of the the CBP reorganization that would result due to the bill. See future issues of ITT for additional details of the legislation.)

The bill text is (here). Descriptions of each section of the bill are (here). A bill summary is (here).