CBP Considering Some Revision to 'Customs Business' and 'Employee' Definitions in Broker Regs Rewrite

CBP provided a broad update on its ongoing work toward revising CBP regulations in 19 CFR Part 111 that govern licensed customs broker during the National Customs Brokers and Forwarders Association of America's Government Affairs Conference Sept. 22. Heather Sykes, the new chief of CBP's Broker Management Branch, outlined areas the agency is considering making updates to.

Among the things CBP is considering revising as part of the update:

• CBP is looking at the definition of "customs business" and whether to add language that would specify that customs business is limited to such work in the U.S.
• CBP is considering revising the definition of "employee" so brokerages must only report employees working in customs business.
• CBP is looking at the definition of "responsible supervision and control."
• CBP is also considering requiring brokers to obtain powers of attorney only from the importers and not from a third party. The agency is also considering adding language to prohibit the use of agreements between brokers and third-parties that limits brokers' ability to directly contact the importer.
• CBP is also looking to move to more electronic filings throughout the regulations, such as triennial reports. The agency would also like to add regulatory language allowing for the coming rollout of the global enrollment system for broker license applicants, which is hoped to speed up the licensing application process.
• CBP is looking at whether it needs to update the broker permitting regime, which is now spelled out in statute. Some possible options being considered are to eliminate the permit requirement entirely, moving to a national permit only and to broaden the ability to give permit waivers. Each of these options may require statutory change, said Sykes.
• CBP is also looking what should be a broker's responsibility for gathering bona fides for an importer. Sykes said the agency understands that a site visit and/or compiling importer financial documents may not always be feasible.

There's still a lot to be done before CBP will make any update to the regulations, said Alison Umberger, a lawyer with CBP's Office of Regulations and Rulings. There will first need to be agreement on the proposed changes between the Broker Management Branch and Entry Process and Duty Refund Branch, she said. There's been a regulatory worksheet created by the Trade Policy and Programs, though there are "several areas where we still need to finalize the decisions before we are able to move forward," she said. Many of the considered changes have privacy implications, which requires a review by the CBP Privacy Officer, said Umberger. Some of the issues are also being considered by other agency working groups and will require some further agreement, she said.

An economic impact study is another major step necessary before the updates can be officially proposed, said Umberger. "Initial steps have been taken to begin the economic impact analysis for the proposed continuing education program," she said. CBP will also review all the fees involved in Part 111 to make sure they are set at an appropriate level, she said. Any information collections that may be part of the update will also require approval from the Office of Management and Budget (OMB), she said. Once the Notice of Proposed Rulemaking (NPRM) is complete, it will be reviewed by all the relevant Office of International Trade branches and then face review by CBP, the Department of Homeland Security and OMB, Umberger said. Once approved, the proposal will be put out in the Federal Register for comment, after which, CBP will make the necessary revisions and the final rule will face the same reviews as the NPRM, said Umberger.

CBP also recently made it possible for broker license applications to be uploaded through the Document Imaging System as part of an effort to improve its processing, said Sykes. It hopes this ability will allow "faster turnaround" at the ports and will give CBP headquarters visibility into the applications "which should lead to better oversight," she said. Directions on how to upload the applications will be posted soon, she said. There are 1,551 people registered to take the Oct. 7 broker exam, after which CBP will invite people from customs broker educational institutions to weigh in on the exam in order to improve the exam in the future, she said.